Texas 2021 - 87th Regular

Texas House Bill HB2106 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	H.B. No. 2106
	1	+	By: Perez, et al. (Senate Sponsor - Zaffirini) H.B. No. 2106
	2	+	(In the Senate - Received from the House April 28, 2021;
	3	+	May 3, 2021, read first time and referred to Committee on Business &
	4	+	Commerce; May 13, 2021, reported favorably by the following vote:
	5	+	Yeas 8, Nays 0; May 13, 2021, sent to printer.)
	6	+	Click here to see the committee vote
2	7
3	8
	9	+	A BILL TO BE ENTITLED
4	10		AN ACT
5	11		relating to the prevention, identification, investigation, and
6	12		enforcement of payment card fraud; providing a civil penalty.
7	13		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
8	14		SECTION 1. The heading to Chapter 607, Business & Commerce
9	15		Code, is amended to read as follows:
10	16		CHAPTER 607. PAYMENT CARD SKIMMERS ON MOTOR FUEL METERING DEVICES
11	17		[DISPENSERS]
12	18		SECTION 2. Section 607.001, Business & Commerce Code, is
13	19		amended by amending Subdivisions (1), (2), (4), (5), (7), and (8)
14	20		and adding Subdivisions (1-a), (1-b), (2-a), (3-a), (5-a), and
15	21		(6-a) to read as follows:
16	22		(1) "Center" means the financial crimes intelligence
17	23		[payment fraud fusion] center established under Chapter 2312 [424],
18	24		Occupations [Government] Code.
19	25		(1-a) "Commission" means the Texas Commission of
20	26		Licensing and Regulation.
21	27		(1-b) "Credit card issuer" has the meaning assigned by
22	28		Section 505.001.
23	29		(2) "Department" means the Texas Department of
24	30		Licensing and Regulation [state agency that is the licensing
25	31		authority for service companies and service technicians].
26	32		(2-a) "Executive director" means the executive
27	33		director of the department.
28	34		(3-a) "Institution of higher education" has the
29	35		meaning assigned by Section 61.003, Education Code.
30	36		(4) "Merchant" means a person whose business includes
31	37		the sale of motor fuel through motor fuel metering devices
32	38		[dispensers] to retail customers.
33	39		(5) "Motor fuel" and "motor fuel metering device" have
34	40		the meanings assigned by Section 2310.001, Occupations Code ["Motor
35	41		fuel dispenser" means a machine that is used to pump gasoline,
36	42		diesel, biofuels, or other types of fuels into motor vehicles].
37	43		(5-a) "Motor fuel unattended payment terminal" means a
38	44		point-of-sale terminal or kiosk that is operated by a customer to
39	45		activate or complete a transaction at a motor fuel metering device
40	46		through the use of a payment card or a payment by other electronic
41	47		means.
42	48		(6-a) "Payment card network" means an entity that
43	49		directly, or through a licensed member, processor, or agent,
44	50		provides the proprietary services, infrastructure, and software
45	51		that route information and data to conduct debit card or credit card
46	52		transaction authorization, clearance, and settlement, and that an
47	53		entity uses in order to accept as a form of payment a brand of debit
48	54		card, credit card, or other device that may be used to carry out
49	55		debit or credit transactions.
50	56		(7) "Service company" and "service technician" have
51	57		the meanings assigned by Section 2310.151 [13.451], Occupations
52	58		[Agriculture] Code.
53	59		(8) "Skimmer" means a wire or electronic device that
54	60		is capable of unlawfully intercepting electronic communications or
55	61		data to perpetrate fraud. [The term includes a re-encoder and
56	62		scanning device, as those terms are defined by Section 522.001.]
57	63		SECTION 3. Subchapter A, Chapter 607, Business & Commerce
58	64		Code, is amended by adding Sections 607.002, 607.003, and 607.004
59	65		to read as follows:
60	66		Sec. 607.002. ADMINISTRATION AND ENFORCEMENT OF CHAPTER.
61	67		(a) The department shall administer and enforce this chapter.
62	68		(b) The commission or the executive director may enforce
63	69		this chapter, a rule adopted under this chapter, or an order of the
64	70		commission or executive director as provided by Subchapters F and
65	71		G, Chapter 51, Occupations Code.
66	72		Sec. 607.003. FUNDING. The department may solicit and
67	73		accept gifts, grants, and other donations for purposes of
68	74		administering this chapter, except that the department may not
69	75		solicit or accept a gift, grant, or other donation from a license
70	76		holder as defined by Section 2310.151, Occupations Code.
71	77		Sec. 607.004. RULES. The commission shall adopt rules for
72	78		administering this chapter.
73	79		SECTION 4. Section 607.053, Business & Commerce Code, is
74	80		amended to read as follows:
75	81		Sec. 607.053. NOTICE OF DISCOVERY OF SKIMMER REQUIRED. (a)
76	82		If a service technician discovers a skimmer in or on a motor fuel
77	83		[the] unattended payment terminal or [of a] motor fuel metering
78	84		device [dispenser], the service technician or service company that
79	85		employs the technician shall [immediately] notify the department
80	86		and the merchant of the skimmer in the manner prescribed by
81	87		commission rule.
82	88		(b) If a merchant discovers a [the] skimmer in or on a motor
83	89		fuel unattended payment terminal or motor fuel metering device or
84	90		is notified of the presence of a skimmer [by a service technician or
85	91		other person], the merchant shall, in the manner prescribed by
86	92		commission rule:
87	93		(1) [immediately] disable, or cause to be disabled,
88	94		the motor fuel metering device [dispenser] on which the skimmer was
89	95		discovered;
90	96		(1-a) [and] notify a law enforcement agency and the
91	97		department that a skimmer has been detected; and
92	98		(2) take appropriate measures to protect [from
93	99		tampering with] the motor fuel metering device from being tampered
94	100		with [dispenser] until the department or law enforcement agency
95	101		arrives and the skimmer is removed[; and
96	102		[(3) not later than 24 hours after the discovery of the
97	103		skimmer or a report of the discovery of a skimmer is made to the
98	104		merchant, report the discovery to the department].
99	105		SECTION 5. Section 607.054(a), Business & Commerce Code, is
100	106		amended to read as follows:
101	107		(a) The department may accept a report of a suspected
102	108		skimmer from any interested person, including [In this section,
103	109		"interested person" includes]:
104	110		(1) a law enforcement agency;
105	111		(2) a financial institution;
106	112		(3) a credit card or debit card issuer [as defined by
107	113		Section 505.001];
108	114		(4) a service technician or service company;
109	115		(5) a member of the public; and[; or]
110	116		(6) a payment card network [any other interested
111	117		person].
112	118		SECTION 6. Section 607.055, Business & Commerce Code, is
113	119		amended to read as follows:
114	120		Sec. 607.055. INVESTIGATION OF SKIMMER REPORT. (a) On
115	121		receipt of a report under Section 607.053 or 607.054, the
116	122		department may conduct an inspection for the presence of suspected
117	123		skimmers [shall immediately notify the center and share the report
118	124		with the center].
119	125		(b) The department [and the center] shall coordinate with
120	126		law enforcement agencies in conducting an investigation of the
121	127		report.
122	128		(c) The department may inspect, directly or in coordination
123	129		with a law enforcement agency, the motor fuel metering device
124	130		[dispenser] that is the subject of the report and any other motor
125	131		fuel metering device located at the same place of business.
126	132		(d) A merchant shall cooperate with the department or law
127	133		enforcement agency during an investigation of a skimmer discovered
128	134		or reported at the merchant's place of business and permit the
129	135		inspection and alteration of motor fuel metering devices at the
130	136		place of business [department or agency to inspect and alter the
131	137		motor fuel dispenser that is the subject of the report] as
132	138		necessary.
133	139		SECTION 7. Sections 607.056(b), (d), and (e), Business &
134	140		Commerce Code, are amended to read as follows:
135	141		(b) Information described by Subsection (a) may be
136	142		disclosed to:
137	143		(1) an institution of higher education [the attorney
138	144		general];
139	145		(2) a law enforcement agency;
140	146		(3) the center;
141	147		(4) a credit card issuer, a debit card issuer, a
142	148		financial institution that is not a credit card issuer, or a payment
143	149		card network that may be impacted by the use of a skimmer on a motor
144	150		fuel [the] unattended payment terminal or [of a] motor fuel
145	151		metering device [dispenser]; [or]
146	152		(5) another person if the disclosure of the
147	153		information is permitted or required by other law or court order;
148	154		(6) a trade association representing a financial
149	155		institution; or
150	156		(7) a department contractor or other agent.
151	157		(d) On the dismissal or final resolution of a report [or
152	158		investigation] by the department, information described by
153	159		Subsection (a) is subject to disclosure under Chapter 552,
154	160		Government Code.
155	161		(e) Notwithstanding Subsection (a), a law enforcement
156	162		agency or the center [the attorney general] may disclose to the
157	163		public information made confidential by that subsection if the law
158	164		enforcement agency or the chief intelligence coordinator for the
159	165		center [attorney general] determines that the disclosure of the
160	166		information furthers a law enforcement purpose, except that a law
161	167		enforcement agency or the center may not disclose to the public the
162	168		identity of a person that submits a report of a suspected skimmer to
163	169		the department under Section 607.053 or 607.054.
164	170		SECTION 8. Subchapter C, Chapter 607, Business & Commerce
165	171		Code, is amended by adding Section 607.1021 to read as follows:
166	172		Sec. 607.1021. CIVIL PENALTY. (a) A person who violates
167	173		this chapter or a rule adopted under this chapter is liable to the
168	174		state for a civil penalty.
169	175		(b) The attorney general or the executive director may bring
170	176		an action to collect a penalty under this section.
171	177		(c) The provisions of Section 51.352, Occupations Code,
172	178		relating to an action to collect and the amount of a civil penalty
173	179		under that section apply to an action to collect and the amount of a
174	180		civil penalty under this section.
175	181		SECTION 9. Section 607.103, Business & Commerce Code, is
176	182		amended to read as follows:
177	183		Sec. 607.103. OFFENSES; PENALTIES. (a) A person commits an
178	184		offense if the person refuses to allow an inspection of a motor fuel
179	185		metering device [dispenser] at the merchant's place of business in
180	186		violation of Section 607.055. An offense under this subsection is a
181	187		Class C misdemeanor.
182	188		(b) A person commits an offense if the person negligently or
183	189		recklessly disposes of a skimmer that was installed on a motor fuel
184	190		[the] unattended payment terminal or [of a] motor fuel metering
185	191		device [dispenser] by another person. An offense under this
186	192		subsection is a Class B misdemeanor.
187	193		(c) A person commits an offense if, knowing that an
188	194		investigation is ongoing or that a criminal proceeding has been
189	195		commenced and is pending, the person disposes of a skimmer that was
190	196		installed on a motor fuel [the] unattended payment terminal or [of
191	197		a] motor fuel metering device [dispenser] by another person. An
192	198		offense under this subsection is a felony of the third degree.
193	199		SECTION 10. Section 2310.101, Occupations Code, is amended
194	200		by adding Subsection (c) to read as follows:
195	201		(c) Regardless of whether the department has received a
196	202		report of a suspected skimmer under Section 607.053 or 607.054,
197	203		Business & Commerce Code, the department may inspect each motor
198	204		fuel metering device located at a dealer's retail outlet if the
199	205		department has reason to believe that a skimmer is installed on or
200	206		in a motor fuel unattended payment terminal or motor fuel metering
201	207		device at the retail outlet. In this subsection, "motor fuel
202	208		unattended payment terminal" and "skimmer" have the meanings
203	209		assigned by Section 607.001, Business & Commerce Code.
204	210		SECTION 11. Chapter 424, Government Code, as added by
205	211		Chapter 863 (H.B. 2945), Acts of the 86th Legislature, Regular
206	212		Session, 2019, is transferred to Subtitle A, Title 14, Occupations
207	213		Code, redesignated as Chapter 2312, Occupations Code, and amended
208	214		to read as follows:
209	215		CHAPTER 2312 [424]. FINANCIAL CRIMES INTELLIGENCE [PAYMENT FRAUD
210	216		FUSION] CENTER
211	217		SUBCHAPTER A. GENERAL PROVISIONS
212	218		Sec. 2312.001 [424.001]. DEFINITIONS. In this chapter:
213	219		(1) "Card fraud" means an act that constitutes the
214	220		offense of fraudulent use or possession of a credit card or debit
215	221		card under Section 32.315, Penal Code.
216	222		(2) "Center" means the financial crimes intelligence
217	223		[payment fraud fusion] center established under this chapter.
218	224		(3) "Commission" means the Texas Commission of
219	225		Licensing and Regulation.
220	226		(4) "Department" means the Texas Department of
221	227		Licensing and Regulation.
222	228		(5) [(2) "Payment card" has the meaning assigned by
223	229		Section 522.001, Business & Commerce Code.
224	230		[(3) "Payment fraud" means a fraudulent payment
225	231		transaction made by the unauthorized use of a payment card or other
226	232		electronic means.
227	233		[(4)] "Skimmer" means an [a wire or] electronic,
228	234		mechanical, or other device that may be used to [is capable of]
229	235		unlawfully intercept [intercepting] electronic communications or
230	236		data to perpetrate card fraud.
231	237		Sec. 2312.002. RULES. The commission shall adopt rules as
232	238		necessary to implement this chapter [The term includes a re-encoder
233	239		and scanning device, as those terms are defined by Section 522.001,
234	240		Business & Commerce Code].
235	241		SUBCHAPTER B. PURPOSE AND ADMINISTRATION
236	242		Sec. 2312.051 [424.002]. FINANCIAL CRIMES INTELLIGENCE
237	243		[PAYMENT FRAUD FUSION] CENTER ESTABLISHED. [(a) Law enforcement
238	244		agencies or other governmental agencies designated by the attorney
239	245		general may collaborate with the attorney general to establish a
240	246		payment fraud fusion center.
241	247		[(b)] The commission [attorney general] shall establish the
242	248		center within the department [in the City of Tyler].
243	249		Sec. 2312.052. PURPOSES [424.003. PURPOSE] OF CENTER.
244	250		[(a)] The purposes of the center are to:
245	251		(1) serve [serves] as the state's primary entity for
246	252		the planning, coordination, and integration of [the capabilities
247	253		of] law enforcement agencies and other governmental agencies that
248	254		[to] respond to criminal activity [that is] related to card
249	255		[payment] fraud, including through the use of skimmers; and[.]
250	256		(2) [(b) The purpose of the center is to] maximize
251	257		the ability of the department, law enforcement agencies, and other
252	258		governmental agencies to detect, prevent, and respond to criminal
253	259		activities related to card [payment] fraud.
254	260		Sec. 2312.053. OPERATION AGREEMENTS AUTHORIZED; CHIEF
255	261		INTELLIGENCE COORDINATOR. (a) The department:
256	262		(1) may enter into agreements with law enforcement
257	263		agencies or other governmental agencies for the operation of the
258	264		center; and
259	265		(2) shall enter into an agreement with a law
260	266		enforcement agency or other governmental agency for the appointment
261	267		of a chief intelligence coordinator to supervise and manage the
262	268		operation of the center.
263	269		(b) The chief intelligence coordinator appointed under the
264	270		agreement required by Subsection (a)(2) may be a licensed peace
265	271		officer. The agreement must provide that the commission of a chief
266	272		intelligence coordinator who is a licensed peace officer will be
267	273		carried by the agency with which the department enters into the
268	274		agreement under that subdivision.
269	275		(c) Information a law enforcement agency or other
270	276		governmental agency collects and maintains under an agreement
271	277		entered into with the department under this chapter is the
272	278		intellectual property of the center. On termination of the
273	279		agreement, the contracting agency shall transfer the information to
274	280		the department in accordance with the terms of the agreement.
275	281		Sec. 2312.054 [424.004]. POWERS AND DUTIES. (a) The
276	282		center may collaborate with federal, state, and local governmental
277	283		agencies [for the performance of the center's duties and] to
278	284		accomplish the purposes [purpose] of the center.
279	285		(b) The center shall assist law enforcement agencies, [and]
280	286		other governmental agencies, financial institutions, credit card
281	287		issuers, debit card issuers, payment card networks, institutions of
282	288		higher education, and merchants in their efforts to develop and
283	289		implement strategies to:
284	290		(1) detect skimmers;
285	291		(2) ensure an effective response if a skimmer is
286	292		found; and
287	293		(3) prevent card [payment] fraud.
288	294		(c) The center may:
289	295		(1) serve as a centralized collection point for
290	296		information related to card fraud;
291	297		(2) provide training and educational opportunities to
292	298		law enforcement;
293	299		(3) provide outreach to the public; and
294	300		(4) release information to affected financial
295	301		institutions, credit card issuers, debit card issuers, payment card
296	302		networks, institutions of higher education, and merchants if the
297	303		center does not consider the information to be sensitive to law
298	304		enforcement.
299	305		(d) For purposes of Subsection (c)(4), information is
300	306		considered sensitive to law enforcement if the information could
301	307		cause harm to law enforcement activities or jeopardize an
302	308		investigation or operation if disclosed.
303	309		Sec. 2312.055. ANNUAL REPORT. (a) Not later than December
304	310		1 of each year, the chief intelligence coordinator shall file a
305	311		report with the department.
306	312		(b) The report must include:
307	313		(1) a plan of operation for the center and an estimate
308	314		of the amount of money necessary to implement that plan;
309	315		(2) an assessment of the current state of card fraud in
310	316		this state, including:
311	317		(A) an identification of the geographic
312	318		locations in this state that have the highest statistical
313	319		probability for card fraud; and
314	320		(B) a summary of card fraud statistics for the
315	321		year in which the report is filed;
316	322		(3) a detailed plan of operation for combatting card
317	323		fraud;
318	324		(4) a communications plan for outreach to law
319	325		enforcement agencies, financial institutions, credit card issuers,
320	326		debit card issuers, payment card networks, merchants, and the
321	327		public; and
322	328		(5) a list of expenditures made since the most recent
323	329		report was filed with the department.
324	330		SUBCHAPTER C. FINANCIAL PROVISIONS
325	331		[Sec. 424.005. DIRECTOR. (a) The attorney general shall
326	332		appoint a director to supervise and manage the center.
327	333		[(b) The director is under the supervision and direction of
328	334		the attorney general.
329	335		[Sec. 424.006. RULES. The attorney general by rule shall
330	336		adopt reasonable policies and procedures necessary to implement
331	337		this chapter.
332	338		[Sec. 424.007. FACILITIES AND ADMINISTRATIVE SUPPORT. A
333	339		municipality's police department may provide facilities and
334	340		administrative support to a payment fraud fusion center established
335	341		in the municipality.]
336	342		Sec. 2312.101 [424.008]. FUNDING [GIFTS AND GRANTS]. The
337	343		department [payment fraud fusion center] may solicit and accept
338	344		gifts, grants, and other donations to fund, administer, and carry
339	345		out the purposes [purpose] of the center, except that the
340	346		department may not solicit or accept a gift, grant, or other
341	347		donation from a license holder as defined by Section 2310.151.
342	348		Sec. 2312.102. AWARD OF GRANTS. (a) Subject to the
343	349		availability of appropriated money, the department may award grants
344	350		for the purposes of this chapter by entering into a contract with
345	351		each grant recipient.
346	352		(b) A grant recipient may use grant money to:
347	353		(1) reduce card fraud by removing skimmers;
348	354		(2) purchase or upgrade fraud deterrence equipment,
349	355		including unique locking systems, cameras, and lights;
350	356		(3) provide training opportunities regarding
351	357		skimmers; and
352	358		(4) conduct public outreach regarding card fraud.
353	359		SECTION 12. The following provisions of the Business &
354	360		Commerce Code are repealed:
355	361		(1) Section 607.001(9);
356	362		(2) Section 607.051;
357	363		(3) Section 607.052;
358	364		(4) Section 607.054(b);
359	365		(5) Section 607.101; and
360	366		(6) Section 607.102.
361	367		SECTION 13. (a) The Texas Department of Licensing and
362	368		Regulation may establish a workgroup composed of stakeholders to
363	369		provide input, advice, and recommendations regarding the
364	370		department's powers and duties under and the administration of:
365	371		(1) Chapter 607, Business & Commerce Code, as amended
366	372		by this Act;
367	373		(2) Section 2310.101(c), Occupations Code, as added by
368	374		this Act; and
369	375		(3) Chapter 2312, Occupations Code, as transferred,
370	376		redesignated, and amended by this Act.
371	377		(b) If a workgroup is established as authorized by
372	378		Subsection (a) of this section, the Texas Department of Licensing
373	379		and Regulation shall lead the workgroup and determine the
374	380		workgroup's size, composition, and scope of purpose.
375	381		(c) A workgroup established under this section is abolished
376	382		and this section expires December 1, 2022.
377	383		SECTION 14. The Texas Commission of Licensing and
378	384		Regulation shall adopt rules necessary to implement the changes in
379	385		law made by this Act not later than September 1, 2021.
380	386		SECTION 15. (a) On the effective date of this Act:
381	387		(1) the payment fraud fusion center is redesignated as
382	388		the financial crimes intelligence center;
383	389		(2) all powers, duties, functions, programs, and
384	390		activities of the office of the attorney general under Chapter 424,
385	391		Government Code, as added by Chapter 863 (H.B. 2945), Acts of the
386	392		86th Legislature, Regular Session, 2019, as that chapter existed
387	393		immediately before the effective date of this Act, are transferred
388	394		to the Texas Commission of Licensing and Regulation and the Texas
389	395		Department of Licensing and Regulation;
390	396		(3) all obligations, contracts, property, and records
391	397		of the office of the attorney general that are related to a power,
392	398		duty, function, program, or activity transferred under Subdivision
393	399		(2) of this subsection are transferred to the Texas Commission of
394	400		Licensing and Regulation and the Texas Department of Licensing and
395	401		Regulation; and
396	402		(4) all pending complaints, investigations, or
397	403		contested cases that are related to a power, duty, function,
398	404		program, or activity transferred under Subdivision (2) of this
399	405		subsection are transferred without change in status to the Texas
400	406		Commission of Licensing and Regulation and the Texas Department of
401	407		Licensing and Regulation.
402	408		(b) A rule or form adopted by the office of the attorney
403	409		general that relates to a power, duty, function, program, or
404	410		activity transferred under Subsection (a)(2) of this section is a
405	411		rule or form of the Texas Commission of Licensing and Regulation and
406	412		the Texas Department of Licensing and Regulation, as applicable,
407	413		until altered by the commission.
408	414		SECTION 16. Section 607.103, Business & Commerce Code, as
409	415		amended by this Act, applies only to an offense committed on or
410	416		after the effective date of this Act. An offense committed before
411	417		the effective date of this Act is governed by the law in effect on
412	418		the date the offense was committed, and the former law is continued
413	419		in effect for that purpose. For purposes of this section, an
414	420		offense was committed before the effective date of this Act if any
415	421		element of the offense occurred before that date.
416	422		SECTION 17. To the extent of any conflict, this Act prevails
417	423		over another Act of the 87th Legislature, Regular Session, 2021,
418	424		relating to nonsubstantive additions to and corrections in enacted
419	425		codes.
420	426		SECTION 18. This Act takes effect September 1, 2021.
421		-	______________________________ ______________________________
422		-	President of the Senate Speaker of the House
423		-	I certify that H.B. No. 2106 was passed by the House on April
424		-	28, 2021, by the following vote: Yeas 144, Nays 0, 1 present, not
425		-	voting.
426		-	______________________________
427		-	Chief Clerk of the House
428		-	I certify that H.B. No. 2106 was passed by the Senate on May
429		-	18, 2021, by the following vote: Yeas 31, Nays 0.
430		-	______________________________
431		-	Secretary of the Senate
432		-	APPROVED: _____________________
433		-	Date
434		-	_____________________
435		-	Governor
	427	+	* * * * *