SB 134

NOTE: This bill has been prepared for the signatures of the appropriate legislative
officers and the Governor. To determine whether the Governor has signed the bill
or taken other action on it, please consult the legislative status sheet, the legislative
history, or the Session Laws.
     SENATE BILL 26-134
     BY SENATOR(S) Lindstedt and Jodeh, Amabile, Roberts, Weissman, Ball,
     Daugherty;
     also REPRESENTATIVE(S) Duran and McCluskie, Brooks, Brown,
     Froelich, Garcia, Nguyen, Smith, Story, Willford, Woodrow, McCormick,
     Rutinel, Sirota, Zokaie.
     CONCERNING THE IMPOSITION OF FEES BY PAYMENT CARD NETWORKS.
     Be it enacted by the General Assembly of the State of Colorado:
           SECTION 1.  In Colorado Revised Statutes, add 5-2-215 as
     follows:
            5-2-215. Payment card networks - interchange fees - prohibited
     conduct - exemption - compliance - penalties - use of savings -
     definitions.
          (1) Definitions. AS USED IN THIS SECTION, UNLESS THE CONTEXT
     OTHERWISE REQUIRES:
             (a) "AUTHORIZATION" MEANS THE PROCESS THROUGH WHICH A
     MERCHANT  REQUESTS       APPROVAL        FOR     AN    ELECTRONIC  PAYMENT
     ________
     Capital letters or bold & italic numbers indicate new material added to existing law; dashes
     through words or numbers indicate deletions from existing law and such material is not part of
     the act.
TRANSACTION FROM AN ISSUER.
      (b) "BAD FAITH CONDUCT" MEANS FRAUDULENT, WILLFUL, KNOWING,
OR INTENTIONAL CONDUCT THAT CAUSES INJURY.
      (c) "CARDHOLDER" MEANS A PERSON TO WHICH A DEBIT CARD OR
CREDIT CARD IS ISSUED BY AN ISSUER OR AN ISSUER'S AGENT.
      (d) "CLEARANCE" MEANS THE PROCESS OF:
      (I) TRANSMITTING FINAL TRANSACTION DATA FROM A MERCHANT TO
AN ISSUER FOR POSTING TO A CARDHOLDER'S ACCOUNT; AND
       (II) CALCULATING FEES AND CHARGES, INCLUDING INTERCHANGE
FEES, THAT APPLY TO AN ISSUER AND A MERCHANT.
      (e) "DEBIT CARD" HAS THE MEANING SET FORTH IN 15 U.S.C. SEC.
1693o-2 (c)(2).
      (f) "ELECTRONIC PAYMENT TRANSACTION" OR "TRANSACTION"
MEANS A TRANSACTION IN WHICH A PERSON USES A DEBIT CARD, A CREDIT
CARD, OR ANOTHER PAYMENT CODE OR DEVICE ISSUED OR APPROVED FOR
USE THROUGH A PAYMENT CARD NETWORK TO DEBIT A CARDHOLDER'S
ACCOUNT OR LINE OF CREDIT.
      (g) "EXEMPTED TRANSACTION" MEANS AN ELECTRONIC PAYMENT
TRANSACTION INVOLVING A DEBIT CARD OR CREDIT CARD ISSUED BY AN
ISSUER THAT:
      (I) DID NOT, DURING ANY POINT IN THE PREVIOUS CALENDAR YEAR,
HOLD CONSOLIDATED WORLDWIDE BANKING AND NONBANKING ASSETS,
INCLUDING ASSETS OF AFFILIATES, OTHER THAN TRUST ASSETS UNDER
MANAGEMENT, OF MORE THAN SIXTY BILLION DOLLARS; OR
      (II) AS OF FEBRUARY 1, 2026, HAD CONTRACTED TO BRAND THE
CARD WITH THE BRAND OF A FINANCIAL INSTITUTION CHARTERED OR
AUTHORIZED TO DO BUSINESS IN THIS STATE THAT DID NOT, DURING ANY
POINT IN THE PREVIOUS CALENDAR YEAR, HOLD CONSOLIDATED WORLDWIDE
BANKING AND NONBANKING ASSETS, INCLUDING ASSETS OF AFFILIATES,
OTHER THAN TRUST ASSETS UNDER MANAGEMENT, OF MORE THAN SIXTY
PAGE 2-SENATE BILL 26-134
BILLION DOLLARS.
     (h) "FEE SCHEDULE" MEANS A SCHEDULE, LIST, TABLE, CHART,
AGREEMENT, COMMUNICATION, OR OTHER DOCUMENT THAT:
     (I) SETS FORTH AN AMOUNT OR A FORMULA FOR DETERMINING ONE
OR MORE FEES; AND
      (II) MAY OR MAY NOT BE MADE PUBLICLY AVAILABLE.
      (i) "INTERCHANGE FEE" MEANS A FEE ESTABLISHED, CHARGED, OR
RECEIVED BY A PAYMENT CARD NETWORK FOR THE PURPOSE OF
COMPENSATING AN ISSUER FOR ITS INVOLVEMENT IN AN ELECTRONIC
PAYMENT TRANSACTION.
      (j) "ISSUER" MEANS:
     (I) A PERSON THAT ISSUES A DEBIT CARD OR CREDIT CARD TO A
CARDHOLDER; OR
      (II) THE AGENT OF A PERSON THAT ISSUES A DEBIT CARD OR CREDIT
CARD TO A CARDHOLDER.
     (k) "MERCHANT" MEANS A PERSON THAT ACCEPTS ELECTRONIC
PAYMENT TRANSACTIONS AND COLLECTS AND REMITS A TAX.
      (l) "PAYMENT CARD NETWORK" MEANS AN ENTITY THAT:
     (I) DIRECTLY OR THROUGH LICENSED MEMBERS, PROCESSORS, OR
AGENTS, PROVIDES THE PROPRIETARY SERVICES, INFRASTRUCTURE, AND
SOFTWARE TO ROUTE INFORMATION AND DATA FOR THE PURPOSE OF
CONDUCTING ELECTRONIC PAYMENT TRANSACTION AUTHORIZATION,
CLEARANCE, AND SETTLEMENT; AND
      (II) A MERCHANT USES IN ORDER TO ACCEPT A DEBIT CARD, A CREDIT
CARD, OR OTHER DEVICE AS PART OF AN ELECTRONIC PAYMENT
TRANSACTION.
     (m) "PROCESSOR" MEANS AN ENTITY THAT FACILITATES, SERVICES,
PROCESSES, OR MANAGES DEBIT CARD OR CREDIT CARD AUTHORIZATION,
PAGE 3-SENATE BILL 26-134
BILLING, TRANSFER, PAYMENT PROCEDURES, OR SETTLEMENT WITH RESPECT
TO AN ELECTRONIC PAYMENT TRANSACTION.
      (n) "SETTLEMENT" MEANS THE PROCESS OF:
      (I)  TRANSMITTING SALES INFORMATION TO AN ISSUER FOR
COLLECTION AND REIMBURSEMENT OF FUNDS TO A MERCHANT; AND
      (II) CALCULATING AND REPORTING A NET TRANSACTION AMOUNT TO
AN ISSUER AND A MERCHANT FOR AN ELECTRONIC PAYMENT TRANSACTION
THAT IS CLEARED.
      (o) "TAX" MEANS ANY SALES, USE, OCCUPATION, OR EXCISE TAX
IMPOSED BY THE STATE OR A UNIT OF LOCAL GOVERNMENT IN THE STATE.
       (2) Prohibition on certain payment card network practices.
EXCEPT AS DESCRIBED ELSEWHERE IN THIS SECTION, A PAYMENT CARD
NETWORK, WHETHER DIRECTLY OR INDIRECTLY THROUGH AN AGENT,
CONTRACT, REQUIREMENT, CONDITION, PENALTY, TECHNOLOGICAL
SPECIFICATION, OR INDUCEMENT OR OTHERWISE, SHALL NOT:
      (a) ESTABLISH, CHARGE, OR INCLUDE IN A FEE SCHEDULE AN
INTERCHANGE FEE IF:
      (I)   THE INTERCHANGE FEE IS OR INCLUDES A PERCENTAGE
MULTIPLIED BY THE GROSS DOLLAR AMOUNT OF A TRANSACTION CONDUCTED
WITH A DEBIT CARD OR CREDIT CARD; AND
      (II) THE FEE DOES NOT EXCLUDE FROM THE GROSS DOLLAR AMOUNT
OF THE TRANSACTION ANY AMOUNT ATTRIBUTABLE TO A TAX ON THE
TRANSACTION; OR
      (b) INCREASE THE RATE OR AMOUNT OF FEES THAT APPLY TO A
PORTION OF A TRANSACTION OTHER THAN THE PORTION DESCRIBED IN
SUBSECTION (2)(a)(II) OF THIS SECTION IN AN ATTEMPT TO, OR IN A MANNER
THAT WOULD, CIRCUMVENT THE PROHIBITION SET FORTH IN SUBSECTION
(2)(a) OF THIS SECTION.
      (3) Exemption.
PAGE 4-SENATE BILL 26-134
      (a) SUBSECTION (2)(a) OF THIS SECTION DOES NOT APPLY TO AN
INTERCHANGE FEE THAT A PAYMENT CARD NETWORK ESTABLISHES,
CHARGES, OR INCLUDES IN A FEE SCHEDULE SOLELY FOR USE IN EXEMPTED
TRANSACTIONS.
       (b) AN ISSUER THAT SATISFIES THE DESCRIPTION IN SUBSECTION
(1)(g)(I) OR (1)(g)(II) OF THIS SECTION SHALL IDENTIFY TO A PAYMENT CARD
NETWORK ALL OF THE ISSUER'S DEBIT CARDS AND CREDIT CARDS THAT ARE
USED FOR EXEMPTED TRANSACTIONS, AND THE PAYMENT CARD NETWORK
SHALL NOT, WHETHER DIRECTLY OR INDIRECTLY THROUGH AN AGENT,
CONTRACT, REQUIREMENT, CONDITION, PENALTY, TECHNOLOGICAL
SPECIFICATION, OR INDUCEMENT OR OTHERWISE:
     (I) DENY SUCH A CARD ACCESS TO TRANSACTION PROCESSING
SYSTEMS; OR
      (II) IMPOSE ANY FEE INCREASE OR PENALTY ON THE ISSUER OR ON A
FINANCIAL INSTITUTION BRANDED ON THE CARD FOR ANY COSTS OF
UPGRADES OR CONFIGURATIONS TO PAYMENT AND PROCESSING SYSTEMS
THAT MAY BE NECESSARY TO COMPLY WITH THIS SECTION WITH RESPECT TO
SUCH CARDS.
      (4) Compliance. A PAYMENT CARD NETWORK IS DEEMED TO BE IN
COMPLIANCE WITH SUBSECTION (2)(a) OF THIS SECTION IF THE PAYMENT
CARD NETWORK ENSURES ANY OF THE FOLLOWING:
     (a) AT THE TIME OF SETTLEMENT OF AN ELECTRONIC PAYMENT
TRANSACTION, THAT THE CALCULATION OF ANY INTERCHANGE FEE
EXCLUDES THE AMOUNT ATTRIBUTABLE TO ANY TAX IMPOSED ON THE
TRANSACTION;
      (b) WITHIN THIRTY DAYS AFTER THE DATE OF SETTLEMENT OF AN
ELECTRONIC PAYMENT TRANSACTION, THAT FOR ANY INTERCHANGE FEE
CHARGED ON THE TRANSACTION, A PORTION OF THE INTERCHANGE FEE IS
REBATED TO THE MERCHANT'S ACCOUNT IN AN AMOUNT EQUAL TO THE
REDUCTION IN THE INTERCHANGE FEE THAT WOULD HAVE OCCURRED HAD
THE CALCULATION OF THE INTERCHANGE FEE AT THE TIME OF SETTLEMENT
EXCLUDED THE AMOUNT ATTRIBUTABLE TO ANY TAX IMPOSED ON THE
TRANSACTION;
PAGE 5-SENATE BILL 26-134
      (c) IF A MERCHANT IS UNABLE TO CAPTURE AND TRANSMIT TAX
INFORMATION RELEVANT TO THE ELECTRONIC PAYMENT TRANSACTION AT
THE TIME OF SETTLEMENT, THAT THE MERCHANT MAY, WITHIN ONE
HUNDRED EIGHTY DAYS AFTER THE DATE OF THE TRANSACTION, SUBMIT
DOCUMENTATION IDENTIFYING ANY TAX IMPOSED ON THE TRANSACTION AND
THAT, WITHIN THIRTY DAYS AFTER THE SUBMISSION OF SUCH
DOCUMENTATION, THE MERCHANT'S ACCOUNT SHALL BE CREDITED AN
AMOUNT EQUAL TO THE REDUCTION IN THE INTERCHANGE FEE THAT WOULD
HAVE OCCURRED HAD THE CALCULATION OF THE INTERCHANGE FEE AT THE
TIME OF SETTLEMENT EXCLUDED THE AMOUNT ATTRIBUTABLE TO ANY TAX
IMPOSED ON THE TRANSACTION;
      (d) THAT NO INTERCHANGE FEE ESTABLISHED, CHARGED, OR
INCLUDED IN A FEE SCHEDULE BY THE PAYMENT CARD NETWORK IS OR
INCLUDES A PERCENTAGE MULTIPLIED BY THE GROSS DOLLAR AMOUNT OF A
TRANSACTION UNLESS THE AMOUNT OF ANY TAX IS EXCLUDED FROM SUCH
GROSS DOLLAR AMOUNT; OR
      (e)   THAT NO INTERCHANGE FEES ESTABLISHED, CHARGED, OR
INCLUDED IN A FEE SCHEDULE BY THE PAYMENT CARD NETWORK ARE
DEDUCTED BEFORE SETTLEMENT FROM THE TRANSACTION AMOUNT OF ANY
ELECTRONIC PAYMENT TRANSACTION AND THAT SUCH INTERCHANGE FEES
ARE INSTEAD CUMULATIVELY CHARGED ON A REGULAR BILLING CYCLE
AFTER TRANSACTIONS HAVE SETTLED AND AFTER ALL TAX AMOUNTS HAVE
BEEN IDENTIFIED AND EXCLUDED FROM TRANSACTION AMOUNTS IN THE
CALCULATION OF INTERCHANGE FEES.
      (5) Penalties.
      (a) IF A PAYMENT CARD NETWORK VIOLATES SUBSECTION (2) OR (3)
OF THIS SECTION, A MERCHANT, CONSUMER, OR OTHER PERSON THAT IS
INJURED AS A RESULT OF THE VIOLATION MAY BRING A CIVIL ACTION
AGAINST THE PAYMENT CARD NETWORK. EXCEPT IN A CERTIFIED CLASS
ACTION, AND NOTWITHSTANDING ANY OTHER LAW, A PAYMENT CARD
NETWORK THAT IS FOUND IN A CIVIL ACTION TO HAVE VIOLATED THIS
SECTION IS LIABLE IN AN AMOUNT EQUAL TO THE SUM OF:
      (I) THE GREATER OF:
      (A) THE AMOUNT OF ACTUAL DAMAGES SUSTAINED OR, IF IT IS
PAGE 6-SENATE BILL 26-134
ESTABLISHED BY CLEAR AND CONVINCING EVIDENCE THAT THE PAYMENT
CARD NETWORK ENGAGED IN BAD FAITH CONDUCT, THREE TIMES THE
AMOUNT OF ACTUAL DAMAGES. ACTUAL DAMAGES INCLUDES PREJUDGMENT
INTEREST OF EITHER EIGHT PERCENT PER YEAR OR AT THE RATE PROVIDED IN
SECTION 13-21-101, WHICHEVER IS GREATER, FROM THE DATE THE CLAIM
ACCRUED.
      (B) FIVE HUNDRED DOLLARS; AND
       (II) IN THE CASE OF ANY SUCCESSFUL ACTION TO ENFORCE A
LIABILITY ESTABLISHED IN SUBSECTION (5)(a)(I) OF THIS SECTION, THE
COSTS OF THE ACTION TOGETHER WITH REASONABLE ATTORNEY FEES AS
DETERMINED BY THE COURT.
      (b)    IN A CASE CERTIFIED AS A CLASS ACTION, A SUCCESSFUL
PLAINTIFF MAY RECOVER ACTUAL DAMAGES, AS DESCRIBED IN SUBSECTION
(5)(a)(I)(A) OF THIS SECTION; INJUNCTIVE RELIEF ALLOWED BY LAW; AND
REASONABLE ATTORNEY FEES AND COSTS.
     (c) A PERSON THAT BRINGS AN ACTION UNDER THIS SECTION THAT IS
FOUND BY THE COURT TO BE FRIVOLOUS, GROUNDLESS, AND BROUGHT IN
BAD FAITH OR FOR THE PURPOSE OF HARASSMENT IS LIABLE TO THE
DEFENDANT FOR THE COSTS OF THE ACTION TOGETHER WITH REASONABLE
ATTORNEY FEES AS DETERMINED BY THE COURT.
      (6) Antitrust authority. NOTHING IN THIS SECTION LIMITS OR
OTHERWISE AFFECTS THE ATTORNEY GENERAL'S AUTHORITY TO ENFORCE
THE "COLORADO STATE ANTITRUST ACT OF 2023", ARTICLE 4 OF TITLE 6.
      (7) Use of savings. FOR THE 2026-27 STATE FISCAL YEAR AND EACH
STATE FISCAL YEAR THEREAFTER, A RETAIL BUSINESS THAT HAS MORE THAN
FIVE HUNDRED EMPLOYEES STATEWIDE ON THE EFFECTIVE DATE OF THIS
SECTION SHALL APPLY ANY SAVINGS RESULTING FROM THIS SECTION TO
REDUCING PRICES FOR CONSUMERS OR INVESTING IN EMPLOYEE WAGES OR
BENEFITS.
       (8) FOR THE PURPOSES OF SUBSECTION (7) OF THIS SECTION, THE
FIVE-HUNDRED-EMPLOYEE THRESHOLD DESCRIBED IN SUBSECTION (7) OF
THIS SECTION IS BASED ON A RETAIL BUSINESS'S PARENT COMPANY AND NOT
ON A SINGLE LOCATION OF THE PARENT COMPANY.
PAGE 7-SENATE BILL 26-134
        SECTION 2. Act subject to petition - effective date -
applicability. (1) This act takes effect January 1, 2028; except that, if a
referendum petition is filed pursuant to section 1 (3) of article V of the state
constitution against this act or an item, section, or part of this act within the
ninety-day period after final adjournment of the general assembly, then the
act, item, section, or part will not take effect unless approved by the people
at the general election to be held in November 2026 and, in such case, will
PAGE 8-SENATE BILL 26-134
take effect January 1, 2028, or on the date of the official declaration of the
vote thereon by the governor, whichever is later.
       (2) This act applies to conduct occurring on or after the applicable
effective date of this act.
____________________________  ____________________________
James Rashad Coleman, Sr.  Julie McCluskie
PRESIDENT OF  SPEAKER OF THE HOUSE
THE SENATE  OF REPRESENTATIVES
____________________________  ____________________________
Esther van Mourik  Vanessa Reilly
SECRETARY OF  CHIEF CLERK OF THE HOUSE
THE SENATE  OF REPRESENTATIVES
       APPROVED________________________________________
                          (Date and Time)
                    _________________________________________
                   Jared S. Polis
                   GOVERNOR OF THE STATE OF COLORADO
PAGE 9-SENATE BILL 26-134