S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5587
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                             February 25, 2025
                                ___________
 
 Introduced  by  Sen. SKOUFIS -- read twice and ordered printed, and when
   printed to be committed to the Committee on Consumer Protection
 
 AN ACT to amend  the general business law, in  relation  to  the  calcu-
   lation of interchange fees charged by credit card networks
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The general business law is amended by adding a new article
 42-A to read as follows:
                                ARTICLE 42-A
                             INTERCHANGE FEES
 SECTION 1120. DEFINITIONS.
         1121. CALCULATION OF INTERCHANGE FEES.
         1122. REBATE OF FEES ON TAX AMOUNT.
         1123. PENALTIES.
   § 1120. DEFINITIONS. FOR PURPOSES OF THIS ARTICLE:
   1. "CREDIT CARD" MEANS A CARD, PLATE, COUPON  BOOK,  OR  OTHER  CREDIT
 DEVICE  EXISTING FOR THE PURPOSE OF OBTAINING MONEY, PROPERTY, LABOR, OR
 SERVICES ON CREDIT.
   2. "DEBIT CARD":
   (A) MEANS A CARD, OR OTHER PAYMENT CODE OR DEVICE, ISSUED OR  APPROVED
 FOR  USE  THROUGH  A  PAYMENT  CARD  NETWORK  TO DEBIT AN ASSET ACCOUNT,
 REGARDLESS OF THE PURPOSE FOR WHICH THE ACCOUNT IS ESTABLISHED,  WHETHER
 AUTHORIZATION  IS BASED ON SIGNATURE, PERSONAL IDENTIFICATION NUMBER, OR
 OTHER MEANS; AND
   (B) INCLUDES A GENERAL-USE PREPAID CARD, AS DEFINED  IN  15  U.S.C.  §
 1693L-1; AND
   (C) DOES NOT INCLUDE PAPER CHECKS.
   3.  "ELECTRONIC  PAYMENT  TRANSACTION"  MEANS A TRANSACTION IN WHICH A
 CONSUMER USES A DEBIT CARD,  CREDIT  CARD,  OR  OTHER  PAYMENT  CODE  OR
 DEVICE,  ISSUED  OR  APPROVED  THROUGH A PAYMENT CARD NETWORK TO DEBIT A
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD04674-02-5
 S. 5587                             2
              

 
 DEPOSIT ACCOUNT OR USE A LINE OF CREDIT, WHETHER AUTHORIZATION IS  BASED
 ON A SIGNATURE, PERSONAL IDENTIFICATION NUMBER, OR OTHER MEANS.
   4.  "INTERCHANGE FEE" MEANS A FEE ESTABLISHED, CHARGED, OR RECEIVED BY
 A PAYMENT CARD NETWORK FOR THE PURPOSE OF COMPENSATING  THE  ISSUER  FOR
 ITS INVOLVEMENT IN AN ELECTRONIC PAYMENT TRANSACTION.
   5. "ISSUER" MEANS A PERSON ISSUING A DEBIT CARD OR CREDIT CARD, OR THE
 ISSUER'S AGENT.
   6. "PAYMENT CARD NETWORK" MEANS AN ENTITY THAT:
   (A)  DIRECTLY,  OR  THROUGH  LICENSED  MEMBERS,  PROCESSORS, OR AGENTS
 PROVIDES THE PROPRIETARY SERVICES,  INFRASTRUCTURE,  AND  SOFTWARE  THAT
 ROUTES  INFORMATION AND DATA TO CONDUCT DEBIT CARD OR CREDIT CARD TRANS-
 ACTION AUTHORIZATION, CLEARANCE, AND SETTLEMENT; AND
   (B) A MERCHANT OR SELLER USES IN ORDER TO ACCEPT AS A FORM OF  PAYMENT
 A  BRAND OF DEBIT CARD, CREDIT CARD, OR OTHER DEVICE THAT MAY BE USED TO
 CARRY OUT DEBIT OR CREDIT TRANSACTIONS.
   7. "SETTLEMENT" MEANS THE TRANSFER OF FUNDS FROM A CUSTOMER'S  ACCOUNT
 TO  A  SELLER  OR MERCHANT UPON ELECTRONIC SUBMISSION OF FINALIZED SALES
 TRANSACTIONS TO THE PAYMENT CARD NETWORK.
   § 1121. CALCULATION OF INTERCHANGE FEES. THE  AMOUNT  OF  A  STATE  OR
 LOCAL  TAX  OR  FEE  THAT IS CALCULATED AS A PERCENTAGE OF AN ELECTRONIC
 PAYMENT TRANSACTION AMOUNT AND LISTED SEPARATELY ON THE PAYMENT  INVOICE
 OR OTHER DEMAND FOR PAYMENT MUST BE EXCLUDED FROM THE AMOUNT ON WHICH AN
 INTERCHANGE FEE IS CHARGED FOR THAT ELECTRONIC PAYMENT TRANSACTION. SUCH
 TAXES AND FEES INCLUDE, BUT ARE NOT LIMITED TO:
   1.  SALES AND COMPENSATING USE TAXES UNDER ARTICLE TWENTY-EIGHT OF THE
 TAX LAW;
   2. HOTEL AND MOTEL AND OCCUPANCY TAXES UNDER  ARTICLE  TWENTY-NINE  OF
 THE TAX LAW;
   3. TAXES ON ALCOHOLIC BEVERAGES UNDER ARTICLE EIGHTEEN OF THE TAX LAW;
   4.  TAX  ON  GASOLINE AND MOTOR FUEL UNDER ARTICLE TWELVE-A OF THE TAX
 LAW;
   5. TAX ON PETROLEUM BUSINESSES UNDER ARTICLE  THIRTEEN-A  OF  THE  TAX
 LAW;
   6. TAX ON FUEL USE UNDER ARTICLE TWENTY-ONE-A OF THE TAX LAW;
   7.  RENTAL  VEHICLE TAXES UNDER ARTICLE TWENTY-EIGHT-A OF THE TAX LAW;
 AND
   8. GRATUITIES.
   § 1122. REBATE OF FEES ON TAX AMOUNT. 1. A PAYMENT CARD NETWORK  SHALL
 EITHER:
   (A) DEDUCT THE AMOUNT OF ANY TAX OR GRATUITIES IMPOSED FROM THE CALCU-
 LATION  OF  INTERCHANGE FEES SPECIFIC TO EACH FORM OR TYPE OF ELECTRONIC
 PAYMENT TRANSACTION AT THE TIME OF SETTLEMENT; OR
   (B) REBATE AN AMOUNT OF INTERCHANGE FEE PROPORTIONATE  TO  THE  AMOUNT
 ATTRIBUTABLE TO THE TAX OR FEE AND/OR GRATUITIES.
   2. A DEDUCTION OR REBATE MUST OCCUR AT THE TIME OF SETTLEMENT WHEN THE
 MERCHANT  OR  SELLER  IS  ABLE TO CAPTURE AND TRANSMIT TAX OR FEE AND/OR
 GRATUITY AMOUNTS RELEVANT TO THE SALE AT THE TIME OF SALE AS PART OF THE
 TRANSACTION FINALIZATION.
   3. IF A MERCHANT OR SELLER IS UNABLE TO CAPTURE AND  TRANSMIT  TAX  OR
 FEE  AND/OR  GRATUITY  AMOUNTS RELEVANT TO THE SALE AT THE TIME OF SALE,
 THEN THE PAYMENT CARD NETWORK SHALL ACCEPT PROOF OF TAX OR  FEE  AMOUNTS
 COLLECTED  ON SALES SUBJECT TO AN INTERCHANGE FEE UPON THE SUBMISSION OF
 SALES DATA BY THE MERCHANT OR SELLER AND PROMPTLY CREDIT THE MERCHANT OR
 SELLER'S SETTLEMENT ACCOUNT.
   § 1123. PENALTIES. A PAYMENT CARD NETWORK THAT VIOLATES  THIS  ARTICLE
 IS  SUBJECT TO A CIVIL PENALTY OF NOT MORE THAN ONE THOUSAND DOLLARS PER
 S. 5587                             3

 VIOLATION AND SHALL ALSO REFUND THE SURCHARGE TO EACH MERCHANT OR SELLER
 FROM WHOM SUCH FEES WERE COLLECTED.
   §  2.  This act shall take effect on the first of July next succeeding
 the date on which it shall have become a law.