Bill Text: TX SB2032 | 2019-2020 | 86th Legislature | Introduced
Bill Title: Relating to payment card skimmers and the creation of a payment card fraud center; imposing a civil penalty; creating criminal offenses.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2019-03-21 - Referred to Business & Commerce [SB2032 Detail]
Download: Texas-2019-SB2032-Introduced.html
2019S0381-1 03/07/19 | ||
By: Hall | S.B. No. 2032 |
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relating to payment card skimmers and the creation of a payment card | ||
fraud center; imposing a civil penalty; 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 | ||
SUBCHAPTER A. GENERAL PROVISIONS | ||
Sec. 607.001. DEFINITIONS. In this chapter: | ||
(1) "Center" means the payment card fraud center | ||
established under Chapter 424, Government Code. | ||
(2) "Financial institution" has the meaning assigned | ||
by Section 277.001, Finance Code. | ||
(3) "Merchant" means a person whose business includes | ||
the sale of motor fuel or other goods and services to retail | ||
customers. | ||
(4) "Motor fuel dispenser" means a machine that is | ||
used to pump gasoline, diesel, biofuels, or other types of fuels | ||
into motor vehicles. | ||
(5) "Payment card" has the meaning assigned by Section | ||
522.001. | ||
(6) "Service company" and "service technician" have | ||
the meanings assigned by Section 13.451, Agriculture Code. | ||
(7) "Skimmer" means a wire or electronic device that | ||
is capable of unlawfully intercepting electronic communications | ||
and used to perpetrate fraud. The term includes a re-encoder and | ||
scanning device, as those terms are defined by Section 522.001. | ||
(8) "Unattended payment terminal" means a | ||
point-of-sale terminal or kiosk that is operated by a customer to | ||
activate a transaction through the use of a payment card. | ||
SUBCHAPTER B. DUTIES RELATED TO USE OF CERTAIN UNATTENDED PAYMENT | ||
TERMINALS | ||
Sec. 607.051. MERCHANT DUTIES REGARDING UNATTENDED PAYMENT | ||
TERMINALS. A merchant that has an unattended payment terminal 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 center. | ||
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 SKIMMERS. (a) If a service | ||
technician discovers a skimmer on the unattended payment terminal, | ||
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 | ||
unattended payment terminal on which the skimmer was discovered and | ||
notify a local law enforcement agency that a skimmer has been | ||
detected; | ||
(2) take appropriate measures to protect the | ||
unattended payment terminal from being tampered with until a local | ||
law enforcement agency arrives; and | ||
(3) not later than 24 hours after the discovery of the | ||
skimmer or after a report of the discovery of a skimmer is made to | ||
the merchant, report the discovery to the center. | ||
(b) 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 local law enforcement agency that a skimmer has been detected; | ||
(2) take appropriate measures to protect the motor | ||
fuel dispenser from being tampered with until a local law | ||
enforcement agency arrives; and | ||
(3) not later than 24 hours after the discovery of the | ||
skimmer or after a report of the discovery of a skimmer is made to | ||
the merchant, report the discovery to the center. | ||
Sec. 607.054. REPORT TO CENTER. (a) In this section, | ||
"interested person" includes: | ||
(1) a local law enforcement agency; | ||
(2) a merchant; | ||
(3) a financial institution; | ||
(4) a credit card issuer as defined by Section | ||
505.001; | ||
(5) a service technician or service company; | ||
(6) a member of the public; or | ||
(7) any other interested person. | ||
(b) An interested person may submit a report of the | ||
discovery of a skimmer on an unattended payment terminal at a | ||
merchant's place of business to the center. | ||
Sec. 607.055. INVESTIGATION OF SKIMMER REPORTS. (a) On | ||
receipt of a report under Section 607.053 or 607.054, the center | ||
shall direct the merchant to conduct an investigation and share the | ||
report with the center. | ||
(b) The center may coordinate with local law enforcement | ||
agencies in conducting an investigation under this section. | ||
(c) A merchant shall cooperate with the center during an | ||
investigation conducted under this section. | ||
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) received by the center under Section 607.053 or | ||
607.054; or | ||
(2) prepared or compiled by the center in connection | ||
with a report to or investigation conducted by the center under this | ||
subchapter. | ||
(b) Information described by Subsection (a) may be | ||
disclosed to: | ||
(1) the attorney general; | ||
(2) a criminal justice agency, as defined by Section | ||
411.082, Government Code; | ||
(3) the center; | ||
(4) a financial institution that may be impacted by | ||
the installation of a skimmer on the unattended payment terminal; | ||
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 center, 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. If the attorney general | ||
has reason to believe that a merchant, after an investigation | ||
conducted by a law enforcement agency, has at the merchant's place | ||
of business an unattended payment terminal on which a skimmer has | ||
been installed and 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. 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 $2,500 for each violation. | ||
(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 not to exceed $2,500 for | ||
each violation. | ||
Sec. 607.103. OFFENSES; PENALTIES. (a) A person commits | ||
an offense if the person refuses to allow the center to direct the | ||
inspection of an unattended payment terminal at a 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, after making a report | ||
under Section 607.053, the person negligently or recklessly | ||
disposes of a skimmer that was installed on the unattended payment | ||
terminal by another person. An offense under this subsection is a | ||
state jail felony. | ||
(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 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 CARD FRAUD CENTER | ||
Sec. 424.001. DEFINITIONS. In this chapter: | ||
(1) "Center" means the payment card fraud center | ||
established under this chapter. | ||
(2) "Payment card" has the meaning assigned by Section | ||
522.001, Business & Commerce Code. | ||
(3) "Skimmer" means a wire or electronic device that | ||
is capable of unlawfully intercepting electronic communications | ||
and used 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 CARD FRAUD CENTER. (a) The | ||
Department of Public Safety and other state or local agencies, as | ||
designated by the attorney general, shall collaborate with the | ||
attorney general to establish a payment card fraud center as | ||
provided by this chapter. The attorney general shall establish the | ||
center in the city of Tyler. | ||
(b) The attorney general shall appoint a director to | ||
supervise and manage the center. The director is under the | ||
supervision and direction of the attorney general. | ||
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 agencies to respond to criminal activity that is related to | ||
payment card fraud, including through the use of skimmers. | ||
(b) The purpose of the center is to maximize the ability of | ||
state agencies and local law enforcement agencies to detect, | ||
prevent, and respond to criminal activities related to payment card | ||
fraud. | ||
(c) The center shall assist state agencies and local law | ||
enforcement 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 card fraud. | ||
Sec. 424.004. RULES. The attorney general by rule shall | ||
adopt reasonable policies and procedures necessary to implement | ||
this chapter. | ||
Sec. 424.005. FACILITIES AND ADMINISTRATIVE SUPPORT. A | ||
municipality's police department may provide facilities and | ||
administrative support if the center is established in the | ||
municipality. | ||
Sec. 424.006. GIFTS AND GRANTS. The center may accept | ||
gifts, grants, and donations to carry out the purpose of the center. | ||
SECTION 3. This Act takes effect September 1, 2019. |