I 
109TH CONGRESS 
2D SESSION 
H. R. 6299 
To prevent children from purchasing Internet-distributed age-restricted prod-
ucts and services by regulating the funding thereof and for other pur-
poses. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 29, 2006 
Mr. PICKERING (for himself and Mr. BACHUS) introduced the following bill; 
which was referred to the Committee on Financial Services 
A BILL 
To prevent children from purchasing Internet-distributed 
age-restricted products and services by regulating the 
funding thereof and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Protecting Our Chil-
dren from Age-Restricted Internet Products and Services 
Act of 2006’’. 
SEC. 2. FINDINGS. 
The Congress finds that— 
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(1) the Internet enables anyone, regardless of 
age, to visit merchant websites selling a vast array 
of products and services, including products and 
services that, by Federal or State law, cannot be 
sold to minors; 
(2) Internet-distributed age-restricted products 
and services are primarily purchased using personal 
payment system instruments and credit cards; 
(3) age-verification systems based on purely 
electronic means of identification have proven inad-
equate in preventing the purchase by minors of age- 
restricted Internet-distributed products and services; 
(4) many providers of Internet-distributed age- 
restricted products and services are located in for-
eign jurisdictions and are beyond the reach of 
United States laws; and 
(5) the anonymity of purchases of Internet-dis-
tributed age-restricted products and services perpet-
uates the easy access of such products and services 
by minors. 
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SEC. 3. REGULATION OF ACCEPTANCE OF PAYMENT SYS-
TEM 
INSTRUMENTS, 
CREDIT 
CARDS, 
OR 
FUND TRANSFERS FOR INTERNET-DISTRIB-
UTED PRODUCTS AND SERVICES HARMFUL 
TO MINORS. 
(a) IN GENERAL.—Chapter 53 of title 31, United 
States Code, is amended by adding at the end the fol-
lowing: 
‘‘SUBCHAPTER V—REGULATION OF FUNDING 
OF 
INTERNET-DISTRIBUTED 
PRODUCTS 
AND SERVICES HARMFUL TO MINORS 
‘‘§ 5371. Definitions 
‘‘For purposes of this subchapter, the following defi-
nitions shall apply: 
‘‘(1) AUTHORIZED INTERNET PAYMENT PROC-
ESSING BUSINESS.—The term ‘authorized Internet 
payment processing business’ means any Internet 
payment processing business that— 
‘‘(A) offers a regulated payment system for 
use by sellers of any Internet-distributed age-re-
stricted product or service; 
‘‘(B) facilitates any regulated transaction; 
and 
‘‘(C) is certified by and registered with the 
Office of Electronic Funding Oversight as pro-
vided in section 5372. 
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‘‘(2) AUTHORIZED
MONEY
RECEIVING
BUSI-
NESS.—The term ‘authorized money receiving busi-
ness’ means any financial institution that— 
‘‘(A) is subject to the provisions of sub-
chapter II of chapter 53 of title 31, United 
States Code; 
‘‘(B) receives monies from consumers in 
connection with the operation of any regulated 
payment system; 
‘‘(C) facilitates the electronic transfer of 
funds from a consumer’s money market, check-
ing, or savings account into a designated Inter-
net payment account; and 
‘‘(D) has physical properties within which 
an interactive age verification process can be 
executed by an independent second party. 
‘‘(3) DESIGNATED
INTERNET
PAYMENT
AC-
COUNT.—The term ‘designated Internet payment ac-
count’ means a financial account— 
‘‘(A) that is managed by an authorized 
internet payment processing business; 
‘‘(B) from which funds may be drawn elec-
tronically to pay for an Internet-distributed 
product or service harmful to minors; 
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‘‘(C) that holds funds that are received 
from the account owner by an authorized 
money receiving business; and 
‘‘(D) that is owned by an individual whose 
identity and age have been verified at least one 
time by an independent second party. 
‘‘(4) DIRECTOR.—The term ‘Director’ means 
the Director of the Office of Electronic Funding 
Oversight of the Department of the Treasury, estab-
lished under section 5373. 
‘‘(5) FINANCIAL INSTITUTION.—The term ‘fi-
nancial institution’ means a State or National bank, 
a State or Federal savings and loan association, a 
mutual savings bank, a State or Federal credit 
union, or any other person who, directly or indi-
rectly, holds an account belonging to a consumer or 
business. 
‘‘(6) INDEPENDENT SECOND PARTY.—The term 
‘independent second party’ means any person who is 
employed by a private business and trained to verify 
the identity and age of a consumer using a valid 
government-issued identification card or equivalent 
identifying documentation bearing the consumer’s 
birth date or indication of age, which is presented by 
the consumer at the request of such person. 
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‘‘(7) INTERACTIVE
AGE
VERIFICATION
PROC-
ESS.—The term ‘interactive age verification process’ 
means any age verification process employing any 
sequence of actions by which a consumer’s identity 
and age are verified by an independent second party 
at the time funds are first added to a designated 
Internet payment account. 
‘‘(8) INTERNET.—The term ‘Internet’ means 
the international computer network of interoperable 
packet switched data networks. 
‘‘(9) INTERNET-DISTRIBUTED
PRODUCT
OR 
SERVICE HARMFUL TO MINORS.—The term ‘Inter-
net-distributed product or service harmful to minors’ 
means any product or service that— 
‘‘(A) is harmful to minors; and 
‘‘(B) is offered for sale over the Internet. 
‘‘(10) INTERNET PAYMENT PROCESSING BUSI-
NESS.—The term ‘Internet payment processing busi-
ness’ means any payment processing business that 
facilitates the settlement of payments by any means 
between— 
‘‘(A) any bank, credit card, or other finan-
cial institution account of a consumer of Inter-
net-distributed products or services; and 
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‘‘(B) any financial institution account, do-
mestic or foreign, controlled by the seller of the 
Internet-distributed product or service. 
‘‘(11) MINOR.—The term ‘minor’ means an in-
dividual who has not attained the age of 17. 
‘‘(12) OFFICE.—The term ‘Office’ means the 
Office of Electronic Funding Oversight of the De-
partment of the Treasury, established under section 
5373. 
‘‘(13) PAYMENT PROCESSING BUSINESS FINAN-
CIAL INSTITUTION.—The term ‘payment processing 
business financial institution’ means any financial 
institution that holds an account belonging to an 
Internet payment processing business. 
‘‘(14) PRODUCT OR SERVICE HARMFUL TO MI-
NORS.—The term ‘product or service harmful to mi-
nors’ means— 
‘‘(A) any picture, image, graphic image 
file, or other visual depiction that— 
‘‘(i) taken as a whole and with respect 
to minors, appeals to a prurient interest in 
nudity, sex, or excretion; 
‘‘(ii) depicts, describes, or represents, 
in a patently offensive way with respect to 
what is suitable for minors, an actual or 
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simulated sexual act or sexual contact, ac-
tual or simulated normal or perverted sex-
ual acts, or a lewd exhibition of the geni-
tals; and 
‘‘(iii) taken as a whole, lacks serious 
literary, artistic, political, or scientific 
value as to minors; 
‘‘(B) any beverage in liquid form which 
contains not less than 0.05 percent of alcohol 
by volume and is intended for human consump-
tion; 
‘‘(C) any tobacco product, as such term is 
defined in section 5702 of the Internal Revenue 
Code of 1986 (26 U.S.C. 5702); 
‘‘(D) any prescription drug product, as 
such term is defined in section 735 of the Fed-
eral, Drug, and Cosmetic Act (21 U.S.C. 379g); 
and 
‘‘(E) any other product or service deter-
mined to be harmful to minors by the Attorney 
General of the United States. 
‘‘(15) REGULATED
PAYMENT
SYSTEM.—The 
term ‘regulated payment system’ means any Internet 
payment processing system or method utilized by 
any seller of any Internet-distributed age-restricted 
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product or service that involves the settlement of 
payments between the seller and the consumer of 
such product or service. 
‘‘(16) REGULATED
TRANSACTION.—The term 
‘regulated transaction’ means any transaction or 
transmittal involving any credit, funds, instrument, 
or proceeds described in any paragraph of section 
5374 which the recipient is allowed to accept under 
section 5372. 
‘‘(17) RESTRICTED
TRANSACTION.—The term 
‘restricted transaction’ means any transaction or 
transmittal involving any credit, funds, instrument, 
or proceeds described in any paragraph of section 
5374 which the recipient is prohibited from accept-
ing under section 5374. 
‘‘(18) SEXUAL
ACT; SEXUAL
CONTACT.—The 
terms ‘sexual act’ and ‘sexual contact’ have the 
meanings given such terms in section 2246 of title 
18, United States Code. 
‘‘(19) 
SECRETARY.—The 
term 
‘Secretary’ 
means the Secretary of the Treasury. 
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‘‘§ 5372. Age verification requirement for internet 
payment processing businesses involving 
the 
purchase 
of 
internet-distributed 
products and services harmful to minors 
‘‘(a) AGE VERIFICATION REQUIREMENT.—A regu-
lated payment system complies with the requirements 
under this subsection only if the system includes each of 
the following: 
‘‘(1) An interactive age verification process. 
‘‘(3) A network of authorized money receiving 
businesses. 
‘‘(2) A designated Internet payment account for 
each consumer. 
‘‘(4) Procedures for funding each designated 
Internet payment account that ensure that the con-
sumer’s identity and age are verified as follows: 
‘‘(A) Verification shall be made by an inde-
pendent second party when funds are first 
added to the designated internet payment ac-
count. 
‘‘(B) After verification under subparagraph 
(A), each time that funds are added to the ac-
count— 
‘‘(i) in the case of a consumer who 
has a money market, savings, checking, or 
other account in the same financial institu-
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tion as the authorized money receiving 
business, the consumer may direct the 
transfer of money from his or her financial 
institution account to the designated inter-
net payment account; and 
‘‘(ii) in the case of a consumer who 
does not have a money market, savings, 
checking, or other account in the same fi-
nancial institution as the authorized money 
receiving business, verification shall be 
made using the same procedure that is 
used pursuant to subparagraph (A) when 
funds are first added to the account. 
‘‘(b) CERTIFICATION OF COMPLIANCE.— 
‘‘(1) EVALUATION AND CERTIFICATION OF REG-
ULATED PAYMENT SYSTEMS.—The Director of the 
Office of Electronic Funding Oversight shall evalu-
ate each regulated payment system facilitating any 
regulated transaction for compliance with the re-
quirements under subsection (a) and shall certify 
each regulated payment system that meets such re-
quirements as so complying. 
‘‘(2) CERTIFICATION
OF
AUTHORIZED
INTER-
NET PAYMENT PROCESSING BUSINESSES.—The Di-
rector shall issue a certificate of compliance to each 
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Internet payment processing business that offers a 
regulated payment system that is certified pursuant 
to paragraph (1). 
‘‘(3) CERTIFICATION PROGRAM.—The Director 
shall carry out a program for certifying authorized 
Internet payment processing businesses and shall 
issue such regulations as necessary to comply with 
the requirements of this subchapter. 
‘‘(c) REGISTRATION .— 
‘‘(1) REQUIREMENT.—The Director shall reg-
ister with the Office each authorized Internet pay-
ment processing business that is issued a certificate 
of compliance under subsection (b)(2). 
‘‘(2) REGISTRATION
PROGRAM.—The Director 
shall carry out a program for registering authorized 
Internet payment processing businesses and shall 
issue such regulations as necessary to comply with 
the requirements of this subchapter. 
‘‘(d) COORDINATING REGULATIONS.— 
‘‘(1) COORDINATION WITH EXISTING LAWS.— 
The Director shall, where appropriate and in coordi-
nation with the Attorney General of the United 
States, coordinate the provisions of this subchapter 
with existing United States laws and regulations. 
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‘‘(2) REGULATIONS.—The Director may issue 
coordinating regulations as appropriate under sub-
section (1). 
‘‘§ 5373. Office of Electronic Funding Oversight; poli-
cies and procedures to identify and pre-
vent restricted transactions 
‘‘(a) ESTABLISHMENT IN TREASURY.— 
‘‘(1) IN GENERAL.—There is established within 
the Department of the Treasury the Office of Elec-
tronic Funding Oversight, the purposes of which 
are— 
‘‘(A) to coordinate Federal efforts to pro-
hibit restricted transactions; 
‘‘(B) to develop controls necessary for reg-
ulated transactions; and 
‘‘(C) otherwise to carry out the duties 
specified in this subchapter. 
‘‘(2) DIRECTOR.—The Office shall be headed by 
a Director, appointed by the Secretary. The Director 
of the Office may serve as the designee of the Sec-
retary, at the request of the Secretary, for any pur-
pose under this subchapter. 
‘‘(b) REGULATIONS.—Not later than 270 days after 
the date of the enactment of this subchapter, the Sec-
retary, in consultation with the Board of Governors of the 
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Federal Reserve System and the Attorney General of the 
United States, shall prescribe regulations that require— 
‘‘(1) each Internet payment processing busi-
ness, and all participants therein, to fully investigate 
the products and services offered by a seller of Inter-
net-distributed products and services, regardless of 
whether the seller is domestic or foreign, prior to 
settling payments for the seller on behalf of its cus-
tomers through the establishment of policies and 
procedures reasonably designed to— 
‘‘(A) ensure that the seller of Internet-dis-
tributed products and services is conducting 
business lawfully; and 
‘‘(B) prevent the settlement of payments 
for any seller of any Internet-distributed prod-
uct or service harmful to minors if the Internet 
payment processing business is not authorized 
to do so by the Director; and 
‘‘(2) each payment processing business financial 
institution, and all participants therein, to fully in-
vestigate any Internet payment processing business, 
regardless of whether the business is domestic or 
foreign, for which it intends to hold accounts 
through the establishment of policies and procedures 
reasonably designed to— 
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‘‘(A) ensure that the Internet payment 
processing business is conducting its business 
lawfully; and 
‘‘(B) prevent acceptance of accounts by 
any Internet payment processing business that 
intends to settle payments for sellers of any 
Internet-distributed product or service harmful 
to minors but is not authorized to do so by the 
Director. 
‘‘(c) REQUIREMENTS
FOR POLICIES
AND PROCE-
DURES.—In prescribing regulations pursuant to sub-
section (b), the Secretary shall identify types of policies 
and procedures, including nonexclusive examples, which 
would be deemed, as applicable, to be ‘reasonably designed 
to ensure’ and ‘reasonably designed to prevent’ with re-
spect to each seller of any Internet-distributed product or 
service harmful to minors in the case of Internet payment 
processing businesses or each Internet payment processing 
business in the case of Internet payment processing busi-
ness financial institutions. 
‘‘(d) COMPLIANCE WITH INTERNET PAYMENT PROC-
ESSING
BUSINESS
POLICIES
AND
PROCEDURES.—An 
Internet payment processing business shall be considered 
to be in compliance with the regulations prescribed under 
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subsection (b), if such business relies on and complies with 
policies and procedures— 
‘‘(1) to identify sellers of any Internet-distrib-
uted product or service harmful to minors; 
‘‘(2) to ensure that payment settlements are ex-
ecuted on behalf of the seller of any Internet-distrib-
uted product or service harmful to minors only if 
such business is certified to do so by the Director; 
and 
‘‘(3) to ensure that payment settlements are ex-
ecuted on behalf of the seller of any Internet-distrib-
uted product or service harmful to minors only if 
such business is registered with the Office. 
‘‘(e) COMPLIANCE
WITH
PAYMENT
PROCESSING 
BUSINESS FINANCIAL INSTITUTION POLICIES AND PRO-
CEDURES.—A payment processing business financial insti-
tution shall be considered to be in compliance with the 
regulations prescribed under subsection (b), if such finan-
cial institution relies on and complies with policies and 
procedures— 
‘‘(1) to identify Internet payment processing 
businesses that intend to settle payments for sellers 
of any Internet-distributed product or service harm-
ful to minors; and 
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‘‘(2) to ensure that no Internet payment proc-
essing business intending to settle payments for sell-
ers of any Internet-distributed product or service 
harmful to minors and not certified by the Office in 
accordance with section 5372 is permitted to open 
an account held by such financial institution. 
‘‘(f) NO LIABILITY FOR REFUSING TO PROCESS PAY-
MENTS FOR A SELLER OF ANY INTERNET-DISTRIBUTED 
PRODUCT OR SERVICE HARMFUL TO MINORS.—An inter-
net payment processing business that is subject to a regu-
lation prescribed or order issued under this subchapter 
and refuses to process transactions that such business rea-
sonably believes to be a restricted transaction, or as a 
member of an Internet payment processing business relies 
on the policies and procedures of the business, in an effort 
to comply with regulations prescribed under subsection 
(b), shall not be liable to any party for such action. 
‘‘(g) NO LIABILITY FOR REFUSING TO HOLD AC-
COUNTS
FOR
A NON-COMPLIANT INTERNET PAYMENT 
PROCESSING BUSINESS.—An internet payment processing 
business financial institution that is subject to a regula-
tion prescribed or order issued under this subchapter and 
refuses to hold accounts for any Internet payment proc-
essing business that such financial institution reasonably 
believes to be unlawfully processing restricted trans-
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actions, or as a member of an Internet payment processing 
business financial institution relies on the policies and pro-
cedures of the financial institution, in an effort to comply 
with regulations prescribed under subsection (b), shall not 
be liable to any party for such action. 
‘‘(h) 
REGULATORY
ENFORCEMENT.—Regulations 
issued by the Secretary under this subchapter shall be en-
forced by the Federal functional regulators and the Fed-
eral Trade Commission, in the manner provided in section 
505(a) of the Gramm-Leach-Bliley Act. 
‘‘§ 5374. Prohibition on acceptance of any non-compli-
ant bank instrument for the purchase of 
internet-distributed products and serv-
ices harmful to minors 
‘‘An Internet payment processing business that is not 
in compliance with the provisions of section 5372 may not 
knowingly process, in connection with the purchase by a 
consumer of Internet-distributed products and services 
harmful to minors— 
‘‘(1) credit, or the proceeds of credit, extended 
to or on behalf of the consumer (including credit ex-
tended through the use of a credit card); 
‘‘(2) an electronic fund transfer, or funds trans-
mitted by or through a money transmitting business, 
or the proceeds of an electronic fund transfer or 
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