Amendments	Fiscal Memos
SA0719	Amendment 1-0 to SB2223

	Amendments	Fiscal Memos
HA0745	Amendment 1-1 to HB2762

NOTE: Each fiscal memorandum applies only to the amendment(s) identified in the memorandum. The fiscal memorandum must be matched to any amendments that have been adopted.

Fiscal Summary

NOT SIGNIFICANT

Bill Summary

FIREARMS MERCHANT CATEGORY CODE

This bill prohibits a financial institution, or its agents, from requiring the usage of a firearms merchant category code by a firearms retailer physically located in this state in a manner that distinguishes a firearms retailer from a general merchandise retailer or a sporting goods retailer. As used in this bill, a "firearms merchant category code" means the merchant category code 5723 approved in September of 2022 by the International Organization for Standardization for firearms retailers or any other indicator that a financial institution assigns to a merchant that identifies a merchant as a firearms retailer or the payment card transaction as involving the purchase of a firearm, firearm ammunition, ammunition components for use with firearms, or firearm accessories.

NOT DISCRIMINATING AGAINST FIREARMS RETAILER

This bill prohibits a financial institution from discriminating against a firearms retailer by declining a lawful payment card transaction based solely on the assignment or non-assignment of a firearms merchant category code. However, a financial entity may decline or otherwise refuse to process the transaction on the basis of the firearms merchant category code only if necessary to comply with this bill; if requested by the customer; or due to fraud controls or merchant category exclusions offered by a financial entity for the purpose of expenditure control or corporate card control.

NOT DISCLOSING A FINANCIAL RECORD

This bill generally prohibits a financial institution from disclosing a financial record, including protected financial information, that was collected in violation of this bill unless the disclosure of the financial record or protected financial information was based on a good-faith conclusion that the entity's action was required by applicable law or regulation.

NEGOTIATING WITH RESPONSIBLE PARTIES

This bill does not limit the ability of a financial institution to negotiate with responsible parties or otherwise impair the financial institution's actions related to dispute processing, fraud management, or protecting transaction integrity from concerns related to illegal activities, a data breach, or cyber risks.

ATTORNEY GENERAL

This bill requires the attorney general to investigate alleged violations of this bill and, upon finding a violation, to provide written notice to any individual or entity believed to be in violation. Written notice to a commercial entity must be made to the entity's registered agent. Upon receipt of the written notice from the attorney general, the entity must cease any violation of this bill within 30 calendar days.

Additionally, this bill provides that a firearms retailer physically located in this state whose business was the subject of an alleged violation of this bill or a customer who transacted at a firearms retailer physically located in this state whose business was the subject of an alleged violation of this bill, may petition the attorney general to investigate an alleged violation of this bill.

This bill provides that if an individual or entity is found to be in violation of this bill and fails to cease the violating activity after the expiration of 30 calendar days from the receipt of written notice by the attorney general's office, then the attorney general must pursue an injunction against the individual or entity alleged to be in violation of this bill. The attorney general may pursue an injunction in the chancery court of the judicial district where the alleged violation occurred. If a court finds that an individual or entity continues to be in violation of this bill after 30 calendar days from receiving written notice from the attorney general, then the court must enjoin the individual or entity from continuing the activity found to be in violation of this bill.

Furthermore, this bill provides that if an individual or entity knowingly and willfully fails to comply with an injunction issued pursuant to the above provisions within 30 days after being served with the injunction, then the attorney general, upon petition to the court, may recover on behalf of the state a civil penalty in a sum not to exceed $10,000 for each violation committed after the expiration of the 30-day period. In assessing a penalty, the court must consider the financial resources of the violator and the harm or risk of harm to the rights afforded to the individual pursuant to the Second Amendment of the United States Constitution resulting from the violation. The attorney general may also recover, in addition to the civil penalty, investigative costs and reasonable attorney's fees. An order assessing a penalty for violation of this bill must be stayed pending appeal of the order.

DEFENSE

This bill provides that it is a defense to a proceeding initiated pursuant to this bill that the firearms merchant category code was required to be used based on a good-faith conclusion that the entity's disclosure or action was required by applicable law or regulation.

PRIVATE RIGHT OF ACTION

This bill prohibits a financial institution or a financial institution's agent from intentionally (i) using a firearms merchant category code in connection with a firearms retailer physically located in this state in a manner that distinguishes a firearms retailer from a general merchandise retailer or a sporting goods retailer; or (ii) requiring the usage of a firearms merchant category code by a firearms retailer physically located in this state in a manner that distinguishes a firearms retailer from a general merchandise retailer or a sporting goods retailer.

This bill provides that a financial institution in violation of the above provision is subject to a private right of action by a person or entity aggrieved by the violation.

AWARD FROM A COURT

Present law provides that a court may award the person whose information was disclosed and prevails in an action certain listed damages, costs, and fees. This bill amends this provision to, instead, provide that a court may award the person or entity who prevails in an action certain listed damages, costs, and fees in present law.

ON MARCH 21, 2024, THE SENATE ADOPTED AMENDMENT #1 AND PASSED SENATE BILL 2223, AS AMENDED.

AMENDMENT #1 rewrites the bill to, instead, enact the "Second Amendment Financial Privacy Act," as described below.

PROHIBITIONS

Except for those records kept during the regular course of a criminal investigation and prosecution, or as otherwise required by law, this amendment prohibits a government entity, or an official, employee, or agent of a government entity, from knowingly keeping or causing to be kept any list, record, or registry of privately-owned firearms or the owners of such firearms.

This amendment prohibits a financial institution, including an agent of the financial institution, from (i) requiring or permitting the assignment of a firearms code in a way that distinguishes a firearms retailer from other retailers; or (ii) subject to this amendment, declining a payment card transaction involving a firearms retailer based solely on the assignment of a firearms code.

However, this amendment does not prohibit a financial institution from declining or otherwise refusing to process a payment card transaction for any of the following reasons: (i) if necessary to comply with applicable state or federal law; (ii) if requested by the customer; (iii) if necessary due to fraud controls; or (iv) for the purpose of merchant category exclusions offered by a financial institution for the purpose of expenditure control or corporate card control.

This amendment does not limit the authority of a financial institution to negotiate with responsible parties or otherwise impair a financial institution's actions related to (i) dispute processing; (ii) fraud risk, credit management, or other controls in the ordinary course of business operations; (iii) protecting against illegal activities, breach, or cyber risks; or (iv) restricting the use or availability of a firearms code in this state.

INVESTIGATION

This amendment requires the attorney general to investigate allegations that an individual or entity, including a government entity, has violated this amendment and, upon finding a violation, provide written notice to the individual or entity believed to have committed the violation. The individual or entity must cease the violation within 30 days after receiving such notice.

If an individual or entity does not cease the violation within 30 days after receiving notice, then this amendment requires the attorney general to file an action against that individual or entity to seek an injunction in a court of competent jurisdiction. If the court finds that the individual or entity violated this amendment and has not ceased the activity constituting the violation, the court must enjoin the individual or entity from continuing such activity and may award any other relief that the court deems appropriate. If an individual or entity knowingly fails to comply with an after 30 days of being served with the injunction, then the attorney general, upon petition to the court, must seek to impose on that individual or entity a civil fine in an amount not to exceed $10,000 for each violation committed after the expiration of the thirty-day period. In assessing such fine, the court must consider as factors the financial resources of the violator, the harm or risk of harm to the rights under the Second Amendment to the United States Constitution and the Constitution of Tennessee resulting from the violation.

This amendment requires an order assessing a civil fine to be stayed pending appeal of the order. This amendment provides that the remedies set forth in this amendment are the exclusive remedies for any violation of this amendment.

This amendment provides that it is a defense to a proceeding initiated pursuant to this amendment that a firearms code was required to be disclosed or assigned by law.

This amendment authorizes a firearms retailer physically located in this state whose business was the subject of an alleged violation or a customer who transacted at a firearms retailer physically located in this state whose business was the subject of an alleged violation to petition the attorney general to investigate an alleged violation. If the attorney general declines to investigate, then the firearms retailer or customer may pursue an injunction in the chancery court of the judicial district where the alleged violation occurred. If that court finds that an individual or entity is responsible for a violation, then the court must enjoin such individual or entity from continuing the activity found to be in violation of this amendment.

ON APRIL 1, 2024, THE HOUSE SUBSTITUTED SENATE BILL 2223 FOR HOUSE BILL 2762, ADOPTED AMENDMENT #1, AND PASSED SENATE BILL 2223, AS AMENDED.

AMENDMENT #1 revises the provision that authorizes a firearms retailer physically located in this state whose business was the subject of an alleged violation or a customer who transacted at a firearms retailer physically located in this state whose business was the subject of an alleged violation to petition the attorney general to investigate an alleged violation by, instead, authorizing a firearms retailer physically located in this state whose business was the subject of a violation or a customer who has transacted business at such a firearms retailer to petition the attorney general to investigate an alleged violation.