C.S.H.B. 2138 78(R)    BILL ANALYSIS


C.S.H.B. 2138
By: Hopson
Financial Institutions
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Credit card "skimming" is a method by which information encoded in a
magnetic strip of a credit card is gathered by an electronic card reader,
or skimmer.  This information is used legitimately when processing a
credit card transaction.  However, a skimmer can become a handy tool for
criminals who use the skimmed data for illegal transactions and purchases
or to re-encode the magnetic strip of a counterfeit card. 

C.S.H.B. 2138 would create an offense for a person who uses a skimmer or
re-encoder to access, read, scan, store, or transfer the information
encoded on a payment card's magnetic strip without the consent of the
card's authorized user. 

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state officer, department, agency, or
institution. 

ANALYSIS

C.S.H.B. 2138 adds new Section 35.38, Business & Commerce Code to provide
that a person commits an offense by using a scanning device or re-encoder
to access, read, scan, store, or transfer information encoded on the
magnetic strip of a payment card without the consent of the card's
authorized user and with intent to harm or defraud another.  Such an
offense is a Class B misdemeanor (up to $2,000 fine and/or up to 180 days
in jail).  However, the perpetrator may be prosecuted under another law if
the action triggering this bill's provisions also constitutes another
offense.  

The bill provides definitions for "payment card," "re-encoder," and
"scanning device," and makes conforming changes to the Code of Criminal
Procedure. 

EFFECTIVE DATE

September 1, 2003

COMPARISON OF ORIGINAL TO SUBSTITUTE

The substitute adds the provision permitting the prosecution of another
offense in lieu of prosecuting for an offense established by the bill.