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.