Texas 2021 - 87th Regular

Texas Senate Bill SB964 Compare Versions

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1+87R5709 JES-F
12 By: Zaffirini S.B. No. 964
2- (In the Senate - Filed March 3, 2021; March 11, 2021, read
3- first time and referred to Committee on Business & Commerce;
4- April 7, 2021, reported adversely, with favorable Committee
5- Substitute by the following vote: Yeas 9, Nays 0; April 7, 2021,
6- sent to printer.)
7-Click here to see the committee vote
8- COMMITTEE SUBSTITUTE FOR S.B. No. 964 By: Nichols
93
104
115 A BILL TO BE ENTITLED
126 AN ACT
137 relating to the prevention, identification, investigation, and
148 enforcement of payment card fraud; providing a civil penalty.
159 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1610 SECTION 1. The heading to Chapter 607, Business & Commerce
1711 Code, is amended to read as follows:
1812 CHAPTER 607. PAYMENT CARD SKIMMERS ON MOTOR FUEL METERING DEVICES
1913 [DISPENSERS]
2014 SECTION 2. Section 607.001, Business & Commerce Code, is
2115 amended by amending Subdivisions (1), (2), (4), (5), (7), and (8)
22- and adding Subdivisions (1-a), (1-b), (2-a), (3-a), (5-a), and
23- (6-a) to read as follows:
16+ and adding Subdivisions (1-a), (1-b), (2-a), and (5-a) to read as
17+ follows:
2418 (1) "Center" means the financial crimes intelligence
2519 [payment fraud fusion] center established under Chapter 2312 [424],
2620 Occupations [Government] Code.
2721 (1-a) "Commission" means the Texas Commission of
2822 Licensing and Regulation.
2923 (1-b) "Credit card issuer" has the meaning assigned by
3024 Section 505.001.
3125 (2) "Department" means the Texas Department of
3226 Licensing and Regulation [state agency that is the licensing
3327 authority for service companies and service technicians].
3428 (2-a) "Executive director" means the executive
3529 director of the department.
36- (3-a) "Institution of higher education" has the
37- meaning assigned by Section 61.003, Education Code.
3830 (4) "Merchant" means a person whose business includes
3931 the sale of motor fuel through motor fuel metering devices
4032 [dispensers] to retail customers.
4133 (5) "Motor fuel" and "motor fuel metering device" have
4234 the meanings assigned by Section 2310.001, Occupations Code ["Motor
4335 fuel dispenser" means a machine that is used to pump gasoline,
4436 diesel, biofuels, or other types of fuels into motor vehicles].
4537 (5-a) "Motor fuel unattended payment terminal" means a
4638 point-of-sale terminal or kiosk that is operated by a customer to
4739 activate or complete a transaction at a motor fuel metering device
4840 through the use of a payment card or a payment by other electronic
4941 means.
50- (6-a) "Payment card network" means an entity that
51- directly, or through a licensed member, processor, or agent,
52- provides the proprietary services, infrastructure, and software
53- that route information and data to conduct debit card or credit card
54- transaction authorization, clearance, and settlement, and that an
55- entity uses in order to accept as a form of payment a brand of debit
56- card, credit card, or other device that may be used to carry out
57- debit or credit transactions.
5842 (7) "Service company" and "service technician" have
5943 the meanings assigned by Section 2310.151 [13.451], Occupations
6044 [Agriculture] Code.
6145 (8) "Skimmer" means a wire or electronic device that
6246 is capable of unlawfully intercepting electronic communications or
6347 data to perpetrate fraud. [The term includes a re-encoder and
6448 scanning device, as those terms are defined by Section 522.001.]
6549 SECTION 3. Subchapter A, Chapter 607, Business & Commerce
6650 Code, is amended by adding Sections 607.002, 607.003, and 607.004
6751 to read as follows:
6852 Sec. 607.002. ADMINISTRATION AND ENFORCEMENT OF CHAPTER.
6953 (a) The department shall administer and enforce this chapter.
7054 (b) The commission or the executive director may enforce
7155 this chapter, a rule adopted under this chapter, or an order of the
7256 commission or executive director as provided by Subchapters F and
7357 G, Chapter 51, Occupations Code.
7458 Sec. 607.003. FUNDING. The department may solicit and
7559 accept gifts, grants, and other donations for purposes of
7660 administering this chapter, except that the department may not
7761 solicit or accept a gift, grant, or other donation from a license
7862 holder as defined by Section 2310.151, Occupations Code.
7963 Sec. 607.004. RULES. The commission shall adopt rules for
8064 administering this chapter.
8165 SECTION 4. Section 607.053, Business & Commerce Code, is
8266 amended to read as follows:
8367 Sec. 607.053. NOTICE OF DISCOVERY OF SKIMMER REQUIRED. (a)
8468 If a service technician discovers a skimmer in or on a motor fuel
8569 [the] unattended payment terminal or [of a] motor fuel metering
8670 device [dispenser], the service technician or service company that
8771 employs the technician shall [immediately] notify the department
8872 and the merchant of the skimmer in the manner prescribed by
8973 commission rule.
9074 (b) If a merchant discovers a [the] skimmer in or on a motor
9175 fuel unattended payment terminal or motor fuel metering device or
9276 is notified of the presence of a skimmer [by a service technician or
9377 other person], the merchant shall, in the manner prescribed by
9478 commission rule:
9579 (1) [immediately] disable, or cause to be disabled,
9680 the motor fuel metering device [dispenser] on which the skimmer was
9781 discovered;
9882 (1-a) [and] notify a law enforcement agency and the
9983 department that a skimmer has been detected; and
10084 (2) take appropriate measures to protect [from
10185 tampering with] the motor fuel metering device from being tampered
10286 with [dispenser] until the department or law enforcement agency
10387 arrives and the skimmer is removed[; and
10488 [(3) not later than 24 hours after the discovery of the
10589 skimmer or a report of the discovery of a skimmer is made to the
10690 merchant, report the discovery to the department].
10791 SECTION 5. Section 607.054(a), Business & Commerce Code, is
10892 amended to read as follows:
10993 (a) The department may accept a report of a suspected
11094 skimmer from any interested person, including [In this section,
11195 "interested person" includes]:
11296 (1) a law enforcement agency;
11397 (2) a financial institution;
114- (3) a credit card or debit card issuer [as defined by
115- Section 505.001];
116- (4) a service technician or service company;
117- (5) a member of the public; and[; or]
118- (6) a payment card network [any other interested
119- person].
98+ (3) a credit card issuer [as defined by Section
99+ 505.001];
100+ (4) a service technician or service company; and
101+ (5) a member of the public[; or
102+ [(6) any other interested person].
120103 SECTION 6. Section 607.055, Business & Commerce Code, is
121104 amended to read as follows:
122105 Sec. 607.055. INVESTIGATION OF SKIMMER REPORT. (a) On
123106 receipt of a report under Section 607.053 or 607.054, the
124- department may conduct an inspection for the presence of suspected
125- skimmers [shall immediately notify the center and share the report
126- with the center].
107+ department shall conduct an inspection for the presence of
108+ suspected skimmers [immediately notify the center and share the
109+ report with the center].
127110 (b) The department [and the center] shall coordinate with
128111 law enforcement agencies in conducting an investigation of the
129112 report.
130113 (c) The department may inspect, directly or in coordination
131114 with a law enforcement agency, the motor fuel metering device
132115 [dispenser] that is the subject of the report and any other motor
133116 fuel metering device located at the same place of business.
134117 (d) A merchant shall cooperate with the department or law
135118 enforcement agency during an investigation of a skimmer discovered
136119 or reported at the merchant's place of business and permit the
137120 inspection and alteration of motor fuel metering devices at the
138121 place of business [department or agency to inspect and alter the
139122 motor fuel dispenser that is the subject of the report] as
140123 necessary.
141124 SECTION 7. Sections 607.056(b), (d), and (e), Business &
142125 Commerce Code, are amended to read as follows:
143126 (b) Information described by Subsection (a) may be
144127 disclosed to:
145- (1) an institution of higher education [the attorney
146- general];
128+ (1) an institution of higher education, as defined by
129+ Section 61.003, Education Code [the attorney general];
147130 (2) a law enforcement agency;
148131 (3) the center;
149- (4) a credit card issuer, a debit card issuer, a
150- financial institution that is not a credit card issuer, or a payment
151- card network that may be impacted by the use of a skimmer on a motor
152- fuel [the] unattended payment terminal or [of a] motor fuel
153- metering device [dispenser]; [or]
132+ (4) a credit card issuer or a financial institution
133+ that is not a credit card issuer that may be impacted by the use of a
134+ skimmer on a motor fuel [the] unattended payment terminal or [of a]
135+ motor fuel metering device [dispenser]; [or]
154136 (5) another person if the disclosure of the
155137 information is permitted or required by other law or court order;
156138 (6) a trade association representing a financial
157139 institution; or
158140 (7) a department contractor or other agent.
159141 (d) On the dismissal or final resolution of a report [or
160142 investigation] by the department, information described by
161143 Subsection (a) is subject to disclosure under Chapter 552,
162144 Government Code.
163145 (e) Notwithstanding Subsection (a), a law enforcement
164146 agency or the center [the attorney general] may disclose to the
165147 public information made confidential by that subsection if the law
166148 enforcement agency or the chief intelligence coordinator for the
167149 center [attorney general] determines that the disclosure of the
168- information furthers a law enforcement purpose, except that a law
169- enforcement agency or the center may not disclose to the public the
170- identity of a person that submits a report of a suspected skimmer to
171- the department under Section 607.053 or 607.054.
150+ information furthers a law enforcement purpose.
172151 SECTION 8. Subchapter C, Chapter 607, Business & Commerce
173152 Code, is amended by adding Section 607.1021 to read as follows:
174153 Sec. 607.1021. CIVIL PENALTY. (a) A person who violates
175154 this chapter or a rule adopted under this chapter is liable to the
176155 state for a civil penalty.
177156 (b) The attorney general or the executive director may bring
178157 an action to collect a penalty under this section.
179158 (c) The provisions of Section 51.352, Occupations Code,
180159 relating to an action to collect and the amount of a civil penalty
181160 under that section apply to an action to collect and the amount of a
182161 civil penalty under this section.
183162 SECTION 9. Section 607.103, Business & Commerce Code, is
184163 amended to read as follows:
185164 Sec. 607.103. OFFENSES; PENALTIES. (a) A person commits an
186165 offense if the person refuses to allow an inspection of a motor fuel
187166 metering device [dispenser] at the merchant's place of business in
188167 violation of Section 607.055. An offense under this subsection is a
189168 Class C misdemeanor.
190169 (b) A person commits an offense if the person negligently or
191170 recklessly disposes of a skimmer that was installed on a motor fuel
192171 [the] unattended payment terminal or [of a] motor fuel metering
193172 device [dispenser] by another person. An offense under this
194173 subsection is a Class B misdemeanor.
195174 (c) A person commits an offense if, knowing that an
196175 investigation is ongoing or that a criminal proceeding has been
197176 commenced and is pending, the person disposes of a skimmer that was
198177 installed on a motor fuel [the] unattended payment terminal or [of
199178 a] motor fuel metering device [dispenser] by another person. An
200179 offense under this subsection is a felony of the third degree.
201180 SECTION 10. Section 2310.101, Occupations Code, is amended
202181 by adding Subsection (c) to read as follows:
203182 (c) Regardless of whether the department has received a
204183 report of a suspected skimmer under Section 607.053 or 607.054,
205184 Business & Commerce Code, the department may inspect each motor
206185 fuel metering device located at a dealer's retail outlet if the
207186 department has reason to believe that a skimmer is installed on or
208187 in a motor fuel unattended payment terminal or motor fuel metering
209188 device at the retail outlet. In this subsection, "motor fuel
210189 unattended payment terminal" and "skimmer" have the meanings
211190 assigned by Section 607.001, Business & Commerce Code.
212191 SECTION 11. Chapter 424, Government Code, as added by
213192 Chapter 863 (H.B. 2945), Acts of the 86th Legislature, Regular
214193 Session, 2019, is transferred to Subtitle A, Title 14, Occupations
215194 Code, redesignated as Chapter 2312, Occupations Code, and amended
216195 to read as follows:
217196 CHAPTER 2312 [424]. FINANCIAL CRIMES INTELLIGENCE [PAYMENT FRAUD
218197 FUSION] CENTER
219198 SUBCHAPTER A. GENERAL PROVISIONS
220199 Sec. 2312.001 [424.001]. DEFINITIONS. In this chapter:
221200 (1) "Card fraud" means an act that constitutes the
222201 offense of fraudulent use or possession of a credit card or debit
223202 card under Section 32.315, Penal Code.
224203 (2) "Center" means the financial crimes intelligence
225204 [payment fraud fusion] center established under this chapter.
226205 (3) "Commission" means the Texas Commission of
227206 Licensing and Regulation.
228207 (4) "Department" means the Texas Department of
229208 Licensing and Regulation.
230209 (5) [(2) "Payment card" has the meaning assigned by
231210 Section 522.001, Business & Commerce Code.
232211 [(3) "Payment fraud" means a fraudulent payment
233212 transaction made by the unauthorized use of a payment card or other
234213 electronic means.
235214 [(4)] "Skimmer" means an [a wire or] electronic,
236215 mechanical, or other device that may be used to [is capable of]
237216 unlawfully intercept [intercepting] electronic communications or
238217 data to perpetrate card fraud.
239218 Sec. 2312.002. RULES. The commission shall adopt rules as
240219 necessary to implement this chapter [The term includes a re-encoder
241220 and scanning device, as those terms are defined by Section 522.001,
242221 Business & Commerce Code].
243222 SUBCHAPTER B. PURPOSE AND ADMINISTRATION
244223 Sec. 2312.051 [424.002]. FINANCIAL CRIMES INTELLIGENCE
245224 [PAYMENT FRAUD FUSION] CENTER ESTABLISHED. [(a) Law enforcement
246225 agencies or other governmental agencies designated by the attorney
247226 general may collaborate with the attorney general to establish a
248227 payment fraud fusion center.
249228 [(b)] The commission [attorney general] shall establish the
250229 center within the department [in the City of Tyler].
251230 Sec. 2312.052. PURPOSES [424.003. PURPOSE] OF CENTER.
252231 [(a)] The purposes of the center are to:
253232 (1) serve [serves] as the state's primary entity for
254233 the planning, coordination, and integration of [the capabilities
255234 of] law enforcement agencies and other governmental agencies that
256235 [to] respond to criminal activity [that is] related to card
257236 [payment] fraud, including through the use of skimmers; and[.]
258237 (2) [(b) The purpose of the center is to] maximize
259238 the ability of the department, law enforcement agencies, and other
260239 governmental agencies to detect, prevent, and respond to criminal
261240 activities related to card [payment] fraud.
262241 Sec. 2312.053. OPERATION AGREEMENTS AUTHORIZED; CHIEF
263242 INTELLIGENCE COORDINATOR. (a) The department:
264243 (1) may enter into agreements with law enforcement
265244 agencies or other governmental agencies for the operation of the
266245 center; and
267246 (2) shall enter into an agreement with a law
268247 enforcement agency or other governmental agency for the appointment
269248 of a chief intelligence coordinator to supervise and manage the
270249 operation of the center.
271250 (b) The chief intelligence coordinator appointed under the
272251 agreement required by Subsection (a)(2) may be a licensed peace
273252 officer. The agreement must provide that the commission of a chief
274253 intelligence coordinator who is a licensed peace officer will be
275254 carried by the agency with which the department enters into the
276255 agreement under that subdivision.
277256 (c) Information a law enforcement agency or other
278257 governmental agency collects and maintains under an agreement
279258 entered into with the department under this chapter is the
280259 intellectual property of the center. On termination of the
281260 agreement, the contracting agency shall transfer the information to
282261 the department in accordance with the terms of the agreement.
283262 Sec. 2312.054 [424.004]. POWERS AND DUTIES. (a) The
284- center may collaborate with federal, state, and local governmental
263+ center may collaborate with federal, state, and other governmental
285264 agencies [for the performance of the center's duties and] to
286265 accomplish the purposes [purpose] of the center.
287266 (b) The center shall assist law enforcement agencies, [and]
288267 other governmental agencies, financial institutions, credit card
289- issuers, debit card issuers, payment card networks, institutions of
290- higher education, and merchants in their efforts to develop and
291- implement strategies to:
268+ issuers, and merchants in their efforts to develop and implement
269+ strategies to:
292270 (1) detect skimmers;
293271 (2) ensure an effective response if a skimmer is
294272 found; and
295273 (3) prevent card [payment] fraud.
296274 (c) The center may:
297275 (1) serve as a centralized collection point for
298276 information related to card fraud;
299277 (2) provide training and educational opportunities to
300278 law enforcement;
301279 (3) provide outreach to the public; and
302280 (4) release information to affected financial
303- institutions, credit card issuers, debit card issuers, payment card
304- networks, institutions of higher education, and merchants if the
305- center does not consider the information to be sensitive to law
306- enforcement.
281+ institutions, credit card issuers, and merchants if the center does
282+ not consider the information to be sensitive to law enforcement.
307283 (d) For purposes of Subsection (c)(4), information is
308284 considered sensitive to law enforcement if the information could
309285 cause harm to law enforcement activities or jeopardize an
310286 investigation or operation if disclosed.
311287 Sec. 2312.055. ANNUAL REPORT. (a) Not later than December
312288 1 of each year, the chief intelligence coordinator shall file a
313289 report with the department.
314290 (b) The report must include:
315291 (1) a plan of operation for the center and an estimate
316292 of the amount of money necessary to implement that plan;
317293 (2) an assessment of the current state of card fraud in
318294 this state, including:
319295 (A) an identification of the geographic
320296 locations in this state that have the highest statistical
321297 probability for card fraud; and
322298 (B) a summary of card fraud statistics for the
323299 year in which the report is filed;
324300 (3) a detailed plan of operation for combatting card
325301 fraud;
326302 (4) a communications plan for outreach to law
327303 enforcement agencies, financial institutions, credit card issuers,
328- debit card issuers, payment card networks, merchants, and the
329- public; and
304+ merchants, and the public; and
330305 (5) a list of expenditures made since the most recent
331306 report was filed with the department.
332307 SUBCHAPTER C. FINANCIAL PROVISIONS
333308 [Sec. 424.005. DIRECTOR. (a) The attorney general shall
334309 appoint a director to supervise and manage the center.
335310 [(b) The director is under the supervision and direction of
336311 the attorney general.
337312 [Sec. 424.006. RULES. The attorney general by rule shall
338313 adopt reasonable policies and procedures necessary to implement
339314 this chapter.
340315 [Sec. 424.007. FACILITIES AND ADMINISTRATIVE SUPPORT. A
341316 municipality's police department may provide facilities and
342317 administrative support to a payment fraud fusion center established
343318 in the municipality.]
344319 Sec. 2312.101 [424.008]. FUNDING [GIFTS AND GRANTS]. The
345320 department [payment fraud fusion center] may solicit and accept
346321 gifts, grants, and other donations to fund, administer, and carry
347322 out the purposes [purpose] of the center, except that the
348323 department may not solicit or accept a gift, grant, or other
349324 donation from a license holder as defined by Section 2310.151.
350325 Sec. 2312.102. AWARD OF GRANTS. (a) Subject to the
351326 availability of appropriated money, the department may award grants
352327 for the purposes of this chapter by entering into a contract with
353328 each grant recipient.
354329 (b) A grant recipient may use grant money to:
355330 (1) reduce card fraud by removing skimmers;
356331 (2) purchase or upgrade fraud deterrence equipment,
357332 including unique locking systems, cameras, and lights;
358333 (3) provide training opportunities regarding
359334 skimmers; and
360335 (4) conduct public outreach regarding card fraud.
361336 SECTION 12. The following provisions of the Business &
362337 Commerce Code are repealed:
363338 (1) Section 607.001(9);
364339 (2) Section 607.051;
365340 (3) Section 607.052;
366341 (4) Section 607.054(b);
367342 (5) Section 607.101; and
368343 (6) Section 607.102.
369344 SECTION 13. (a) The Texas Department of Licensing and
370345 Regulation may establish a workgroup composed of stakeholders to
371346 provide input, advice, and recommendations regarding the
372347 department's powers and duties under and the administration of:
373348 (1) Chapter 607, Business & Commerce Code, as amended
374349 by this Act;
375350 (2) Section 2310.101(c), Occupations Code, as added by
376351 this Act; and
377352 (3) Chapter 2312, Occupations Code, as transferred,
378353 redesignated, and amended by this Act.
379354 (b) If a workgroup is established as authorized by
380355 Subsection (a) of this section, the Texas Department of Licensing
381356 and Regulation shall lead the workgroup and determine the
382357 workgroup's size, composition, and scope of purpose.
383358 (c) A workgroup established under this section is abolished
384359 and this section expires December 1, 2022.
385360 SECTION 14. The Texas Commission of Licensing and
386361 Regulation shall adopt rules necessary to implement the changes in
387- law made by this Act not later than September 1, 2021.
388- SECTION 15. (a) On the effective date of this Act:
362+ law made by this Act not later than January 1, 2022.
363+ SECTION 15. (a) On January 1, 2022:
389364 (1) the payment fraud fusion center is redesignated as
390365 the financial crimes intelligence center;
391366 (2) all powers, duties, functions, programs, and
392367 activities of the office of the attorney general under Chapter 424,
393368 Government Code, as added by Chapter 863 (H.B. 2945), Acts of the
394369 86th Legislature, Regular Session, 2019, as that chapter existed
395- immediately before the effective date of this Act, are transferred
396- to the Texas Commission of Licensing and Regulation and the Texas
397- Department of Licensing and Regulation;
370+ immediately before January 1, 2022, are transferred to the Texas
371+ Commission of Licensing and Regulation and the Texas Department of
372+ Licensing and Regulation;
398373 (3) all obligations, contracts, property, and records
399374 of the office of the attorney general that are related to a power,
400375 duty, function, program, or activity transferred under Subdivision
401376 (2) of this subsection are transferred to the Texas Commission of
402377 Licensing and Regulation and the Texas Department of Licensing and
403378 Regulation; and
404379 (4) all pending complaints, investigations, or
405380 contested cases that are related to a power, duty, function,
406381 program, or activity transferred under Subdivision (2) of this
407382 subsection are transferred without change in status to the Texas
408383 Commission of Licensing and Regulation and the Texas Department of
409384 Licensing and Regulation.
410385 (b) A rule or form adopted by the office of the attorney
411386 general that relates to a power, duty, function, program, or
412387 activity transferred under Subsection (a)(2) of this section is a
413388 rule or form of the Texas Commission of Licensing and Regulation and
414389 the Texas Department of Licensing and Regulation, as applicable,
415390 until altered by the commission.
416391 SECTION 16. Section 607.103, Business & Commerce Code, as
417392 amended by this Act, applies only to an offense committed on or
418- after the effective date of this Act. An offense committed before
419- the effective date of this Act is governed by the law in effect on
420- the date the offense was committed, and the former law is continued
421- in effect for that purpose. For purposes of this section, an
422- offense was committed before the effective date of this Act if any
423- element of the offense occurred before that date.
393+ after January 1, 2022. An offense committed before January 1, 2022,
394+ is governed by the law in effect on the date the offense was
395+ committed, and the former law is continued in effect for that
396+ purpose. For purposes of this section, an offense was committed
397+ before January 1, 2022, if any element of the offense occurred
398+ before that date.
424399 SECTION 17. To the extent of any conflict, this Act prevails
425400 over another Act of the 87th Legislature, Regular Session, 2021,
426401 relating to nonsubstantive additions to and corrections in enacted
427402 codes.
428- SECTION 18. This Act takes effect September 1, 2021.
429- * * * * *
403+ SECTION 18. (a) Except as provided by Subsection (b) of
404+ this section, this Act takes effect January 1, 2022.
405+ (b) Sections 13 and 14 of this Act take effect immediately
406+ if this Act receives a vote of two-thirds of all the members elected
407+ to each house, as provided by Section 39, Article III, Texas
408+ Constitution. If this Act does not receive the vote necessary for
409+ those sections to have immediate effect, Sections 13 and 14 of this
410+ Act take effect September 1, 2021.