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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4059 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 4059

To enhance Internet safety and security and to prevent exploitation of 
             children online through the use of technology.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                            November 6, 2009

  Mr. Stupak introduced the following bill; which was referred to the 
 Committee on Financial Services, and in addition to the Committee on 
Energy and Commerce, for a period to be subsequently determined by the 
  Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL

 
To enhance Internet safety and security and to prevent exploitation of 
             children online through the use of technology.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Online Age Verification and Child 
Safety Act''.

                       TITLE I--AGE VERIFICATION

SEC. 101. AGE VERIFICATION REQUIREMENT.

    (a) Pornographic Material in General.--It is unlawful for an 
operator of any pornographic website accessible by any computer located 
within the United States to display any pornographic material, 
including free content that may be available prior to the purchase of a 
subscription or product, without first verifying that any user 
attempting to access their site is 18 years of age or older in a manner 
consistent with the regulations prescribed under subsection (c).
    (b) Financial Transactions Requiring Age Verification.--
            (1) In general.--It is unlawful for an operator of any 
        website accessible by any computer located within the United 
        States to carry out any financial transaction relating to any 
        product or service whose sale or access to persons under a 
        legally specified age is prohibited by law, without first 
        verifying that each user attempting to carry out the 
        transaction meets the legally required age limitation, 
        consistent with the regulations prescribed under subsection 
        (c).
            (2) Scope.--The product or services subject to paragraph 
        (1) include alcohol, cigarettes and tobacco, fireworks, 
        gambling, handguns, pornographic material, and any other 
        product or service that the Commission determines is age-
        restricted under Federal or State law.
    (c) Regulations.--Not later than 1 year after the date of enactment 
of this Act, the Commission, in accordance with section 553 of title 5, 
United States Code, shall promulgate regulations that--
            (1) require the operator of any website or online service 
        described in subsection (a) or (b) to--
                    (A) establish and maintain a system of internal 
                policies, procedures and controls to ensure that no 
                such material is displayed to any user attempting to 
                access their site without first verifying that the user 
                is 18 years or older;
                    (B) limit the use of any personal information 
                collected by the website to age verification, except 
                with the express consent of the user;
                    (C) establish and maintain reasonable procedures to 
                protect the confidentiality, security, and integrity of 
                personal information collected by the website; and
                    (D) undertake an independent audit function to test 
                the system;
            (2) allow the operator to terminate service to any user who 
        fails to provide information sufficient to verify that the user 
        meets the age requirement relating to the products, services, 
        or content provided by the website; and
            (3) establish a system under which the Commission develops 
        and maintains a regularly updated list of operators and online 
        sites displaying pornographic material which are not in 
        compliance with this section.

SEC. 102. CRIMINAL VIOLATIONS.

    (a) Offenses.--Whoever knowingly and with intent sells or provides 
access to any product or service to a person under a legally specified 
age to whom such sale or access is prohibited under applicable law, if 
the offense affects interstate or foreign commerce, shall be fined 
under title 18, United States Code, and imprisoned for not more than 10 
years, or both.
    (b) Attempts.--Whoever attempts to commit an offense under 
subsection (a) of this section shall be subject to the same penalties 
as those prescribed for the offense attempted.
    (c) Conspiracies.--Whoever is a party to a conspiracy of 2 or more 
persons to commit an offense under subsection (a) of this section, if 
any of the parties engages in any conduct in furtherance of such 
offense, shall be fined an amount not greater than the amount provided 
as the maximum fine for such offense under subsection (a) of this 
section or imprisoned not longer than one-half the period provided as 
the maximum imprisonment for such offense under subsection (c) of this 
section, or both.
    (d) Forfeiture Procedure.--The forfeiture of property under this 
section, including any seizure and disposition of the property and any 
related administrative and judicial proceeding, shall be governed by 
section 413 of the Controlled Substances Act, except for subsection (d) 
of that section.
    (e) Racketeering Predicate Activity.--An offense under subsection 
(a) of this section shall constitute racketeering activity within the 
meaning of section 1981(a) of title 18, United States Code.

SEC. 103. INTERNET PAYMENT SERVICE PROVIDER REQUIREMENT.

    (a) Pornographic Material.--Any Internet payment service provider, 
or business that performs financial transactions for an operator 
relating to pornographic material, including any bank, credit card 
company, payments services provider or third-party merchant, shall only 
process age-verified transactions for Internet sales involving 
pornography.
    (b) Financial Transactions.--Any Internet payment service provider, 
or business that performs financial transactions for an operator 
relating to any product or service whose sale or access to persons 
below a legally specified age is prohibited by law, including but not 
limited to any bank, credit card company, payments services provider or 
third-party merchant, shall only process age-verified transactions for 
Internet sales relating to such product or service.
    (c) Safe Harbors.--
            (1) Pornographic material.--With regard to financial 
        transactions involving any operator under section 101, any 
        Internet payment service provider may satisfy the requirements 
        of regulations issued under subsection (a) by--
                    (A) receiving a certification from an operator that 
                the operator is in compliance with the regulations 
                issued under section 101(c);
                    (B) determining that the operator or website is not 
                on the list of entities determined by the Commission 
                not to be in compliance with the regulations issued 
                under section 101(c); and
                    (C) such other means as the Commission may 
                determine would meet the intent of this Act to protect 
                children from gaining access to Internet pornography.
            (2) Financial transactions.--With regard to financial 
        transactions involving any operator under section 101 of age-
        restricted products or services other than pornography, any 
        Internet payment service provider may satisfy the requirements 
        of regulations issued under subsection (b) by--
                    (A) receiving a certification from an operator that 
                the operator is in compliance with the regulations 
                issued under section 101(c); or
                    (B) such other means as the regulator specified in 
                section 105 shall determine would meet the intent of 
                this Act to protect children from obtaining products 
                and services on the Internet whose sale or access to 
                persons below a legally specified age is prohibited by 
                law.

SEC. 104. ENFORCEMENT OF AGE-VERIFICATION.

    (a) Unfair or Deceptive Acts or Practices.--A violation of section 
101 or the regulations issued under such section shall be treated as a 
violation of a rule issued under section 18(a) of the Federal Trade 
Commission Act (15 U.S.C. 57a) regarding unfair or deceptive acts or 
practices.
    (b) Powers of Commission.--The Federal Trade Commission shall 
enforce section 101 in the same manner, by the same means, and with the 
same jurisdiction, powers, and duties as though all applicable terms 
and provisions of the Federal Trade Commission Act (15 U.S.C. 41 et 
seq.) were incorporated into and made a part of this title. Any person 
who violates such regulations shall be subject to the penalties 
provided in that Act.

SEC. 105. ENFORCEMENT OF PAYMENT PROVIDER REQUIREMENTS.

    (a) In General.--Section 103, and the regulations required 
thereunder, shall be enforced exclusively under--
            (1) section 8 of the Federal Deposit Insurance Act (12 
        U.S.C. 1818), in the case of--
                    (A) a national bank, a Federal branch or Federal 
                agency of a foreign bank, or any subsidiary thereof 
                (other than a broker, dealer, person providing 
                insurance, investment company, or investment adviser), 
                by the Office of the Comptroller of the Currency;
                    (B) a member bank of the Federal Reserve System 
                (other than a national bank), a branch or agency of a 
                foreign bank (other than a Federal branch, Federal 
                agency, or insured State branch of a foreign bank), a 
                commercial lending company owned or controlled by a 
                foreign bank, an organization operating under section 
                25 or 25A of the Federal Reserve Act (12 U.S.C. 601, 
                604), or a bank holding company and its nonbank 
                subsidiary or affiliate (other than a broker, dealer, 
                person providing insurance, investment company, or 
                investment adviser), by the Board of Governors of the 
                Federal Reserve System;
                    (C) a bank, the deposits of which are insured by 
                the Federal Deposit Insurance Corporation (other than a 
                member of the Federal Reserve System), an insured State 
                branch of a foreign bank, or any subsidiary thereof 
                (other than a broker, dealer, person providing 
                insurance, investment company, or investment adviser), 
                by the Board of Directors of the Federal Deposit 
                Insurance Corporation; and
                    (D) a savings association, the deposits of which 
                are insured by the Federal Deposit Insurance 
                Corporation, or any subsidiary thereof (other than a 
                broker, dealer, person providing insurance, investment 
                company, or investment adviser), by the Director of the 
                Office of Thrift Supervision;
            (2) the Federal Credit Union Act (12 U.S.C. 1751 et seq.), 
        by the National Credit Union Administration Board with respect 
        to any federally insured credit union;
            (3) the Securities Exchange Act of 1934 (15 U.S.C. 78a et 
        seq.), by the Securities and Exchange Commission with respect 
        to any broker or dealer;
            (4) the Investment Company Act of 1940 (15 U.S.C. 80a-1 et 
        seq.), by the Securities and Exchange Commission with respect 
        to any investment company;
            (5) the Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et 
        seq.), by the Securities and Exchange Commission with respect 
        to any investment adviser registered with the Securities and 
        Exchange Commission under that Act;
            (6) the Commodity Exchange Act (7 U.S.C. 1 et seq.), by the 
        Commodity Futures Trading Commission with respect to any 
        futures commission merchant, commodity trading advisor, 
        commodity pool operator, or introducing broker;
            (7) the provisions of title XIII of the Housing and 
        Community Development Act of 1992 (12 U.S.C. 4501 et seq.), by 
        the Director of Federal Housing Enterprise Oversight (and any 
        successor to such functional regulatory agency) with respect to 
        the Federal National Mortgage Association, the Federal Home 
        Loan Mortgage Corporation, and any other entity or enterprise 
        (as defined in that title) subject to the jurisdiction of such 
        functional regulatory agency under that title, including any 
        affiliate of any such enterprise;
            (8) State insurance law, in the case of any person engaged 
        in providing insurance, by the applicable State insurance 
        authority of the State in which the person is domiciled; and
            (9) the Federal Trade Commission Act (15 U.S.C. 41 et 
        seq.), by the Commission for any other covered entity that is 
        not subject to the jurisdiction of any agency or authority 
        described under paragraphs (1) through (8).
    (b) No Private Right of Action.--
            (1) In general.--This Act, and the regulations prescribed 
        under this Act, may not be construed to provide a private right 
        of action, including a class action with respect to any act or 
        practice regulated under this Act.
            (2) Civil and criminal actions.--No civil or criminal 
        action relating to any act or practice governed under this Act, 
        or the regulations prescribed under this Act, shall be 
        commenced or maintained in any State court or under State law, 
        including a pendent State claim to an action under Federal law.

SEC. 106. DEFINITIONS.

    In this title the following definitions apply:
            (1) Commission.--The term ``Commission'' means the Federal 
        Trade Commission.
            (2) Pornographic material.--The term ``pornographic 
        material'' means any film, video, digitally- or computer-
        manipulated image, digital image, picture, or other matter that 
        contains a depiction of an actual human being engaged in actual 
        sexually explicit conduct that is produced in whole or in part 
        with materials that have been mailed or shipped in interstate 
        or foreign commerce, or is shipped or transported or is 
        intended for shipment or transportation in interstate or 
        foreign commerce and that contains one or more visual 
        depictions of an actual human being engaged in actual sexually 
        explicit conduct made after July 3, 1995.
            (3) Pornographic web site.--The term ``pornographic Web 
        site'' means a person required to maintain documents verifying 
        the age of persons engaged in sexually explicit conduct 
        pursuant to section 2257(a) of title 18, United States Code.
            (4) Age restricted.--The term ``age restricted'' means a 
        product or service whose access, sale, or use is limited under 
        applicable Federal or State law to persons over a specified 
        age.
            (5) Operator.--The term ``operator'' means a person who 
        provides products or services online whose sale is limited by 
        applicable law to persons over the age of 18 or with regard to 
        alcohol, over the age of 21.
            (6) Payment services provider.--The term ``payment services 
        provider'' means any person who engages in any of the following 
        activities:
                    (A) Enabling cash to be placed on a payment account 
                as well as all the operations required for operating a 
                payment account.
                    (B) Enabling cash withdrawals from a payment 
                account as well as all the operations required for 
                operating a payment account.
                    (C) Execution of payment transactions, including 
                transfers of funds on a payment account with the user's 
                payment service provider or with another payment 
                service provider.
                    (D) Execution of direct debits, including one-time 
                direct debits.
                    (E) Execution of payment transactions through a 
                payment card or a similar device.
                    (F) Execution of credit transfers, including 
                standing orders.
                    (G) Execution of payment transactions where the 
                funds are covered by a credit line for a payment 
                service user.
                    (H) Execution of direct debits, including one-off 
                direct debits.
                    (I) Execution of payment transactions through a 
                payment card or a similar device.
                    (J) Execution of credit transfers, including 
                standing orders.
                    (K) Issuing and/or acquiring of payment 
                instruments.
                    (L) Money remittance.
                    (M) Execution of payment transactions where the 
                consent of the payer to execute a payment transaction 
                is given by means of any telecommunication, digital or 
                IT device and the payment is made to the 
                telecommunication, IT system or network operator, 
                acting only as an intermediary between the payment 
                service user and the supplier of the goods and 
                services.

    TITLE II--ENHANCING ANTI-MONEY LAUNDERING LAWS TO COVER ONLINE 
                              TRANSACTIONS

SEC. 201. FINANCIAL INSTITUTIONS SPECIFIED IN SUBCHAPTER II OF CHAPTER 
              53 OF TITLE 31, UNITED STATES CODE.

    (a) Payment Services Providers.--Section 5312(c) of title 31, 
United States Code, is amended by adding at the end the following:
            ``(2) Any payments services provider that is not otherwise 
        covered as a financial institution under this subsection, 
        including any person who engages in any of the following 
        activities:
                    ``(A) Enabling cash to be placed on a payment 
                account as well as all the operations required for 
                operating a payment account.
                    ``(B) Enabling cash withdrawals from a payment 
                account as well as all the operations required for 
                operating a payment account.
                    ``(C) Execution of payment transactions, including 
                transfers of funds on a payment account with the user's 
                payment service provider or with another payment 
                service provider.
                    ``(D) Execution of direct debits, including one-
                time direct debits.
                    ``(E) Execution of payment transactions through a 
                payment card or a similar device.
                    ``(F) Execution of credit transfers, including 
                standing orders.
                    ``(G) Execution of payment transactions where the 
                funds are covered by a credit line for a payment 
                service user.
                    ``(H) Execution of direct debits, including one-off 
                direct debits.
                    ``(I) Execution of payment transactions through a 
                payment card or a similar device.
                    ``(J) Execution of credit transfers, including 
                standing orders.
                    ``(K) Issuing or acquiring of payment instruments.
                    ``(L) Money remittance.
                    ``(M) Execution of payment transactions where the 
                consent of the payer to execute a payment transaction 
                is given by means of any telecommunication, digital or 
                IT device and the payment is made to the 
                telecommunication, IT system or network operator, 
                acting only as an intermediary between the payment 
                service user and the supplier of the goods and 
                services.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect at the end of the 180-day period beginning on the date of 
enactment of this Act.
    (c) Date of Application of Regulations; Factors To Be Taken Into 
Account.--Before the end of the 180-day period beginning on the date of 
enactment of this Act, the Secretary of the Treasury shall prescribe 
regulations that consider the extent to which the requirements imposed 
under this section are commensurate with the size, location, and 
activities of the financial institutions to which such regulations 
apply.

SEC. 202. CURRENCIES NOT BACKED BY UNITED NATIONS MEMBER STATES.

    (a) In General.--No financial institution may process a financial 
transaction denominated in or otherwise involving an electronic 
currency not backed by the full faith and credit of a member state of 
the United Nations.
    (b) Exclusion.--For the purposes of this subsection, an electronic 
currency does not include--
            (1) any activity governed by the securities laws (as that 
        term is defined in section 3(a)(47) of the Securities Exchange 
        Act of 1934 for the purchase or sale of securities (as that 
        term is defined in section 3(a)(10) of that Act);
            (2) any transaction conducted on or subject to the rules of 
        a registered entity or exempt board of trade under the 
        Commodity Exchange Act;
            (3) any over-the-counter derivative instrument;
            (4) any contract of indemnity or guarantee;
            (5) any contract for insurance;
            (6) any deposit or other transaction with an insured 
        depository institution; and
            (7) any other form of financial instrument or payment, 
        however denominated, that the Secretary determines should not 
        be subject to the prohibition of this subsection.
    (c) Effective Date.--The amendment made by subsection (a) shall 
take effect at the end of the 180-day period beginning on the date of 
enactment of this Act.
    (d) Date of Application of Regulations.--Before the end of the 180-
day period beginning on the date of enactment of this Act, the 
Secretary shall prescribe regulations to implement the prohibitions set 
forth in subsection (a).

SEC. 203. DEFINITIONS.

    In this title, the term ``Secretary'' means Secretary of the 
Treasury.
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