BILL ANALYSIS Ó AB 2307 Page 1 Date of Hearing: May 4, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair AB 2307 (Chau) - As Amended April 11, 2016 ----------------------------------------------------------------- |Policy |Privacy and Consumer |Vote:|11 - 0 | |Committee: |Protection | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: YesReimbursable: Yes SUMMARY: This bill establishes a uniform reporting protocol for service agents alerted to the presence of a credit card skimming device or who discover a suspicious device during the course of a AB 2307 Page 2 repair of a weighing and measuring device. Specifically, this bill: 1)Requires a county sealer who receives information or evidence indicating that any weighing or measuring device under the county sealer's jurisdiction has been altered to facilitate fraudulent activity to coordinate with the appropriate law enforcement authorities in investigating and prosecuting the fraudulent activity. 2)Requires a service agency or service agent, upon discovering an altering device, to report to the county sealer within 24 hours and, if the service agency or service agent has possession of the device, to surrender the device to the county sealer or local law enforcement within 24 hours of discovery. FISCAL EFFECT: Negligible state fiscal impact. The bill contains a potential reimbursable mandate for the reporting requirement, but county sealers indicate that this cost is minor. It is unlikely a county would submit a claim to the Commission on State Mandates. COMMENTS: 1)Purpose. This bill is intended to help prevent credit card fraud and identity theft by requiring service agents who AB 2307 Page 3 repair gas pumps and other measuring devices to report and turn over credit card skimming devices within 24 hours to their county sealer, or law enforcement. According to the author's office, "Across the country, criminal organizations are using skimmer devices to steal money from unsuspecting victims using gas pumps, ATMs, or other credit card vending machines. In 2015, there was an inspection conducted at 33 gas stations in Los Angeles and Ventura Counties, by personnel from the Los Angeles County Agricultural Commissioner's office, numerous federal and local law enforcement agencies, an energy corporation, and a financial services corporation, which found ten credit card skimmers located at eight gas stations. Unfortunately, there is no uniform process for dealing with these devices when they are discovered by a service agent in California. Reports from county sealers throughout California indicate that service agents often dispose skimmers into the garbage or hand them over to gas station attendants instead of reporting the problem." 2)Background. County sealers of weights and measures are responsible for ensuring all commercial scaling and volumetric measuring devices are providing accurate readings, so customers pay the appropriate amount for the product they are purchasing. One of the most common devices sealers test annually is gas station pumps. If the county sealer determines that a gas pump is not providing an accurate reading, then it is removed from operation until an authorized service agent can repair the pump. According to the California Agricultural Commissioners and Sealers Association, service agents have been encountering a growing number of credit card skimmers in the course of repairing gas pumps. Unlike retails stores, which typically have cashiers at point-of-sale, gas stations typically have self-service pumps AB 2307 Page 4 making them harder to monitor to prevent tampering. In addition, the oil industry received a two-year extension to October 2017 to comply with new federal regulations that began requiring all other retailers to install chip enabled credit card machines by October 2015. Analysis Prepared by:Jennifer Swenson / APPR. / (916) 319-2081