Bill Text: TX HB2945 | 2019-2020 | 86th Legislature | Enrolled


Bill Title: Relating to payment card skimmers on motor fuel dispensers and to creating a payment fraud fusion center; imposing civil penalties; creating criminal offenses.

Spectrum: Slight Partisan Bill (Democrat 56-32)

Status: (Passed) 2019-06-10 - Effective on 9/1/19 [HB2945 Detail]

Download: Texas-2019-HB2945-Enrolled.html
 
 
  H.B. No. 2945
 
 
 
 
AN ACT
  relating to payment card skimmers on motor fuel dispensers and to
  creating a payment fraud fusion center; imposing civil penalties;
  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 fraud fusion center
  established under Chapter 424, Government Code.
               (2)  "Department" means the state agency that is the
  licensing authority for service companies and service technicians.
               (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 or
  data to perpetrate 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 or complete a transaction through the use of a payment card
  or a payment by other electronic means.
  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 SKIMMER. 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 law enforcement agency that a skimmer has been detected;
               (2)  take appropriate measures to protect from
  tampering with the motor fuel dispenser until the law enforcement
  agency arrives; and
               (3)  not later than 24 hours after the discovery of the
  skimmer or 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 law enforcement agency;
               (2)  a financial institution;
               (3)  a credit card issuer as defined by Section
  505.001;
               (4)  a service technician or service company;
               (5)  a member of the public; or
               (6)  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 REPORT. (a) On
  receipt of a report under Section 607.053 or 607.054, the
  department shall immediately notify the center and share the report
  with the center.
         (b)  The department and the center shall coordinate with law
  enforcement agencies in conducting an investigation of the report.
         (c)  The department may inspect, directly or in coordination
  with a law enforcement agency, the motor fuel dispenser that is the
  subject of the report.
         (d)  A merchant shall cooperate with the department or law
  enforcement agency during an investigation of a skimmer discovered
  at the merchant's place of business and permit the department or
  agency to inspect and alter the motor fuel dispenser that is the
  subject of the report 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)  from a report received by the department under
  Section 607.053 or 607.054; or
               (2)  prepared or compiled by the department in
  connection with the report or an investigation conducted under this
  subchapter.
         (b)  Information described by Subsection (a) may be
  disclosed to:
               (1)  the attorney general;
               (2)  a law enforcement agency;
               (3)  the center;
               (4)  a financial institution that may be impacted by
  the use 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. (a) If the attorney
  general has reason to believe that a merchant who, after an
  investigation conducted by the department or one or more law
  enforcement agencies, 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.
         (b)  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.
         (c)  The attorney general may bring an action to recover a
  civil penalty imposed under this section.
         Sec. 607.103.  OFFENSES; PENALTIES. (a) A person commits an
  offense if the person refuses to allow an inspection of 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 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 Class B misdemeanor.
         (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 FRAUD FUSION CENTER
         Sec. 424.001.  DEFINITIONS. In this chapter:
               (1)  "Center" means the payment fraud fusion center
  established under this chapter.
               (2)  "Payment card" has the meaning assigned by Section
  522.001, Business & Commerce Code.
               (3)  "Payment fraud" means a fraudulent payment
  transaction made by the unauthorized use of a payment card or other
  electronic means.
               (4)  "Skimmer" means a wire or electronic device that
  is capable of unlawfully intercepting electronic communications or
  data to perpetrate 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 FRAUD FUSION CENTER ESTABLISHED. (a)
  Law enforcement agencies or other governmental agencies designated
  by the attorney general may collaborate with the attorney general
  to establish a payment fraud fusion center.
         (b)  The attorney general shall establish the center in the
  City of Tyler.
         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 governmental agencies to respond to criminal activity that is
  related to payment fraud, including through the use of skimmers.
         (b)  The purpose of the center is to maximize the ability of
  law enforcement agencies and other governmental agencies to detect,
  prevent, and respond to criminal activities related to payment
  fraud.
         Sec. 424.004.  POWERS AND DUTIES. (a) The center may
  collaborate with federal agencies for the performance of the
  center's duties and to accomplish the purpose of the center.
         (b)  The center shall assist law enforcement agencies and
  other governmental 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 fraud.
         Sec. 424.005.  DIRECTOR. (a) The attorney general shall
  appoint a director to supervise and manage the center.
         (b)  The director is under the supervision and direction of
  the attorney general.
         Sec. 424.006.  RULES. The attorney general by rule shall
  adopt reasonable policies and procedures necessary to implement
  this chapter.
         Sec. 424.007.  FACILITIES AND ADMINISTRATIVE SUPPORT. A
  municipality's police department may provide facilities and
  administrative support to a payment fraud fusion center established
  in the municipality.
         Sec. 424.008.  GIFTS AND GRANTS. The payment fraud fusion
  center may accept gifts, grants, and donations to carry out the
  purpose of the center.
         SECTION 3.  The attorney general is required to implement
  Chapter 424, Government Code, as added by this Act, only if the
  legislature appropriates money specifically for that purpose. If
  the legislature does not appropriate money specifically for that
  purpose, the attorney general may, but is not required to,
  implement Chapter 424, Government Code, as added by this Act, using
  other appropriations available for that purpose.
 
         SECTION 4.  This Act takes effect September 1, 2019.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 2945 was passed by the House on May 2,
  2019, by the following vote:  Yeas 141, Nays 2, 1 present, not
  voting; and that the House concurred in Senate amendments to H.B.
  No. 2945 on May 22, 2019, by the following vote:  Yeas 145, Nays 0,
  1 present, not voting.
 
  ______________________________
  Chief Clerk of the House   
 
         I certify that H.B. No. 2945 was passed by the Senate, with
  amendments, on May 14, 2019, by the following vote:  Yeas 31, Nays
  0.
 
  ______________________________
  Secretary of the Senate   
  APPROVED: __________________
                  Date       
   
           __________________
                Governor       
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