By: Schaefer H.B. No. 2837       A BILL TO BE ENTITLED   AN ACT   relating to prohibiting financial institutions in Texas from   surveilling, reporting, or tracking the purchase of firearms and   ammunition; imposing a civil penalty.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  This act shall be known and may be cited as the   "Second Amendment Financial Privacy Act".          (a)  The Legislature finds that:                (1)  The Second Amendment to the United States   Constitution guarantees the people the right to keep and bear arms;                (2)  Article I, Section 23, of the Texas Constitution   provides that "Every citizen shall have the right to keep and bear   arms in the lawful defense 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 the 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 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 the   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 the   State of Texas, paving the way for both unprecedented surveillance   of Second Amendment activity and unprecedented 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   Texas;                (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   the State of Texas.          SECTION 2.  Chapter 271, Finance Code, is amended by adding   Section 271.007 to read as follows:          Sec. 271.007.  DEFINITIONS. In this Section:                (1)  "Customer" has the meaning assigned by Section   59.001, Finance Code.                (2)  "Disclosure" means the transfer, publication, or   distribution of protected financial information to another person   or entity for any purpose other than to process or facilitate a   payment card transaction.                (3)  "Financial institution" has the meaning assigned   by Section 201.101, Finance Code.                (4)  "Financial record" means a record held by a   financial institution related to a payment card transaction that   the financial institution has processed or facilitated.                (5)  "Firearms retailer" means any person or entity   engaged in the lawful business of selling or trading firearms or   ammunition to be used in firearms.                (6)  "Firearms code" means the Merchant Category Code   5723 approved in September of 2022 by the International   Organization for Standardization for firearms retailers.                (7)  "Government entity" means any county or   municipality, or state board, commission, agency, bureau,   department, or any other political subdivision of the state.          SECTION 3.  Chapter 271, Finance Code, is amended by adding   Section 271.0071 to read as follows:          Sec. 271.0071.  UNAUTHORIZED CATEGORIZATION OF FIREARMS AND   AMMUNITION TRANSACTIONS BY A FINANCIAL INSTITUTION. (a)  Except   for those records kept during the regular course of a criminal   investigation and prosecution or as otherwise required by law, a   state governmental agency or local government, special district, or   other political subdivision or official, agent, or employee of the   state or other governmental entity or any other person, public or   private, other than the owner or owner's representative, may not   knowingly and willfully keep or cause to be kept any list, record,   or registry of privately owned firearms or any list, record, or   registry of the owners of those firearms.          (b)  A financial institution or its agent may not require the   usage of the firearms code in a way that distinguishes a firearms   retailer physically located in the state of Texas from Texas   general merchandise retailers or sporting goods retailers.          (c)  A financial institution may not discriminate against a   firearms retailer by:                (1)  Declining a lawful payment card transaction based   solely on the assignment or non-assignment of a firearms code to the   merchant or transaction;                (2)  Limiting or declining to do business with a   customer, potential customer, or merchant based on the assignment   or non-assignment of a firearms code to previous lawful   transactions involving the customer, potential customer, or   merchant;                (3)  Charging a higher transaction or interchange fee   to any merchant or for a lawful transaction based on the assignment   or non-assignment of a firearms code; or                (4)  Otherwise taking any action against a customer or   merchant that is intended to suppress lawful commerce involving   firearms, firearm accessories or components, or ammunition, which   action is based solely or in part on the customer's or merchant's   business involving firearms, firearm accessories or components, or   ammunition.          (d)  Except as otherwise required by law, a financial   institution may not disclose a financial record, including a   firearms code that was collected in violation of this Act.          SECTION 4.  Chapter 271, Finance Code, is amended by adding   section 271.0072 to read as follows:          Sec. 271.0072.  VIOLATION OF UNAUTHORIZED CATEGORIZATION OF   FIREARM AND AMMUNITION TRANSACTIONS; CIVIL PENALTY.  (a)  The   Attorney General shall investigate alleged violations of this act   and, upon finding a violation, shall provide written notice to any   individual or entity, public or private, believed to be in   violation of this act. Upon receipt of such written notice from the   Attorney General, the entity shall have thirty (30) calendar days   to cease the requirement for usage of the firearms code by Texas   merchant physically located in Texas.          (b)  Either a firearms retailer physically located in Texas   whose business was the subject of an alleged violation of this Act   or a customer who transacted at a firearms retailer physically   located in Texas whose business was the subject of an alleged   violation of this Act, may petition the Attorney General to   investigate the alleged violation in accordance with subsection   (a).          (c)  If the Attorney General does not commence an action   within 90 days of receiving the petition under this subsection,   then the firearms retailer - or customer may file an action in court   to enjoin the individual or entity from requiring the firearms code   in violation of this Act.          (d)  If an individual or entity is found to be requiring the   usage of a firearms code by any merchant physically located in Texas   in violation of this Act and fails to cease the requirement for   usage of the firearms code by any firearms retailer physically   located in Texas after the expiration of thirty (30) calendar days   from the receipt of written notice by the Attorney General's   office, the Attorney General shall pursue an injunction against any   individual or entity, public or private, alleged to be in violation   of this Act. The Attorney General shall pursue an injunction   pursuant to this subsection in court in the judicial district where   the alleged violation occurred against the individual or entity in   alleged violation of this Act.          (e)  If a court finds that an individual or entity continues   to be in violation of this Act after thirty (30) calendar days from   receiving written notice from the Attorney General in accordance   with subsection (a) or from a finding by the court of a violation of   this Act in an action commenced under subsection (c), then the court   shall enjoin the individual or entity from continuing to require   the usage of the firearms code.          (f)  If an individual or entity knowingly and willfully fails   to comply with an injunction as provided in subsection (e) above   within thirty (30) days after being served with the injunction,   then the court shall impose a civil penalty in a sum not to exceed   Ten Thousand Dollars ($10,000.00) per violation of an injunction   issued pursuant to subsection (e), committed after the expiration   of the period of thirty (30) days after the entity was served with   the injunction. In assessing such a penalty, the Court shall   consider factors including the financial resources of the violator   and the harm or risk of harm to Second Amendment rights resulting   from the violation. Any order assessing a penalty for violation of   this Act pursuant to this paragraph shall be stayed pending appeal   of the order.          (g)  In addition to the remedies provided in this section,   the Attorney General or a petitioner who prevails in an action under   this section shall recover reasonable expenses incurred in   obtaining the civil penalty, including court costs, reasonable   attorney's fees, investigative costs, witness fees, and deposition   expenses.          (h)  It shall not be a defense to a civil action filed under   this act that such information was disclosed to a federal   government entity, unless such disclosure or action was made based   on a good faith conclusion that the disclosure or action was   required by federal law or regulation.          SECTION 5.  The change in law made by this Act applies only   to a violation on or after the effective date of this Act.          Section 6.  This Act takes effect September 1, 2023.