[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1417 Reported in Senate (RS)]






                                                       Calendar No. 744
108th CONGRESS
  2d Session
                                H.R. 1417


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 4, 2004

  Received; read twice and referred to the Committee on the Judiciary

                           September 29, 2004

                Reported by Mr. Hatch, with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

_______________________________________________________________________

                                 A BILL


 
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,

<DELETED>SECTION 1. SHORT TITLE.</DELETED>

<DELETED>    This Act may be cited as the ``Copyright Royalty and 
Distribution Reform Act of 2004''.</DELETED>

<DELETED>SEC. 2. REFERENCE.</DELETED>

<DELETED>    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.</DELETED>

<DELETED>SEC. 3. COPYRIGHT ROYALTY JUDGE AND STAFF.</DELETED>

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

<DELETED>``CHAPTER 8--PROCEEDINGS BY COPYRIGHT ROYALTY JUDGES</DELETED>

<DELETED>``Sec.
<DELETED>``801. Copyright Royalty Judges; appointment and functions.
<DELETED>``802. Copyright Royalty Judgeships; staff.
<DELETED>``803. Proceedings of Copyright Royalty Judges.
<DELETED>``804. Institution of proceedings.
<DELETED>``805. General rule for voluntarily negotiated agreements.
<DELETED>``Sec. 801. Copyright Royalty Judges; appointment and 
              functions</DELETED>
<DELETED>    ``(a) Appointment.--The Librarian of Congress shall 
appoint 3 full-time Copyright Royalty Judges, and shall appoint one of 
the three as the Chief Copyright Royalty Judge. In making such 
appointments, the Librarian shall consult with the Register of 
Copyrights.</DELETED>
<DELETED>    ``(b) Functions.--Subject to the provisions of this 
chapter, the functions of the Copyright Royalty Judges shall be as 
follows:</DELETED>
        <DELETED>    ``(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:</DELETED>
                <DELETED>    ``(A) To maximize the availability of 
                creative works to the public.</DELETED>
                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(D) To minimize any disruptive impact on 
                the structure of the industries involved and on 
                generally prevailing industry practices.</DELETED>
        <DELETED>    ``(2) To make determinations concerning the 
        adjustment of the copyright royalty rates under section 111 
        solely in accordance with the following provisions:</DELETED>
                <DELETED>    ``(A) The rates established by section 
                111(d)(1)(B) may be adjusted to reflect--</DELETED>
                        <DELETED>    ``(i) national monetary inflation 
                        or deflation; or</DELETED>
                        <DELETED>    ``(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,</DELETED>
                <DELETED>except that--</DELETED>
                        <DELETED>    ``(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</DELETED>
                        <DELETED>    ``(II) no increase in the royalty 
                        fee shall be permitted based on any reduction 
                        in the average number of distant signal 
                        equivalents per subscriber.</DELETED>
                <DELETED>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.</DELETED>
                <DELETED>    ``(B) In the event that the rules and 
                regulations of the Federal Communications Commission 
                are amended at any time after April 8, 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 
                insure 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--</DELETED>
                        <DELETED>    ``(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</DELETED>
                        <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(C) the Copyright Royalty Judges shall 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--
        </DELETED>
                <DELETED>    ``(i) agree to such partial 
                distribution;</DELETED>
                <DELETED>    ``(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); and</DELETED>
                <DELETED>    ``(iii) file the agreement with the 
                Copyright Royalty Judges.</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(4) To accept or reject royalty claims filed 
        under section 111, 119, and 1007, on the basis of timeliness or 
        the failure to establish the basis for a claim.</DELETED>
        <DELETED>    ``(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).</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(7)(A) To adopt as the 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--</DELETED>
                <DELETED>    ``(i) the Copyright Royalty Judges shall 
                provide to the other participants in the proceeding 
                under section 803(b)(2) that would be bound by the 
                terms, rates, distribution, or other determination set 
                by the agreement an opportunity to comment on the 
                agreement and object to its adoption as the basis for 
                statutory terms and rates or as a basis for the 
                distribution of statutory royalty payments, as the case 
                may be; and</DELETED>
                <DELETED>    ``(ii) the Copyright Royalty Judges may 
                decline to adopt the agreement as the basis for 
                statutory terms and rates or as the basis for the 
                distribution of statutory royalty payments, as the case 
                may be, if any other participant described in 
                subparagraph (A) objects to the agreement and the 
                Copyright Royalty Judges find, based on the record 
                before them, that the agreement is not likely to meet 
                the statutory standard for setting the terms and rates, 
                or for distributing the royalty payments, as the case 
                may be.</DELETED>
        <DELETED>    ``(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).</DELETED>
<DELETED>    ``(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. The Copyright Royalty Judges 
may consult with the Register of Copyrights in making any rulings under 
section 802(f)(1).</DELETED>
<DELETED>    ``(d) Administrative Support.--The Librarian of Congress 
shall provide the Copyright Royalty Judges with the necessary 
administrative services related to proceedings under this 
chapter.</DELETED>
<DELETED>    ``(e) Location in Library of Congress.--The offices of the 
Copyright Royalty Judges and staff shall be in the Library of 
Congress.</DELETED>
<DELETED>``Sec. 802. Copyright Royalty Judgeships; staff</DELETED>
<DELETED>    ``(a) Qualifications of Copyright Royalty Judges.--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 two Copyright Royalty Judges, one 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). In this subsection, 
`adjudication' has the meaning given that term in section 551 of title 
5, but does not include mediation.</DELETED>
<DELETED>    ``(b) Staff.--The Chief Copyright Royalty Judge shall hire 
3 full-time staff members to assist the Copyright Royalty Judges in 
performing their functions.</DELETED>
<DELETED>    ``(c) Terms.--The terms of the Copyright Royalty Judges 
shall each be 6 years, except of the individuals first appointed, the 
Chief Copyright Royalty Judge shall be appointed to a term of 6 years, 
and of the remaining Copyright Royalty Judges, one shall be appointed 
to a term of 2 years, and the other shall be appointed to a term of 4 
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.</DELETED>
<DELETED>    ``(d) Vacancies or Incapacity.--</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(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.</DELETED>
<DELETED>    ``(e) Compensation.--</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(2) Staff members.--Of the staff members 
        appointed under subsection (b)--</DELETED>
                <DELETED>    ``(A) the rate of pay of one staff member 
                shall be not more than the basic rate of pay payable 
                for GS-15 of the General Schedule;</DELETED>
                <DELETED>    ``(B) the rate of pay of one 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 GS-14 of such Schedule; 
                and</DELETED>
                <DELETED>    ``(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 GS-11 of such 
                Schedule.</DELETED>
<DELETED>    ``(f) Independence of Copyright Royalty Judge.--</DELETED>
        <DELETED>    ``(1) In making determinations.--</DELETED>
                <DELETED>    ``(A) In general.--Subject to 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. Any such consultations 
                between the Copyright Royalty Judges and the Register 
                of Copyright on any question of law shall be in writing 
                or on the record.</DELETED>
                <DELETED>    ``(B) Novel questions.--(i) 
                Notwithstanding the provisions of subparagraph (A), in 
                any case in which the Copyright Royalty Judges in a 
                proceeding under this title are presented with a novel 
                question of law concerning an interpretation of those 
                provisions of this title that are the subject of the 
                proceeding, the Copyright Royalty Judges shall request 
                the Register of Copyrights, in writing, to submit a 
                written opinion on the resolution of such novel 
                question. The Register shall submit and make public 
                that opinion within such time period as the Copyright 
                Royalty Judges may prescribe. Any consultations under 
                this subparagraph between the Copyright Royalty Judges 
                and the Register of Copyrights shall be in writing or 
                on the record. The opinion of the Register shall not be 
                binding on the Copyright Royalty Judges, but the 
                Copyright Royalty Judges shall take the opinion of the 
                Register into account in making the judges' 
                determination on the question concerned.</DELETED>
                <DELETED>    ``(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).</DELETED>
        <DELETED>    ``(2) Performance appraisals.--</DELETED>
                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(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.</DELETED>
<DELETED>    ``(g) Inconsistent Duties Barred.--No Copyright Royalty 
Judge may undertake duties inconsistent with his or her duties and 
responsibilities as Copyright Royalty Judge.</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>``Sec. 803. Proceedings of Copyright Royalty Judges</DELETED>
<DELETED>    ``(a) Proceedings.--</DELETED>
        <DELETED>    ``(1) In general.--The Copyright Royalty Judges 
        shall act in accordance with this title, and to the extent not 
        inconsistent with this title, in accordance with subchapter II 
        of chapter 5 of title 5, in carrying out the purposes set forth 
        in section 801. The Copyright Royalty Judges shall act in 
        accordance with regulations issued by the Copyright Royalty 
        Judges and on the basis of a fully documented written record, 
        prior decisions of the Copyright Royalty Tribunal, prior 
        copyright arbitration royalty panel determinations, rulings by 
        the Librarian of Congress before the effective date of the 
        Copyright Royalty and Distribution Reform Act of 2004, prior 
        determinations of Copyright Royalty Judges under this chapter, 
        and decisions of the court in appeals under this chapter 
        before, on, or after such effective date. Any participant in a 
        proceeding under subsection (b)(2) may submit relevant 
        information and proposals to the Copyright Royalty 
        Judges.</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(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.</DELETED>
<DELETED>    ``(b) Procedures.--</DELETED>
        <DELETED>    ``(1) Initiation.--</DELETED>
                <DELETED>    ``(A) Call for petitions to participate.--
                (i) Promptly upon the filing of a petition for a rate 
                adjustment or determination under section 804(a) or 
                804(b)(8), or by no later than January 5 of a year 
                specified in section 804 for the commencement of a 
                proceeding if a petition has not been filed by that 
                date, 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.</DELETED>
                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(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--</DELETED>
                <DELETED>    ``(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;</DELETED>
                <DELETED>    ``(B) the Copyright Royalty Judges have 
                not determined that the petition to participate is 
                facially invalid; and</DELETED>
                <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(3) Voluntary negotiation period.--</DELETED>
                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(B) Length of proceedings.--The 
                voluntary negotiation period initiated under 
                subparagraph (A) shall be 3 months.</DELETED>
                <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(4) Small claims procedure in distribution 
        proceedings.--</DELETED>
                <DELETED>    ``(A) In general.--If, in a proceeding 
                under this chapter to determine the distribution of 
                royalties, a participant in the proceeding asserts that 
                the contested amount of the claim is $10,000 or less, 
                the Copyright Royalty Judges shall decide the 
                controversy on the basis of the filing in writing of 
                the initial claim, the initial response by any opposing 
                participant, and one additional response by each such 
                party. The participant asserting the claim shall not be 
                required to pay the filing fee under paragraph 
                (2).</DELETED>
                <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(5) Paper proceedings in ratemaking 
        proceedings.--The Copyright Royalty Judges in proceedings under 
        this chapter to determine royalty rates may decide, sua sponte 
        or upon motion of a participant, to determine issues on the 
        basis of initial filings in writing, initial responses 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--</DELETED>
                <DELETED>    ``(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</DELETED>
                <DELETED>    ``(B) may be applied under such other 
                circumstances as the Copyright Royalty Judges consider 
                appropriate.</DELETED>
        <DELETED>    ``(6) Regulations.--</DELETED>
                <DELETED>    ``(A) In general.--The Copyright Royalty 
                Judges may issue regulations to carry out their 
                functions under this title. 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.</DELETED>
                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(C) Requirements.--Regulations issued 
                under subparagraph (A) shall include the 
                following:</DELETED>
                        <DELETED>    ``(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 no earlier than four months, and 
                        no later than five months, after the end of the 
                        voluntary negotiation period under paragraph 
                        (3). Notwithstanding the preceding sentence, a 
                        participant in a proceeding may, within 15 days 
                        after the end of the discovery period specified 
                        in clause (iii), file an amended written direct 
                        statement based on new information received 
                        during the discovery process.</DELETED>
                        <DELETED>    ``(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.</DELETED>
                        <DELETED>    ``(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.</DELETED>
                        <DELETED>    ``(iii) Hearsay may be admitted in 
                        proceedings under this chapter to the extent 
                        deemed appropriate by the Copyright Royalty 
                        Judges.</DELETED>
                        <DELETED>    ``(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.</DELETED>
                        <DELETED>    ``(v) Any participant under 
                        paragraph (2) in a proceeding under this 
                        chapter to determine royalty rates may, upon 
                        written notice, seek discovery of information 
                        and materials relevant and material to the 
                        proceeding. Any objection to any such discovery 
                        request shall be resolved by a motion or 
                        request to compel discovery made to 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), who may approve the request 
                        only if the evidence that would be produced is 
                        relevant and material. A Copyright Royalty 
                        Judge may refuse a request to compel discovery 
                        of evidence that has been found to be relevant 
                        and material, only upon good cause shown. For 
                        purposes of the preceding sentence, the basis 
                        for `good cause' may only be that--</DELETED>
                                <DELETED>    ``(I) the discovery sought 
                                is unreasonably cumulative or 
                                duplicative, or is obtainable from 
                                another source that is more convenient, 
                                less burdensome, or less 
                                expensive;</DELETED>
                                <DELETED>    ``(II) the participant 
                                seeking discovery has had ample 
                                opportunity by discovery in the action 
                                to obtain the information sought; 
                                or</DELETED>
                                <DELETED>    ``(III) the burden or 
                                expense of the proposed discovery 
                                outweighs its likely benefit, taking 
                                into account the needs and resources of 
                                the participants, the importance of the 
                                issues at stake, and the importance of 
                                the proposed discovery in resolving the 
                                issues.</DELETED>
                        <DELETED>    ``(vi) The rules 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 
                        title to determine the distribution of royalty 
                        fees, shall continue to apply to such 
                        proceedings on and after such effective 
                        date.</DELETED>
                        <DELETED>    ``(vii) The Copyright Royalty 
                        Judges may issue subpoenas requiring the 
                        production of evidence or witnesses, but only 
                        if the evidence requested to be produced or 
                        that would be proffered by the witness is 
                        relevant and material.</DELETED>
                        <DELETED>    ``(viii) 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.</DELETED>
<DELETED>    ``(c) Determination of Copyright Royalty Judges.--
</DELETED>
        <DELETED>    ``(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)(3)(C)(vi), 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.</DELETED>
        <DELETED>    ``(2) Rehearings.--</DELETED>
                <DELETED>    ``(A) In general.--The Copyright Royalty 
                Judges may, in exceptional cases, upon motion of a 
                participant under subsection (b)(2), order a rehearing, 
                after the determination in a proceeding is issued under 
                paragraph (1), on such matters as the Copyright Royalty 
                Judges determine to be appropriate.</DELETED>
                <DELETED>    ``(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 their initial 
                determination concerning rates and terms to the 
                participants in the proceeding.</DELETED>
                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(D) No negative inference.--No negative 
                inference shall be drawn from lack of participation in 
                a rehearing.</DELETED>
                <DELETED>    ``(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--</DELETED>
                        <DELETED>    ``(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</DELETED>
                        <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(3) Contents of determination.--A determination 
        of the Copyright Royalty Judges shall be accompanied by the 
        written record, and shall set forth the facts that the 
        Copyright Royalty Judges found relevant to their determination. 
        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.</DELETED>
        <DELETED>    ``(4) Continuing jurisdiction.--The Copyright 
        Royalty Judges may amend the determination or the regulations 
        issued pursuant to the determination in order to correct any 
        technical errors in the determination or to respond to 
        unforeseen circumstances that preclude the proper effectuation 
        of the determination.</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(6) Publication of determination.--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.</DELETED>
<DELETED>    ``(d) Judicial Review.--</DELETED>
        <DELETED>    ``(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. 
        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).</DELETED>
        <DELETED>    ``(2) Effect of rates.--</DELETED>
                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(B) Other cases.--In cases where rates 
                and terms do not expire on a specified date or have not 
                yet been established, successor or new rates or 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, 
                and the rates and terms previously in effect, to the 
                extent applicable, shall remain in effect until such 
                successor rates and terms become effective.</DELETED>
                <DELETED>    ``(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 providing the statements of account (and 
                any report of use, to the extent required) and paying 
                the royalties required under the relevant determination 
                or regulations.</DELETED>
                <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(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).</DELETED>
<DELETED>    ``(e) Administrative Matters.--</DELETED>
        <DELETED>    ``(1) Deduction of costs of library of congress 
        and copyright office from filing fees.--</DELETED>
                <DELETED>    ``(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).</DELETED>
                <DELETED>    ``(B) Authorization of appropriations.--
                There are authorized to be appropriated such sums as 
                may be necessary to pay the costs of proceedings 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.</DELETED>
        <DELETED>    ``(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.</DELETED>
<DELETED>``Sec. 804. Institution of proceedings</DELETED>
<DELETED>    ``(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, 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 therefor, 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).</DELETED>
<DELETED>    ``(b) Timing of Proceedings.--</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(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 under section 11(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.</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(3) Section 114 and corresponding 112 
        proceedings.--</DELETED>
                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(C)(i) Notwithstanding any other 
                provision of this chapter, this subparagraph shall 
                govern proceedings commenced pursuant to sections 
                114(f)(1)(C) and 114(f)(2)(C) concerning new types of 
                services.</DELETED>
                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(iii) The proceeding shall follow the 
                schedule set forth in such subsections (b), (c), and 
                (d) of section 803, except that--</DELETED>
                        <DELETED>    ``(I) the determination shall be 
                        issued by not later than 24 months after the 
                        publication of the notice under clause (ii); 
                        and</DELETED>
                        <DELETED>    ``(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).</DELETED>
                <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(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).</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(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).</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(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).</DELETED>
        <DELETED>    ``(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, 116, 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.</DELETED>
<DELETED>``Sec. 805. General rule for voluntarily negotiated 
              agreements</DELETED>
<DELETED>    ``Any rates or terms under this title that--</DELETED>
        <DELETED>    ``(1) are agreed to by participants to a 
        proceeding under section 803(b)(2),</DELETED>
        <DELETED>    ``(2) are adopted by the Copyright Royalty Judges 
        as part of a determination under this chapter, and</DELETED>
        <DELETED>    ``(3) are in effect for a period shorter than 
        would otherwise apply under a determination pursuant to this 
        chapter,</DELETED>
<DELETED>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.''.</DELETED>
<DELETED>    (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:</DELETED>

<DELETED>``8. Proceedings by Copyright Royalty Judges.......     801''.

<DELETED>SEC. 4. DEFINITION.</DELETED>

<DELETED>    Section 101 is amended by inserting after the definition 
of ``copies'' the following:</DELETED>
        <DELETED>    ``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.''.</DELETED>

<DELETED>SEC. 5. TECHNICAL AMENDMENTS.</DELETED>

<DELETED>    (a) Cable Rates.--Section 111(d) is amended--</DELETED>
        <DELETED>    (1) in paragraph (2), in the second sentence, by 
        striking ``a copyright arbitration royalty panel'' and 
        inserting ``the Copyright Royalty Judges.''; and</DELETED>
        <DELETED>    (2) in paragraph (4)--</DELETED>
                <DELETED>    (A) in subparagraph (A), by striking 
                ``Librarian of Congress'' each place it appears and 
                inserting ``Copyright Royalty Judges'';</DELETED>
                <DELETED>    (B) in subparagraph (B)--</DELETED>
                        <DELETED>    (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'';</DELETED>
                        <DELETED>    (ii) in the second sentence, by 
                        striking ``Librarian determines'' and inserting 
                        ``Copyright Royalty Judges determine''; 
                        and</DELETED>
                        <DELETED>    (iii) in the third sentence--
                        </DELETED>
                                <DELETED>    (I) by striking 
                                ``Librarian'' each place it appears and 
                                inserting ``Copyright Royalty Judges''; 
                                and</DELETED>
                                <DELETED>    (II) by striking ``convene 
                                a copyright arbitration royalty panel'' 
                                and inserting ``conduct a proceeding''; 
                                and</DELETED>
                <DELETED>    (C) in subparagraph (C), by striking 
                ``Librarian of Congress'' and inserting ``Copyright 
                Royalty Judges''.</DELETED>
<DELETED>    (b) Ephemeral Recordings.--Section 112(e) is amended--
</DELETED>
        <DELETED>    (1) in paragraph (3)--</DELETED>
                <DELETED>    (A) by amending the first sentence to read 
                as follows: ``Voluntary negotiation proceedings 
                initiated pursuant to section 804(a) for the purpose of 
                determining reasonable terms and rates of royalty 
                payments for the activities specified by paragraph (1) 
                shall cover the 5-year period beginning on January 1 of 
                the second year following the year in which the 
                proceedings are commenced, or such other period as the 
                parties may agree.''; and</DELETED>
                <DELETED>    (B) in the third sentence, by striking 
                ``Librarian of Congress'' and inserting ``Copyright 
                Royalty Judges'';</DELETED>
        <DELETED>    (2) in paragraph (4)--</DELETED>
                <DELETED>    (A) by amending the first sentence to read 
                as follows: ``In the absence of license agreements 
                negotiated under paragraphs (2) and (3), the Copyright 
                Royalty Judges shall commence a proceeding pursuant to 
                chapter 8 to determine and publish in the Federal 
                Register a schedule of reasonable rates and terms 
                which, subject to paragraph (5), shall 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.'';</DELETED>
                <DELETED>    (B) by striking ``copyright arbitration 
                royalty panel'' each subsequent place it appears and 
                inserting ``Copyright Royalty Judges'';</DELETED>
                <DELETED>    (C) in the fourth sentence, by striking 
                ``its decision'' and inserting ``their decision''; 
                and</DELETED>
                <DELETED>    (D) in the last sentence, by striking 
                ``Librarian of Congress'' and inserting ``Copyright 
                Royalty Judges'';</DELETED>
        <DELETED>    (3) in paragraph (5), by striking ``or decision by 
        the Librarian of Congress'' and inserting ``, decision by the 
        Librarian of Congress, or determination by the Copyright 
        Royalty Judges'';</DELETED>
        <DELETED>    (4) by striking paragraph (6) and redesignating 
        paragraphs (7), (8), and (9), as paragraphs (6), (7), and (8), 
        respectively; and</DELETED>
        <DELETED>    (5) in paragraph (6)(A), as so redesignated, by 
        striking ``Librarian of Congress'' and inserting ``Copyright 
        Royalty Judges''.</DELETED>
<DELETED>    (c) Scope of Exclusive Rights in Sound Recordings.--
Section 114(f) is amended--</DELETED>
        <DELETED>    (1) in paragraph (1)--</DELETED>
                <DELETED>    (A) in subparagraph (A)--</DELETED>
                        <DELETED>    (i) by amending the first sentence 
                        to read as follows: ``Voluntary negotiation 
                        proceedings initiated pursuant to section 
                        804(a) for the purpose of determining 
                        reasonable terms and rates of royalty payments 
                        for subscription transmissions by preexisting 
                        subscription services and transmissions by 
                        preexisting satellite digital audio radio 
                        services shall cover the 5-year period 
                        beginning on January 1 of the year following 
                        the second year in which the proceedings are 
                        commenced, except where differential 
                        transitional periods are provided in section 
                        804(b)(3), or such other period as the parties 
                        may agree.''; and</DELETED>
                        <DELETED>    (ii) in the third sentence, by 
                        striking ``Librarian of Congress'' and 
                        inserting ``Copyright Royalty 
                        Judges'';</DELETED>
                <DELETED>    (B) in subparagraph (B)--</DELETED>
                        <DELETED>    (i) by amending the first sentence 
                        to read as follows: ``In the absence of license 
                        agreements negotiated under subparagraph (A), 
                        the Copyright Royalty Judges shall commence a 
                        proceeding pursuant to chapter 8 to determine 
                        and publish in the Federal Register a schedule 
                        of rates and terms which, subject to paragraph 
                        (3), shall 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), or such other date as the 
                        parties may agree.''; and</DELETED>
                        <DELETED>    (ii) in the second sentence, by 
                        striking ``copyright arbitration royalty 
                        panel'' and inserting ``Copyright Royalty 
                        Judges''; and</DELETED>
                <DELETED>    (C) by amending subparagraph (C) to read 
                as follows:</DELETED>
        <DELETED>    ``(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.'';</DELETED>
        <DELETED>    (2) in paragraph (2)--</DELETED>
                <DELETED>    (A) in subparagraph (A)--</DELETED>
                        <DELETED>    (i) by amending the first sentence 
                        to read as follows: ``Voluntary negotiation 
                        proceedings initiated pursuant to section 
                        804(a) for the purpose of determining 
                        reasonable terms and rates of royalty payments 
                        for public performances of sound recordings by 
                        means of eligible nonsubscription transmissions 
                        and transmissions by new subscription services 
                        specified by subsection (d)(2) shall cover the 
                        5-year period beginning on January 1 of the 
                        second year following the year in which the 
                        proceedings are commenced, except where 
                        different transitional periods are provided in 
                        section 804(b)(3)(A), or such other period as 
                        the parties may agree.''; and</DELETED>
                        <DELETED>    (ii) in the third sentence, by 
                        striking ``Librarian of Congress'' and 
                        inserting ``Copyright Royalty 
                        Judges'';</DELETED>
                <DELETED>    (B) in subparagraph (B)--</DELETED>
                        <DELETED>    (i) by amending the first sentence 
                        to read as follows: ``In the absence of license 
                        agreements negotiated under subparagraph (A), 
                        the Copyright Royalty Judges shall commence a 
                        proceeding pursuant to chapter 8 to determine 
                        and publish in the Federal Register a schedule 
                        of rates and terms which, subject to paragraph 
                        (3), shall be binding on all copyright owners 
                        of sound recordings and entities performing 
                        sound recordings affected by this paragraph 
                        during the period specified in subparagraph 
                        (A), or such other period as the parties may 
                        agree.''; and</DELETED>
                        <DELETED>    (ii) by striking ``copyright 
                        arbitration royalty panel'' each subsequent 
                        place it appears and inserting ``Copyright 
                        Royalty Judges''; and</DELETED>
                <DELETED>    (C) by amending subparagraph (C) to read 
                as follows:</DELETED>
        <DELETED>    ``(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.'';</DELETED>
        <DELETED>    (3) in paragraph (3), by striking ``or decision by 
        the Librarian of Congress'' and inserting ``, decision by the 
        Librarian of Congress, or determination by the Copyright 
        Royalty Judges''; and</DELETED>
        <DELETED>    (4) in paragraph (4), by striking ``Librarian of 
        Congress'' each place it appears and inserting ``Copyright 
        Royalty Judges''.</DELETED>
<DELETED>    (d) Phonorecords of Nondramatic Musical Works.--Section 
115(c)(3) is amended--</DELETED>
        <DELETED>    (1) in subparagraph (A)(ii), by striking ``(F)'' 
        and inserting ``(E)'';</DELETED>
        <DELETED>    (2) in subparagraph (B)--</DELETED>
                <DELETED>    (A) by striking ``under this paragraph'' 
                and inserting ``under this section''; and</DELETED>
                <DELETED>    (B) by striking ``subparagraphs (B) 
                through (F)'' and inserting ``this subparagraph and 
                subparagraphs (B) through (E)'';</DELETED>
        <DELETED>    (3) in subparagraph (C)--</DELETED>
                <DELETED>    (A) by amending the first sentence to read 
                as follows: ``Voluntary negotiation proceedings 
                initiated pursuant to a petition filed under section 
                804(a) for the purpose of determining reasonable terms 
                and rates of royalty payments for the activities 
                specified by this section shall cover the period 
                beginning with the effective date of such terms and 
                rates, but not earlier than January 1 of the second 
                year following the year in which the petition is filed, 
                and ending on the effective date of successor terms and 
                rates, or such other period as the parties may 
                agree.''; and</DELETED>
                <DELETED>    (B) in the third sentence, by striking 
                ``Librarian of Congress'' and inserting ``Copyright 
                Royalty Judges'';</DELETED>
        <DELETED>    (4) in subparagraph (D)--</DELETED>
                <DELETED>    (A) by amending the first sentence to read 
                as follows: ``In the absence of license agreements 
                negotiated under subparagraphs (B) and (C), the 
                Copyright Royalty Judges shall commence proceedings 
                pursuant to chapter 8 to determine and publish in the 
                Federal Register a schedule of rates and terms which, 
                subject to subparagraph (E), shall 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) or such other period as may be 
                determined pursuant to subparagraphs (B) and (C), or 
                such other period as the parties may 
                agree.'';</DELETED>
                <DELETED>    (B) in the third sentence, by striking 
                ``copyright arbitration royalty panel'' and inserting 
                ``Copyright Royalty Judges''; and</DELETED>
                <DELETED>    (C) in the last sentence, by striking 
                ``Librarian of Congress'' and inserting ``Copyright 
                Royalty Judges'';</DELETED>
        <DELETED>    (5) in subparagraph (E)--</DELETED>
                <DELETED>    (A) in clause (i)--</DELETED>
                        <DELETED>    (i) in the first sentence, by 
                        striking ``the Librarian of Congress'' and 
                        inserting ``a copyright arbitration royalty 
                        panel, the Librarian of Congress, or the 
                        Copyright Royalty Judges''; and</DELETED>
                        <DELETED>    (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</DELETED>
                <DELETED>    (B) in clause (ii)(I), by striking ``(C), 
                (D) or (F)'' each place it appears and inserting ``(C) 
                or (D)''; and</DELETED>
        <DELETED>    (6) by striking subparagraph (F) and redesignating 
        subparagraphs (G) through (L) as subparagraphs (F) through (K), 
        respectively.</DELETED>
<DELETED>    (e) Coin-Operated Phonorecord Players.--Section 116 is 
amended--</DELETED>
        <DELETED>    (1) in subsection (b), by amending paragraph (2) 
        to read as follows:</DELETED>
        <DELETED>    ``(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</DELETED>
        <DELETED>    (2) in subsection (c)--</DELETED>
                <DELETED>    (A) in the subsection heading, by striking 
                ``Copyright Arbitration Royalty Panel Determinations'' 
                and inserting ``Determinations by Copyright Royalty 
                Judges''; and</DELETED>
                <DELETED>    (B) by striking ``a copyright arbitration 
                royalty panel'' and inserting ``the Copyright Royalty 
                Judges''.</DELETED>
<DELETED>    (f) Use of Certain Works in Connection With Noncommercial 
Broadcasting.--Section 118 is amended--</DELETED>
        <DELETED>    (1) in subsection (b)--</DELETED>
                <DELETED>    (A) in paragraph (1)--</DELETED>
                        <DELETED>    (i) in the first sentence, by 
                        striking ``Librarian of Congress'' and 
                        inserting ``Copyright Royalty Judges''; 
                        and</DELETED>
                        <DELETED>    (ii) by striking the second and 
                        third sentences;</DELETED>
                <DELETED>    (B) in paragraph (2), by striking ``the 
                Librarian of Congress:'' and all that follows through 
                the end of the sentence and inserting ``a copyright 
                arbitration royalty panel, the Librarian of Congress, 
                or the Copyright Royalty Judge, 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</DELETED>
                <DELETED>    (C) in paragraph (3)--</DELETED>
                        <DELETED>    (i) in the second sentence--
                        </DELETED>
                                <DELETED>    (I) by striking 
                                ``copyright arbitration royalty panel'' 
                                and inserting ``Copyright Royalty 
                                Judges''; and</DELETED>
                                <DELETED>    (II) by striking 
                                ``paragraph (2).'' and inserting 
                                ``paragraph (2) or (3).'';</DELETED>
                        <DELETED>    (ii) in the last sentence, by 
                        striking ```Librarian of Congress'' and 
                        inserting ``Copyright Royalty Judges''; 
                        and</DELETED>
                        <DELETED>    (iii) by striking ``(3) In'' and 
                        all that follows through the end of the first 
                        sentence and inserting the following:</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(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.'';</DELETED>
        <DELETED>    (2) by striking subsection (c) and redesignating 
        subsections (d) through (g) as subsections (c) through (f), 
        respectively;</DELETED>
        <DELETED>    (3) in subsection (c), as so redesignated, in the 
        matter preceding paragraph (1)--</DELETED>
                <DELETED>    (A) by striking ``(b)(2)'' and inserting 
                ``(b)(2) or (3)'';</DELETED>
                <DELETED>    (B) by striking ``(b)(3)'' and inserting 
                ``(b)(4)''; and</DELETED>
                <DELETED>    (C) by striking ``a copyright arbitration 
                royalty panel'' and inserting ``the Copyright Royalty 
                Judges'';</DELETED>
        <DELETED>    (4) in subsection (d), as so redesignated--
        </DELETED>
                <DELETED>    (A) by striking ``in the Copyright 
                Office'' and inserting ``with the Copyright Royalty 
                Judges''; and</DELETED>
                <DELETED>    (B) by striking ``Register of Copyrights'' 
                and inserting ``Copyright Royalty Judges''; 
                and</DELETED>
        <DELETED>    (5) in subsection (f), as so redesignated, by 
        striking ``(d)'' and inserting ``(c)''.</DELETED>
<DELETED>    (g) Secondary Transmissions by Satellite Carriers.--
Section 119(b) is amended--</DELETED>
        <DELETED>    (1) in paragraph (3), by striking ``Librarian of 
        Congress'' and inserting ``Copyright Royalty Judges''; 
        and</DELETED>
        <DELETED>    (2) in paragraph (4)--</DELETED>
                <DELETED>    (A) in subparagraph (A), by striking 
                ``Librarian of Congress'' each place it appears and 
                inserting ``Copyright Royalty Judges''; and</DELETED>
                <DELETED>    (B) by amending subparagraphs (B) and (C) 
                to read as follows:</DELETED>
                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(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, subject to any distributions made 
                under section 801(b)(3).''.</DELETED>
<DELETED>    (h) Digital Audio Recording Devices.--</DELETED>
        <DELETED>    (1) Royalty payments.--Section 1004(a)(3) is 
        amended by striking ``Librarian of Congress'' each place it 
        appears and inserting ``Copyright Royalty Judges''.</DELETED>
        <DELETED>    (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''.</DELETED>
        <DELETED>    (3) Procedures for distributing royalty 
        payments.--Section 1007 is amended--</DELETED>
                <DELETED>    (A) in subsection (a), by amending 
                paragraph (1) to read as follows:</DELETED>
        <DELETED>    ``(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</DELETED>
                <DELETED>    (B) by amending subsections (b) and (c) to 
                read as follows:</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(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.''.</DELETED>
        <DELETED>    (4) Determination of certain disputes.--(A) 
        Section 1010 is amended to read as follows:</DELETED>
<DELETED>``Sec. 1010. Determination of certain disputes</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(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.''.</DELETED>
        <DELETED>    (B) The item relating to section 1010 in the table 
        of sections for chapter 10 is amended to read as 
        follows:</DELETED>

<DELETED>``1010. Determination of certain disputes.''.

<DELETED>SEC. 6. EFFECTIVE DATE AND TRANSITION PROVISIONS.</DELETED>

<DELETED>    (a) Effective Date.--This Act and the amendments made by 
this Act shall take effect 6 months after the date of the enactment of 
this Act, except that the Librarian of Congress shall appoint 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.</DELETED>
<DELETED>    (b) Transition Provisions.--</DELETED>
        <DELETED>    (1) In general.--Subject to paragraph (2), the 
        amendments made by this Act shall not affect any proceedings 
        commenced, petitions filed, or voluntary agreements entered 
        into before the enactment of this Act under the provisions of 
        title 17, United States Code, amended by this Act, and pending 
        on such date of enactment. 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.</DELETED>
        <DELETED>    (2) Effective periods for certain ratemaking 
        proceedings.--Notwithstanding paragraph (1), terms and rates in 
        effect under section 114(f)(2) or 112(e) of title 17, United 
        States Code, for new subscription services, eligible 
        nonsubscription services, and services exempt under section 
        114(d)(1)(C)(iv) of such title for the period 2003 through 
        2004, and any rates published in the Federal Register under the 
        authority of the Small Webcaster Settlement Act of 2002 for the 
        years 2003 through 2004, shall be effective until 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 until such later date as the parties may agree. 
        Any proceeding commenced before the enactment of this Act 
        pursuant to section 114(f)(2) and chapter 8 of title 17, United 
        States Code, to adjust or determine such rates and terms for 
        periods following 2004 shall be terminated upon the enactment 
        of this Act and shall be null and void.</DELETED>
<DELETED>    (c) Existing Appropriations.--Any funds made available in 
an appropriations Act before the date of the enactment of this Act to 
carry out chapter 8 of title 17, United States Code, shall be available 
to the extent necessary to carry out this section.</DELETED>

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.--Upon the recommendation of the Register of 
Copyrights, 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.
    ``(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 8, 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 
                insure 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, 
                distribution, or other determination set by the 
                agreement an opportunity to comment on the agreement 
                and shall provide to the other participants in the 
                proceeding under section 803(b)(2) that would be bound 
                by the terms, rates, distribution, 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 or as a basis for 
                the distribution of statutory royalty payments, as the 
                case may be; and
                    ``(ii) the Copyright Royalty Judges may decline to 
                adopt the agreement as a basis for statutory terms and 
                rates or as a basis for the distribution of statutory 
                royalty payments, as the case may be, if any other 
                participant described in subparagraph (A) 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, 
                or for distributing the royalty payments, as the case 
                may be.
            ``(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) or (3) 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.--As provided in section 802(f)(1), 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 two Copyright Royalty Judges, one 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 terms of the Copyright Royalty Judges shall each 
be 6 years, except of the individuals first appointed, the Chief 
Copyright Royalty Judge shall be appointed to a term of 6 years, and of 
the remaining Copyright Royalty Judges, one shall be appointed to a 
term of 2 years, and the other shall be appointed to a term of 4 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 one 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 one 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.--Subject to 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. A Copyright Royalty Judge or Judges, or by motion 
                to the Copyright Royalty Judge or Judges, any 
                participant in a proceeding may request a determination 
                of the resolution by the Register of Copyrights on 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 motion requesting a written decision by the 
                Register of Copyrights shall be in writing or on the 
                record, and reasonable provision shall be made for 
                comment by the participants in the proceeding 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 his or her decision within 14 days of receipt by 
                the Register of Copyrights of 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 Register of Copyrights, 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.
                    ``(B) Novel questions.--(i) In any case in which a 
                novel question of 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. 
                To the extent practicable, 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 shall transmit his or her 
                decision to the Copyright Royalty Judges within 30 days 
                of receipt by the Register of Copyrights of 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 
                transmitted, 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) Sua sponte 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. 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 upon the Copyright Royalty 
                Judges in subsequent proceedings under this chapter. 
                When a decision has been rendered pursuant to 
                subsection 802(f)(1)(D), 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 and undertakes to consult 
                with the Attorney General with respect to such 
                intervention, and the Attorney General fails within 
                reasonable period after receipt of 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 of the Copyright Royalty 
        Tribunal, Librarian of Congress, copyright arbitration royalty 
        panels, 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 pursuant to subsection 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) 
                Promptly upon the filing of a petition for a rate 
                adjustment or upon a determination made under section 
                804(a) or as provided under section 804(b)(8), or by no 
                later than January 5 of a year specified in section 804 
                for the commencement of a proceeding if a petition has 
                not been filed by that date, 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.
                    ``(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 section 803(b)(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, a 
                participant in the proceeding asserts a claim in the 
                amount of $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 no 
                        earlier than four months, and no later than 
                        five 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 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 according to 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) Any participant under paragraph (2) 
                        in a proceeding under this chapter to determine 
                        royalty rates may, upon a written motion to the 
                        Copyright Royalty Judges, request of an 
                        opposing participant or witness other relevant 
                        information and materials if absent the 
                        discovery sought the moving party would be 
                        prejudiced or the Copyright Royalty Judges' 
                        resolution of the proceeding would be 
                        substantially impaired. Absent a showing of 
                        substantial good cause or demonstration of a 
                        likelihood of substantial prejudice, no 
                        participant in a proceeding may take more than 
                        3 depositions and propound more than 10 
                        interrogatories in that proceeding. Absent such 
                        a showing, the total number of depositions 
                        ordered in such a proceeding shall not exceed 
                        10, and the total number of interrogatories 
                        shall not exceed 25 in each proceeding. In 
                        determining whether discovery will be granted 
                        under this clause, the Copyright Royalty Judges 
                        may consider--
                                    ``(I) whether the information 
                                sought would serve to protect the 
                                integrity of the proceeding, to prevent 
                                substantial prejudice to any 
                                participant, or to correct a material 
                                misrepresentation or omission by any 
                                participant;
                                    ``(II) 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;
                                    ``(III) 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
                                    ``(IV) whether the participant 
                                seeking discovery has had ample 
                                opportunity by discovery in the 
                                proceeding or by other means to obtain 
                                the information sought.
                            ``(vii) 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.
                            ``(viii) In proceedings to determine 
                        royalty rates, the Copyright Royalty Judges may 
                        issue a subpoena commanding a participant or 
                        witness in a proceeding to determine royalty 
                        rates 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 
                        subparagraph 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. A 
                        Copyright Royalty Judge may not issue a 
                        subpoena under this clause to any person who 
                        was a participant in a proceeding to determine 
                        royalty rates and has negotiated a settlement 
                        with respect to those rates.
                            ``(ix) 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.
                            ``(x) No evidence, including exhibits, may 
                        be submitted in the written direct 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)(3)(C)(vi), 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 
                under subsection (b)(2), order a rehearing, after the 
                determination in a 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 their initial determination 
                concerning rates and terms to the participants in the 
                proceeding.
                    ``(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 as provided under 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.
            ``(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.--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 party 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.
                    ``(B) Other cases.--In cases where rates and terms 
                do not expire on a specified date or have not yet been 
                established, the Copyright Royalty Judges shall 
                determine the dates that successor or new rates or 
                terms shall take effect. Except as otherwise provided 
                in this title, the rates and terms previously in 
                effect, 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.
            ``(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 under section 11(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.
            ``(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 
                periods beginning on January 1 of the second year 
                following the year in which the proceedings are to be 
                commenced, or such other periods as the parties may 
                agree.''; and
                    (B) by striking the second sentence;
                    (C) in the third sentence, by striking ``Librarian 
                of Congress'' and inserting ``Copyright Royalty 
                Judges''; and
                    (D) 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 ``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 5-year periods beginning on 
                        January 1 of the second year following the year 
                        in which the proceedings are to be commenced, 
                        except where different transitional periods are 
                        provided in section 804(b), or such periods 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 in section 
                        804(b), 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 
                        preexisting subscription services and 
                        transmissions by preexisting satellite digital 
                        audio radio services specified by subsection 
                        (d)(2) during 5-year periods beginning on 
                        January 1 of the second year following the year 
                        in which the proceedings are to be commenced, 
                        except where different transitional periods are 
                        provided in section 804(b), or such periods 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 in section 
                        804(b), 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 ``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 ``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 
                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 function of the 
                designated agents that are authorized to collect and 
                distribute royalty fees as such functions exist on the 
                day prior to the effective date of this Act.''.
    (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''; and
                    (B) by striking ``subparagraphs (B) through (F)'' 
                and inserting ``this subparagraph and subparagraphs (B) 
                through (E)'';
            (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 periods 
                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''; and
                    (C) in the third sentence, by striking ``negotiated 
                as provided in subparagraphs (B) and (C)'' and 
                inserting ``described'';
            (5) in subparagraph (E)--
                    (A) in clause (i)--
                            (i) in the first sentence, by striking 
                        ``Librarian of Congress'' and inserting 
                        ``Librarian of Congress, Copyright Royalty 
                        Judges, or a copyright arbitration royalty 
                        panel to the extent those determinations were 
                        accepted by the Librarian of Congress''; 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, a 
                copyright arbitration royalty panel, or the Copyright 
                Royalty Judges, to the extent that they were accepted 
                by the Librarian of Congress, 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) 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 the 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 enactment of this Act under the provisions of 
        title 17, United States Code, amended by this Act, and pending 
        on such date of enactment. 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 the purposes of this 
        paragraph, the Librarian of Congress may determine whether a 
        proceeding has commenced.
            (2) Pending proceedings.--Notwithstanding paragraph (1), 
        any proceeding commenced before the enactment of this Act may 
        be terminated by the Librarian of Congress, with the approval 
        of the Copyright Royalty Judges. In such cases, the Copyright 
        Royalty Judges shall initiate a new proceeding in accordance 
        with regulations adopted pursuant to section 803(b)(6) of title 
        17, United States Code.
            (3) Effective periods for certain ratemaking proceedings.--
        Notwithstanding paragraph (1), terms and rates in effect under 
        section 114(f)(2) or 112(e) of title 17, United States Code, 
        for new subscription services, eligible nonsubscription 
        services, and services exempt under section 114(d)(1)(C)(iv) of 
        such title for the period 2003 through 2004, and any rates 
        published in the Federal Register under the authority of the 
        Small Webcaster Settlement Act of 2002 for the years 2003 
        through 2004, shall be effective 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 until such later date as the parties may agree 
        or the Copyright Royalty Judges may establish. If successor 
        terms and rates have not yet been established by such date, 
        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.
    (c) Existing Appropriations.--Any funds made available in an 
appropriations Act before the effective date of this Act to carry out 
chapter 8 of title 17, United States Code, shall be available to the 
extent necessary to carry out this section.




                                                       Calendar No. 744

108th CONGRESS

  2d Session

                               H. R. 1417

_______________________________________________________________________

                                 AN ACT

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

_______________________________________________________________________

                           September 29, 2004

                       Reported with an amendment