BILL ANALYSIS Ó
SENATE COMMITTEE ON
BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT
Senator Jerry Hill, Chair
2015 - 2016 Regular
Bill No: AB 2307 Hearing Date: June 20,
2016
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|Author: |Chau |
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|Version: |April 11, 2016 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Mark Mendoza |
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Subject: Weights and measures: reporting fraud
SUMMARY: Establishes a uniform reporting protocol for service agents
that discover a device that facilitates fraud found during their
repair of a weighing and measuring device.
Existing law:
1) Establishes the office of the county sealer in California's
58 counties and authorizes the sealer to prosecute violations
of laws relating to weights and measures. (Business and
Professions Code (BPC) § 1201; 12015; and 12200; et seq.)
2) Requires that service agents, who act as agents of county
sealers, be registered by the Secretary of Food and
Agriculture. (BPC § 12532(a))
3) Specifies that a device may only be placed into service by a
county sealer or a service agent. (BPC § 12532(d))
4) Specifies that a person who repairs a device is not required
to be registered with the Secretary of Food and Agriculture
as long as the device is placed into service following a
repair by a sealer or registered service agent or registered
service agency. (BPC 12532(e))
This bill:
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1) Requires a county sealer who receives information or evidence
indicating that any weighing or measuring device, parking
meter, or other installation under the county sealer's
jurisdiction has been altered in such a way to facilitate any
type of fraud, to coordinate with the appropriate law
enforcement authorities as needed in investigating and
prosecuting the fraudulent activity.
2) Requires a service agency or service agent to report to the
county sealer, within 24 hours, if a measuring device has
been altered in such a way as to facilitate fraud.
3) Requires that if a service agency or service agent has
possession of the device or any mechanism, component,
software, or other device attached to or used in conjunction
with a device that serves to facilitate fraud, then the
service agency or service agent must surrender the device,
mechanism, component, software, or other device to the county
sealer or local law enforcement within 24 hours of
discovering that the measuring device has been altered.
FISCAL
EFFECT: This bill has been keyed "fiscal" by Legislative
Counsel. According to the April 11, 2016 Assembly
Appropriations Committee analysis, this bill has, "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. The California Agricultural Commissioners and
Sealers Association is the Sponsor of this bill. According
to the Author, "This bill would require a service agent
working on a weighing and measuring device who finds a device
that may be used to commit fraud, to report and turn over the
device to their county sealer or law enforcement within 24
hours. It also requires county sealers to coordinate with
the appropriate law enforcement authorities as needed in
investigating and prosecuting criminal activities."
2. County Sealers. The inspection and testing of weighing and
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measuring devices is overseen by a County Sealer of Weights
and Measures. Historically, these Sealers have been
responsible for ensuring that 'equity prevails' in the
marketplace and that consumers reliably get precisely what
they paid for. As such, these Sealers and their offices
enforce the laws and regulations of the state under the
general direction and oversight of the Secretary of Food and
Agriculture. In practice, this oversight involves the
inspection and testing of packaged commodities and all
commercially-used weighing and measuring devices.
3. Fraud within Weighing and Measuring Devices. In the course
of fixing a pump, service agents have been encountering the
growing problem of credit card skimmers, devices that can be
created using various electronic parts purchased at stores.
The devices are inserted into a gas pump where they collect
information from the credit cards being used, including PIN
numbers and security codes. The information is then either
collected later by the individual themselves or is
transmitted wirelessly to a computer where it can be
collected and then used to commit fraud.
Unlike retails stores which typically have cashiers at
point-of-sale who can readily monitor the security of the
cash registers and credit card swiping machines, gas stations
typically have self-service pumps. The cashiers who work
inside of gas station convenience stores simply cannot easily
monitor gas pumps throughout the day to prevent tampering by
individuals. Gas pumps are also an easy target for
individuals because 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.
Across the country, individuals are utilizing these devices
to steal money from unsuspecting victims using gas pumps,
ATMs, or other credit card vending machines. Other states
hit hard by this type of fraud include Illinois, Indiana,
Kentucky, Ohio, Michigan, and Wisconsin.
California has started to see a rise in this type of fraud as
well. In 2015, inspections conducted at 33 gas stations in
Los Angeles and Ventura Counties conducted by personnel from
the Los Angeles County Agricultural Commissioner's office,
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numerous federal and local law enforcement agencies, an
energy corporation and a financial services corporation found
ten credit card skimmers located at eight gas stations.
There is currently no uniform process for dealing with these
devices when they are discovered by a service agent in
California. The Author's office underscores that, "Reports
from county sealers throughout California indicate that
service agents often dispose of skimmers into the garbage or
hand them over to gas station attendants instead of reporting
the problem."
AB 2307 will require service agents to report and turn in
credit card skimming devices and other fraudulent mechanisms
within 24 hours to their county sealer, or law enforcement.
4. Prior Related Legislation. AB 296 (Dodd, Chapter 133,
Statutes of 2015) extended the authority of a County Board of
Supervisors and the Department of Food and Agriculture to
charge fees to recover the County Sealer's costs related to
the inspection and testing of weighing and measuring devices,
from January 1, 2016, to January 1, 2019.
5. Arguments in Support. The California Agricultural
Commissioners and Sealers Association (Sponsor) writes that,
"AB 2307 will establish 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 repair of a weighing and measuring device.
The bill would direct the service agent to report, to their
local county sealer, any weighing or measuring device that
has been altered in such a way as to facilitate any type of
fraud within 24 hours."
SUPPORT AND OPPOSITION:
Support:
The California Agricultural Commissioners and Sealers
Association (Sponsor)
Opposition:
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None on file as of June 14, 2016.
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