Bill Text: TX SB964 | 2021-2022 | 87th Legislature | Comm Sub
Bill Title: Relating to the prevention, identification, investigation, and enforcement of payment card fraud; providing a civil penalty.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2021-04-12 - Co-author authorized [SB964 Detail]
Download: Texas-2021-SB964-Comm_Sub.html
By: Zaffirini | S.B. No. 964 | |
(In the Senate - Filed March 3, 2021; March 11, 2021, read | ||
first time and referred to Committee on Business & Commerce; | ||
April 7, 2021, reported adversely, with favorable Committee | ||
Substitute by the following vote: Yeas 9, Nays 0; April 7, 2021, | ||
sent to printer.) | ||
COMMITTEE SUBSTITUTE FOR S.B. No. 964 | By: Nichols |
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relating to the prevention, identification, investigation, and | ||
enforcement of payment card fraud; providing a civil penalty. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. The heading to Chapter 607, Business & Commerce | ||
Code, is amended to read as follows: | ||
CHAPTER 607. PAYMENT CARD SKIMMERS ON MOTOR FUEL METERING DEVICES | ||
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SECTION 2. Section 607.001, Business & Commerce Code, is | ||
amended by amending Subdivisions (1), (2), (4), (5), (7), and (8) | ||
and adding Subdivisions (1-a), (1-b), (2-a), (3-a), (5-a), and | ||
(6-a) to read as follows: | ||
(1) "Center" means the financial crimes intelligence | ||
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Occupations [ |
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(1-a) "Commission" means the Texas Commission of | ||
Licensing and Regulation. | ||
(1-b) "Credit card issuer" has the meaning assigned by | ||
Section 505.001. | ||
(2) "Department" means the Texas Department of | ||
Licensing and Regulation [ |
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(2-a) "Executive director" means the executive | ||
director of the department. | ||
(3-a) "Institution of higher education" has the | ||
meaning assigned by Section 61.003, Education Code. | ||
(4) "Merchant" means a person whose business includes | ||
the sale of motor fuel through motor fuel metering devices | ||
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(5) "Motor fuel" and "motor fuel metering device" have | ||
the meanings assigned by Section 2310.001, Occupations Code [ |
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(5-a) "Motor fuel unattended payment terminal" means a | ||
point-of-sale terminal or kiosk that is operated by a customer to | ||
activate or complete a transaction at a motor fuel metering device | ||
through the use of a payment card or a payment by other electronic | ||
means. | ||
(6-a) "Payment card network" means an entity that | ||
directly, or through a licensed member, processor, or agent, | ||
provides the proprietary services, infrastructure, and software | ||
that route information and data to conduct debit card or credit card | ||
transaction authorization, clearance, and settlement, and that an | ||
entity uses in order to accept as a form of payment a brand of debit | ||
card, credit card, or other device that may be used to carry out | ||
debit or credit transactions. | ||
(7) "Service company" and "service technician" have | ||
the meanings assigned by Section 2310.151 [ |
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(8) "Skimmer" means a wire or electronic device that | ||
is capable of unlawfully intercepting electronic communications or | ||
data to perpetrate fraud. [ |
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SECTION 3. Subchapter A, Chapter 607, Business & Commerce | ||
Code, is amended by adding Sections 607.002, 607.003, and 607.004 | ||
to read as follows: | ||
Sec. 607.002. ADMINISTRATION AND ENFORCEMENT OF CHAPTER. | ||
(a) The department shall administer and enforce this chapter. | ||
(b) The commission or the executive director may enforce | ||
this chapter, a rule adopted under this chapter, or an order of the | ||
commission or executive director as provided by Subchapters F and | ||
G, Chapter 51, Occupations Code. | ||
Sec. 607.003. FUNDING. The department may solicit and | ||
accept gifts, grants, and other donations for purposes of | ||
administering this chapter, except that the department may not | ||
solicit or accept a gift, grant, or other donation from a license | ||
holder as defined by Section 2310.151, Occupations Code. | ||
Sec. 607.004. RULES. The commission shall adopt rules for | ||
administering this chapter. | ||
SECTION 4. Section 607.053, Business & Commerce Code, is | ||
amended to read as follows: | ||
Sec. 607.053. NOTICE OF DISCOVERY OF SKIMMER REQUIRED. (a) | ||
If a service technician discovers a skimmer in or on a motor fuel | ||
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device [ |
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employs the technician shall [ |
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and the merchant of the skimmer in the manner prescribed by | ||
commission rule. | ||
(b) If a merchant discovers a [ |
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fuel unattended payment terminal or motor fuel metering device or | ||
is notified of the presence of a skimmer [ |
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commission rule: | ||
(1) [ |
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the motor fuel metering device [ |
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discovered; | ||
(1-a) [ |
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department that a skimmer has been detected; and | ||
(2) take appropriate measures to protect [ |
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with [ |
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arrives and the skimmer is removed[ |
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SECTION 5. Section 607.054(a), Business & Commerce Code, is | ||
amended to read as follows: | ||
(a) The department may accept a report of a suspected | ||
skimmer from any interested person, including [ |
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(1) a law enforcement agency; | ||
(2) a financial institution; | ||
(3) a credit card or debit card issuer [ |
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(4) a service technician or service company; | ||
(5) a member of the public; and[ |
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(6) a payment card network [ |
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SECTION 6. Section 607.055, Business & Commerce Code, is | ||
amended to read as follows: | ||
Sec. 607.055. INVESTIGATION OF SKIMMER REPORT. (a) On | ||
receipt of a report under Section 607.053 or 607.054, the | ||
department may conduct an inspection for the presence of suspected | ||
skimmers [ |
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(b) The department [ |
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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 metering device | ||
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fuel metering device located at the same place of business. | ||
(d) A merchant shall cooperate with the department or law | ||
enforcement agency during an investigation of a skimmer discovered | ||
or reported at the merchant's place of business and permit the | ||
inspection and alteration of motor fuel metering devices at the | ||
place of business [ |
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necessary. | ||
SECTION 7. Sections 607.056(b), (d), and (e), Business & | ||
Commerce Code, are amended to read as follows: | ||
(b) Information described by Subsection (a) may be | ||
disclosed to: | ||
(1) an institution of higher education [ |
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(2) a law enforcement agency; | ||
(3) the center; | ||
(4) a credit card issuer, a debit card issuer, a | ||
financial institution that is not a credit card issuer, or a payment | ||
card network that may be impacted by the use of a skimmer on a motor | ||
fuel [ |
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metering device [ |
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(5) another person if the disclosure of the | ||
information is permitted or required by other law or court order; | ||
(6) a trade association representing a financial | ||
institution; or | ||
(7) a department contractor or other agent. | ||
(d) On the dismissal or final resolution of a report [ |
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Subsection (a) is subject to disclosure under Chapter 552, | ||
Government Code. | ||
(e) Notwithstanding Subsection (a), a law enforcement | ||
agency or the center [ |
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public information made confidential by that subsection if the law | ||
enforcement agency or the chief intelligence coordinator for the | ||
center [ |
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information furthers a law enforcement purpose, except that a law | ||
enforcement agency or the center may not disclose to the public the | ||
identity of a person that submits a report of a suspected skimmer to | ||
the department under Section 607.053 or 607.054. | ||
SECTION 8. Subchapter C, Chapter 607, Business & Commerce | ||
Code, is amended by adding Section 607.1021 to read as follows: | ||
Sec. 607.1021. CIVIL PENALTY. (a) A person who violates | ||
this chapter or a rule adopted under this chapter is liable to the | ||
state for a civil penalty. | ||
(b) The attorney general or the executive director may bring | ||
an action to collect a penalty under this section. | ||
(c) The provisions of Section 51.352, Occupations Code, | ||
relating to an action to collect and the amount of a civil penalty | ||
under that section apply to an action to collect and the amount of a | ||
civil penalty under this section. | ||
SECTION 9. Section 607.103, Business & Commerce Code, is | ||
amended to read as follows: | ||
Sec. 607.103. OFFENSES; PENALTIES. (a) A person commits an | ||
offense if the person refuses to allow an inspection of a motor fuel | ||
metering device [ |
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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 a motor fuel | ||
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device [ |
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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 a motor fuel [ |
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offense under this subsection is a felony of the third degree. | ||
SECTION 10. Section 2310.101, Occupations Code, is amended | ||
by adding Subsection (c) to read as follows: | ||
(c) Regardless of whether the department has received a | ||
report of a suspected skimmer under Section 607.053 or 607.054, | ||
Business & Commerce Code, the department may inspect each motor | ||
fuel metering device located at a dealer's retail outlet if the | ||
department has reason to believe that a skimmer is installed on or | ||
in a motor fuel unattended payment terminal or motor fuel metering | ||
device at the retail outlet. In this subsection, "motor fuel | ||
unattended payment terminal" and "skimmer" have the meanings | ||
assigned by Section 607.001, Business & Commerce Code. | ||
SECTION 11. Chapter 424, Government Code, as added by | ||
Chapter 863 (H.B. 2945), Acts of the 86th Legislature, Regular | ||
Session, 2019, is transferred to Subtitle A, Title 14, Occupations | ||
Code, redesignated as Chapter 2312, Occupations Code, and amended | ||
to read as follows: | ||
CHAPTER 2312 [ |
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SUBCHAPTER A. GENERAL PROVISIONS | ||
Sec. 2312.001 [ |
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(1) "Card fraud" means an act that constitutes the | ||
offense of fraudulent use or possession of a credit card or debit | ||
card under Section 32.315, Penal Code. | ||
(2) "Center" means the financial crimes intelligence | ||
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(3) "Commission" means the Texas Commission of | ||
Licensing and Regulation. | ||
(4) "Department" means the Texas Department of | ||
Licensing and Regulation. | ||
(5) [ |
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mechanical, or other device that may be used to [ |
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unlawfully intercept [ |
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data to perpetrate card fraud. | ||
Sec. 2312.002. RULES. The commission shall adopt rules as | ||
necessary to implement this chapter [ |
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SUBCHAPTER B. PURPOSE AND ADMINISTRATION | ||
Sec. 2312.051 [ |
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center within the department [ |
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Sec. 2312.052. PURPOSES [ |
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(1) serve [ |
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the planning, coordination, and integration of [ |
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(2) [ |
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the ability of the department, law enforcement agencies, and other | ||
governmental agencies to detect, prevent, and respond to criminal | ||
activities related to card [ |
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Sec. 2312.053. OPERATION AGREEMENTS AUTHORIZED; CHIEF | ||
INTELLIGENCE COORDINATOR. (a) The department: | ||
(1) may enter into agreements with law enforcement | ||
agencies or other governmental agencies for the operation of the | ||
center; and | ||
(2) shall enter into an agreement with a law | ||
enforcement agency or other governmental agency for the appointment | ||
of a chief intelligence coordinator to supervise and manage the | ||
operation of the center. | ||
(b) The chief intelligence coordinator appointed under the | ||
agreement required by Subsection (a)(2) may be a licensed peace | ||
officer. The agreement must provide that the commission of a chief | ||
intelligence coordinator who is a licensed peace officer will be | ||
carried by the agency with which the department enters into the | ||
agreement under that subdivision. | ||
(c) Information a law enforcement agency or other | ||
governmental agency collects and maintains under an agreement | ||
entered into with the department under this chapter is the | ||
intellectual property of the center. On termination of the | ||
agreement, the contracting agency shall transfer the information to | ||
the department in accordance with the terms of the agreement. | ||
Sec. 2312.054 [ |
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center may collaborate with federal, state, and local governmental | ||
agencies [ |
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accomplish the purposes [ |
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(b) The center shall assist law enforcement agencies, [ |
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other governmental agencies, financial institutions, credit card | ||
issuers, debit card issuers, payment card networks, institutions of | ||
higher education, 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 card [ |
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(c) The center may: | ||
(1) serve as a centralized collection point for | ||
information related to card fraud; | ||
(2) provide training and educational opportunities to | ||
law enforcement; | ||
(3) provide outreach to the public; and | ||
(4) release information to affected financial | ||
institutions, credit card issuers, debit card issuers, payment card | ||
networks, institutions of higher education, and merchants if the | ||
center does not consider the information to be sensitive to law | ||
enforcement. | ||
(d) For purposes of Subsection (c)(4), information is | ||
considered sensitive to law enforcement if the information could | ||
cause harm to law enforcement activities or jeopardize an | ||
investigation or operation if disclosed. | ||
Sec. 2312.055. ANNUAL REPORT. (a) Not later than December | ||
1 of each year, the chief intelligence coordinator shall file a | ||
report with the department. | ||
(b) The report must include: | ||
(1) a plan of operation for the center and an estimate | ||
of the amount of money necessary to implement that plan; | ||
(2) an assessment of the current state of card fraud in | ||
this state, including: | ||
(A) an identification of the geographic | ||
locations in this state that have the highest statistical | ||
probability for card fraud; and | ||
(B) a summary of card fraud statistics for the | ||
year in which the report is filed; | ||
(3) a detailed plan of operation for combatting card | ||
fraud; | ||
(4) a communications plan for outreach to law | ||
enforcement agencies, financial institutions, credit card issuers, | ||
debit card issuers, payment card networks, merchants, and the | ||
public; and | ||
(5) a list of expenditures made since the most recent | ||
report was filed with the department. | ||
SUBCHAPTER C. FINANCIAL PROVISIONS | ||
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Sec. 2312.101 [ |
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department [ |
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gifts, grants, and other donations to fund, administer, and carry | ||
out the purposes [ |
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department may not solicit or accept a gift, grant, or other | ||
donation from a license holder as defined by Section 2310.151. | ||
Sec. 2312.102. AWARD OF GRANTS. (a) Subject to the | ||
availability of appropriated money, the department may award grants | ||
for the purposes of this chapter by entering into a contract with | ||
each grant recipient. | ||
(b) A grant recipient may use grant money to: | ||
(1) reduce card fraud by removing skimmers; | ||
(2) purchase or upgrade fraud deterrence equipment, | ||
including unique locking systems, cameras, and lights; | ||
(3) provide training opportunities regarding | ||
skimmers; and | ||
(4) conduct public outreach regarding card fraud. | ||
SECTION 12. The following provisions of the Business & | ||
Commerce Code are repealed: | ||
(1) Section 607.001(9); | ||
(2) Section 607.051; | ||
(3) Section 607.052; | ||
(4) Section 607.054(b); | ||
(5) Section 607.101; and | ||
(6) Section 607.102. | ||
SECTION 13. (a) The Texas Department of Licensing and | ||
Regulation may establish a workgroup composed of stakeholders to | ||
provide input, advice, and recommendations regarding the | ||
department's powers and duties under and the administration of: | ||
(1) Chapter 607, Business & Commerce Code, as amended | ||
by this Act; | ||
(2) Section 2310.101(c), Occupations Code, as added by | ||
this Act; and | ||
(3) Chapter 2312, Occupations Code, as transferred, | ||
redesignated, and amended by this Act. | ||
(b) If a workgroup is established as authorized by | ||
Subsection (a) of this section, the Texas Department of Licensing | ||
and Regulation shall lead the workgroup and determine the | ||
workgroup's size, composition, and scope of purpose. | ||
(c) A workgroup established under this section is abolished | ||
and this section expires December 1, 2022. | ||
SECTION 14. The Texas Commission of Licensing and | ||
Regulation shall adopt rules necessary to implement the changes in | ||
law made by this Act not later than September 1, 2021. | ||
SECTION 15. (a) On the effective date of this Act: | ||
(1) the payment fraud fusion center is redesignated as | ||
the financial crimes intelligence center; | ||
(2) all powers, duties, functions, programs, and | ||
activities of the office of the attorney general under Chapter 424, | ||
Government Code, as added by Chapter 863 (H.B. 2945), Acts of the | ||
86th Legislature, Regular Session, 2019, as that chapter existed | ||
immediately before the effective date of this Act, are transferred | ||
to the Texas Commission of Licensing and Regulation and the Texas | ||
Department of Licensing and Regulation; | ||
(3) all obligations, contracts, property, and records | ||
of the office of the attorney general that are related to a power, | ||
duty, function, program, or activity transferred under Subdivision | ||
(2) of this subsection are transferred to the Texas Commission of | ||
Licensing and Regulation and the Texas Department of Licensing and | ||
Regulation; and | ||
(4) all pending complaints, investigations, or | ||
contested cases that are related to a power, duty, function, | ||
program, or activity transferred under Subdivision (2) of this | ||
subsection are transferred without change in status to the Texas | ||
Commission of Licensing and Regulation and the Texas Department of | ||
Licensing and Regulation. | ||
(b) A rule or form adopted by the office of the attorney | ||
general that relates to a power, duty, function, program, or | ||
activity transferred under Subsection (a)(2) of this section is a | ||
rule or form of the Texas Commission of Licensing and Regulation and | ||
the Texas Department of Licensing and Regulation, as applicable, | ||
until altered by the commission. | ||
SECTION 16. Section 607.103, Business & Commerce Code, as | ||
amended by this Act, applies only to an offense committed on or | ||
after the effective date of this Act. An offense committed before | ||
the effective date of this Act is governed by the law in effect on | ||
the date the offense was committed, and the former law is continued | ||
in effect for that purpose. For purposes of this section, an | ||
offense was committed before the effective date of this Act if any | ||
element of the offense occurred before that date. | ||
SECTION 17. To the extent of any conflict, this Act prevails | ||
over another Act of the 87th Legislature, Regular Session, 2021, | ||
relating to nonsubstantive additions to and corrections in enacted | ||
codes. | ||
SECTION 18. This Act takes effect September 1, 2021. | ||
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