89R15796 JCG-F

By: Cook H.B. No. 4301

A BILL TO BE ENTITLED

AN ACT

relating to the financial crimes intelligence center, including the establishment of an advisory committee and grants supporting the investigation and prosecution of certain offenses.

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

SECTION 1. Chapter 2312, Occupations Code, is transferred to Subtitle B, Title 4, Government Code, redesignated as Chapter 426, Government Code, and amended to read as follows:

CHAPTER 426 [2312]. FINANCIAL CRIMES INTELLIGENCE CENTER

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 426.001 [2312.001]. DEFINITIONS. In this chapter:

(1) "Card fraud" means conduct constituting an [act that constitutes the] offense [of fraudulent use or possession of a credit card or debit card] under Section 32.315, Penal Code. The term includes the commission of the offense by use of a skimmer.

(2) "Cargo theft" means conduct constituting an offense under Section 31.18, Penal Code.

(3) [(2)] "Center" means the financial crimes intelligence center established under this chapter.

(4) "Chief" means the chief intelligence coordinator appointed to supervise and manage the operation of the center under Section 426.053.

(5) [(3)] "Commission" means the Texas Commission of Licensing and Regulation.

(6) [(4)] "Department" means the Texas Department of Licensing and Regulation.

(7) "Law enforcement agency" means an agency of this state or a political subdivision of this state authorized by law to appoint or employ peace officers.

(8) "Mail theft" means conduct constituting an offense under Section 31.20, Penal Code.

(9) "Organized retail theft" means conduct constituting an offense under Section 31.16, Penal Code.

(10) "Prosecutor" means a district attorney, a criminal district attorney, or a county attorney who may prosecute criminal offenses.

(11) [(5)] "Skimmer" means an electronic, mechanical, or other device that may be used to unlawfully intercept electronic communications or data to perpetrate card fraud.

(12) "Theft of service" means conduct constituting an offense under Section 31.04, Penal Code.

(13) "Unauthorized acquisition or transfer of certain financial information" means conduct constituting an offense under Section 31.17, Penal Code.

Sec. 426.002 [2312.002]. RULES. The commission shall adopt rules as necessary to implement this chapter.

SUBCHAPTER B. PURPOSE AND ADMINISTRATION; LAW ENFORCEMENT AGENCY

AND PROSECUTOR DUTIES

Sec. 426.051 [2312.051]. FINANCIAL CRIMES INTELLIGENCE CENTER ESTABLISHED. The commission shall establish the center within the department.

Sec. 426.052 [2312.052]. PURPOSES OF CENTER. The purposes of the center are to:

(1) serve as the state's primary entity for the planning, coordination, and integration of law enforcement agencies and other governmental agencies that respond to criminal activity related to card fraud and organized retail theft[, including through the use of skimmers]; and

(2) maximize the ability of the department, law enforcement agencies, and other governmental agencies to detect, prevent, and respond to criminal activities related to card fraud and organized retail theft.

Sec. 426.053 [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. 426.054 [2312.054]. POWERS AND DUTIES. (a) The center may collaborate with federal, state, and local governmental agencies to accomplish the purposes of the center.

(b) The center shall assist law enforcement agencies, 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 fraud; and

(4) detect and prevent organized retail theft.

(c) The center may:

(1) serve as a centralized collection point for information related to card fraud and organized retail theft;

(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. 426.055 [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 and organized retail theft in this state, including:

(A) an identification of the geographic locations in this state that have the highest statistical probability for card fraud and organized retail theft; and

(B) a summary of card fraud and organized retail theft statistics for the year in which the report is filed;

(3) a detailed plan of operation for combatting card fraud and organized retail theft;

(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.

Sec. 426.056. DUTIES OF LAW ENFORCEMENT AGENCIES AND PROSECUTORS. (a) A law enforcement agency or prosecutor that is investigating or prosecuting organized retail theft, card fraud, cargo theft, fraud involving gift cards and related to organized retail theft, mail theft, theft of service, or unauthorized acquisition or transfer of certain financial information, at the request of the center, shall cooperate and assist the center in collecting any statistical data or intelligence on the nature and extent of those activities in the possession of the law enforcement agency or prosecutor.

(b) A law enforcement agency or prosecutor may disclose confidential information under Subsection (a) to the center, and any disclosure of confidential information under this section does not waive or affect the confidentiality of the information for purposes of state or federal law or waive the right to assert exceptions to required disclosure of the information in the future.

(c) Information collected under this section is excepted from the requirements of Section 552.021.

SUBCHAPTER C. FINANCIAL PROVISIONS

Sec. 426.101 [2312.101]. FUNDING. The department may solicit and accept gifts, grants, and other donations to fund, administer, and carry out the purposes 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, Occupations Code.

Sec. 426.102 [2312.102]. AWARD OF GRANTS FOR FRAUD DETERRENCE. (a) Subject to the availability of appropriated money, the department may award grants for the purposes of Subsection (b) [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.

Sec. 426.103. AWARD OF GRANTS FOR ORGANIZED RETAIL THEFT INVESTIGATION AND PROSECUTION. (a) From any funds available for this purpose, the center by rule shall establish and implement procedures to award grants that provide funding to eligible law enforcement agencies and prosecuting attorneys to investigate and prosecute organized retail theft.

(b) To be eligible for a grant, a recipient must be:

(1) a law enforcement agency that has established or intends to establish a program or policy designed to prevent or investigate organized retail theft; or

(2) a prosecuting attorney who:

(A) regularly prosecutes organized retail theft; or

(B) has established or intends to establish a program or policy focusing on the prosecution of organized retail theft.

(c) The rules adopted under this section must:

(1) prioritize the award of grants based on a demonstrated need for resources to prevent, investigate, or prosecute organized retail theft in the jurisdiction of the law enforcement agency or prosecuting attorney;

(2) include accountability measures for grant recipients and mechanisms for enforcing the condition of any grant; and

(3) require grant recipients to provide the center with information regarding outcomes resulting from the use of grant money.

SUBCHAPTER D. ORGANIZED RETAIL THEFT PREVENTION ADVISORY COMMITTEE

Sec. 426.151. DEFINITIONS. In this subchapter:

(1) "Advisory committee" means the organized retail theft prevention advisory committee established under this subchapter.

(2) "Qualifying theft and fraud scheme" means conduct that constitutes:

(A) card fraud;

(B) cargo theft;

(C) fraud involving gift cards and related to organized retail theft;

(D) mail theft;

(E) theft of service; or

(F) unauthorized acquisition or transfer of certain financial information.

Sec. 426.152. ESTABLISHMENT OF ADVISORY COMMITTEE. The center shall establish the organized retail theft prevention advisory committee to develop policies, procedures, and intelligence to assist in the prevention and prosecution of organized retail theft and qualifying theft and fraud schemes.

Sec. 426.153. MEMBERSHIP. (a) The advisory committee consists of 15 members appointed by the chief as follows:

(1) one representative of the center;

(2) two representatives of local law enforcement agencies located in different municipalities, each with a population of 500,000 or more;

(3) two representatives of local law enforcement agencies located in different municipalities, each with a population of 200,000 or more but less than 500,000;

(4) one representative of a local law enforcement agency located in a municipality with a population of less than 200,000;

(5) one prosecutor whose jurisdiction includes a county with a population of 500,000 or more;

(6) one prosecutor whose jurisdiction includes a county with a population of 200,000 or more but less than 500,000;

(7) one retail investigator;

(8) three retailer representatives who specialize in organized retail theft;

(9) one representative from an online retailer;

(10) one expert in fraud involving gift cards; and

(11) one expert in the unauthorized acquisition or transfer of certain financial information.

(b) The center shall ensure that the members of the advisory committee reflect the diverse geographic regions of the state.

(c) The presiding officer of the advisory committee is the center's representative.

Sec. 426.154. MEETINGS. The advisory committee shall meet at least quarterly and at the call of the presiding officer or the center. An advisory committee meeting may be conducted virtually through the Internet.

Sec. 426.155. ANNUAL EVALUATION OF MEMBERSHIP PARTICIPATION. The center shall annually evaluate the input and participation of members appointed under Section 426.153 and remove members and appoint new members as necessary to ensure that each member of the advisory committee collaborates and contributes to the advisory committee.

Sec. 426.156. GENERAL DUTIES. The advisory committee shall:

(1) advise the center and law enforcement agencies on methods and procedures to:

(A) detect, deter, and prevent criminal activity related to organized retail theft and qualifying theft and fraud schemes; and

(B) develop best practices for conducting investigations and responding to criminal activity related to organized retail theft and related qualifying theft and fraud schemes;

(2) collect and organize statistical data and intelligence on the nature and extent of organized retail theft and qualifying theft and fraud schemes, including:

(A) the number of investigations concerning, arrests and prosecutions for, and convictions of the offense of organized retail theft and any offense that is a qualifying theft and fraud scheme;

(B) demographic information on persons who are convicted of offenses described by Paragraph (A) and the merchants and related persons who are the victims of those offenses; and

(C) intelligence on the methods and means used by persons who engage in organized retail theft and qualifying theft and fraud schemes; and

(3) collaborate with the Texas Commission on Law Enforcement to develop and conduct training for peace officers on the identification and prevention of organized retail theft and qualifying theft and fraud schemes.

Sec. 426.157. REPORT. Not later than December 1 of each year, the advisory committee shall file with the center a report that must include a detailed account of its activities.

Sec. 426.158. INFORMATION EXCEPTED FROM REQUIRED PUBLIC DISCLOSURE. The information collected under Section 426.156 is excepted from the requirements of Section 552.021.

Sec. 426.159. APPLICABILITY OF OTHER LAW. Chapter 2110 does not apply to the size, composition, or duration of the advisory committee or to the appointment of the advisory committee's presiding officer.

SECTION 2. This Act takes effect September 1, 2025.