86R11687 TSR-F
By: Zaffirini S.B. No. 1648
A BILL TO BE ENTITLED
AN ACT
relating to payment card skimmers on motor fuel dispensers;
imposing a civil penalty; creating criminal offenses.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 12, Business & Commerce Code, is amended by
adding Chapter 607 to read as follows:
CHAPTER 607. PAYMENT CARD SKIMMERS ON MOTOR FUEL DISPENSERS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 607.001. DEFINITIONS. In this chapter:
(1) "Center" means the payment card fraud center
established under Chapter 424, Government Code.
(2) "Department" means the Texas Department of
Agriculture.
(3) "Financial institution" has the meaning assigned
by Section 277.001, Finance Code.
(4) "Merchant" means a person whose business includes
the sale of motor fuel through motor fuel dispensers to retail
customers.
(5) "Motor fuel dispenser" means a machine that is
used to pump gasoline, diesel, biofuels, or other types of fuels
into motor vehicles.
(6) "Payment card" has the meaning assigned by Section
522.001.
(7) "Service company" and "service technician" have
the meanings assigned by Section 13.451, Agriculture Code.
(8) "Skimmer" means a wire or electronic device that
is capable of unlawfully intercepting electronic communications
and used to perpetuate fraud. The term includes a re-encoder and
scanning device, as those terms are defined by Section 522.001.
(9) "Unattended payment terminal" means a
point-of-sale terminal or kiosk that is operated by a customer to
activate a transaction through use of a payment card.
SUBCHAPTER B. DUTIES RELATED TO USE OF CERTAIN UNATTENDED PAYMENT
TERMINALS
Sec. 607.051. MERCHANT DUTIES REGARDING UNATTENDED PAYMENT
TERMINALS ON MOTOR FUEL DISPENSERS. A merchant that has an
unattended payment terminal on a motor fuel dispenser at the
merchant's place of business shall implement procedures in
accordance with the rules adopted by the attorney general under
Section 607.052 to:
(1) prevent the installation of a skimmer on the
payment terminal;
(2) find and remove a skimmer placed on the payment
terminal; and
(3) report the discovery of a skimmer to the
department.
Sec. 607.052. RULES. (a) The attorney general by rule
shall establish reasonable policies and procedures that identify
best practices for merchants to use to comply with Section 607.051.
(b) In adopting rules under Subsection (a), the attorney
general must consider:
(1) emerging technology;
(2) compliance costs to merchants; and
(3) any impact the policies and procedures may have on
consumers.
Sec. 607.053. DISCOVERY OF SKIMMERS. If a service
technician discovers a skimmer on the unattended payment terminal
of a motor fuel dispenser, the service technician or service
company that employs the technician shall immediately notify the
merchant of the skimmer. If a merchant discovers the skimmer or is
notified of the skimmer by a service technician or other person, the
merchant shall:
(1) immediately disable, or cause to be disabled, the
motor fuel dispenser on which the skimmer was discovered and notify
a local law enforcement agency that a skimmer has been detected;
(2) take appropriate measures to protect from
tampering with the motor fuel dispenser until a local law
enforcement agency arrives; and
(3) not later than 24 hours after the discovery of the
skimmer, or after a report of the discovery of a skimmer is made to
the merchant, report the discovery to the department.
Sec. 607.054. REPORT TO DEPARTMENT. (a) In this section,
"interested person" includes:
(1) a local law enforcement agency;
(2) a merchant;
(3) a financial institution;
(4) a credit card issuer as defined by Section
505.001;
(5) a service technician or service company;
(6) a member of the public; or
(7) any other interested person.
(b) An interested person may submit a report of the
discovery of a skimmer on an unattended payment terminal of a motor
fuel dispenser at a merchant's place of business to the department.
Sec. 607.055. INVESTIGATION OF SKIMMER REPORTS. (a) On
receipt of a report under Section 607.053 or 607.054, the
department shall conduct an investigation and share the report with
the center.
(b) The department may:
(1) coordinate with local law enforcement agencies in
conducting an investigation under this section; and
(2) inspect the motor fuel dispenser that is the
subject of the report.
(c) A merchant shall cooperate with the department during an
investigation conducted under this section and permit the
department to inspect the motor fuel dispenser that is the subject
of the report or alter the motor fuel dispenser as necessary.
Sec. 607.056. CONFIDENTIALITY. (a) Except as otherwise
provided by this section, information is confidential and not
subject to disclosure under Chapter 552, Government Code, if the
information is:
(1) received by the department under Section 607.053
or 607.054; or
(2) prepared or compiled by the department in
connection with a report to or investigation conducted by the
department under this subchapter.
(b) Information described by Subsection (a) may be
disclosed to:
(1) the attorney general;
(2) a criminal justice agency, as defined by Section
411.082, Government Code;
(3) the center;
(4) a financial institution that may be impacted by
the installation of a skimmer on the unattended payment terminal of
a motor fuel dispenser; or
(5) another person if the disclosure of the
information is permitted or required by other law or court order.
(c) The disclosure of information under Subsection (b) is
not a voluntary disclosure for purposes of Section 552.007,
Government Code.
(d) On the dismissal or final resolution of a report or
investigation by the department, information described by
Subsection (a) is subject to disclosure under Chapter 552,
Government Code.
(e) Notwithstanding Subsection (a), the attorney general
may disclose to the public information made confidential by that
subsection if the attorney general determines that the disclosure
of the information furthers a law enforcement purpose.
SUBCHAPTER C. ENFORCEMENT
Sec. 607.101. CORRECTIVE ACTION. If the attorney general
has reason to believe that a merchant who, after an investigation
conducted by a law enforcement agency, has at the merchant's place
of business an unattended payment terminal of a motor fuel
dispenser on which a skimmer was installed and who is in violation
of a rule adopted by the attorney general under Section 607.052, the
attorney general shall notify the merchant of the violation. The
attorney general may order the merchant to take corrective action
as necessary, including the implementation of best practices and
the training of employees to detect skimmers.
Sec. 607.102. CIVIL PENALTIES. (a) A merchant who wilfully
violates a rule adopted by the attorney general under Section
607.052 is liable to this state for a civil penalty in an amount not
to exceed $5,000.
(b) A merchant who negligently fails to make a report within
the period prescribed by Section 607.053, or who has had at least
three reports made under that section within a 24-month period as a
result of the merchant failing to comply with Subchapter B, is
liable to this state for a civil penalty of at least $1,000 but not
more than $5,000 for each violation.
Sec. 607.103. OFFENSES; PENALTIES. (a) A person commits an
offense if the person refuses to allow the department to inspect a
motor fuel dispenser at the merchant's place of business in
violation of Section 607.055. An offense under this subsection is a
Class C misdemeanor.
(b) A person commits an offense if, after making a report
under Section 607.053, the person negligently or recklessly
disposes of a skimmer that was installed on the unattended payment
terminal of a motor fuel dispenser by another person. An offense
under this subsection is a state jail felony.
(c) A person commits an offense if, knowing that an
investigation is ongoing or that a criminal proceeding has been
commenced and is pending, the person disposes of a skimmer that was
installed on the unattended payment terminal of a motor fuel
dispenser by another person. An offense under this subsection is a
felony of the third degree.
SECTION 2. Subtitle B, Title 4, Government Code, is amended
by adding Chapter 424 to read as follows:
CHAPTER 424. PAYMENT CARD FRAUD CENTER
Sec. 424.001. DEFINITIONS. In this chapter:
(1) "Center" means the payment card fraud center
established under this chapter.
(2) "Payment card" has the meaning assigned by Section
522.001, Business & Commerce Code.
(3) "Skimmer" means a wire or electronic device that
is capable of unlawfully intercepting electronic communications
and used to perpetuate fraud. The term includes a re-encoder and
scanning device, as those terms are defined by Section 522.001,
Business & Commerce Code.
Sec. 424.002. PAYMENT CARD FRAUD CENTER. (a) The
Department of Public Safety, the Department of Agriculture, and
other state or local agencies, as designated by the attorney
general, may collaborate with the attorney general to establish a
payment card fraud center as provided by this chapter. The attorney
general shall establish the center in the City of Tyler.
(b) The attorney general shall appoint a director to
supervise and manage the center. The director is under the
supervision and direction of the attorney general.
Sec. 424.003. PURPOSE OF CENTER. (a) The center serves as
the state's primary entity for the planning, coordination, and
integration of the capabilities of law enforcement agencies and
other agencies to respond to criminal activity that is related to
payment card fraud, including through the use of skimmers.
(b) The purpose of the center is to maximize the ability of
state agencies and local law enforcement agencies to detect,
prevent, and respond to criminal activities related to payment card
fraud.
(c) The center shall assist state agencies and local law
enforcement agencies and merchants in their efforts to develop and
implement strategies to:
(1) detect skimmers;
(2) ensure an effective response if a skimmer is
found; and
(3) prevent payment card fraud.
Sec. 424.004. RULES. The attorney general by rule shall
adopt reasonable policies and procedures necessary to implement
this chapter.
Sec. 424.005. FACILITIES AND ADMINISTRATIVE SUPPORT. A
municipality's police department may provide facilities and
administrative support if the payment card fraud center is
established in the municipality.
Sec. 424.006. GIFTS AND GRANTS. The payment card fraud
center may accept gifts, grants, and donations to carry out the
purpose of the center.
SECTION 3. This Act takes effect September 1, 2019.