Florida Senate - 2023 CS for CS for CS for SB 564 By the Committees on Rules; Commerce and Tourism; and Banking and Insurance; and Senator Hutson 595-04221-23 2023564c3 1 A bill to be entitled 2 An act relating to interchange fees on taxes; creating 3 s. 501.0119, F.S.; defining terms; providing 4 applicability and construction; prohibiting issuers, 5 payment card networks, acquirer banks, and processors 6 from receiving or charging merchants interchange fees 7 on the tax amounts of electronic payment transactions 8 if the merchant provides certain information in a 9 specified manner; requiring an issuer to credit a 10 merchant the amount of interchange fees on taxes 11 within a certain timeframe if the merchant meets 12 certain conditions; providing a civil penalty; 13 prohibiting specified actions relating to electronic 14 payment transaction data by certain entities; 15 specifying penalties and the enforcing authority for 16 such violations; authorizing the enforcing authority 17 to recover reasonable attorney fees and costs; 18 requiring the Office of Economic and Demographic 19 Research to submit a certain report to the Legislature 20 by a specified date; authorizing the office to 21 contract with certain entities for a specified 22 purpose; providing effective dates. 23 24 Be It Enacted by the Legislature of the State of Florida: 25 26 Section 1. Effective October 1, 2024, section 501.0119, 27 Florida Statutes, is created to read: 28 501.0119 Interchange fees on taxes prohibited.— 29 (1) As used in this section, the term: 30 (a) “Acquirer bank” means a member of a payment card 31 network which contracts with a merchant for the settlement of 32 electronic payment transactions. An acquirer bank may contract 33 directly with merchants or indirectly through a processor to 34 process electronic payment transactions. 35 (b) “Authorization” means the process through which a 36 merchant requests approval for an electronic payment transaction 37 from the issuer. 38 (c) “Clearance” means the process of transmitting final 39 transaction data from a merchant to an issuer for posting to the 40 cardholder’s account and the calculation of fees and charges, 41 including interchange fees, which apply to the issuer and 42 merchant. 43 (d) “Credit card” means a card, plate, coupon book, or 44 other credit device existing for the purpose of obtaining money, 45 property, labor, or services on credit. 46 (e) “Debit card”: 47 1. Means a card, or other payment code or device, issued or 48 approved for use through a payment card network to debit an 49 asset account, regardless of the purpose for which the account 50 is established, whether authorization is based on a signature, a 51 personal identification number, or other means; 52 2. Includes a general-use prepaid card, as defined in 15 53 U.S.C. s. 1693l-1; and 54 3. Excludes paper checks. 55 (f) “Electronic payment transaction” means a transaction in 56 which a person uses a debit card, credit card, or other payment 57 code or device issued or approved through a payment card network 58 to debit a deposit account or use a line of credit, whether 59 authorization is based on a signature, a personal identification 60 number, or other means. 61 (g) “Interchange fee” means a fee established, charged, or 62 received by a payment card network for the purpose of 63 compensating the issuer for its involvement in an electronic 64 payment transaction. 65 (h) “Issuer” means a person issuing a debit card or credit 66 card or the issuer’s agent. 67 (i) “Merchant” has the same meaning as the term “dealer” in 68 s. 212.06(2). 69 (j) “Payment card network” means an entity: 70 1. That directly or through licensed members, processors, 71 or agents provides the proprietary services, infrastructure, and 72 software that route information and data to conduct electronic 73 payment transaction authorization, clearance, and settlement; 74 and 75 2. That a merchant uses to accept as a form of payment a 76 brand of debit card, credit card, or other device that may be 77 used to carry out electronic payment transactions. 78 (k) “Processor” means an entity that facilitates, services, 79 processes, or manages the debit or credit authorization, 80 billing, transfer, payment procedures, or settlement with 81 respect to any electronic payment transaction. 82 (l) “Settlement” means the process of transmitting sales 83 information to the issuing bank for collection and reimbursement 84 of funds to the merchant and calculating and reporting the net 85 transaction amount to the issuer and merchant for an electronic 86 payment transaction that is cleared. 87 (m) “Tax” means all taxes and fees levied under chapter 212 88 and s. 125.0104. 89 (n) “Tax documentation” means documentation sufficient for 90 the payment card network to determine the total amount of the 91 electronic payment transaction and the tax amount of such 92 transaction. Tax documentation may be related to a single 93 electronic payment transaction or multiple electronic payment 94 transactions aggregated over a period of time. Examples of tax 95 documentation include, but are not limited to, invoices, 96 receipts, journals, ledgers, and tax returns filed with the 97 Department of Revenue or local taxing authorities. 98 (2) This section does not apply to an electronic payment 99 transaction in which the tax amount is not separately stated on 100 the consumer’s payment invoice, sales slip, or other evidence of 101 sale as required under s. 212.07(2). 102 (3) This section does not create liability for a payment 103 card network regarding the accuracy of the tax data reported by 104 the merchant. 105 (4) Except as provided in subsection (2), an issuer, a 106 payment card network, an acquirer bank, or a processor may not 107 receive or charge the merchant any interchange fees on the tax 108 amount of an electronic payment transaction if the merchant 109 informs the acquirer bank or its designee of such tax amount as 110 part of the authorization or settlement process for the 111 electronic payment transaction. A merchant must transmit the tax 112 amount data as part of the authorization or settlement process 113 to avoid being charged interchange fees on the tax amount of an 114 electronic payment transaction. 115 (5) A merchant that does not transmit the tax amount data 116 in accordance with subsection (4) may submit tax documentation 117 for the electronic payment transaction to the acquirer bank or 118 its designee no later than 180 days after the date of the 119 electronic payment transaction, and within 30 days, the issuer 120 must credit to the merchant the amount of interchange fees 121 charged on the tax amount of the electronic payment transaction. 122 (6) An issuer, a payment card network, an acquirer bank, a 123 processor, or other designated entity that has received the tax 124 amount data and violates this section is subject to a civil 125 penalty of $1,000 per electronic payment transaction, and the 126 issuer must refund the merchant the interchange fee calculated 127 on the tax amount relative to the electronic payment 128 transaction. 129 (7) An entity, other than the merchant, involved in 130 facilitating or processing an electronic payment transaction, 131 including, but not limited to, an issuer, a payment card 132 network, an acquirer bank, a processor, or other designated 133 entity, may not distribute, exchange, transfer, disseminate, or 134 use the electronic payment transaction data except to facilitate 135 or process the electronic payment transaction or as required by 136 law. A violation of this subsection constitutes a violation of 137 the Florida Deceptive and Unfair Trade Practices Act under part 138 II of this chapter. Notwithstanding s. 501.211, a violation of 139 this subsection must be enforced only by the enforcing authority 140 as defined in s. 501.203(2) and subjects the violator to the 141 sanctions and penalties provided for in part II of this chapter. 142 If such action is successful, the enforcing authority is 143 entitled to reasonable attorney fees and costs. 144 Section 2. The Office of Economic and Demographic Research 145 (EDR) shall submit a report to the President of the Senate and 146 the Speaker of the House of Representatives by January 9, 2024, 147 containing findings of any policy options related to the 148 implementation of prohibiting interchange fees on taxes. The 149 report must address the impacts of the legislation, including, 150 but not limited to, technological, financial, and economic 151 impacts on merchants, processors, payment card networks, 152 acquiring banks, and issuers. EDR may contract with a public or 153 private institution of higher learning or a nationally 154 recognized organization or entity with experience in performing 155 this type of evaluation for the sole purpose of developing some 156 or all of the underlying analysis and findings to be included in 157 the report. 158 Section 3. Except as otherwise expressly provided in this 159 act, this act shall take effect upon becoming a law.