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  H.B. No. 2106
 
 
 
 
AN ACT
  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
  [DISPENSERS]
         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
  [payment fraud fusion] center established under Chapter 2312 [424],
  Occupations [Government] Code.
               (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 [state agency that is the licensing
  authority for service companies and service technicians].
               (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
  [dispensers] to retail customers.
               (5)  "Motor fuel" and "motor fuel metering device" have
  the meanings assigned by Section 2310.001, Occupations Code ["Motor
  fuel dispenser" means a machine that is used to pump gasoline,
  diesel, biofuels, or other types of fuels into motor vehicles].
               (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 [13.451], Occupations
  [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.]
         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
  [the] unattended payment terminal or [of a] motor fuel metering
  device [dispenser], the service technician or service company that
  employs the technician shall [immediately] notify the department
  and the merchant of the skimmer in the manner prescribed by
  commission rule.
         (b)  If a merchant discovers a [the] skimmer in or on a motor
  fuel unattended payment terminal or motor fuel metering device or
  is notified of the presence of a skimmer [by a service technician or
  other person], the merchant shall, in the manner prescribed by
  commission rule:
               (1)  [immediately] disable, or cause to be disabled,
  the motor fuel metering device [dispenser] on which the skimmer was
  discovered;
               (1-a)  [and] notify a law enforcement agency and the
  department that a skimmer has been detected; and
               (2)  take appropriate measures to protect [from
  tampering with] the motor fuel metering device from being tampered
  with [dispenser] until the department or law enforcement agency
  arrives and the skimmer is removed[; 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].
         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 [In this section,
  "interested person" includes]:
               (1)  a law enforcement agency;
               (2)  a financial institution;
               (3)  a credit card or debit card issuer [as defined by
  Section 505.001];
               (4)  a service technician or service company;
               (5)  a member of the public; and[; or]
               (6)  a payment card network [any other interested
  person].
         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 [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 metering device
  [dispenser] that is the subject of the report and any other motor
  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 [department or agency to inspect and alter the
  motor fuel dispenser that is the subject of the report] as
  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 [the attorney
  general];
               (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 [the] unattended payment terminal or [of a] motor fuel
  metering device [dispenser]; [or]
               (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 [or
  investigation] by the department, information described by
  Subsection (a) is subject to disclosure under Chapter 552,
  Government Code.
         (e)  Notwithstanding Subsection (a), a law enforcement
  agency or the center [the attorney general] may disclose to the
  public information made confidential by that subsection if the law
  enforcement agency or the chief intelligence coordinator for the
  center [attorney general] determines that the disclosure of the
  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 [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 a motor fuel
  [the] unattended payment terminal or [of a] motor fuel metering
  device [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 a motor fuel [the] unattended payment terminal or [of
  a] motor fuel metering device [dispenser] by another person.  An
  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 [424]. FINANCIAL CRIMES INTELLIGENCE [PAYMENT FRAUD
  FUSION] CENTER
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 2312.001 [424.001].  DEFINITIONS. In this chapter:
               (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
  [payment fraud fusion] center established under this chapter.
               (3)  "Commission" means the Texas Commission of
  Licensing and Regulation.
               (4)  "Department" means the Texas Department of
  Licensing and Regulation.
               (5) [(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 an [a wire or] electronic,
  mechanical, or other device that may be used to [is capable of]
  unlawfully intercept [intercepting] electronic communications or
  data to perpetrate card fraud.
         Sec. 2312.002.  RULES. The commission shall adopt rules as
  necessary to implement this chapter [The term includes a re-encoder
  and scanning device, as those terms are defined by Section 522.001,
  Business & Commerce Code].
  SUBCHAPTER B. PURPOSE AND ADMINISTRATION
         Sec. 2312.051 [424.002].  FINANCIAL CRIMES INTELLIGENCE
  [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 commission [attorney general] shall establish the
  center within the department [in the City of Tyler].
         Sec. 2312.052.  PURPOSES [424.003.  PURPOSE] OF CENTER.
  [(a)]  The purposes of the center are to:
               (1)  serve [serves] as the state's primary entity for
  the planning, coordination, and integration of [the capabilities
  of] law enforcement agencies and other governmental agencies that
  [to] respond to criminal activity [that is] related to card
  [payment] fraud, including through the use of skimmers; and[.]
               (2)  [(b)  The purpose of the center is to] maximize
  the ability of the department, law enforcement agencies, and other
  governmental agencies to detect, prevent, and respond to criminal
  activities related to card [payment] fraud.
         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 [424.004].  POWERS AND DUTIES. (a)  The
  center may collaborate with federal, state, and local governmental
  agencies [for the performance of the center's duties and] to
  accomplish the purposes [purpose] of the center.
         (b)  The center shall assist law enforcement agencies, [and]
  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 [payment] fraud.
         (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
         [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. 2312.101 [424.008].  FUNDING [GIFTS AND GRANTS]. The
  department [payment fraud fusion center] may solicit and accept
  gifts, grants, and other donations to fund, administer, and carry
  out the purposes [purpose] of the center, 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.
         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.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 2106 was passed by the House on April
  28, 2021, by the following vote:  Yeas 144, Nays 0, 1 present, not
  voting.
 
  ______________________________
  Chief Clerk of the House   
 
 
         I certify that H.B. No. 2106 was passed by the Senate on May
  18, 2021, by the following vote:  Yeas 31, Nays 0.
 
  ______________________________
  Secretary of the Senate    
  APPROVED:  _____________________
                     Date          
   
            _____________________
                   Governor