House Bill 789

AN ACT TO CREATE THE "PROHIBITING FINANCIAL SURVEILLANCE ACT"; TO PROHIBIT ALL FINANCIAL INSTITUTIONS IN THE STATE OF MISSISSIPPI FROM BEING REQUIRED TO REPORT ANY ACCOUNT BALANCES, TRANSACTIONS, TRANSFERS, OR SIMILAR INFORMATION WITH RESPECT TO ANY ACCOUNT MAINTAINED BY SUCH INSTITUTION, EXCEPT TO THE EXTENT THAT SUCH REPORTING IS REQUIRED UNDER ANY STATE OR FEDERAL LAW IN EFFECT ON THE DATE OF THE ENACTMENT OF THIS ACT; TO DEFINE THE TERM "FINANCIAL INSTITUTION" FOR PURPOSES OF THIS ACT; AND FOR RELATED PURPOSES.

WHEREAS, the Biden administration's tax increase proposal for fiscal year 2022 includes a number of provisions that would place undue burdens on banks, small businesses, and law-abiding American citizens; and

WHEREAS, this proposal seeks to increase tax enforcement measures by requiring banks and other financial institutions to annually report aggregated data on all account inflows and outflows of Six Hundred Dollars ($600.00) or more to the Internal Revenue Service (IRS); and

WHEREAS, these reports to the IRS would disclose whether transactions involved physical cash, foreign accounts, or transfers between accounts with the same owner; and

WHEREAS, the proposal's low threshold for reporting would include most active bank accounts, including those owned by individuals and small businesses, and as a result, the financial data of the majority of bank accounts would be sent to the IRS; and

WHEREAS, by holding financial institutions responsible for

data collection and reporting, the proposal would force banks to

increase spending on additional staffing, technology, and other

resources, and these costs could then be passed on to the depositors, thereby burdening tax-compliant citizens and businesses; and

WHEREAS, this proposal fails to consider cybersecurity risks, unjust burdens on lawful individuals, and the serious issues regarding privacy, compliance costs, and negative impacts on low-income communities, and because of these reasons, the Mississippi Legislature opposes this unprecedented intrusion into the privacy of Americans; NOW, THEREFORE,

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. This act shall be known and may be cited as the "Prohibiting Financial Surveillance Act."

SECTION 2. All financial institutions in the State of Mississippi shall not be required to report any account balances, transactions, transfers, or similar information with respect to

any account maintained by such institution, except to the extent that such reporting is required under any state or federal law in effect on the date of the enactment of this act.

SECTION 3. For purposes of this act, "financial institution" means a bank, trust company, mutual savings bank, savings and loan association or credit union authorized to do business and accept deposits in the State of Mississippi under state or federal law.

SECTION 4. This act shall take effect and be in force from and after its passage.