Texas 2019 - 86th Regular

Texas House Bill HB4007 Compare Versions

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1	1	By: Hefner H.B. No. 4007
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to payment card skimmers and the creation of a payment card
7	7	fraud center; imposing a civil penalty; creating criminal offenses.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Title 12, Business & Commerce Code, is amended by
10	10	adding Chapter 607 to read as follows:
11	11	CHAPTER 607. PAYMENT CARD SKIMMERS
12	12	SUBCHAPTER A. GENERAL PROVISIONS
13	13	Sec. 607.001. DEFINITIONS. In this chapter:
14	14	(1) "Center" means the payment card fraud center
15	15	established under Chapter 424, Government Code.
16	16	(2) "Financial institution" has the meaning assigned
17	17	by Section 277.001, Finance Code.
18	18	(3) "Merchant" means a person whose business includes
19	19	the sale of motor fuel or other goods and services to retail
20	20	customers.
21	21	(4) "Motor fuel dispenser" means a machine that is
22	22	used to pump gasoline, diesel, biofuels, or other types of fuels
23	23	into motor vehicles.
24	24	(5) "Payment card" has the meaning assigned by Section
25	25	522.001.
26	26	(6) "Service Company" and "service technician" have
27	27	the meanings assigned by Section 13.451, Agriculture Code.
28	28	(7) "Skimmer" means a wire or electronic device that
29	29	is capable of unlawfully intercepting electronic communications
30	30	and used
31	31	to perpetuate fraud. The term includes a re-encoder and
32	32	scanning device, as those terms are defined by Section 522.001.
33	33	(8) "Unattended payment terminal" means a
34	34	point-of-sale terminal or kiosk that is operated by a customer to
35	35	activate a transaction through use of a payment card.
36	36	SUBCHAPTER B. DUTIES RELATED TO USE OF CERTAIN UNATTENDED PAYMENT
37	37	TERMINALS
38	38	Sec. 607.051. MERCHANT DUTIES REGARDING UNATTENDED PAYMENT
39	39	TERMINALS. A merchant that has an unattended payment terminal at
40	40	the merchant's place of business shall implement procedures in
41	41	accordance with the rules adopted by the attorney general under
42	42	Section 607.052 to:
43	43	(1) prevent the installation of a skimmer on the
44	44	payment terminal;
45	45	(2) find and remove a skimmer placed on the payment
46	46	terminal; and
47	47	(3) report the discovery of a skimmer to the Center.
48	48	Sec. 607.052. RULES. (a) The attorney general by rule
49	49	shall establish reasonable policies and procedures that identify
50	50	best practices for merchants to use to comply with Section 607.051.
51	51	(b) In adopting rules under Subsection (a), the attorney
52	52	general must consider:
53	53	(1) emerging technology;
54	54	(2) compliance costs to merchants; and
55	55	(3) any impact the policies and procedures may have on
56	56	consumers.
57	57	Sec. 607.053. DISCOVERY OF SKIMMERS. (a) If a service
58	58	technician discovers a skimmer on the unattended payment terminal,
59	59	the service technician or service company that employs the
60	60	technician shall immediately notify the merchant of the skimmer.
61	61	If a merchant discovers the skimmer or is notified of the skimmer by
62	62	a service technician or other person, the merchant shall:
63	63	(1) immediately disable, or cause to be disabled,
64	64	unattended payment terminal on which the skimmer was discovered and
65	65	notify a local law enforcement agency that a skimmer has been
66	66	detected;
67	67	(2) take appropriate measures to protect from
68	68	tampering with the unattended payment terminal until a local law
69	69	enforcement agency arrives; and
70	70	(3) not later than 24 hours after the discovery of the
71	71	skimmer, or after a report of the discovery of a skimmer is made to
72	72	the merchant, report the discovery to the Center.
73	73	(b) If a service technician discovers a skimmer on the
74	74	unattended payment terminal of a motor fuel dispenser, the service
75	75	technician or service company that employs the technician shall
76	76	immediately notify the merchant of the skimmer. If a merchant
77	77	discovers the skimmer or is notified of the skimmer by a service
78	78	technician or other person, the merchant shall:
79	79	(1) immediately disable, or cause to be disabled, the
80	80	motor fuel dispenser on which the skimmer was discovered and notify
81	81	a local law enforcement agency that a skimmer has been detected;
82	82	(2) take appropriate measures to protect from
83	83	tampering with the motor fuel dispenser until a local law
84	84	enforcement agency arrives; and
85	85	(3) not later than 24 hours after the discovery of the
86	86	skimmer, or after a report of the discovery of a skimmer is made to
87	87	the merchant, report the discovery to the Center.
88	88	Sec. 607.054. REPORT TO Center. (a) In this section,
89	89	"interested person" includes:
90	90	(1) a local law enforcement agency;
91	91	(2) a merchant;
92	92	(3) a financial institution;
93	93	(4) a credit card issuer as defined by Section
94	94	505.001;
95	95	(5) a service technician or service company;
96	96	(6) a member of the public; or
97	97	(7) any other interested person.
98	98	(b) An interested person may submit a report of the
99	99	discovery of a skimmer on an unattended payment terminal at a
100	100	merchant's place of business to the Center.
101	101	Sec. 607.055. INVESTIGATION OF SKIMMER REPORTS. (a) On
102	102	receipt of a report under Section 607.053 or 607.054, the Center
103	103	shall direct the merchant to conduct an investigation and share the
104	104	report with the center.
105	105	(b) The Center may:
106	106	(1) coordinate with local law enforcement agencies in
107	107	conducting an investigation under this section; and
108	108	(c) A merchant shall cooperate with the Center during an
109	109	investigation conducted under this.
110	110	Sec. 607.056. CONFIDENTIALITY. (a) Except as otherwise
111	111	provided by this section, information is confidential and not
112	112	subject to disclosure under Chapter 552, Government Code, if the
113	113	information is:
114	114	(1) received by the Center under Section 607.053 or
115	115	607.054; or
116	116	(2) prepared or compiled by the Center in connection
117	117	with a report to or investigation conducted by the Center under this
118	118	subchapter.
119	119	(b) Information described by Subsection (a) may be
120	120	disclosed to:
121	121	(1) the attorney general;
122	122	(2) a criminal justice agency, as defined by Section
123	123	411.082, Government Code;
124	124	(3) the center;
125	125	(4) a financial institution that may be impacted by
126	126	the installation of a skimmer on the unattended payment terminal;
127	127	or
128	128	(5) another person if the disclosure of the
129	129	information is permitted or required by other law or court order.
130	130	(c) The disclosure of information under Subsection (b) is
131	131	not a voluntary disclosure for purposes of Section 552.007,
132	132	Government Code.
133	133	(d) On the dismissal or final resolution of a report or
134	134	investigation by the Center, information described by Subsection
135	135	(a) is subject to disclosure under Chapter 552, Government Code.
136	136	(e) Notwithstanding Subsection (a), the attorney general
137	137	may disclose to the public information made confidential by that
138	138	subsection if the attorney general determines that the disclosure
139	139	of the information furthers a law enforcement purpose.
140	140	SUBCHAPTER C. ENFORCEMENT
141	141	Sec. 607.101. CORRECTIVE ACTION. If the attorney general
142	142	has reason to believe that a merchant who, after an investigation
143	143	conducted by a law enforcement agency, has at the merchant's place
144	144	of business an unattended payment terminal on which a skimmer was
145	145	installed and who is in violation of a rule adopted by the attorney
146	146	general under Section 607.052, the attorney general shall notify
147	147	the merchant of the violation. The attorney general may order the
148	148	merchant to take corrective action as necessary, including the
149	149	implementation of best practices and the training of employees to
150	150	detect skimmers.
151	151	Sec. 607.102. CIVIL PENALTIES. (a) A merchant who wilfully
152	152	violates a rule adopted by the attorney general under Section
153	153	607.052 is liable to this state for a civil penalty in an amount not
154	154	to exceed $2,500.
155	155	(b) A merchant who negligently fails to make a report within
156	156	the period prescribed by Section 607.053, or who has had at least
157	157	three reports made under that section within a 24-month period as a
158	158	result of the merchant failing to comply with Subchapter B, is
159	159	liable to this state for a civil penalty not to exceed $2,500 for
160	160	each violation.
161	161	Sec. 607.103. OFFENSES; PENALTIES. (a) A person commits an
162	162	offense if the person refuses to allow the Center to direct the
163	163	inspection of an unattended payment terminal at the merchant's
164	164	place of business in violation of Section 607.055. An offense under
165	165	this subsection is a Class C misdemeanor.
166	166	(b) A person commits an offense if, after making a report
167	167	under Section 607.053, the person negligently or recklessly
168	168	disposes of a skimmer that was installed on the unattended payment
169	169	terminal by another person. An offense under this subsection is a
170	170	state jail felony.
171	171	(c) A person commits an offense if, knowing that an
172	172	investigation is ongoing or that a criminal proceeding has been
173	173	commenced and is pending, the person disposes of a skimmer that was
174	174	installed on the unattended payment terminal by another person. An
175	175	offense under this subsection is a felony of the third degree.
176	176	SECTION 2. Subtitle B, Title 4, Government Code, is amended
177	177	by adding Chapter 424 to read as follows:
178	178	CHAPTER 424. PAYMENT CARD FRAUD CENTER
179	179	Sec. 424.001. DEFINITIONS. In this chapter:
180	180	(1) "Center" means the payment card fraud center
181	181	established under this chapter.
182	182	(2) "Payment card" has the meaning assigned by Section
183	183	522.001, Business & Commerce Code.
184	184	(3) "Skimmer" means a wire or electronic device that
185	185	is capable of unlawfully intercepting electronic communications
186	186	and used to perpetuate fraud. The term includes a re-encoder and
187	187	scanning device, as those terms are defined by Section 522.001,
188	188	Business & Commerce Code.
189	189	Sec. 424.002. PAYMENT CARD FRAUD CENTER. (a) The
190	190	Department of Public Safety and other state or local agencies, as
191	191	designated by the attorney general, may collaborate with the
192	192	attorney general to establish a payment card fraud center as
193	193	provided by this chapter. The attorney general shall establish the
194	194	center in the City of Tyler.
195	195	(b) The attorney general shall appoint a director to
196	196	supervise and manage the center. The director is under the
197	197	supervision and direction of the attorney general.
198	198	Sec. 424.003. PURPOSE OF CENTER. (a) The center serves as
199	199	the state's primary entity for the planning, coordination, and
200	200	integration of the capabilities of law enforcement agencies and
201	201	other agencies to respond to criminal activity that is related to
202	202	payment card fraud, including through the use of skimmers.
203	203	(b) The purpose of the center is to maximize the ability of
204	204	state agencies and local law enforcement agencies to detect,
205	205	prevent, and respond to criminal activities related to payment card
206	206	fraud.
207	207	(c) The center shall assist state agencies and local law
208	208	enforcement agencies and merchants in their efforts to develop and
209	209	implement strategies to:
210	210	(1) detect skimmers;
211	211	(2) ensure an effective response if a skimmer is
212	212	found; and
213	213	(3) prevent payment card fraud.
214	214	Sec. 424.004. RULES. The attorney general by rule shall
215	215	adopt reasonable policies and procedures necessary to implement
216	216	this chapter.
217	217	Sec. 424.005. FACILITIES AND ADMINISTRATIVE SUPPORT. A
218	218	municipality's police department may provide facilities and
219	219	administrative support if the payment card fraud center is
220	220	established in the municipality.
221	221	Sec. 424.006. GIFTS AND GRANTS. The payment card fraud
222	222	center may accept gifts, grants, and donations to carry out the
223	223	purpose of the center.
224	224	SECTION 3. This Act takes effect September 1, 2019.