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HOUSE BILL 2039
By Hulsey
SENATE BILL 2071
By Watson
SB2071
009710
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AN ACT to amend Tennessee Code Annotated, Title 47,
relative to programmable money.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 47-1-201(b)(25)(C), is amended by
deleting the subdivision and substituting:
(C) Does not include:
(i) A central bank digital currency; or
(ii) Programmable money;
SECTION 2. Tennessee Code Annotated, Section 47-1-201(b), is amended by adding
the following as a new subdivision:
( ) "Programmable money" means money or currency that:
(A) Can be encoded with specific rules and conditions that allow it to be
automatically controlled and used according to predefined parameters;
(B) Has capabilities allowing for the denial or approval of specific
transactions;
(C) Allows for user-specific restrictions on usability, or on location,
nature, time, or identity of the transaction or parties to the transaction;
(D) Expires or diminishes, other than being subject to ordinary inflation;
or
(E) Can be used to implement a social credit score system;
SECTION 3. Tennessee Code Annotated, Section 47-9-102(a)(29), is amended by
deleting the subdivision and substituting:
(29) "Deposit account":
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(A) Means a demand, time, savings, passbook, or similar account
maintained with a bank; and
(B) Does not include:
(i) Investment property;
(ii) Accounts evidenced by an instrument;
(iii) A central bank digital currency; or
(iv) Programmable money;
SECTION 4. Tennessee Code Annotated, Title 47, Chapter 10, is amended by adding
the following language as a new part:
47-10-301.
(a) It is unlawful to require any person to use programmable money for any
transaction. For purposes of this subsection (a), requiring a person to use
programmable money includes offering or accepting payments only in programmable
money and not accepting or offering a nondigital alternative free of charge.
(b) It is unlawful for an issuer of programmable money to deny a transaction on
the basis of:
(1) A person's political opinions, speech, or affiliations;
(2) A person's religious beliefs, religious exercise, or religious affiliations;
(3) A person's gender, skin color, ethnicity, or sexual orientation;
(4) A person's medical history, including, but not limited to, vaccination
status or participation or non-participation in any treatment, procedure, or
diagnosis;
(5) A person's location, purchase, or browsing history;
(6) A person's place of residence or current location;
(7) Any factor related to a person's business sector; or
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(8) The use of a rating, scoring, analysis, tabulation, or action that
considers a social credit score based on factors that include:
(A) A person's political opinions, speech, or affiliations;
(B) A person's religious beliefs, religious exercise, or religious
affiliations;
(C) A person's gender, skin color, ethnicity, or sexual orientation;
(D) A person's medical history, including, but not limited to,
vaccination status or participation or non-participation in any treatment,
procedure, or diagnosis;
(E) A person's location history, purchase history, or browsing
history;
(F) A person's place of residence or current location;
(G) A person's lawful ownership of a firearm;
(H) A person's engagement in the lawful manufacture,
distribution, sale, purchase, or use of firearms, firearms accessories, or
ammunition;
(I) A person's engagement in the exploration, production,
utilization, transportation, sale, or manufacture of fossil fuel-based
energy, timber, mining, or agriculture;
(J) A person's support of the state or federal government in
combatting illegal immigration, drug trafficking, or human trafficking;
(K) A person's engagement with, facilitation of, employment by,
support of, business or other relationship with, representation of, or
advocacy for any person described in this subsection (b);
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(L) A person's failure to meet or commit to meet, or expected
failure to meet, any of the following, as long as such person is in
compliance with applicable state or federal law:
(i) Environmental standards, including emissions
standards, benchmarks, requirements, or disclosures;
(ii) Social governance standards, benchmarks, or
requirements, including environmental or social justice;
(iii) Corporate board or company employment composition
standards, benchmarks, requirements, or disclosures based on
characteristics protected under title 4, chapter 21; or
(iv) Policies or procedures requiring or encouraging
employee participation in social justice programming, including
diversity, equity, or inclusion training; or
(M) Any other lawful act or behavior.
(c) It is unlawful for an issuer of programmable money to cause or allow for the
denial or failure of transactions based on the criteria listed in subsection (b), whether
through direct action, automation, or programming. For purposes of this subsection (c),
to "allow for the denial or failure" includes any act or omission by the issuer relating to
the programmable money issued by the issuer, including automatic actions caused by
computer code, algorithms, or artificial intelligence used by, on behalf of, or in support of,
the issuer, the issuer's product, and affiliates.
(d) If an issuer of programmable money denies a transaction, then either party to
the denied transaction may request a statement of specific reasons for the denial within
ninety (90) days of the denial. The affected party may request the statement from a
customer service representative or designated account representative by phone, mail, or
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electronic mail. Unless otherwise prohibited by federal law, the issuer shall transmit the
statement of specific reasons by mail and electronic mail, if known to the issuer, within
thirty (30) days of receiving the affected party's request. The statement of specific
reasons must include:
(1) A detailed explanation of the basis for the denial, restriction, or
termination of service, including a description of any of the speech, religious
exercise, business activity with a particular industry, or other conduct that was, in
whole or in part, the basis of the programmable money issuer's denial, restriction,
or termination of service;
(2) A copy of the terms of service agreed to by the person and the issuer;
and
(3) A citation to the specific provisions of the terms of service upon which
the issuer relied to refuse to provide, restrict, or terminate service.
(e) This section does not prohibit an issuer of programmable money from
declining a transaction that constitutes a criminal offense or payment for a criminal act.
47-10-302.
(a) In addition to the remedies and penalties provided under this part, a violation
of this part constitutes a violation of the Tennessee Consumer Protection Act of 1977,
compiled in chapter 18, part 1, of this title. A violation of this part constitutes an unfair or
deceptive act or practice affecting trade or commerce and is subject to the penalties and
remedies of the Tennessee Consumer Protection Act of 1977.
(b) The commissioner of financial institutions, in the name of the state, is
authorized to institute proceedings pursuant to § 45-1-122 against a state-chartered
bank that is an issuer of programmable money that has violated this part.
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(c) The secretary of state may rescind the authority of an issuer of
programmable money to do business in this state if the issuer of programmable money
knowingly, intentionally, or repeatedly violates § 47-10-301.
47-10-303.
(a) A party aggrieved by a violation of § 47-10-301 may bring suit for statutory
and declaratory relief, as well as actual and punitive damages against the violating party.
(b) A prevailing plaintiff is entitled to reasonable attorney fees.
(c) A court shall award punitive damages of an amount equal to either three (3)
times the actual damages or three (3) times the amount of the awarded attorney fees,
whichever is greater.
(d) If a court finds that the conditions described in § 47-10-302(c) are met, then
the court may order the secretary of state to revoke the defendant's certificate of
authority.
(e) A suit to enforce or alleging a violation of this part may be brought in
chancery court in the plaintiff's county of residence, the county where the violation
occurred, the county where the defendant is domiciled, or in Davidson County.
47-10-304.
This part does not prohibit an investment in cryptocurrency by any private party.
SECTION 5. Tennessee Code Annotated, Section 47-18-104(b), is amended by adding
the following as a new subdivision:
( ) A violation of § 47-10-301;
SECTION 6. If any provision of this act or its application to any person or circumstance
is held invalid, then the invalidity does not affect other provisions or applications of the act that
can be given effect without the invalid provision or application, and to that end, the provisions of
this act are severable.
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SECTION 7. This act takes effect July 1, 2026, the public welfare requiring it.