Texas 2019 - 86th Regular

Texas Senate Bill SB2032 Compare Versions

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1	1	2019S0381-1 03/07/19
2	2	By: Hall S.B. No. 2032
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to payment card skimmers and the creation of a payment card
8	8	fraud center; 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
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) "Financial institution" has the meaning assigned
18	18	by Section 277.001, Finance Code.
19	19	(3) "Merchant" means a person whose business includes
20	20	the sale of motor fuel or other goods and services to retail
21	21	customers.
22	22	(4) "Motor fuel dispenser" means a machine that is
23	23	used to pump gasoline, diesel, biofuels, or other types of fuels
24	24	into motor vehicles.
25	25	(5) "Payment card" has the meaning assigned by Section
26	26	522.001.
27	27	(6) "Service company" and "service technician" have
28	28	the meanings assigned by Section 13.451, Agriculture Code.
29	29	(7) "Skimmer" means a wire or electronic device that
30	30	is capable of unlawfully intercepting electronic communications
31	31	and used to perpetrate 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 the 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, the
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 the
68	68	unattended payment terminal from being tampered with until a local
69	69	law 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 the motor
83	83	fuel dispenser from being tampered with 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 coordinate with local law enforcement
106	106	agencies in conducting an investigation under this section.
107	107	(c) A merchant shall cooperate with the center during an
108	108	investigation conducted under this section.
109	109	Sec. 607.056. CONFIDENTIALITY. (a) Except as otherwise
110	110	provided by this section, information is confidential and not
111	111	subject to disclosure under Chapter 552, Government Code, if the
112	112	information is:
113	113	(1) received by the center under Section 607.053 or
114	114	607.054; or
115	115	(2) prepared or compiled by the center in connection
116	116	with a report to or investigation conducted by the center under this
117	117	subchapter.
118	118	(b) Information described by Subsection (a) may be
119	119	disclosed to:
120	120	(1) the attorney general;
121	121	(2) a criminal justice agency, as defined by Section
122	122	411.082, Government Code;
123	123	(3) the center;
124	124	(4) a financial institution that may be impacted by
125	125	the installation of a skimmer on the unattended payment terminal;
126	126	or
127	127	(5) another person if the disclosure of the
128	128	information is permitted or required by other law or court order.
129	129	(c) The disclosure of information under Subsection (b) is
130	130	not a voluntary disclosure for purposes of Section 552.007,
131	131	Government Code.
132	132	(d) On the dismissal or final resolution of a report or
133	133	investigation by the center, information described by Subsection
134	134	(a) is subject to disclosure under Chapter 552, Government Code.
135	135	(e) Notwithstanding Subsection (a), the attorney general
136	136	may disclose to the public information made confidential by that
137	137	subsection if the attorney general determines that the disclosure
138	138	of the information furthers a law enforcement purpose.
139	139	SUBCHAPTER C. ENFORCEMENT
140	140	Sec. 607.101. CORRECTIVE ACTION. If the attorney general
141	141	has reason to believe that a merchant, after an investigation
142	142	conducted by a law enforcement agency, has at the merchant's place
143	143	of business an unattended payment terminal on which a skimmer has
144	144	been installed and is in violation of a rule adopted by the attorney
145	145	general under Section 607.052, the attorney general shall notify
146	146	the merchant of the violation. The attorney general may order the
147	147	merchant to take corrective action as necessary, including the
148	148	implementation of best practices and the training of employees to
149	149	detect skimmers.
150	150	Sec. 607.102. CIVIL PENALTIES. (a) A merchant who
151	151	wilfully violates a rule adopted by the attorney general under
152	152	Section 607.052 is liable to this state for a civil penalty in an
153	153	amount not to exceed $2,500 for each violation.
154	154	(b) A merchant who negligently fails to make a report within
155	155	the period prescribed by Section 607.053, or who has had at least
156	156	three reports made under that section within a 24-month period as a
157	157	result of the merchant failing to comply with Subchapter B, is
158	158	liable to this state for a civil penalty not to exceed $2,500 for
159	159	each violation.
160	160	Sec. 607.103. OFFENSES; PENALTIES. (a) A person commits
161	161	an offense if the person refuses to allow the center to direct the
162	162	inspection of an unattended payment terminal at a merchant's place
163	163	of business in violation of Section 607.055. An offense under this
164	164	subsection is a Class C misdemeanor.
165	165	(b) A person commits an offense if, after making a report
166	166	under Section 607.053, the person negligently or recklessly
167	167	disposes of a skimmer that was installed on the unattended payment
168	168	terminal by another person. An offense under this subsection is a
169	169	state jail felony.
170	170	(c) A person commits an offense if, knowing that an
171	171	investigation is ongoing or that a criminal proceeding has been
172	172	commenced and is pending, the person disposes of a skimmer that was
173	173	installed on the unattended payment terminal by another person. An
174	174	offense under this subsection is a felony of the third degree.
175	175	SECTION 2. Subtitle B, Title 4, Government Code, is amended
176	176	by adding Chapter 424 to read as follows:
177	177	CHAPTER 424. PAYMENT CARD FRAUD CENTER
178	178	Sec. 424.001. DEFINITIONS. In this chapter:
179	179	(1) "Center" means the payment card fraud center
180	180	established under this chapter.
181	181	(2) "Payment card" has the meaning assigned by Section
182	182	522.001, Business & Commerce Code.
183	183	(3) "Skimmer" means a wire or electronic device that
184	184	is capable of unlawfully intercepting electronic communications
185	185	and used to perpetrate fraud. The term includes a re-encoder and
186	186	scanning device, as those terms are defined by Section 522.001,
187	187	Business & Commerce Code.
188	188	Sec. 424.002. PAYMENT CARD FRAUD CENTER. (a) The
189	189	Department of Public Safety and other state or local agencies, as
190	190	designated by the attorney general, shall collaborate with the
191	191	attorney general to establish a payment card fraud center as
192	192	provided by this chapter. The attorney general shall establish the
193	193	center in the city of Tyler.
194	194	(b) The attorney general shall appoint a director to
195	195	supervise and manage the center. The director is under the
196	196	supervision and direction of the attorney general.
197	197	Sec. 424.003. PURPOSE OF CENTER. (a) The center serves as
198	198	the state's primary entity for the planning, coordination, and
199	199	integration of the capabilities of law enforcement agencies and
200	200	other agencies to respond to criminal activity that is related to
201	201	payment card fraud, including through the use of skimmers.
202	202	(b) The purpose of the center is to maximize the ability of
203	203	state agencies and local law enforcement agencies to detect,
204	204	prevent, and respond to criminal activities related to payment card
205	205	fraud.
206	206	(c) The center shall assist state agencies and local law
207	207	enforcement agencies and merchants in their efforts to develop and
208	208	implement strategies to:
209	209	(1) detect skimmers;
210	210	(2) ensure an effective response if a skimmer is
211	211	found; and
212	212	(3) prevent payment card fraud.
213	213	Sec. 424.004. RULES. The attorney general by rule shall
214	214	adopt reasonable policies and procedures necessary to implement
215	215	this chapter.
216	216	Sec. 424.005. FACILITIES AND ADMINISTRATIVE SUPPORT. A
217	217	municipality's police department may provide facilities and
218	218	administrative support if the center is established in the
219	219	municipality.
220	220	Sec. 424.006. GIFTS AND GRANTS. The center may accept
221	221	gifts, grants, and donations to carry out the purpose of the center.
222	222	SECTION 3. This Act takes effect September 1, 2019.