80R7613 HLT-D

By: Giddings H.B. No. 2003

A BILL TO BE ENTITLED

AN ACT

relating to the approval of certain checks by a check verification entity following notification that the issuer was a victim of identity theft; providing a civil penalty.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter D, Chapter 35, Business & Commerce Code, is amended by adding Section 35.597 to read as follows:

Sec. 35.597. CHECK VERIFICATION ENTITY'S APPROVAL OF CERTAIN CHECKS ON NOTIFICATION OF IDENTITY THEFT. (a) In this section:

(1) "Check verification" means a determination of whether the issuer of a check or similar sight order:

(A) has sufficient funds in or on deposit with the bank or other drawee for the payment in full of the check or order and all other checks or orders then outstanding; or

(B) has a history of issuing checks or other sight orders for which the issuer does not have sufficient funds in or on deposit with the bank or other drawee for the payment in full of the check or order and all other checks or orders then outstanding.

(2) "Check verification entity" means a business entity that provides check verification services to businesses in this state.

(b) A check verification entity may not approve a check or similar sight order purportedly issued by a person if the person presents to the check verification entity a copy of:

(1) a police report of an offense under Section 32.51, Penal Code; or

(2) a sworn statement by the person that the person was the victim of an offense under that section.

(c) A check verification entity that violates Subsection (b) is liable to the state for a civil penalty of up to $1,000. The attorney general may sue to collect the penalty.

(d) The attorney general may recover reasonable expenses incurred in obtaining a civil penalty under this section, including court costs, reasonable attorney's fees, investigative costs, witness fees, and deposition expenses.

SECTION 2. This Act takes effect September 1, 2007.