An Act concerning credit card purchases of firearms and ammunitions and supplementing Title 2C of the New Jersey Statutes.

Whereas, The International Organization for Standardization, based in Switzerland, recently approved a new merchant category code for firearms and ammunition merchants; and

Whereas, Firearms and ammunition merchants historically have been classified as sporting goods retailers or general merchandise retailers, which has been sufficient for credit card companies' business needs; and

Whereas, According to advocates for the new merchant category code, the new code will allow credit card companies to flag "suspicious" transactions, ostensibly for the purpose of predicting and preventing future gun violence; and

Whereas, Proponents indicate that the new merchant category code is a "first step" but have given no guidance as to how to distinguish suspicious activity from lawful sales; and

Whereas, The use of the merchant category code cannot distinguish the sale of a firearm from the sale of a gun safe by a firearms and ammunition merchant; and

Whereas, The use of the new merchant category code to detect suspicious activities predicting future unlawful activity will likely discourage financial institutions from serving lawful retailers of firearms and ammunition and chill the lawful exercise of the Second Amendment rights; and

Whereas, Current State and federal laws require a potential firearms purchaser in New Jersey to undergo multiple criminal history and mental health records checks and a vast permitting system before a licensed retail dealer of firearms can deliver a firearm to the purchaser; and

Whereas, The new merchant category code may result in credit card companies reporting law-abiding citizens to a law enforcement agency based on overly broad definitions of suspicious activity and the creation of a de facto gun registry and of watchlists of law-abiding citizens; and

Whereas, The use of the new merchant category code could lead to banks and other financial institutions refusing to do business with law-abiding gun owners and licensed firearm retail dealers; and

Whereas, Developing regulation for the sale of firearms and ammunition is not the role of unelected bankers and foreign organizations and runs counter to the Second Amendment right to keep and bear arms and our nation's sovereignty; now, therefore,

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. The Legislature finds and declares that:

a. The right of individuals to keep and bear arms is guaranteed under the Second Amendment to the United States Constitution;

b. Information acquired from records showing the legal purchase of a firearm or of ammunition by a law-abiding citizen using a credit card is not a law enforcement tool and can become an instrument for profiling, harassing, or abusing law-abiding citizens based on the choice to own a firearm and exercise rights under the Second Amendment to keep and bear arms as guaranteed under the United States Constitution. Further, the information has the potential to fall into the wrong hands and become a shopping list for thieves.

c. Information acquired from records showing the legal purchase of a firearm or of ammunition by a law-abiding citizen using a credit card is not a tool for fighting terrorism, but rather is an instrument that can be used as a means to profile innocent citizens and to harass and abuse American citizens based solely on their choice to own firearms and exercise their Second Amendment right to keep and bear arms as guaranteed under the United States Constitution.

d. The creation or maintenance of records of purchases of firearms or ammunition or the tracking of sales made by a licensed retail dealer 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.

e. Law-abiding firearms owners whose names have been illegally recorded as a result of purchasing firearms or ammunition using a credit card are entitled to redress.

2. As used in this act:

"Merchant category code" means a specific identification number established by the International Organization for Standardization that is used to identify a specific good or service provided by a merchant.

3. A payment settlement entity, merchant acquiring entity, or third party settlement organization, as those terms are defined pursuant to section 6050W of the Internal Revenue Code, 26 U.S.C. 6050W, shall not assign a merchant category code to, or otherwise classify, a merchant that is a seller of firearms or ammunition separately from general merchandise retailers or sporting goods retailers.

4. a. An entity involved in facilitating or processing a payment card transaction, including, but not limited to, a financial institution, an acquirer, a payment card network, or a payment card issuer, shall not assign to or require a merchant to use a merchant category code that classifies the merchant as a firearms or ammunition retailer or places the merchant as a similar classification. A merchant of firearms or ammunition shall be assigned or shall use a merchant category code for general merchandise retailers or sporting goods retailers.

b. Any agreement or contractual provision between an entity required to comply with subsection a. of this section and a merchant that is contrary to the stipulations of the subsection shall be void.

5. The Department of Law and Public Safety shall investigate alleged violations of sections 3 and 4 of this act and, upon finding of a violation, bring an administrative action seeking to impose an administrative fine of not more than $10,000 for each violation of sections 3 or 4 of this act.

6. This act shall take effect on the first day of the fourth month next after enactment.

STATEMENT

This bill prohibits the use of a new merchant category code to designate when consumers purchase a firearm or ammunition. The bill defines "merchant category code" to mean a specific identification number established by the International Organization for Standardization that is used to identify a specific good or service provided by a merchant. Under the bill, a payment settlement entity, merchant acquiring entity, or third party settlement organization, as those terms are defined pursuant to the Internal Revenue Code, are prohibited from assigning a merchant category code to, or otherwise classifying, a merchant that is a seller of firearms or ammunition separately from general merchandise retailers or sporting goods retailers.

Additionally, an entity involved in facilitating or processing a payment card transaction, including, but not limited to, a financial institution, an acquirer, a payment card network, or a payment card issuer, is not to assign to or require a merchant to use a merchant category code that classifies the merchant as a firearms or ammunition retailer or places the merchant as a similar classification. A merchant of firearms or ammunition is to be assigned or is to use a merchant category code for general merchandise retailers or sporting goods retailers. Any agreement or contractual provision between an entity required to comply with the bill and a merchant that is contrary to the bill's provisions is to be considered void.

Lastly, the Department of Law and Public Safety is charged with investigating allegations of violations of the bill. The department is to bring, upon a finding of a violation, an administrative action to impose an administrative fine of not more than $10,000 for each violation of the bill.