H.B. No. 2837         AN ACT   relating to prohibiting a person or entity from surveilling,   reporting, or tracking the purchase of firearms, ammunition, and   accessories through the use of certain merchant category codes;   imposing a civil penalty.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  This Act may be cited as the Second Amendment   Financial Privacy Act.          SECTION 2.  The legislature finds that:                (1)  The Second Amendment to the United States   Constitution guarantees the people the right to keep and bear arms;                (2)  Section 23, Article I, of the Texas Constitution   provides that "Every citizen shall have the right to keep and bear   arms in the lawful defence of himself or the State";                (3)  In September 2022, the International Organization   for Standardization (ISO), based in Switzerland, approved a new   merchant category code for firearm and ammunition merchants;                (4)  In a letter to payment card networks, federal   lawmakers stated that the new merchant category code for firearms   retailers would be ". . . the first step towards facilitating the   collection of valuable financial data that could help law   enforcement in countering the financing of terrorism efforts,"   expressing a clear government expectation that payment card   networks will utilize the new merchant category code to conduct   mass surveillance of constitutionally protected firearms and   ammunition purchases in cooperation with law enforcement;                (5)  The new merchant category code will allow banks,   payment card networks, acquirers, and other entities involved in   payment card processing to identify and separately track lawful   payment card purchases at firearms retailers in this state, paving   the way for unprecedented surveillance of Second Amendment activity   and information sharing between financial institutions and the   government;                (6)  This potential for cooperative surveillance and   tracking of lawful firearms and ammunition purchases will have a   significant chilling effect on citizens wishing to exercise their   federal and state constitutional rights to keep and bear arms in   this state;                (7)  While federal law requires some financial   institutions to report transactions that are highly indicative of   money laundering or other unlawful activities, there is no federal   or state law authorizing financial institutions to surveil and   track lawful activities by customers in cooperation with law   enforcement;                (8)  The creation or maintenance of records of   purchases of firearms or ammunition or the tracking of sales made by   a retailer of firearms or ammunition by a nongovernmental entity,   including a financial institution, without a substantial and   historical business need or a requirement imposed by law, may   frustrate the right to keep and bear arms and violate the reasonable   privacy rights of lawful purchasers of firearms or ammunition; and                (9)  Based on the above stated findings, it is the   intent of the legislature to prohibit the misuse of payment card   processing systems to surveil, report, or otherwise discourage   constitutionally protected firearm and ammunition purchases within   this state.          SECTION 3.  Title 12, Business & Commerce Code, is amended by   adding Chapter 610 to read as follows:   CHAPTER 610. UNAUTHORIZED TRANSACTION CATEGORIZATION          Sec. 610.001.  DEFINITIONS. In this chapter:                (1)  "Electronic payment transaction" means a   transaction in which a person uses a payment card or other payment   code or device issued or approved through a payment card network to   debit a deposit account or use a line of credit, whether   authorization is based on a signature, personal identification   number, or other means.                (2)  "Firearms code" means any merchant category code   approved by the International Organization for Standardization for   a firearms retailer, including Merchant Category Code 5723.                (3)  "Firearms retailer" means any person or entity   engaged in the sale of firearms, ammunition for use in firearms, or   firearms accessories.                (4)  "Payment card" means a credit card, debit card,   check card, or other card that is issued to an authorized user to   purchase or obtain goods, services, money, or any other thing of   value.                (5)  "Payment card issuer" means a lender, including a   financial institution, or a merchant that receives applications and   issues payment cards to individuals.                (6)  "Payment card network" means an entity that   directly or through a licensed member, processor, or agent provides   the proprietary services, infrastructure, and software that route   information and data to conduct debit card or credit card   transaction authorization, clearance, and settlement, and that an   entity uses in order to accept as a form of payment a brand of debit   card, credit card, or other device that may be used to carry out   debit or credit transactions.          Sec. 610.002.  UNAUTHORIZED CATEGORIZATION OF CERTAIN   TRANSACTIONS. (a) A person or entity involved in facilitating or   processing an electronic payment transaction, including a payment   card issuer or payment card network, may not assign to a merchant or   require a merchant to use a firearms code.           (b)  For the purposes of the sale of firearms, ammunition for   use in firearms, and firearms accessories, a firearms retailer may   not provide a firearms code to a payment card issuer or payment card   network and may only use or be assigned a merchant category code for   general merchandise retailers or sporting goods retailers. Any   agreement or contractual provision to the contrary is void.          (c)  A payment card issuer or payment card network shall   notify the payment card holder in writing on every occasion that a   firearms code is assigned to an electronic payment transaction on   the payment card holder's account.          Sec. 610.003.  INVESTIGATIVE AUTHORITY OF ATTORNEY GENERAL.   (a) If the attorney general has reasonable cause to believe that a   person or entity has engaged in, is engaging in, or is about to   engage in a violation of this chapter, the attorney general shall   issue a civil investigative demand. The procedures established for   the issuance of a civil investigative demand under Section 15.10   apply to the same extent and manner to the issuance of a civil   investigative demand under this section.          (b)  The attorney general may request, pursuant to a civil   investigative demand issued under Subsection (a), that a person or   entity disclose any data that is relevant to an investigation   conducted by the attorney general. The attorney general shall   evaluate the data for compliance with the requirements set forth in   Section 610.002.          Sec. 610.004.  NOTICE OF VIOLATION OF CHAPTER; OPPORTUNITY   TO CURE.  (a)  Not later than the 30th day before bringing an action   under Section 610.005, the attorney general must give written   notice to the person or entity identifying the specific provisions   of this chapter that are or were being violated.          (b)  The attorney general may not bring an action against the   person or entity if the person or entity:                (1)  cures the identified violation within the 30-day   period; and                (2)  provides the attorney general a written statement   affirming that the person or entity has:                      (A)  cured the alleged violation;                      (B)  provided supporting documentation to show   how the violation was cured; and                      (C)  made changes to internal policies to prevent   the recurrence of any similar violation in the future.          Sec. 610.005.  ENFORCEMENT; CIVIL PENALTY; INJUNCTION. (a)   Except as provided by Section 610.006, the attorney general has   exclusive authority to enforce this chapter.          (b)  A person or entity who violates this chapter and fails   to cure the violation in accordance with Section 610.004, or who   breaches a written statement provided to the attorney general under   that section, is liable for a civil penalty in the amount of $10,000   for each violation.          (c)  The attorney general shall bring an action to:                (1)  recover a civil penalty under this section; and                (2)  restrain or enjoin a person or entity from   violating this chapter.          (d)  The attorney general may recover reasonable attorney's   fees and other reasonable expenses incurred in investigating and   bringing an action under this section.          (e)  The attorney general shall deposit a civil penalty   collected under this section in the state treasury to the credit of   the general revenue fund.          Sec. 610.006.  PRIVATE RIGHT OF ACTION. (a) A person who has   used a payment card to purchase a firearm, ammunition for use in a   firearm, or a firearm accessory may bring an action against a   payment card issuer or payment card network to obtain:                (1)  a declaratory judgment under Chapter 37, Civil   Practice and Remedies Code, that the payment card issuer or payment   card network has violated Section 610.002; or                (2)  a judgment enjoining the payment card issuer or   payment card network from violating Section 610.002.          (b)  Except as provided by Subsection (a), this chapter may   not be construed as providing a basis for, or being subject to, a   private right of action for a violation of this chapter or any other   law.          SECTION 4.  The changes in law made by Chapter 610, Business &   Commerce Code, as added by this Act, apply only to a purchase of a   firearm, ammunition for use in a firearm, or a firearm accessory   that takes place on or after the effective date of this Act.          SECTION 5.  If any provision of this Act or its application   to any person or circumstance is held invalid, the invalidity does   not affect other provisions or applications of this Act that can be   given effect without the invalid provision or application, and to   this end the provisions of this Act are declared to be severable.          SECTION 6.  This Act takes effect September 1, 2023.       ______________________________ ______________________________      President of the Senate Speaker of the House                   I certify that H.B. No. 2837 was passed by the House on May 3,   2023, by the following vote:  Yeas 89, Nays 56, 2 present, not   voting.     ______________________________   Chief Clerk of the House                 I certify that H.B. No. 2837 was passed by the Senate on May   19, 2023, by the following vote:  Yeas 19, Nays 12.     ______________________________   Secretary of the Senate       APPROVED:  _____________________                      Date                           _____________________                    Governor