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HF 1758

4th Engrossment - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

KEY: stricken = removed, old language.
underscored = added, new language.

Bill Text Versions

Engrossments
Introduction Posted on 03/06/2007
1st Engrossment Posted on 03/22/2007
2nd Engrossment Posted on 03/27/2007
3rd Engrossment Posted on 05/08/2007
4th Engrossment Posted on 05/18/2007
Unofficial Engrossments
1st Unofficial Engrossment Posted on 05/16/2007
Committee Engrossments
1st Committee Engrossment Posted on 03/20/2007

Current Version - 4th Engrossment

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A bill for an act
relating to commerce; regulating access devices; establishing liability for
security breaches; providing enforcement powers; proposing coding for new law
in Minnesota Statutes, chapter 325E.

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

Section 1.

new text begin [325E.64] ACCESS DEVICES; BREACH OF SECURITY.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the terms defined in this
subdivision have the meanings given them.
new text end

new text begin (b) "Access device" means a card issued by a financial institution that contains a
magnetic stripe, microprocessor chip, or other means for storage of information which
includes, but is not limited to, a credit card, debit card, or stored value card.
new text end

new text begin (c) "Breach of the security of the system" has the meaning given in section 325E.61,
subdivision 1, paragraph (d).
new text end

new text begin (d) "Card security code" means the three-digit or four-digit value printed on an access
device or contained in the microprocessor chip or magnetic stripe of an access device
which is used to validate access device information during the authorization process.
new text end

new text begin (e) "Financial institution" means any office of a bank, bank and trust, trust company
with banking powers, savings bank, industrial loan company, savings association, credit
union, or regulated lender.
new text end

new text begin (f) "Microprocessor chip data" means the data contained in the microprocessor
chip of an access device.
new text end

new text begin (g) "Magnetic stripe data" means the data contained in the magnetic stripe of an
access device.
new text end

new text begin (h) "PIN" means a personal identification code that identifies the cardholder.
new text end

new text begin (i) "PIN verification code number" means the data used to verify cardholder identity
when a PIN is used in a transaction.
new text end

new text begin (j) "Service provider" means a person or entity that stores, processes, or transmits
access device data on behalf of another person or entity.
new text end

new text begin Subd. 2. new text end

new text begin Security or identification information; retention prohibited. new text end

new text begin No person
or entity conducting business in Minnesota that accepts an access device in connection
with a transaction shall retain the card security code data, the PIN verification code
number, or the full contents of any track of magnetic stripe data, subsequent to the
authorization of the transaction or in the case of a PIN debit transaction, subsequent
to 48 hours after authorization of the transaction. A person or entity is in violation of
this section if its service provider retains such data subsequent to the authorization of
the transaction or in the case of a PIN debit transaction, subsequent to 48 hours after
authorization of the transaction.
new text end

new text begin Subd. 3. new text end

new text begin Liability. new text end

new text begin Whenever there is a breach of the security of the system of a
person or entity that has violated this section, or that person's or entity's service provider,
that person or entity shall reimburse the financial institution that issued any access devices
affected by the breach for the costs of reasonable actions undertaken by the financial
institution as a result of the breach in order to protect the information of its cardholders
or to continue to provide services to cardholders, including but not limited to, any cost
incurred in connection with:
new text end

new text begin (1) the cancellation or reissuance of any access device affected by the breach;
new text end

new text begin (2) the closure of any deposit, transaction, share draft, or other accounts affected
by the breach and any action to stop payments or block transactions with respect to the
accounts;
new text end

new text begin (3) the opening or reopening of any deposit, transaction, share draft, or other
accounts affected by the breach;
new text end

new text begin (4) any refund or credit made to a cardholder to cover the cost of any unauthorized
transaction relating to the breach; and
new text end

new text begin (5) the notification of cardholders affected by the breach.
new text end

new text begin The financial institution is also entitled to recover costs for damages paid by the financial
institution to cardholders injured by a breach of the security of the system of a person or
entity that has violated this section. Costs do not include any amounts recovered from
a credit card company by a financial institution. The remedies under this subdivision
are cumulative and do not restrict any other right or remedy otherwise available to the
financial institution.
new text end

new text begin EFFECTIVE DATES; APPLICATION. new text end

new text begin Subdivisions 1 and 2 are effective August
1, 2007. Subdivision 3 is effective August 1, 2008, and applies to breaches of the security
of a system occurring on or after that date.
new text end