[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1417 Enrolled Bill (ENR)]

        H.R.1417

                       One Hundred Eighth Congress

                                 of the

                        United States of America


                          AT THE SECOND SESSION

          Begun and held at the City of Washington on Tuesday,
           the twentieth day of January, two thousand and four


                                 An Act


 
To amend title 17, United States Code, to replace copyright arbitration 
  royalty panels with Copyright Royalty Judges, and for other purposes.

    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 ``Copyright Royalty and Distribution 
Reform Act of 2004''.

SEC. 2. REFERENCE.

    Except as otherwise expressly provided, whenever in this Act an 
amendment or repeal is expressed in terms of an amendment to, or repeal 
of, a section or other provision, the reference shall be considered to 
be made to a section or other provision of title 17, United States 
Code.

SEC. 3. COPYRIGHT ROYALTY JUDGE AND STAFF.

    (a) In General.--Chapter 8 is amended to read as follows:

          ``CHAPTER 8--PROCEEDINGS BY COPYRIGHT ROYALTY JUDGES

``Sec.
``801. Copyright Royalty Judges; appointment and functions.
``802. Copyright Royalty Judgeships; staff.
``803. Proceedings of Copyright Royalty Judges.
``804. Institution of proceedings.
``805. General rule for voluntarily negotiated agreements.

``Sec. 801. Copyright Royalty Judges; appointment and functions

    ``(a) Appointment.--The Librarian of Congress shall appoint 3 full-
time Copyright Royalty Judges, and shall appoint 1 of the 3 as the 
Chief Copyright Royalty Judge. The Librarian shall make appointments to 
such positions after consultation with the Register of Copyrights.
    ``(b) Functions.--Subject to the provisions of this chapter, the 
functions of the Copyright Royalty Judges shall be as follows:
        ``(1) To make determinations and adjustments of reasonable 
    terms and rates of royalty payments as provided in sections 112(e), 
    114, 115, 116, 118, 119 and 1004. The rates applicable under 
    sections 114(f)(1)(B), 115, and 116 shall be calculated to achieve 
    the following objectives:
            ``(A) To maximize the availability of creative works to the 
        public.
            ``(B) To afford the copyright owner a fair return for his 
        or her creative work and the copyright user a fair income under 
        existing economic conditions.
            ``(C) To reflect the relative roles of the copyright owner 
        and the copyright user in the product made available to the 
        public with respect to relative creative contribution, 
        technological contribution, capital investment, cost, risk, and 
        contribution to the opening of new markets for creative 
        expression and media for their communication.
            ``(D) To minimize any disruptive impact on the structure of 
        the industries involved and on generally prevailing industry 
        practices.
        ``(2) To make determinations concerning the adjustment of the 
    copyright royalty rates under section 111 solely in accordance with 
    the following provisions:
            ``(A) The rates established by section 111(d)(1)(B) may be 
        adjusted to reflect--
                ``(i) national monetary inflation or deflation; or
                ``(ii) changes in the average rates charged cable 
            subscribers for the basic service of providing secondary 
            transmissions to maintain the real constant dollar level of 
            the royalty fee per subscriber which existed as of the date 
            of October 19, 1976,
        except that--
                ``(I) if the average rates charged cable system 
            subscribers for the basic service of providing secondary 
            transmissions are changed so that the average rates exceed 
            national monetary inflation, no change in the rates 
            established by section 111(d)(1)(B) shall be permitted; and
                ``(II) no increase in the royalty fee shall be 
            permitted based on any reduction in the average number of 
            distant signal equivalents per subscriber.
        The Copyright Royalty Judges may consider all factors relating 
        to the maintenance of such level of payments, including, as an 
        extenuating factor, whether the industry has been restrained by 
        subscriber rate regulating authorities from increasing the 
        rates for the basic service of providing secondary 
        transmissions.
            ``(B) In the event that the rules and regulations of the 
        Federal Communications Commission are amended at any time after 
        April 15, 1976, to permit the carriage by cable systems of 
        additional television broadcast signals beyond the local 
        service area of the primary transmitters of such signals, the 
        royalty rates established by section 111(d)(1)(B) may be 
        adjusted to ensure that the rates for the additional distant 
        signal equivalents resulting from such carriage are reasonable 
        in the light of the changes effected by the amendment to such 
        rules and regulations. In determining the reasonableness of 
        rates proposed following an amendment of Federal Communications 
        Commission rules and regulations, the Copyright Royalty Judges 
        shall consider, among other factors, the economic impact on 
        copyright owners and users; except that no adjustment in 
        royalty rates shall be made under this subparagraph with 
        respect to any distant signal equivalent or fraction thereof 
        represented by--
                ``(i) carriage of any signal permitted under the rules 
            and regulations of the Federal Communications Commission in 
            effect on April 15, 1976, or the carriage of a signal of 
            the same type (that is, independent, network, or 
            noncommercial educational) substituted for such permitted 
            signal; or
                ``(ii) a television broadcast signal first carried 
            after April 15, 1976, pursuant to an individual waiver of 
            the rules and regulations of the Federal Communications 
            Commission, as such rules and regulations were in effect on 
            April 15, 1976.
            ``(C) In the event of any change in the rules and 
        regulations of the Federal Communications Commission with 
        respect to syndicated and sports program exclusivity after 
        April 15, 1976, the rates established by section 111(d)(1)(B) 
        may be adjusted to assure that such rates are reasonable in 
        light of the changes to such rules and regulations, but any 
        such adjustment shall apply only to the affected television 
        broadcast signals carried on those systems affected by the 
        change.
            ``(D) The gross receipts limitations established by section 
        111(d)(1) (C) and (D) shall be adjusted to reflect national 
        monetary inflation or deflation or changes in the average rates 
        charged cable system subscribers for the basic service of 
        providing secondary transmissions to maintain the real constant 
        dollar value of the exemption provided by such section, and the 
        royalty rate specified therein shall not be subject to 
        adjustment.
        ``(3)(A) To authorize the distribution, under sections 111, 
    119, and 1007, of those royalty fees collected under sections 111, 
    119, and 1005, as the case may be, to the extent that the Copyright 
    Royalty Judges have found that the distribution of such fees is not 
    subject to controversy.
        ``(B) In cases where the Copyright Royalty Judges determine 
    that controversy exists, the Copyright Royalty Judges shall 
    determine the distribution of such fees, including partial 
    distributions, in accordance with section 111, 119, or 1007, as the 
    case may be.
        ``(C) The Copyright Royalty Judges may make a partial 
    distribution of such fees during the pendency of the proceeding 
    under subparagraph (B) if all participants under section 803(b)(2) 
    in the proceeding that are entitled to receive those fees that are 
    to be partially distributed--
            ``(i) agree to such partial distribution;
            ``(ii) sign an agreement obligating them to return any 
        excess amounts to the extent necessary to comply with the final 
        determination on the distribution of the fees made under 
        subparagraph (B);
            ``(iii) file the agreement with the Copyright Royalty 
        Judges; and
            ``(iv) agree that such funds are available for 
        distribution.
        ``(D) The Copyright Royalty Judges and any other officer or 
    employee acting in good faith in distributing funds under 
    subparagraph (C) shall not be held liable for the payment of any 
    excess fees under subparagraph (C). The Copyright Royalty Judges 
    shall, at the time the final determination is made, calculate any 
    such excess amounts.
        ``(4) To accept or reject royalty claims filed under sections 
    111, 119, and 1007, on the basis of timeliness or the failure to 
    establish the basis for a claim.
        ``(5) To accept or reject rate adjustment petitions as provided 
    in section 804 and petitions to participate as provided in section 
    803(b) (1) and (2).
        ``(6) To determine the status of a digital audio recording 
    device or a digital audio interface device under sections 1002 and 
    1003, as provided in section 1010.
        ``(7)(A) To adopt as a basis for statutory terms and rates or 
    as a basis for the distribution of statutory royalty payments, an 
    agreement concerning such matters reached among some or all of the 
    participants in a proceeding at any time during the proceeding, 
    except that--
            ``(i) the Copyright Royalty Judges shall provide to those 
        that would be bound by the terms, rates, or other determination 
        set by any agreement in a proceeding to determine royalty rates 
        an opportunity to comment on the agreement and shall provide to 
        participants in the proceeding under section 803(b)(2) that 
        would be bound by the terms, rates, or other determination set 
        by the agreement an opportunity to comment on the agreement and 
        object to its adoption as a basis for statutory terms and 
        rates; and
            ``(ii) the Copyright Royalty Judges may decline to adopt 
        the agreement as a basis for statutory terms and rates for 
        participants that are not parties to the agreement, if any 
        participant described in clause (i) objects to the agreement 
        and the Copyright Royalty Judges conclude, based on the record 
        before them if one exists, that the agreement does not provide 
        a reasonable basis for setting statutory terms or rates.
        ``(B) License agreements voluntarily negotiated pursuant to 
    section 112(e)(5), 114(f)(3), 115(c)(3)(E)(i), 116(c), or 118(b)(2) 
    that do not result in statutory terms and rates shall not be 
    subject to clauses (i) and (ii) of subparagraph (A).
        ``(C) Interested parties may negotiate and agree to, and the 
    Copyright Royalty Judges may adopt, an agreement that specifies as 
    terms notice and recordkeeping requirements that apply in lieu of 
    those that would otherwise apply under regulations.
        ``(8) To perform other duties, as assigned by the Register of 
    Copyrights within the Library of Congress, except as provided in 
    section 802(g), at times when Copyright Royalty Judges are not 
    engaged in performing the other duties set forth in this section.
    ``(c) Rulings.--The Copyright Royalty Judges may make any necessary 
procedural or evidentiary rulings in any proceeding under this chapter 
and may, before commencing a proceeding under this chapter, make any 
such rulings that would apply to the proceedings conducted by the 
Copyright Royalty Judges.
    ``(d) Administrative Support.--The Librarian of Congress shall 
provide the Copyright Royalty Judges with the necessary administrative 
services related to proceedings under this chapter.
    ``(e) Location in Library of Congress.--The offices of the 
Copyright Royalty Judges and staff shall be in the Library of Congress.

``Sec. 802. Copyright Royalty Judgeships; staff

    ``(a) Qualifications of Copyright Royalty Judges.--
        ``(1) In general.--Each Copyright Royalty Judge shall be an 
    attorney who has at least 7 years of legal experience. The Chief 
    Copyright Royalty Judge shall have at least 5 years of experience 
    in adjudications, arbitrations, or court trials. Of the other 2 
    Copyright Royalty Judges, 1 shall have significant knowledge of 
    copyright law, and the other shall have significant knowledge of 
    economics. An individual may serve as a Copyright Royalty Judge 
    only if the individual is free of any financial conflict of 
    interest under subsection (h).
        ``(2) Definition.--In this subsection, the term `adjudication' 
    has the meaning given that term in section 551 of title 5, but does 
    not include mediation.
    ``(b) Staff.--The Chief Copyright Royalty Judge shall hire 3 full-
time staff members to assist the Copyright Royalty Judges in performing 
their functions.
    ``(c) Terms.--The individual first appointed as the Chief Copyright 
Royalty Judge shall be appointed to a term of 6 years, and of the 
remaining individuals first appointed as Copyright Royalty Judges, 1 
shall be appointed to a term of 4 years, and the other shall be 
appointed to a term of 2 years. Thereafter, the terms of succeeding 
Copyright Royalty Judges shall each be 6 years. An individual serving 
as a Copyright Royalty Judge may be reappointed to subsequent terms. 
The term of a Copyright Royalty Judge shall begin when the term of the 
predecessor of that Copyright Royalty Judge ends. When the term of 
office of a Copyright Royalty Judge ends, the individual serving that 
term may continue to serve until a successor is selected.
    ``(d) Vacancies or Incapacity.--
        ``(1) Vacancies.--If a vacancy should occur in the position of 
    Copyright Royalty Judge, the Librarian of Congress shall act 
    expeditiously to fill the vacancy, and may appoint an interim 
    Copyright Royalty Judge to serve until another Copyright Royalty 
    Judge is appointed under this section. An individual appointed to 
    fill the vacancy occurring before the expiration of the term for 
    which the predecessor of that individual was appointed shall be 
    appointed for the remainder of that term.
        ``(2) Incapacity.--In the case in which a Copyright Royalty 
    Judge is temporarily unable to perform his or her duties, the 
    Librarian of Congress may appoint an interim Copyright Royalty 
    Judge to perform such duties during the period of such incapacity.
    ``(e) Compensation.--
        ``(1) Judges.--The Chief Copyright Royalty Judge shall receive 
    compensation at the rate of basic pay payable for level AL-1 for 
    administrative law judges pursuant to section 5372(b) of title 5, 
    and each of the other two Copyright Royalty Judges shall receive 
    compensation at the rate of basic pay payable for level AL-2 for 
    administrative law judges pursuant to such section. The 
    compensation of the Copyright Royalty Judges shall not be subject 
    to any regulations adopted by the Office of Personnel Management 
    pursuant to its authority under section 5376(b)(1) of title 5.
        ``(2) Staff members.--Of the staff members appointed under 
    subsection (b)--
            ``(A) the rate of pay of 1 staff member shall be not more 
        than the basic rate of pay payable for level 10 of GS-15 of the 
        General Schedule;
            ``(B) the rate of pay of 1 staff member shall be not less 
        than the basic rate of pay payable for GS-13 of the General 
        Schedule and not more than the basic rate of pay payable for 
        level 10 of GS-14 of such Schedule; and
            ``(C) the rate of pay for the third staff member shall be 
        not less than the basic rate of pay payable for GS-8 of the 
        General Schedule and not more than the basic rate of pay 
        payable for level 10 of GS-11 of such Schedule.
        ``(3) Locality pay.--All rates of pay referred to under this 
    subsection shall include locality pay.
    ``(f) Independence of Copyright Royalty Judge.--
        ``(1) In making determinations.--
            ``(A) In general.--(i) Subject to clause (ii) of this 
        subparagraph and subparagraph (B), the Copyright Royalty Judges 
        shall have full independence in making determinations 
        concerning adjustments and determinations of copyright royalty 
        rates and terms, the distribution of copyright royalties, the 
        acceptance or rejection of royalty claims, rate adjustment 
        petitions, and petitions to participate, and in issuing other 
        rulings under this title, except that the Copyright Royalty 
        Judges may consult with the Register of Copyrights on any 
        matter other than a question of fact.
            ``(ii) A Copyright Royalty Judge or Judges, or, by motion 
        to the Copyright Royalty Judge or Judges, any participant in a 
        proceeding may request an interpretation by the Register of 
        Copyrights concerning any material question of substantive law 
        (not including questions of procedure before the Copyright 
        Royalty Judges, the ultimate adjustments and determinations of 
        copyright royalty rates and terms, the ultimate distribution of 
        copyright royalties, or the acceptance or rejection of royalty 
        claims, rate adjustment petitions, or petitions to participate) 
        concerning an interpretation or construction of those 
        provisions of this title that are the subject of the 
        proceeding. Any such request for a written interpretation by 
        the Register of Copyrights shall be on the record. Reasonable 
        provision shall be made for comment by the participants in the 
        proceeding on the material question of substantive law in such 
        a way as to minimize duplication and delay. Except as provided 
        in subparagraph (B), the Register of Copyrights shall deliver 
        to the Copyright Royalty Judges a response within 14 days after 
        the Register of Copyrigts receives all of the briefs or 
        comments of the participants. Such decision shall be in writing 
        and shall be included by the Copyright Royalty Judges in the 
        record that accompanies their final determination. If such a 
        decision is timely delivered to the Copyright Royalty Judges, 
        the Copyright Royalty Judges shall apply the legal 
        interpretation embodied in the response of the Register of 
        Copyrights in resolving material questions of substantive law.
            ``(B) Novel questions.--(i) In any case in which a novel 
        material question of substantive law concerning an 
        interpretation of those provisions of this title that are the 
        subject of the proceeding is presented, the Copyright Royalty 
        Judges shall request a decision of the Register of Copyrights, 
        in writing, to resolve such novel question. Reasonable 
        provision shall be made for comment on such request by the 
        participants in the proceeding, in such a way as to minimize 
        duplication and delay. The Register of Copyrights shall 
        transmit his or her decision to the Copyright Royalty Judges 
        within 30 days after the Register of Copyrights receives all of 
        the briefs or comments of the participants. Such decision shall 
        be in writing and included by the Copyright Royalty Judges in 
        the record that accompanies their final determination. If such 
        a decision is timely delivered to the Copyright Royalty Judges, 
        the Copyright Royalty Judges shall apply the legal 
        determinations embodied in the decision of the Register of 
        Copyrights in resolving material questions of substantive law.
            ``(ii) In clause (i), a `novel question of law' is a 
        question of law that has not been determined in prior 
        decisions, determinations, and rulings described in section 
        803(a).
            ``(C) Consultation.--Notwithstanding the provisions of 
        subparagraph (A), the Copyright Royalty Judges shall consult 
        with the Register of Copyrights with respect to any 
        determination or ruling that would require that any act be 
        performed by the Copyright Office, and any such determination 
        or ruling shall not be binding upon the Register of Copyrights.
            ``(D) Review of legal conclusions by the register of 
        copyrights.--The Register of Copyrights may review for legal 
        error the resolution by the Copyright Royalty Judges of a 
        material question of substantive law under this title that 
        underlies or is contained in a final determination of the 
        Copyright Royalty Judges. If the Register of Copyrights 
        concludes, after taking into consideration the views of the 
        participants in the proceeding, that any resolution reached by 
        the Copyright Royalty Judges was in material error, the 
        Register of Copyrights shall issue a written decision 
        correcting such legal error, which shall be made part of the 
        record of the proceeding. The Register of Copyrights shall 
        issue such written decision not later than 60 days after the 
        date on which the final determination by the Copyright Royalty 
        Judges is issued. Additionally, the Register of Copyrights 
        shall cause to be published in the Federal Register such 
        written decision, together with a specific identification of 
        the legal conclusion of the Copyright Royalty Judges that is 
        determined to be erroneous. As to conclusions of substantive 
        law involving an interpretation of the statutory provisions of 
        this title, the decision of the Register of Copyrights shall be 
        binding as precedent upon the Copyright Royalty Judges in 
        subsequent proceedings under this chapter. When a decision has 
        been rendered pursuant to this subparagraph, the Register of 
        Copyrights may, on the basis of and in accordance with such 
        decision, intervene as of right in any appeal of a final 
        determination of the Copyright Royalty Judges pursuant to 
        section 803(d) in the United States Court of Appeals for the 
        District of Columbia Circuit. If, prior to intervening in such 
        an appeal, the Register of Copyrights gives notification to, 
        and undertakes to consult with the Attorney General with 
        respect to such intervention, and the Attorney General fails, 
        within a reasonable period after receiving such notification, 
        to intervene in such appeal, the Register of Copyrights may 
        intervene in such appeal in his or her own name by any attorney 
        designated by the Register of Copyrights for such purpose. 
        Intervention by the Register of Copyrights in his or her own 
        name shall not preclude the Attorney General from intervening 
        on behalf of the United States in such an appeal as may be 
        otherwise provided or required by law.
            ``(E) Effect on judicial review.--Nothing in this section 
        shall be interpreted to alter the standard applied by a court 
        in reviewing legal determinations involving an interpretation 
        or construction of the provisions of this title or to affect 
        the extent to which any construction or interpretation of the 
        provisions of this title shall be accorded deference by a 
        reviewing court.
        ``(2) Performance appraisals.--
            ``(A) In general.--Notwithstanding any other provision of 
        law or any regulation of the Library of Congress, and subject 
        to subparagraph (B), the Copyright Royalty Judges shall not 
        receive performance appraisals.
            ``(B) Relating to sanction or removal.--To the extent that 
        the Librarian of Congress adopts regulations under subsection 
        (h) relating to the sanction or removal of a Copyright Royalty 
        Judge and such regulations require documentation to establish 
        the cause of such sanction or removal, the Copyright Royalty 
        Judge may receive an appraisal related specifically to the 
        cause of the sanction or removal.
    ``(g) Inconsistent Duties Barred.--No Copyright Royalty Judge may 
undertake duties that conflict with his or her duties and 
responsibilities as a Copyright Royalty Judge.
    ``(h) Standards of Conduct.--The Librarian of Congress shall adopt 
regulations regarding the standards of conduct, including financial 
conflict of interest and restrictions against ex parte communications, 
which shall govern the Copyright Royalty Judges and the proceedings 
under this chapter.
    ``(i) Removal or Sanction.--The Librarian of Congress may sanction 
or remove a Copyright Royalty Judge for violation of the standards of 
conduct adopted under subsection (h), misconduct, neglect of duty, or 
any disqualifying physical or mental disability. Any such sanction or 
removal may be made only after notice and opportunity for a hearing, 
but the Librarian of Congress may suspend the Copyright Royalty Judge 
during the pendency of such hearing. The Librarian shall appoint an 
interim Copyright Royalty Judge during the period of any such 
suspension.

``Sec. 803. Proceedings of Copyright Royalty Judges

    ``(a) Proceedings.--
        ``(1) In general.--The Copyright Royalty Judges shall act in 
    accordance with regulations issued by the Copyright Royalty Judges 
    and the Librarian of Congress, and on the basis of a written 
    record, prior determinations and interpretations of the Copyright 
    Royalty Tribunal, Librarian of Congress, the Register of 
    Copyrights, and the Copyright Royalty Judges (to the extent those 
    determinations are not inconsistent with a decision of the Register 
    of Copyrights that was timely delivered to the Copyright Royalty 
    Judges pursuant to section 802(f)(1) (A) or (B), or with a decision 
    of the Register of Copyrights pursuant to section 802(f)(1)(D)), 
    under this chapter, and decisions of the court of appeals under 
    this chapter before, on, or after the effective date of the 
    Copyright Royalty and Distribution Reform Act of 2004.
        ``(2) Judges acting as panel and individually.--The Copyright 
    Royalty Judges shall preside over hearings in proceedings under 
    this chapter en banc. The Chief Copyright Royalty Judge may 
    designate a Copyright Royalty Judge to preside individually over 
    such collateral and administrative proceedings, and over such 
    proceedings under paragraphs (1) through (5) of subsection (b), as 
    the Chief Judge considers appropriate.
        ``(3) Determinations.--Final determinations of the Copyright 
    Royalty Judges in proceedings under this chapter shall be made by 
    majority vote. A Copyright Royalty Judge dissenting from the 
    majority on any determination under this chapter may issue his or 
    her dissenting opinion, which shall be included with the 
    determination.
    ``(b) Procedures.--
        ``(1) Initiation.--
            ``(A) Call for petitions to participate.--(i) The Copyright 
        Royalty Judges shall cause to be published in the Federal 
        Register notice of commencement of proceedings under this 
        chapter, calling for the filing of petitions to participate in 
        a proceeding under this chapter for the purpose of making the 
        relevant determination under section 111, 112, 114, 115, 116, 
        118, 119, 1004, or 1007, as the case may be--
                ``(I) promptly upon a determination made under section 
            804(a);
                ``(II) by no later than January 5 of a year specified 
            in paragraph (2) of section 804(b) for the commencement of 
            proceedings;
                ``(III) by no later than January 5 of a year specified 
            in subparagraph (A) or (B) of paragraph (3) of section 
            804(b) for the commencement of proceedings, or as otherwise 
            provided in subparagraph (A) or (C) of such paragraph for 
            the commencement of proceedings;
                ``(IV) as provided under section 804(b)(8); or
                ``(V) by no later than January 5 of a year specified in 
            any other provision of section 804(b) for the filing of 
            petitions for the commencement of proceedings, if a 
            petition has not been filed by that date.
            ``(ii) Petitions to participate shall be filed by no later 
        than 30 days after publication of notice of commencement of a 
        proceeding under clause (i), except that the Copyright Royalty 
        Judges may, for substantial good cause shown and if there is no 
        prejudice to the participants that have already filed 
        petitions, accept late petitions to participate at any time up 
        to the date that is 90 days before the date on which 
        participants in the proceeding are to file their written direct 
        statements. Notwithstanding the preceding sentence, petitioners 
        whose petitions are filed more than 30 days after publication 
        of notice of commencement of a proceeding are not eligible to 
        object to a settlement reached during the voluntary negotiation 
        period under paragraph (3), and any objection filed by such a 
        petitioner shall not be taken into account by the Copyright 
        Royalty Judges.
            ``(B) Petitions to participate.--Each petition to 
        participate in a proceeding shall describe the petitioner's 
        interest in the subject matter of the proceeding. Parties with 
        similar interests may file a single petition to participate.
        ``(2) Participation in general.--Subject to paragraph (4), a 
    person may participate in a proceeding under this chapter, 
    including through the submission of briefs or other information, 
    only if--
            ``(A) that person has filed a petition to participate in 
        accordance with paragraph (1) (either individually or as a 
        group under paragraph (1)(B)), together with a filing fee of 
        $150;
            ``(B) the Copyright Royalty Judges have not determined that 
        the petition to participate is facially invalid; and
            ``(C) the Copyright Royalty Judges have not determined, sua 
        sponte or on the motion of another participant in the 
        proceeding, that the person lacks a significant interest in the 
        proceeding.
        ``(3) Voluntary negotiation period.--
            ``(A) In general.--Promptly after the date for filing of 
        petitions to participate in a proceeding, the Copyright Royalty 
        Judges shall make available to all participants in the 
        proceeding a list of such participants and shall initiate a 
        voluntary negotiation period among the participants.
            ``(B) Length of proceedings.--The voluntary negotiation 
        period initiated under subparagraph (A) shall be 3 months.
            ``(C) Determination of subsequent proceedings.--At the 
        close of the voluntary negotiation proceedings, the Copyright 
        Royalty Judges shall, if further proceedings under this chapter 
        are necessary, determine whether and to what extent paragraphs 
        (4) and (5) will apply to the parties.
        ``(4) Small claims procedure in distribution proceedings.--
            ``(A) In general.--If, in a proceeding under this chapter 
        to determine the distribution of royalties, the contested 
        amount of a claim is $10,000 or less, the Copyright Royalty 
        Judges shall decide the controversy on the basis of the filing 
        of the written direct statement by the participant, the 
        response by any opposing participant, and 1 additional response 
        by each such party. The participant asserting the claim shall 
        not be required to pay the filing fee under paragraph (2).
            ``(B) Bad faith inflation of claim.--If the Copyright 
        Royalty Judges determine that a participant asserts in bad 
        faith an amount in controversy in excess of $10,000 for the 
        purpose of avoiding a determination under the procedure set 
        forth in subparagraph (A), the Copyright Royalty Judges shall 
        impose a fine on that participant in an amount not to exceed 
        the difference between the actual amount distributed and the 
        amount asserted by the participant.
        ``(5) Paper proceedings.--The Copyright Royalty Judges in 
    proceedings under this chapter may decide, sua sponte or upon 
    motion of a participant, to determine issues on the basis of the 
    filing of the written direct statement by the participant, the 
    response by any opposing participant, and one additional response 
    by each such participant. Prior to making such decision to proceed 
    on such a paper record only, the Copyright Royalty Judges shall 
    offer to all parties to the proceeding the opportunity to comment 
    on the decision. The procedure under this paragraph--
            ``(A) shall be applied in cases in which there is no 
        genuine issue of material fact, there is no need for 
        evidentiary hearings, and all participants in the proceeding 
        agree in writing to the procedure; and
            ``(B) may be applied under such other circumstances as the 
        Copyright Royalty Judges consider appropriate.
        ``(6) Regulations.--
            ``(A) In general.--The Copyright Royalty Judges may issue 
        regulations to carry out their functions under this title. All 
        regulations issued by the Copyright Royalty Judges are subject 
        to the approval of the Librarian of Congress. Not later than 
        120 days after Copyright Royalty Judges or interim Copyright 
        Royalty Judges, as the case may be, are first appointed after 
        the enactment of the Copyright Royalty and Distribution Reform 
        Act of 2004, such judges shall issue regulations to govern 
        proceedings under this chapter.
            ``(B) Interim regulations.--Until regulations are adopted 
        under subparagraph (A), the Copyright Royalty Judges shall 
        apply the regulations in effect under this chapter on the day 
        before the effective date of the Copyright Royalty and 
        Distribution Reform Act of 2004, to the extent such regulations 
        are not inconsistent with this chapter, except that functions 
        carried out under such regulations by the Librarian of 
        Congress, the Register of Copyrights, or copyright arbitration 
        royalty panels that, as of such date of enactment, are to be 
        carried out by the Copyright Royalty Judges under this chapter, 
        shall be carried out by the Copyright Royalty Judges under such 
        regulations.
            ``(C) Requirements.--Regulations issued under subparagraph 
        (A) shall include the following:
                ``(i) The written direct statements of all participants 
            in a proceeding under paragraph (2) shall be filed by a 
            date specified by the Copyright Royalty Judges, which may 
            be not earlier than 4 months, and not later than 5 months, 
            after the end of the voluntary negotiation period under 
            paragraph (3). Notwithstanding the preceding sentence, the 
            Copyright Royalty Judges may allow a participant in a 
            proceeding to file an amended written direct statement 
            based on new information received during the discovery 
            process, within 15 days after the end of the discovery 
            period specified in clause (iii).
                ``(ii)(I) Following the submission to the Copyright 
            Royalty Judges of written direct statements by the 
            participants in a proceeding under paragraph (2), the 
            judges shall meet with the participants for the purpose of 
            setting a schedule for conducting and completing discovery. 
            Such schedule shall be determined by the Copyright Royalty 
            Judges.
                ``(II) In this chapter, the term `written direct 
            statements' means witness statements, testimony, and 
            exhibits to be presented in the proceedings, and such other 
            information that is necessary to establish terms and rates, 
            or the distribution of royalty payments, as the case may 
            be, as set forth in regulations issued by the Copyright 
            Royalty Judges.
                ``(iii) Hearsay may be admitted in proceedings under 
            this chapter to the extent deemed appropriate by the 
            Copyright Royalty Judges.
                ``(iv) Discovery in such proceedings shall be permitted 
            for a period of 60 days, except for discovery ordered by 
            the Copyright Royalty Judges in connection with the 
            resolution of motions, orders, and disputes pending at the 
            end of such period.
                ``(v) Any participant under paragraph (2) in a 
            proceeding under this chapter to determine royalty rates 
            may request of an opposing participant nonprivileged 
            documents directly related to the written direct statement 
            or written rebuttal statement of that participant. Any 
            objection to such a request shall be resolved by a motion 
            or request to compel production made to the Copyright 
            Royalty Judges in accordance with regulations adopted by 
            the Copyright Royalty Judges. Each motion or request to 
            compel discovery shall be determined by the Copyright 
            Royalty Judges, or by a Copyright Royalty Judge when 
            permitted under subsection (a)(2). Upon such motion, the 
            Copyright Royalty Judges may order discovery pursuant to 
            regulations established under this paragraph.
                ``(vi)(I) Any participant under paragraph (2) in a 
            proceeding under this chapter to determine royalty rates 
            may, by means of written motion or on the record, request 
            of an opposing participant or witness other relevant 
            information and materials if, absent the discovery sought, 
            the Copyright Royalty Judges' resolution of the proceeding 
            would be substantially impaired. In determining whether 
            discovery will be granted under this clause, the Copyright 
            Royalty Judges may consider--

                    ``(aa) whether the burden or expense of producing 
                the requested information or materials outweighs the 
                likely benefit, taking into account the needs and 
                resources of the participants, the importance of the 
                issues at stake, and the probative value of the 
                requested information or materials in resolving such 
                issues;
                    ``(bb) whether the requested information or 
                materials would be unreasonably cumulative or 
                duplicative, or are obtainable from another source that 
                is more convenient, less burdensome, or less expensive; 
                and
                    ``(cc) whether the participant seeking discovery 
                has had ample opportunity by discovery in the 
                proceeding or by other means to obtain the information 
                sought.

                ``(II) This clause shall not apply to any proceeding 
            scheduled to commence after December 31, 2010.
                ``(vii) In a proceeding under this chapter to determine 
            royalty rates, the participants entitled to receive 
            royalties shall collectively be permitted to take no more 
            than 10 depositions and secure responses to no more than 25 
            interrogatories, and the participants obligated to pay 
            royalties shall collectively be permitted to take no more 
            than 10 depositions and secure responses to no more than 25 
            interrogatories. The Copyright Royalty Judges shall resolve 
            any disputes among similarly aligned participants to 
            allocate the number of depositions or interrogatories 
            permitted under this clause.
                ``(viii) The rules and practices in effect on the day 
            before the effective date of the Copyright Royalty and 
            Distribution Reform Act of 2004, relating to discovery in 
            proceedings under this chapter to determine the 
            distribution of royalty fees, shall continue to apply to 
            such proceedings on and after such effective date.
                ``(ix) In proceedings to determine royalty rates, the 
            Copyright Royalty Judges may issue a subpoena commanding a 
            participant or witness to appear and give testimony, or to 
            produce and permit inspection of documents or tangible 
            things, if the Copyright Royalty Judges' resolution of the 
            proceeding would be substantially impaired by the absence 
            of such testimony or production of documents or tangible 
            things. Such subpoena shall specify with reasonable 
            particularity the materials to be produced or the scope and 
            nature of the required testimony. Nothing in this clause 
            shall preclude the Copyright Royalty Judges from requesting 
            the production by a nonparticipant of information or 
            materials relevant to the resolution by the Copyright 
            Royalty Judges of a material issue of fact.
                ``(x) The Copyright Royalty Judges shall order a 
            settlement conference among the participants in the 
            proceeding to facilitate the presentation of offers of 
            settlement among the participants. The settlement 
            conference shall be held during a 21-day period following 
            the end of the discovery period and shall take place 
            outside the presence of the Copyright Royalty Judges.
                ``(xi) No evidence, including exhibits, may be 
            submitted in the written direct statement or written 
            rebuttal statement of a participant without a sponsoring 
            witness, except where the Copyright Royalty Judges have 
            taken official notice, or in the case of incorporation by 
            reference of past records, or for good cause shown.
    ``(c) Determination of Copyright Royalty Judges.--
        ``(1) Timing.--The Copyright Royalty Judges shall issue their 
    determination in a proceeding not later than 11 months after the 
    conclusion of the 21-day settlement conference period under 
    subsection (b)(6)(C)(x), but, in the case of a proceeding to 
    determine successors to rates or terms that expire on a specified 
    date, in no event later than 15 days before the expiration of the 
    then current statutory rates and terms.
        ``(2) Rehearings.--
            ``(A) In general.--The Copyright Royalty Judges may, in 
        exceptional cases, upon motion of a participant in a proceeding 
        under subsection (b)(2), order a rehearing, after the 
        determination in the proceeding is issued under paragraph (1), 
        on such matters as the Copyright Royalty Judges determine to be 
        appropriate.
            ``(B) Timing for filing motion.--Any motion for a rehearing 
        under subparagraph (A) may only be filed within 15 days after 
        the date on which the Copyright Royalty Judges deliver to the 
        participants in the proceeding their initial determination 
        concerning rates and terms.
            ``(C) Participation by opposing party not required.--In any 
        case in which a rehearing is ordered, any opposing party shall 
        not be required to participate in the rehearing, except that 
        nonparticipation may give rise to the limitations with respect 
        to judicial review provided for in subsection (d)(1).
            ``(D) No negative inference.--No negative inference shall 
        be drawn from lack of participation in a rehearing.
            ``(E) Continuity of rates and terms.--(i) If the decision 
        of the Copyright Royalty Judges on any motion for a rehearing 
        is not rendered before the expiration of the statutory rates 
        and terms that were previously in effect, in the case of a 
        proceeding to determine successors to rates and terms that 
        expire on a specified date, then--
                ``(I) the initial determination of the Copyright 
            Royalty Judges that is the subject of the rehearing motion 
            shall be effective as of the day following the date on 
            which the rates and terms that were previously in effect 
            expire; and
                ``(II) in the case of a proceeding under section 
            114(f)(1)(C) or 114(f)(2)(C), royalty rates and terms 
            shall, for purposes of section 114(f)(4)(B), be deemed to 
            have been set at those rates and terms contained in the 
            initial determination of the Copyright Royalty Judges that 
            is the subject of the rehearing motion, as of the date of 
            that determination.
            ``(ii) The pendency of a motion for a rehearing under this 
        paragraph shall not relieve persons obligated to make royalty 
        payments who would be affected by the determination on that 
        motion from providing the statements of account and any reports 
        of use, to the extent required, and paying the royalties 
        required under the relevant determination or regulations.
            ``(iii) Notwithstanding clause (ii), whenever royalties 
        described in clause (ii) are paid to a person other than the 
        Copyright Office, the entity designated by the Copyright 
        Royalty Judges to which such royalties are paid by the 
        copyright user (and any successor thereto) shall, within 60 
        days after the motion for rehearing is resolved or, if the 
        motion is granted, within 60 days after the rehearing is 
        concluded, return any excess amounts previously paid to the 
        extent necessary to comply with the final determination of 
        royalty rates by the Copyright Royalty Judges. Any underpayment 
        of royalties resulting from a rehearing shall be paid within 
        the same period.
        ``(3) Contents of determination.--A determination of the 
    Copyright Royalty Judges shall be supported by the written record 
    and shall set forth the findings of fact relied on by the Copyright 
    Royalty Judges. Among other terms adopted in a determination, the 
    Copyright Royalty Judges may specify notice and recordkeeping 
    requirements of users of the copyrights at issue that apply in lieu 
    of those that would otherwise apply under regulations.
        ``(4) Continuing jurisdiction.--The Copyright Royalty Judges 
    may, with the approval of the Register of Copyrights, issue an 
    amendment to a written determination to correct any technical or 
    clerical errors in the determination or to modify the terms, but 
    not the rates, of royalty payments in response to unforeseen 
    circumstances that would frustrate the proper implementation of 
    such determination. Such amendment shall be set forth in a written 
    addendum to the determination that shall be distributed to the 
    participants of the proceeding and shall be published in the 
    Federal Register.
        ``(5) Protective order.--The Copyright Royalty Judges may issue 
    such orders as may be appropriate to protect confidential 
    information, including orders excluding confidential information 
    from the record of the determination that is published or made 
    available to the public, except that any terms or rates of royalty 
    payments or distributions may not be excluded.
        ``(6) Publication of determination.--By no later than the end 
    of the 60-day period provided in section 802(f)(1)(D), the 
    Librarian of Congress shall cause the determination, and any 
    corrections thereto, to be published in the Federal Register. The 
    Librarian of Congress shall also publicize the determination and 
    corrections in such other manner as the Librarian considers 
    appropriate, including, but not limited to, publication on the 
    Internet. The Librarian of Congress shall also make the 
    determination, corrections, and the accompanying record available 
    for public inspection and copying.
        ``(7) Late payment.--A determination of Copyright Royalty 
    Judges may include terms with respect to late payment, but in no 
    way shall such terms prevent the copyright holder from asserting 
    other rights or remedies provided under this title.
    ``(d) Judicial Review.--
        ``(1) Appeal.--Any determination of the Copyright Royalty 
    Judges under subsection (c) may, within 30 days after the 
    publication of the determination in the Federal Register, be 
    appealed, to the United States Court of Appeals for the District of 
    Columbia Circuit, by any aggrieved participant in the proceeding 
    under subsection (b)(2) who fully participated in the proceeding 
    and who would be bound by the determination. Any participant that 
    did not participate in a rehearing may not raise any issue that was 
    the subject of that rehearing at any stage of judicial review of 
    the hearing determination. If no appeal is brought within that 30-
    day period, the determination of the Copyright Royalty Judges shall 
    be final, and the royalty fee or determination with respect to the 
    distribution of fees, as the case may be, shall take effect as set 
    forth in paragraph (2).
        ``(2) Effect of rates.--
            ``(A) Expiration on specified date.--When this title 
        provides that the royalty rates and terms that were previously 
        in effect are to expire on a specified date, any adjustment or 
        determination by the Copyright Royalty Judges of successor 
        rates and terms for an ensuing statutory license period shall 
        be effective as of the day following the date of expiration of 
        the rates and terms that were previously in effect, even if the 
        determination of the Copyright Royalty Judges is rendered on a 
        later date. A licensee shall be obligated to continue making 
        payments under the rates and terms previously in effect until 
        such time as rates and terms for the successor period are 
        established. Whenever royalties pursuant to this section are 
        paid to a person other than the Copyright Office, the entity 
        designated by the Copyright Royalty Judges to which such 
        royalties are paid by the copyright user (and any successor 
        thereto) shall, within 60 days after the final determination of 
        the Copyright Royalty Judges establishing rates and terms for a 
        successor period or the exhaustion of all rehearings or appeals 
        of such determination, if any, return any excess amounts 
        previously paid to the extent necessary to comply with the 
        final determination of royalty rates. Any underpayment of 
        royalties by a copyright user shall be paid to the entity 
        designated by the Copyright Royalty Judges within the same 
        period.
            ``(B) Other cases.--In cases where rates and terms have 
        not, prior to the inception of an activity, been established 
        for that particular activity under the relevant license, such 
        rates and terms shall be retroactive to the inception of 
        activity under the relevant license covered by such rates and 
        terms. In other cases where rates and terms do not expire on a 
        specified date, successor rates and terms shall take effect on 
        the first day of the second month that begins after the 
        publication of the determination of the Copyright Royalty 
        Judges in the Federal Register, except as otherwise provided in 
        this title, or by the Copyright Royalty Judges, or as agreed by 
        the participants in a proceeding that would be bound by the 
        rates and terms. Except as otherwise provided in this title, 
        the rates and terms, to the extent applicable, shall remain in 
        effect until such successor rates and terms become effective.
            ``(C) Obligation to make payments.--
                ``(i) The pendency of an appeal under this subsection 
            shall not relieve persons obligated to make royalty 
            payments under section 111, 112, 114, 115, 116, 118, 119, 
            or 1003, who would be affected by the determination on 
            appeal, from--

                    ``(I) providing the statements of account and any 
                report of use; and
                    ``(II) paying the royalties required under the 
                relevant determination or regulations.

            ``(ii) Notwithstanding clause (i), whenever royalties 
        described in clause (i) are paid to a person other than the 
        Copyright Office, the entity designated by the Copyright 
        Royalty Judges to which such royalties are paid by the 
        copyright user (and any successor thereto) shall, within 60 
        days after the final resolution of the appeal, return any 
        excess amounts previously paid (and interest thereon, if 
        ordered pursuant to paragraph (3)) to the extent necessary to 
        comply with the final determination of royalty rates on appeal. 
        Any underpayment of royalties resulting from an appeal (and 
        interest thereon, if ordered pursuant to paragraph (3)) shall 
        be paid within the same period.
        ``(3) Jurisdiction of court.--If the court, pursuant to section 
    706 of title 5, modifies or vacates a determination of the 
    Copyright Royalty Judges, the court may enter its own determination 
    with respect to the amount or distribution of royalty fees and 
    costs, and order the repayment of any excess fees, the payment of 
    any underpaid fees, and the payment of interest pertaining 
    respectively thereto, in accordance with its final judgment. The 
    court may also vacate the determination of the Copyright Royalty 
    Judges and remand the case to the Copyright Royalty Judges for 
    further proceedings in accordance with subsection (a).
    ``(e) Administrative Matters.--
        ``(1) Deduction of costs of library of congress and copyright 
    office from filing fees.--
            ``(A) Deduction from filing fees.--The Librarian of 
        Congress may, to the extent not otherwise provided under this 
        title, deduct from the filing fees collected under subsection 
        (b) for a particular proceeding under this chapter the 
        reasonable costs incurred by the Librarian of Congress, the 
        Copyright Office, and the Copyright Royalty Judges in 
        conducting that proceeding, other than the salaries of the 
        Copyright Royalty Judges and the 3 staff members appointed 
        under section 802(b).
            ``(B) Authorization of appropriations.--There are 
        authorized to be appropriated such sums as may be necessary to 
        pay the costs incurred under this chapter not covered by the 
        filing fees collected under subsection (b). All funds made 
        available pursuant to this subparagraph shall remain available 
        until expended.
        ``(2) Positions required for administration of compulsory 
    licensing.--Section 307 of the Legislative Branch Appropriations 
    Act, 1994, shall not apply to employee positions in the Library of 
    Congress that are required to be filled in order to carry out 
    section 111, 112, 114, 115, 116, 118, or 119 or chapter 10.

``Sec. 804. Institution of proceedings

    ``(a) Filing of Petition.--With respect to proceedings referred to 
in paragraphs (1) and (2) of section 801(b) concerning the 
determination or adjustment of royalty rates as provided in sections 
111, 112, 114, 115, 116, 118, 119, and 1004, during the calendar years 
specified in the schedule set forth in subsection (b), any owner or 
user of a copyrighted work whose royalty rates are specified by this 
title, or are established under this chapter before or after the 
enactment of the Copyright Royalty and Distribution Reform Act of 2004, 
may file a petition with the Copyright Royalty Judges declaring that 
the petitioner requests a determination or adjustment of the rate. The 
Copyright Royalty Judges shall make a determination as to whether the 
petitioner has such a significant interest in the royalty rate in which 
a determination or adjustment is requested. If the Copyright Royalty 
Judges determine that the petitioner has such a significant interest, 
the Copyright Royalty Judges shall cause notice of this determination, 
with the reasons for such determination, to be published in the Federal 
Register, together with the notice of commencement of proceedings under 
this chapter. With respect to proceedings under paragraph (1) of 
section 801(b) concerning the determination or adjustment of royalty 
rates as provided in sections 112 and 114, during the calendar years 
specified in the schedule set forth in subsection (b), the Copyright 
Royalty Judges shall cause notice of commencement of proceedings under 
this chapter to be published in the Federal Register as provided in 
section 803(b)(1)(A).
    ``(b) Timing of Proceedings.--
        ``(1) Section 111 proceedings.--(A) A petition described in 
    subsection (a) to initiate proceedings under section 801(b)(2) 
    concerning the adjustment of royalty rates under section 111 to 
    which subparagraph (A) or (D) of section 801(b)(2) applies may be 
    filed during the year 2005 and in each subsequent fifth calendar 
    year.
        ``(B) In order to initiate proceedings under section 801(b)(2) 
    concerning the adjustment of royalty rates under section 111 to 
    which subparagraph (B) or (C) of section 801(b)(2) applies, within 
    12 months after an event described in either of those subsections, 
    any owner or user of a copyrighted work whose royalty rates are 
    specified by section 111, or by a rate established under this 
    chapter before or after the enactment of the Copyright Royalty and 
    Distribution Reform Act of 2004, may file a petition with the 
    Copyright Royalty Judges declaring that the petitioner requests an 
    adjustment of the rate. The Copyright Royalty Judges shall then 
    proceed as set forth in subsection (a) of this section. Any change 
    in royalty rates made under this chapter pursuant to this 
    subparagraph may be reconsidered in the year 2005, and each fifth 
    calendar year thereafter, in accordance with the provisions in 
    section 801(b)(3) (B) or (C), as the case may be. A petition for 
    adjustment of rates established by section 111(d)(1)(B) as a result 
    of a change is the rules and regulations of the Federal 
    Communications Commission shall set forth the change on which the 
    petition is based.
        ``(C) Any adjustment of royalty rates under section 111 shall 
    take effect as of the first accounting period commencing after the 
    publication of the determination of the Copyright Royalty Judges in 
    the Federal Register, or on such other date as is specified in that 
    determination.
        ``(2) Certain section 112 proceedings.--Proceedings under this 
    chapter shall be commenced in the year 2007 to determine reasonable 
    terms and rates of royalty payments for the activities described in 
    section 112(e)(1) relating to the limitation on exclusive rights 
    specified by section 114(d)(1)(C)(iv), to become effective on 
    January 1, 2009. Such proceedings shall be repeated in each 
    subsequent fifth calendar year.
        ``(3) Section 114 and corresponding 112 proceedings.--
            ``(A) For eligible nonsubscription services and new 
        subscription services.--Proceedings under this chapter shall be 
        commenced as soon as practicable after the effective date of 
        the Copyright Royalty and Distribution Reform Act of 2004 to 
        determine reasonable terms and rates of royalty payments under 
        sections 114 and 112 for the activities of eligible 
        nonsubscription transmission services and new subscription 
        services, to be effective for the period beginning on January 
        1, 2006, and ending on December 31, 2010. Such proceedings 
        shall next be commenced in January 2009 to determine reasonable 
        terms and rates of royalty payments, to become effective on 
        January 1, 2011. Thereafter, such proceedings shall be repeated 
        in each subsequent fifth calendar year.
            ``(B) For preexisting subscription and satellite digital 
        audio radio services.--Proceedings under this chapter shall be 
        commenced in January 2006 to determine reasonable terms and 
        rates of royalty payments under sections 114 and 112 for the 
        activities of preexisting subscription services, to be 
        effective during the period beginning on January 1, 2008, and 
        ending on December 31, 2012, and preexisting satellite digital 
        audio radio services, to be effective during the period 
        beginning on January 1, 2007, and ending on December 31, 2012. 
        Such proceedings shall next be commenced in 2011 to determine 
        reasonable terms and rates of royalty payments, to become 
        effective on January 1, 2013. Thereafter, such proceedings 
        shall be repeated in each subsequent fifth calendar year.
            ``(C)(i) Notwithstanding any other provision of this 
        chapter, this subparagraph shall govern proceedings commenced 
        pursuant to section 114(f)(1)(C) and 114(f)(2)(C) concerning 
        new types of services.
            ``(ii) Not later than 30 days after a petition to determine 
        rates and terms for a new type of service that is filed by any 
        copyright owner of sound recordings, or such new type of 
        service, indicating that such new type of service is or is 
        about to become operational, the Copyright Royalty Judges shall 
        issue a notice for a proceeding to determine rates and terms 
        for such service.
            ``(iii) The proceeding shall follow the schedule set forth 
        in such subsections (b), (c), and (d) of section 803, except 
        that--
                ``(I) the determination shall be issued by not later 
            than 24 months after the publication of the notice under 
            clause (ii); and
                ``(II) the decision shall take effect as provided in 
            subsections (c)(2) and (d)(2) of section 803 and section 
            114(f)(4)(B)(ii) and (C).
            ``(iv) The rates and terms shall remain in effect for the 
        period set forth in section 114(f)(1)(C) or 114(f)(2)(C), as 
        the case may be.
        ``(4) Section 115 proceedings.--A petition described in 
    subsection (a) to initiate proceedings under section 801(b)(1) 
    concerning the adjustment or determination of royalty rates as 
    provided in section 115 may be filed in the year 2006 and in each 
    subsequent fifth calendar year, or at such other times as the 
    parties have agreed under section 115(c)(3) (B) and (C).
        ``(5) Section 116 proceedings.--(A) A petition described in 
    subsection (a) to initiate proceedings under section 801(b) 
    concerning the determination of royalty rates and terms as provided 
    in section 116 may be filed at any time within 1 year after 
    negotiated licenses authorized by section 116 are terminated or 
    expire and are not replaced by subsequent agreements.
        ``(B) If a negotiated license authorized by section 116 is 
    terminated or expires and is not replaced by another such license 
    agreement which provides permission to use a quantity of musical 
    works not substantially smaller than the quantity of such works 
    performed on coin-operated phonorecord players during the 1-year 
    period ending March 1, 1989, the Copyright Royalty Judges shall, 
    upon petition filed under paragraph (1) within 1 year after such 
    termination or expiration, commence a proceeding to promptly 
    establish an interim royalty rate or rates for the public 
    performance by means of a coin-operated phonorecord player of 
    nondramatic musical works embodied in phonorecords which had been 
    subject to the terminated or expired negotiated license agreement. 
    Such rate or rates shall be the same as the last such rate or rates 
    and shall remain in force until the conclusion of proceedings by 
    the Copyright Royalty Judges, in accordance with section 803, to 
    adjust the royalty rates applicable to such works, or until 
    superseded by a new negotiated license agreement, as provided in 
    section 116(b).
        ``(6) Section 118 proceedings.--A petition described in 
    subsection (a) to initiate proceedings under section 801(b)(1) 
    concerning the determination of reasonable terms and rates of 
    royalty payments as provided in section 118 may be filed in the 
    year 2006 and in each subsequent fifth calendar year.
        ``(7) Section 1004 proceedings.--A petition described in 
    subsection (a) to initiate proceedings under section 801(b)(1) 
    concerning the adjustment of reasonable royalty rates under section 
    1004 may be filed as provided in section 1004(a)(3).
        ``(8) Proceedings concerning distribution of royalty fees.--
    With respect to proceedings under section 801(b)(3) concerning the 
    distribution of royalty fees in certain circumstances under section 
    111, 119, or 1007, the Copyright Royalty Judges shall, upon a 
    determination that a controversy exists concerning such 
    distribution, cause to be published in the Federal Register notice 
    of commencement of proceedings under this chapter.

``Sec. 805. General rule for voluntarily negotiated agreements

    ``Any rates or terms under this title that--
        ``(1) are agreed to by participants to a proceeding under 
    section 803(b)(3),
        ``(2) are adopted by the Copyright Royalty Judges as part of a 
    determination under this chapter, and
        ``(3) are in effect for a period shorter than would otherwise 
    apply under a determination pursuant to this chapter,
shall remain in effect for such period of time as would otherwise apply 
under such determination, except that the Copyright Royalty Judges 
shall adjust the rates pursuant to the voluntary negotiations to 
reflect national monetary inflation during the additional period the 
rates remain in effect.''.
    (b) Conforming Amendment.--The table of chapters for title 17, 
United States Code, is amended by striking the item relating to chapter 
8 and inserting the following:

``8. Proceedings by Copyright Royalty Judges......................801''.

SEC. 4. DEFINITION.

    Section 101 is amended by inserting after the definition of 
``copies'' the following:
        ``A `Copyright Royalty Judge' is a Copyright Royalty Judge 
    appointed under section 802 of this title, and includes any 
    individual serving as an interim Copyright Royalty Judge under such 
    section.''.

SEC. 5. TECHNICAL AMENDMENTS.

    (a) Cable Rates.--Section 111(d) is amended--
        (1) in paragraph (2), in the second sentence, by striking ``a 
    copyright arbitration royalty panel'' and inserting ``the Copyright 
    Royalty Judges.''; and
        (2) in paragraph (4)--
            (A) in subparagraph (A), by striking ``Librarian of 
        Congress'' each place it appears and inserting ``Copyright 
        Royalty Judges'';
            (B) in subparagraph (B)--
                (i) in the first sentence, by striking ``Librarian of 
            Congress shall, upon the recommendation of the Register of 
            Copyrights,'' and inserting ``Copyright Royalty Judges 
            shall'';
                (ii) in the second sentence, by striking ``Librarian 
            determines'' and inserting ``Copyright Royalty Judges 
            determine''; and
                (iii) in the third sentence--

                    (I) by striking ``Librarian'' each place it appears 
                and inserting ``Copyright Royalty Judges''; and
                    (II) by striking ``convene a copyright arbitration 
                royalty panel'' and inserting ``conduct a proceeding''; 
                and

            (C) in subparagraph (C), by striking ``Librarian of 
        Congress'' and inserting ``Copyright Royalty Judges''.
    (b) Ephemeral Recordings.--Section 112(e) is amended--
        (1) in paragraph (3)--
            (A) by amending the first sentence to read as follows: 
        ``Proceedings under chapter 8 shall determine reasonable rates 
        and terms of royalty payments for the activities specified by 
        paragraph (1) during the 5-year period beginning on January 1 
        of the second year following the year in which the proceedings 
        are to be commenced, or such other period as the parties may 
        agree.'';
            (B) in the third sentence, by striking ``Librarian of 
        Congress'' and inserting ``Copyright Royalty Judges''; and
            (C) in the fourth sentence, by striking ``negotiation'';
        (2) in paragraph (4)--
            (A) by amending the first sentence to read as follows: 
        ``The schedule of reasonable rates and terms determined by the 
        Copyright Royalty Judges shall, subject to paragraph (5), be 
        binding on all copyright owners of sound recordings and 
        transmitting organizations entitled to a statutory license 
        under this subsection during the 5-year period specified in 
        paragraph (3), or such other period as the parties may 
        agree.'';
            (B) by striking ``copyright arbitration royalty panel'' 
        each subsequent place it appears and inserting ``Copyright 
        Royalty Judges'';
            (C) in the fourth sentence, by striking ``its decision'' 
        and inserting ``their decision'';
            (D) in the fifth sentence, by striking ``negotiated as 
        provided'' and inserting ``described''; and
            (E) in the last sentence, by striking ``Librarian of 
        Congress'' and inserting ``Copyright Royalty Judges'';
        (3) in paragraph (5), by striking ``determination by a 
    copyright arbitration royalty panel or decision by the Librarian of 
    Congress'' and inserting ``decision by the Librarian of Congress or 
    determination by the Copyright Royalty Judges'';
        (4) by striking paragraph (6) and redesignating paragraphs (7), 
    (8), and (9), as paragraphs (6), (7), and (8), respectively; and
        (5) in paragraph (6)(A), as so redesignated, by striking 
    ``Librarian of Congress'' and inserting ``Copyright Royalty 
    Judges''.
    (c) Scope of Exclusive Rights in Sound Recordings.--Section 114(f) 
is amended--
        (1) in paragraph (1)--
            (A) in subparagraph (A)--
                (i) by amending the first sentence to read as follows: 
            ``Proceedings under chapter 8 shall determine reasonable 
            rates and terms of royalty payments for subscription 
            transmissions by preexisting subscription services and 
            transmissions by preexisting satellite digital audio radio 
            services specified by subsection (d)(2) during the 5-year 
            period beginning on January 1 of the second year following 
            the year in which the proceedings are to be commenced, 
            except where a different transitional period is provided 
            under section 6(b)(3) of the Copyright Royalty and 
            Distribution Reform Act of 2004 or such other period.'';
                (ii) in the third sentence, by striking ``Librarian of 
            Congress'' and inserting ``Copyright Royalty Judges''; and
                (iii) in the fourth sentence, by striking 
            ``negotiation'';
            (B) in subparagraph (B)--
                (i) by amending the first sentence to read as follows: 
            ``The schedule of reasonable rates and terms determined by 
            the Copyright Royalty Judges shall, subject to paragraph 
            (3), be binding on all copyright owners of sound recordings 
            and entities performing sound recordings affected by this 
            paragraph during the 5-year period specified in 
            subparagraph (A), a transitional period provided under 
            section 6(b)(3) of the Copyright Royalty and Distribution 
            Reform Act of 2004, or such other period as the parties may 
            agree.'';
                (ii) in the second sentence, by striking ``copyright 
            arbitration royalty panel'' and inserting ``Copyright 
            Royalty Judges''; and
                (iii) in the second sentence, by striking ``negotiated 
            as provided'' and inserting ``described''; and
            (C) by amending subparagraph (C) to read as follows:
        ``(C) The procedures under subparagraphs (A) and (B) also shall 
    be initiated pursuant to a petition filed by any copyright owners 
    of sound recordings, any preexisting subscription services, or any 
    preexisting satellite digital audio radio services indicating that 
    a new type of subscription digital audio transmission service on 
    which sound recordings are performed is or is about to become 
    operational, for the purpose of determining reasonable terms and 
    rates of royalty payments with respect to such new type of 
    transmission service for the period beginning with the inception of 
    such new type of service and ending on the date on which the 
    royalty rates and terms for subscription digital audio transmission 
    services most recently determined under subparagraph (A) or (B) and 
    chapter 8 expire, or such other period as the parties may agree.'';
        (2) in paragraph (2)--
            (A) in subparagraph (A)--
                (i) by amending the first paragraph to read as follows: 
            ``Proceedings under chapter 8 shall determine reasonable 
            rates and terms of royalty payments for subscription 
            transmissions by eligible nonsubscription transmission 
            services and transmissions by new subscription services 
            specified by subsection (d)(2) during the 5-year period 
            beginning on January 1 of the second year following the 
            year in which the proceedings are to be commenced, except 
            where a different transitional period is provided under 
            section 6(b)(3) of the Copyright Royalty and Distribution 
            Reform Act of 2004, or such other period as the parties may 
            agree.'';
                (ii) in the third sentence, by striking ``Librarian of 
            Congress'' and inserting ``Copyright Royalty Judges''; and
                (iii) in the fourth sentence, by striking 
            ``negotiation'';
            (B) in subparagraph (B)--
                (i) by amending the first sentence to read as follows: 
            ``The schedule of reasonable rates and terms determined by 
            the Copyright Royalty Judges shall, subject to paragraph 
            (3), be binding on all copyright owners of sound recordings 
            and entities performing sound recordings affected by this 
            paragraph during the 5-year period specified in 
            subparagraph (A), a transitional period provided under 
            section 6(b)(3) of the Copyright Royalty and Distribution 
            Act of 2004, or such other period as the parties may 
            agree.'';
                (ii) by striking ``copyright arbitration royalty 
            panel'' each subsequent place it appears and inserting 
            ``Copyright Royalty Judges''; and
                (iii) in the last sentence by striking ``negotiated as 
            provided'' and inserting ``described in''; and
            (C) by amending subparagraph (C) to read as follows:
        ``(C) The procedures under subparagraphs (A) and (B) shall also 
    be initiated pursuant to a petition filed by any copyright owners 
    of sound recordings or any eligible nonsubscription service or new 
    subscription service indicating that a new type of eligible 
    nonsubscription service or new subscription service on which sound 
    recordings are performed is or is about to become operational, for 
    the purpose of determining reasonable terms and rates of royalty 
    payments with respect to such new type of service for the period 
    beginning with the inception of such new type of service and ending 
    on the date on which the royalty rates and terms for preexisting 
    subscription digital audio transmission services or preexisting 
    satellite digital radio audio services, as the case may be, most 
    recently determined under subparagraph (A) or (B) and chapter 8 
    expire, or such other period as the parties may agree.'';
        (3) in paragraph (3), by striking ``determination by a 
    copyright arbitration royalty panel or decision by the Librarian of 
    Congress'' and inserting ``decision by the Librarian of Congress or 
    determination by the Copyright Royalty Judges''; and
        (4) in paragraph (4)--
            (A) by striking ``Librarian of Congress'' each place it 
        appears and inserting ``Copyright Royalty Judges''; and
            (B) by adding after the first sentence of subparagraph (A) 
        the following: ``The notice and recordkeeping rules in effect 
        on the day before the effective date of the Copyright Royalty 
        and Distribution Reform Act of 2004 shall remain in effect 
        unless and until new regulations are promulgated by the 
        Copyright Royalty Judges. If new regulations are promulgated 
        under this subparagraph, the Copyright Royalty Judges shall 
        take into account the substance and effect of the rules in 
        effect on the day before the effective date of the Copyright 
        Royalty and Distribution Reform Act of 2004 and shall, to the 
        extent practicable, avoid significant disruption of the 
        functions of any designated agent authorized to collect and 
        distribute royalty fees.''.
    (d) Phonorecords of Nondramatic Musical Works.--Section 115(c)(3) 
is amended--
        (1) in subparagraph (A)(ii), by striking ``(F)'' and inserting 
    ``(E)'';
        (2) in subparagraph (B)--
            (A) by striking ``under this paragraph'' and inserting 
        ``under this section'';
            (B) by inserting ``on a nonexclusive basis'' after ``common 
        agents''; and
            (C) by striking ``subparagraphs (C) through (F)'' and 
        inserting ``this subparagraph and subparagraphs (C) through 
        (E)''; and
        (3) in subparagraph (C)--
            (A) by amending the first sentence to read as follows: 
        ``Proceedings under chapter 8 shall determine reasonable rates 
        and terms of royalty payments for the activities specified by 
        this section during the period beginning with the effective 
        date of such rates and terms, but not earlier than January 1 of 
        the second year following the year in which the petition 
        requesting the proceeding is filed, and ending on the effective 
        date of successor rates and terms, or such other period as the 
        parties may agree.'';
            (B) in the third sentence, by striking ``Librarian of 
        Congress'' and inserting ``Copyright Royalty Judges''; and
            (C) in the fourth sentence, by striking ``negotiation'';
        (4) in subparagraph (D)--
            (A) by amending the first sentence to read as follows: 
        ``The schedule of reasonable rates and terms determined by the 
        Copyright Royalty Judges shall, subject to subparagraph (E), be 
        binding on all copyright owners of nondramatic musical works 
        and persons entitled to obtain a compulsory license under 
        subsection (a)(1) during the period specified in subparagraph 
        (C), such other period as may be determined pursuant to 
        subparagraphs (B) and (C), or such other period as the parties 
        may agree.'';
            (B) in the third sentence, by striking ``copyright 
        arbitration royalty panel'' and inserting ``Copyright Royalty 
        Judges'';
            (C) in the third sentence, by striking ``negotiated as 
        provided in subparagraphs (B) and (C)'' and inserting 
        ``described''; and
            (D) in the last sentence, by striking ``Librarian of 
        Congress'' and inserting ``Copyright Royalty Judges''.
        (5) in subparagraph (E)--
            (A) in clause (i)--
                (i) in the first sentence, by striking ``Librarian of 
            Congress'' and inserting ``Librarian of Congress and 
            Copyright Royalty Judges''; and
                (ii) in the second sentence, by striking ``(C), (D) or 
            (F) shall be given effect'' and inserting ``(C) or (D) 
            shall be given effect as to digital phonorecord 
            deliveries''; and
            (B) in clause (ii)(I), by striking ``(C), (D) or (F)'' each 
        place it appears and inserting ``(C) or (D)''; and
        (6) by striking subparagraph (F) and redesignating 
    subparagraphs (G) through (L) as subparagraphs (F) through (K), 
    respectively.
    (e) Coin-Operated Phonorecord Players.--Section 116 is amended--
        (1) in subsection (b), by amending paragraph (2) to read as 
    follows:
        ``(2) Chapter 8 proceeding.--Parties not subject to such a 
    negotiation may have the terms and rates and the division of fees 
    described in paragraph (1) determined in a proceeding in accordance 
    with the provisions of chapter 8.''; and
        (2) in subsection (c)--
            (A) in the subsection heading, by striking ``Copyright 
        Arbitration Royalty Panel Determinations'' and inserting 
        ``Determinations by Copyright Royalty Judges''; and
            (B) by striking ``a copyright arbitration royalty panel'' 
        and inserting ``the Copyright Royalty Judges''.
    (f) Use of Certain Works in Connection With Noncommercial 
Broadcasting.--Section 118 is amended--
        (1) in subsection (b)--
            (A) in paragraph (1)--
                (i) in the first sentence, by striking ``Librarian of 
            Congress'' and inserting ``Copyright Royalty Judges''; and
                (ii) by striking the second and third sentences;
            (B) in paragraph (2), by striking ``Librarian of 
        Congress:'' and all that follows through the end of the 
        sentence and inserting ``Librarian of Congress or the Copyright 
        Royalty Judges, if copies of such agreements are filed with the 
        Copyright Royalty Judges within 30 days of execution in 
        accordance with regulations that the Copyright Royalty Judges 
        shall issue.''; and
            (C) in paragraph (3)--
                (i) in the second sentence--

                    (I) by striking ``copyright arbitration royalty 
                panel'' and inserting ``Copyright Royalty Judges''; and
                    (II) by striking ``paragraph (2).'' and inserting 
                ``paragraph (2) or (3).'';

                (ii) in the last sentence, by striking ```Librarian of 
            Congress'' and inserting ``Copyright Royalty Judges''; and
                (iii) by striking ``(3) In'' and all that follows 
            through the end of the first sentence and inserting the 
            following:
        ``(3) Voluntary negotiation proceedings initiated pursuant to a 
    petition filed under section 804(a) for the purpose of determining 
    a schedule of terms and rates of royalty payments by public 
    broadcasting entities to copyright owners in works specified by 
    this subsection and the proportionate division of fees paid among 
    various copyright owners shall cover the 5-year period beginning on 
    January 1 of the second year following the year in which the 
    petition is filed. The parties to each negotiation proceeding shall 
    bear their own costs.
        ``(4) In the absence of license agreements negotiated under 
    paragraph (2) or (3), the Copyright Royalty Judges shall, pursuant 
    to chapter 8, conduct a proceeding to determine and publish in the 
    Federal Register a schedule of rates and terms which, subject to 
    paragraph (2), shall be binding on all owners of copyright in works 
    specified by this subsection and public broadcasting entities, 
    regardless of whether such copyright owners have submitted 
    proposals to the Copyright Royalty Judges.'';
        (2) by striking subsection (c) and redesignating subsections 
    (d) through (g) as subsections (c) through (f), respectively;
        (3) in subsection (c), as so redesignated, in the matter 
    preceding paragraph (1)--
            (A) by striking ``(b)(2)'' and inserting ``(b)(2) or (3)'';
            (B) by striking ``(b)(3)'' and inserting ``(b)(4)''; and
            (C) by striking ``a copyright arbitration royalty panel 
        under subsection (b)(3)'' and inserting ``the Copyright Royalty 
        Judges under subsection (b)(3), to the extent that they were 
        accepted by the Librarian of Congress'';
        (4) in subsection (d), as so redesignated--
            (A) by striking ``in the Copyright Office'' and inserting 
        ``with the Copyright Royalty Judges''; and
            (B) by striking ``Register of Copyrights shall prescribe'' 
        and inserting ``Copyright Royalty Judges shall prescribe as 
        provided in section 803(b)(6)''; and
        (5) in subsection (f), as so redesignated, by striking ``(d)'' 
    and inserting ``(c)''.
    (g) Secondary Transmissions by Satellite Carriers.--Section 119(b) 
is amended--
        (1) in paragraph (3), by striking ``Librarian of Congress'' and 
    inserting ``Copyright Royalty Judges''; and
        (2) in paragraph (4)--
            (A) in subparagraph (A), by striking ``Librarian of 
        Congress'' each place it appears and inserting ``Copyright 
        Royalty Judges''; and
            (B) by amending subparagraphs (B) and (C) to read as 
        follows:
            ``(B) Determination of controversy; distributions.--After 
        the first day of August of each year, the Copyright Royalty 
        Judges shall determine whether there exists a controversy 
        concerning the distribution of royalty fees. If the Copyright 
        Royalty Judges determine that no such controversy exists, the 
        Librarian of Congress shall, after deducting reasonable 
        administrative costs under this paragraph, distribute such fees 
        to the copyright owners entitled to receive them, or to their 
        designated agents. If the Copyright Royalty Judges find the 
        existence of a controversy, the Copyright Royalty Judges shall, 
        pursuant to chapter 8 of this title, conduct a proceeding to 
        determine the distribution of royalty fees.
            ``(C) Withholding of fees during controversy.--During the 
        pendency of any proceeding under this subsection, the Copyright 
        Royalty Judges shall withhold from distribution an amount 
        sufficient to satisfy all claims with respect to which a 
        controversy exists, but shall have the discretion to proceed to 
        distribute any amounts that are not in controversy.''.
    (h) Ratemaking for Satellite Carriers.--Section 119(c) of title 17, 
United States Code, is amended--
        (1) in paragraph (2)--
            (A) in subparagraph (B), by striking ``Librarian of 
        Congress'' and inserting ``Copyright Royalty Judges''; and
            (B) in subparagraph (C), by striking ``Register of 
        Copyrights shall prescribe'' and inserting ``Copyright Royalty 
        Judges shall prescribe as provided in section 803(b)(6); and
        (2) in paragraph (3)--
            (A) in subparagraph (A)--
                (i) by striking ``arbitration proceedings'' and 
            inserting ``proceedings''; and
                (ii) by striking ``arbitration proceeding'' and 
            inserting ``proceedings'';
            (B) in subparagraph (B)--
                (i) by striking ``copyright arbitration royalty panel 
            appointed under chapter 8'' and inserting ``Copyright 
            Royalty Judges''; and
                (ii) by striking ``panel shall base its decision'' and 
            inserting ``Copyright Royalty Judges shall base their 
            determination''; and
            (C) in subparagraph (C)--
                (i) in the heading, by striking ``decision of 
            arbitration panel or order of librarian'' and inserting 
            ``determination under chapter 8''; and
                (ii) by striking clauses (i) and (ii) and inserting the 
            following:
                ``(i) is made by the Copyright Royalty Judges pursuant 
            to this paragraph and becomes final, or
                ``(ii) is made by the court on appeal under section 
            803(d)(3),''.
    (i) Digital Audio Recording Devices.--
        (1) Royalty payments.--Section 1004(a)(3) is amended by 
    striking ``Librarian of Congress'' each place it appears and 
    inserting ``Copyright Royalty Judges''.
        (2) Entitlement to royalty payments.--Section 1006(c) is 
    amended by striking ``Librarian of Congress shall convene a 
    copyright arbitration royalty panel which'' and inserting 
    ``Copyright Royalty Judges''.
        (3) Procedures for distributing royalty payments.--Section 1007 
    is amended--
            (A) in subsection (a), by amending paragraph (1) to read as 
        follows:
        ``(1) Filing of claims.--During the first 2 months of each 
    calendar year, every interested copyright party seeking to receive 
    royalty payments to which such party is entitled under section 1006 
    shall file with the Copyright Royalty Judges a claim for payments 
    collected during the preceding year in such form and manner as the 
    Copyright Royalty Judges shall prescribe by regulation.''; and
            (B) by amending subsections (b) and (c) to read as follows:
    ``(b) Distribution of Payments in the Absence of a Dispute.--After 
the period established for the filing of claims under subsection (a), 
in each year, the Copyright Royalty Judges shall determine whether 
there exists a controversy concerning the distribution of royalty 
payments under section 1006(c). If the Copyright Royalty Judges 
determine that no such controversy exists, the Librarian of Congress 
shall, within 30 days after such determination, authorize the 
distribution of the royalty payments as set forth in the agreements 
regarding the distribution of royalty payments entered into pursuant to 
subsection (a). The Librarian of Congress shall, before such royalty 
payments are distributed, deduct the reasonable administrative costs 
incurred by the Librarian under this section.
    ``(c) Resolution of Disputes.--If the Copyright Royalty Judges find 
the existence of a controversy, the Copyright Royalty Judges shall, 
pursuant to chapter 8 of this title, conduct a proceeding to determine 
the distribution of royalty payments. During the pendency of such a 
proceeding, the Copyright Royalty Judges shall withhold from 
distribution an amount sufficient to satisfy all claims with respect to 
which a controversy exists, but shall, to the extent feasible, 
authorize the distribution of any amounts that are not in controversy. 
The Librarian of Congress shall, before such royalty payments are 
distributed, deduct the reasonable administrative costs incurred by the 
Librarian under this section.''.
        (4) Determination of certain disputes.--(A) Section 1010 is 
    amended to read as follows:

``Sec. 1010. Determination of certain disputes

    ``(a) Scope of Determination.--Before the date of first 
distribution in the United States of a digital audio recording device 
or a digital audio interface device, any party manufacturing, 
importing, or distributing such device, and any interested copyright 
party may mutually agree to petition the Copyright Royalty Judges to 
determine whether such device is subject to section 1002, or the basis 
on which royalty payments for such device are to be made under section 
1003.
    ``(b) Initiation of Proceedings.--The parties under subsection (a) 
shall file the petition with the Copyright Royalty Judges requesting 
the commencement of a proceeding. Within 2 weeks after receiving such a 
petition, the Chief Copyright Royalty Judge shall cause notice to be 
published in the Federal Register of the initiation of the proceeding.
    ``(c) Stay of Judicial Proceedings.--Any civil action brought under 
section 1009 against a party to a proceeding under this section shall, 
on application of one of the parties to the proceeding, be stayed until 
completion of the proceeding.
    ``(d) Proceeding.--The Copyright Royalty Judges shall conduct a 
proceeding with respect to the matter concerned, in accordance with 
such procedures as the Copyright Royalty Judges may adopt. The 
Copyright Royalty Judges shall act on the basis of a fully documented 
written record. Any party to the proceeding may submit relevant 
information and proposals to the Copyright Royalty Judges. The parties 
to the proceeding shall each bear their respective costs of 
participation.
    ``(e) Judicial Review.--Any determination of the Copyright Royalty 
Judges under subsection (d) may be appealed, by a party to the 
proceeding, in accordance with section 803(d) of this title. The 
pendency of an appeal under this subsection shall not stay the 
determination of the Copyright Royalty Judges. If the court modifies 
the determination of the Copyright Royalty Judges, the court shall have 
jurisdiction to enter its own decision in accordance with its final 
judgment. The court may further vacate the determination of the 
Copyright Royalty Judges and remand the case for proceedings as 
provided in this section.''.
        (B) The item relating to section 1010 in the table of sections 
    for chapter 10 is amended to read as follows:
``1010. Determination of certain disputes.''.

SEC. 6. EFFECTIVE DATE AND TRANSITION PROVISIONS.

    (a) Effective Date.--This Act and the amendments made by this Act 
shall take effect 6 months after the date of enactment of this Act, 
except that the Librarian of Congress shall appoint 1 or more interim 
Copyright Royalty Judges under section 802(d) of title 17, United 
States Code, as amended by this Act, within 90 days after such date of 
enactment to carry out the functions of the Copyright Royalty Judges 
under title 17, United States Code, to the extent that Copyright 
Royalty Judges provided for in section 801(a) of title 17, United 
States Code, as amended by this Act, have not been appointed before the 
end of that 90-day period.
    (b) Transition Provisions.--
        (1) In general.--Subject to paragraphs (2) and (3), the 
    amendments made by this Act shall not affect any proceedings 
    commenced, petitions filed, or voluntary agreements entered into 
    before the effective date provided in subsection (a) under the 
    provisions of title 17, United States Code, as amended by this Act, 
    and pending on such effective date. Such proceedings shall 
    continue, determinations made in such proceedings, and appeals 
    taken therefrom, as if this Act had not been enacted, and shall 
    continue in effect until modified under title 17, United States 
    Code, as amended by this Act. Such petitions filed and voluntary 
    agreements entered into shall remain in effect as if this Act had 
    not been enacted. For purposes of this paragraph, the Librarian of 
    Congress may determine whether a proceeding has commenced. The 
    Librarian of Congress may terminate any proceeding commenced before 
    the date of enactment of this Act pursuant to chapter 8 of title 
    17, United States Code, and any proceeding so terminated shall 
    become null and void. In such cases, the Copyright Royalty Judges 
    may initiate a new proceeding in accordance with regulations 
    adopted pursuant to section 803(b)(6) of title 17, United States 
    Code.
        (2) Certain royalty rate proceedings.--Notwithstanding 
    paragraph (1), the amendments made by this Act shall not affect 
    proceedings to determine royalty rates pursuant to section 119(c) 
    of title 17, United States Code, that are commenced before January 
    31, 2006.
        (3) Pending proceedings.--Notwithstanding paragraph (1), any 
    proceedings to establish or adjust rates and terms for the 
    statutory licenses under section 114(f)(2) or 112(e) of title 17, 
    United States Code, for a statutory period commencing on or after 
    January 1, 2005, shall be terminated upon the date of enactment of 
    this Act and shall be null and void. The rates and terms in effect 
    under section 114(f)(2) or 112(e) of title 17, United States Code, 
    on December 31, 2004, for new subscription services, eligible 
    nonsubscription services, and services exempt under section 
    114(d)(1)(C)(iv) of such title, and the rates and terms published 
    in the Federal Register under the authority of the Small Webcaster 
    Settlement Act of 2002 (17 U.S.C. 114 note; Public Law 107-321) 
    (including the amendments made by that Act) for the years 2003 
    through 2004, as well as any notice and recordkeeping provisions 
    adopted pursuant thereto, shall remain in effect until the later of 
    the first applicable effective date for successor terms and rates 
    specified in section 804(b) (2) or (3)(A) of title 17, United 
    States Code, or such later date as the parties may agree or the 
    Copyright Royalty Judges may establish. For the period commencing 
    January 1, 2005, an eligible small webcaster or a noncommercial 
    webcaster, as defined in the regulations published by the Register 
    of Copyrights pursuant to the Small Webcaster Settlement Act of 
    2002 (17 U.S.C. 114 note; Public Law 107-321) (including the 
    amendments made by that Act), may elect to be subject to the rates 
    and terms published in those regulations by complying with the 
    procedures governing the election process set forth in those 
    regulations not later than the first date on which the webcaster 
    would be obligated to make a royalty payment for such period. Until 
    successor terms and rates have been established for the period 
    commencing January 1, 2006, licensees shall continue to make 
    royalty payments at the rates and on the terms previously in 
    effect, subject to retroactive adjustment when successor rates and 
    terms for such services are established.
        (4) Interim proceedings.--Notwithstanding subsection (a), as 
    soon as practicable after the date of enactment of this Act, the 
    Copyright Royalty Judges or interim Copyright Royalty Judges shall 
    publish the notice described in section 803(b)(1)(A) of title 17, 
    United States Code, as amended by this Act, to initiate a 
    proceeding to establish or adjust rates and terms for the statutory 
    licenses under section 114(f)(2) or 112(e) of title 17, United 
    States Code, for new subscription services and eligible 
    nonsubscription services for the period commencing January 1, 2006. 
    The Copyright Royalty Judges or Interim Copyright Royalty Judges 
    are authorized to cause that proceeding to take place as provided 
    in subsection (b) of section 803 of that title within the time 
    periods set forth in that subsection. Notwithstanding section 
    803(c)(1) of that title, the Copyright Royalty Judges shall not be 
    required to issue their determination in that proceeding before the 
    expiration of the statutory rates and terms in effect on December 
    31, 2004.
    (c) Existing Appropriations.--Any funds made available in an 
appropriations Act to carry out chapter 8 of title 17, United States 
Code, shall be available to the extent necessary to carry out this 
section.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.