Texas 2019 - 86th Regular

Texas Senate Bill SB1648 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	86R11687 TSR-F
2	2	By: Zaffirini S.B. No. 1648
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to payment card skimmers on motor fuel dispensers;
8	8	imposing a civil penalty; creating criminal offenses.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Title 12, Business & Commerce Code, is amended by
11	11	adding Chapter 607 to read as follows:
12	12	CHAPTER 607. PAYMENT CARD SKIMMERS ON MOTOR FUEL DISPENSERS
13	13	SUBCHAPTER A. GENERAL PROVISIONS
14	14	Sec. 607.001. DEFINITIONS. In this chapter:
15	15	(1) "Center" means the payment card fraud center
16	16	established under Chapter 424, Government Code.
17	17	(2) "Department" means the Texas Department of
18	18	Agriculture.
19	19	(3) "Financial institution" has the meaning assigned
20	20	by Section 277.001, Finance Code.
21	21	(4) "Merchant" means a person whose business includes
22	22	the sale of motor fuel through motor fuel dispensers to retail
23	23	customers.
24	24	(5) "Motor fuel dispenser" means a machine that is
25	25	used to pump gasoline, diesel, biofuels, or other types of fuels
26	26	into motor vehicles.
27	27	(6) "Payment card" has the meaning assigned by Section
28	28	522.001.
29	29	(7) "Service company" and "service technician" have
30	30	the meanings assigned by Section 13.451, Agriculture Code.
31	31	(8) "Skimmer" means a wire or electronic device that
32	32	is capable of unlawfully intercepting electronic communications
33	33	and used to perpetuate fraud. The term includes a re-encoder and
34	34	scanning device, as those terms are defined by Section 522.001.
35	35	(9) "Unattended payment terminal" means a
36	36	point-of-sale terminal or kiosk that is operated by a customer to
37	37	activate a transaction through use of a payment card.
38	38	SUBCHAPTER B. DUTIES RELATED TO USE OF CERTAIN UNATTENDED PAYMENT
39	39	TERMINALS
40	40	Sec. 607.051. MERCHANT DUTIES REGARDING UNATTENDED PAYMENT
41	41	TERMINALS ON MOTOR FUEL DISPENSERS. A merchant that has an
42	42	unattended payment terminal on a motor fuel dispenser at the
43	43	merchant's place of business shall implement procedures in
44	44	accordance with the rules adopted by the attorney general under
45	45	Section 607.052 to:
46	46	(1) prevent the installation of a skimmer on the
47	47	payment terminal;
48	48	(2) find and remove a skimmer placed on the payment
49	49	terminal; and
50	50	(3) report the discovery of a skimmer to the
51	51	department.
52	52	Sec. 607.052. RULES. (a) The attorney general by rule
53	53	shall establish reasonable policies and procedures that identify
54	54	best practices for merchants to use to comply with Section 607.051.
55	55	(b) In adopting rules under Subsection (a), the attorney
56	56	general must consider:
57	57	(1) emerging technology;
58	58	(2) compliance costs to merchants; and
59	59	(3) any impact the policies and procedures may have on
60	60	consumers.
61	61	Sec. 607.053. DISCOVERY OF SKIMMERS. If a service
62	62	technician discovers a skimmer on the unattended payment terminal
63	63	of a motor fuel dispenser, the service technician or service
64	64	company that employs the technician shall immediately notify the
65	65	merchant of the skimmer. If a merchant discovers the skimmer or is
66	66	notified of the skimmer by a service technician or other person, the
67	67	merchant shall:
68	68	(1) immediately disable, or cause to be disabled, the
69	69	motor fuel dispenser on which the skimmer was discovered and notify
70	70	a local law enforcement agency that a skimmer has been detected;
71	71	(2) take appropriate measures to protect from
72	72	tampering with the motor fuel dispenser until a local law
73	73	enforcement agency arrives; and
74	74	(3) not later than 24 hours after the discovery of the
75	75	skimmer, or after a report of the discovery of a skimmer is made to
76	76	the merchant, report the discovery to the department.
77	77	Sec. 607.054. REPORT TO DEPARTMENT. (a) In this section,
78	78	"interested person" includes:
79	79	(1) a local law enforcement agency;
80	80	(2) a merchant;
81	81	(3) a financial institution;
82	82	(4) a credit card issuer as defined by Section
83	83	505.001;
84	84	(5) a service technician or service company;
85	85	(6) a member of the public; or
86	86	(7) any other interested person.
87	87	(b) An interested person may submit a report of the
88	88	discovery of a skimmer on an unattended payment terminal of a motor
89	89	fuel dispenser at a merchant's place of business to the department.
90	90	Sec. 607.055. INVESTIGATION OF SKIMMER REPORTS. (a) On
91	91	receipt of a report under Section 607.053 or 607.054, the
92	92	department shall conduct an investigation and share the report with
93	93	the center.
94	94	(b) The department may:
95	95	(1) coordinate with local law enforcement agencies in
96	96	conducting an investigation under this section; and
97	97	(2) inspect the motor fuel dispenser that is the
98	98	subject of the report.
99	99	(c) A merchant shall cooperate with the department during an
100	100	investigation conducted under this section and permit the
101	101	department to inspect the motor fuel dispenser that is the subject
102	102	of the report or alter the motor fuel dispenser as necessary.
103	103	Sec. 607.056. CONFIDENTIALITY. (a) Except as otherwise
104	104	provided by this section, information is confidential and not
105	105	subject to disclosure under Chapter 552, Government Code, if the
106	106	information is:
107	107	(1) received by the department under Section 607.053
108	108	or 607.054; or
109	109	(2) prepared or compiled by the department in
110	110	connection with a report to or investigation conducted by the
111	111	department under this subchapter.
112	112	(b) Information described by Subsection (a) may be
113	113	disclosed to:
114	114	(1) the attorney general;
115	115	(2) a criminal justice agency, as defined by Section
116	116	411.082, Government Code;
117	117	(3) the center;
118	118	(4) a financial institution that may be impacted by
119	119	the installation of a skimmer on the unattended payment terminal of
120	120	a motor fuel dispenser; or
121	121	(5) another person if the disclosure of the
122	122	information is permitted or required by other law or court order.
123	123	(c) The disclosure of information under Subsection (b) is
124	124	not a voluntary disclosure for purposes of Section 552.007,
125	125	Government Code.
126	126	(d) On the dismissal or final resolution of a report or
127	127	investigation by the department, information described by
128	128	Subsection (a) is subject to disclosure under Chapter 552,
129	129	Government Code.
130	130	(e) Notwithstanding Subsection (a), the attorney general
131	131	may disclose to the public information made confidential by that
132	132	subsection if the attorney general determines that the disclosure
133	133	of the information furthers a law enforcement purpose.
134	134	SUBCHAPTER C. ENFORCEMENT
135	135	Sec. 607.101. CORRECTIVE ACTION. If the attorney general
136	136	has reason to believe that a merchant who, after an investigation
137	137	conducted by a law enforcement agency, has at the merchant's place
138	138	of business an unattended payment terminal of a motor fuel
139	139	dispenser on which a skimmer was installed and who is in violation
140	140	of a rule adopted by the attorney general under Section 607.052, the
141	141	attorney general shall notify the merchant of the violation. The
142	142	attorney general may order the merchant to take corrective action
143	143	as necessary, including the implementation of best practices and
144	144	the training of employees to detect skimmers.
145	145	Sec. 607.102. CIVIL PENALTIES. (a) A merchant who wilfully
146	146	violates a rule adopted by the attorney general under Section
147	147	607.052 is liable to this state for a civil penalty in an amount not
148	148	to exceed $5,000.
149	149	(b) A merchant who negligently fails to make a report within
150	150	the period prescribed by Section 607.053, or who has had at least
151	151	three reports made under that section within a 24-month period as a
152	152	result of the merchant failing to comply with Subchapter B, is
153	153	liable to this state for a civil penalty of at least $1,000 but not
154	154	more than $5,000 for each violation.
155	155	Sec. 607.103. OFFENSES; PENALTIES. (a) A person commits an
156	156	offense if the person refuses to allow the department to inspect a
157	157	motor fuel dispenser at the merchant's place of business in
158	158	violation of Section 607.055. An offense under this subsection is a
159	159	Class C misdemeanor.
160	160	(b) A person commits an offense if, after making a report
161	161	under Section 607.053, the person negligently or recklessly
162	162	disposes of a skimmer that was installed on the unattended payment
163	163	terminal of a motor fuel dispenser by another person. An offense
164	164	under this subsection is a state jail felony.
165	165	(c) A person commits an offense if, knowing that an
166	166	investigation is ongoing or that a criminal proceeding has been
167	167	commenced and is pending, the person disposes of a skimmer that was
168	168	installed on the unattended payment terminal of a motor fuel
169	169	dispenser by another person. An offense under this subsection is a
170	170	felony of the third degree.
171	171	SECTION 2. Subtitle B, Title 4, Government Code, is amended
172	172	by adding Chapter 424 to read as follows:
173	173	CHAPTER 424. PAYMENT CARD FRAUD CENTER
174	174	Sec. 424.001. DEFINITIONS. In this chapter:
175	175	(1) "Center" means the payment card fraud center
176	176	established under this chapter.
177	177	(2) "Payment card" has the meaning assigned by Section
178	178	522.001, Business & Commerce Code.
179	179	(3) "Skimmer" means a wire or electronic device that
180	180	is capable of unlawfully intercepting electronic communications
181	181	and used to perpetuate fraud. The term includes a re-encoder and
182	182	scanning device, as those terms are defined by Section 522.001,
183	183	Business & Commerce Code.
184	184	Sec. 424.002. PAYMENT CARD FRAUD CENTER. (a) The
185	185	Department of Public Safety, the Department of Agriculture, and
186	186	other state or local agencies, as designated by the attorney
187	187	general, may collaborate with the attorney general to establish a
188	188	payment card fraud center as provided by this chapter. The attorney
189	189	general shall establish the center in the City of Tyler.
190	190	(b) The attorney general shall appoint a director to
191	191	supervise and manage the center. The director is under the
192	192	supervision and direction of the attorney general.
193	193	Sec. 424.003. PURPOSE OF CENTER. (a) The center serves as
194	194	the state's primary entity for the planning, coordination, and
195	195	integration of the capabilities of law enforcement agencies and
196	196	other agencies to respond to criminal activity that is related to
197	197	payment card fraud, including through the use of skimmers.
198	198	(b) The purpose of the center is to maximize the ability of
199	199	state agencies and local law enforcement agencies to detect,
200	200	prevent, and respond to criminal activities related to payment card
201	201	fraud.
202	202	(c) The center shall assist state agencies and local law
203	203	enforcement agencies and merchants in their efforts to develop and
204	204	implement strategies to:
205	205	(1) detect skimmers;
206	206	(2) ensure an effective response if a skimmer is
207	207	found; and
208	208	(3) prevent payment card fraud.
209	209	Sec. 424.004. RULES. The attorney general by rule shall
210	210	adopt reasonable policies and procedures necessary to implement
211	211	this chapter.
212	212	Sec. 424.005. FACILITIES AND ADMINISTRATIVE SUPPORT. A
213	213	municipality's police department may provide facilities and
214	214	administrative support if the payment card fraud center is
215	215	established in the municipality.
216	216	Sec. 424.006. GIFTS AND GRANTS. The payment card fraud
217	217	center may accept gifts, grants, and donations to carry out the
218	218	purpose of the center.
219	219	SECTION 3. This Act takes effect September 1, 2019.