[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 379 Reported in Senate (RS)]

                                                       Calendar No. 181
111th CONGRESS
  1st Session
                                 S. 379

    To provide fair compensation to artists for use of their sound 
                              recordings.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            February 4, 2009

  Mr. Leahy (for himself, Mr. Hatch, Mrs. Feinstein, Mr. Corker, Mrs. 
 Boxer, Mr. Alexander, and Mr. Schumer) introduced the following bill; 
  which was read twice and referred to the Committee on the Judiciary

                            October 15, 2009

                 Reported by Mr. Leahy, with amendments
  [Omit the part struck through and insert the part printed in italic]

_______________________________________________________________________

                                 A BILL


 
    To provide fair compensation to artists for use of their sound 
                              recordings.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Performance Rights Act''.

SEC. 2. <DELETED>EQUITABLE TREATMENT FOR TERRESTRIAL 
              BROADCASTS</DELETED>ESTABLISHING EQUITABLE TREATMENT FOR 
              TERRESTRIAL, CABLE, SATELLITE, AND INTERNET SERVICES.

    (a) Performance Right Applicable to Radio Transmissions 
Generally.--Section 106(6) of title 17, United States Code, is amended 
to read as follows:
            ``(6) in the case of sound recordings, to perform the 
        copyrighted work publicly by means of an audio transmission.''.
    (b) Inclusion of Terrestrial Broadcasts in Existing Performance 
Right.--Section 114(d)(1) of title 17, United States Code, is amended--
            (1) in the matter preceding subparagraph (A), by striking 
        ``a digital'' and inserting ``an''; and
            (2) by striking subparagraph (A).
    (c) Inclusion of Terrestrial Broadcasts in Existing Statutory 
License System.--Section 114(j)(6) of title 17, United States Code, is 
amended by striking ``digital''.
    (d) Eliminating Regulatory Burdens for Terrestrial Broadcast 
Stations.--Section 114(d)(2) of title 17, United States Code, is 
amended in the matter preceding subparagraph (A) by striking 
``subsection (f) if'' and inserting ``subsection (f) if, other than for 
a nonsubscription and noninteractive broadcast transmission,''.
    (e) Ensuring Platform Parity.--Section 114(f) of title 17, United 
States Code, is amended--
            (1) by striking paragraph (1);
            (2) by redesignating paragraphs (2), (3), (4), and (5) as 
        paragraphs (1), (2), (3), and (4), respectively; and
            (3) in paragraph (1), as redesignated--
                    (A) in subparagraph (A), by striking ``under 
                chapter 8'' and all that follows through the end of the 
                third sentence and inserting ``under chapter 8 shall 
                determine reasonable rates and terms of royalty 
                payments for transmissions subject to statutory 
                licensing under 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 in the case of a different transitional period 
                provided under section 6(b)(3) of the Copyright Royalty 
                and Distribution Reform Act of 2004, or such other 
                period as the parties may agree.'';
                    (B) in subparagraph (B)--
                            (i) in the second sentence, by striking 
                        ``eligible nonsubscription transmission''; and
                            (ii) in the third sentence, by striking 
                        ``eligible nonsubscription services and new 
                        subscription'' and all that follows through 
                        ``subparagraph (A)'' and inserting ``services, 
                        in addition to the objectives set forth in 
                        subparagraphs (A), (B), and (C) of section 
                        801(b)(1), the Copyright Royalty Judges may 
                        consider the rates and terms for comparable 
                        types of services and comparable circumstances 
                        under voluntary license agreements. 
                        Notwithstanding section 801(b)(1), the 
                        provisions of section 801(b)(1)(D) shall not be 
                        taken into account by the Copyright Royalty 
                        Judges in any proceeding under this section''; 
                        and
                    (C) by striking subparagraph (C) and inserting the 
                following:
                    ``(C) The procedures under subparagraphs (A) and 
                (B) shall also be initiated pursuant to a petition 
                filed by any copyright owner of sound recordings or any 
                transmitting entity indicating that a new type of 
                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 services most 
                recently determined under subparagraph (A) or (B) and 
                chapter 8 expire, or such other period as the parties 
                may agree.''.
    (f) Technical and Conforming Amendments.--
            (1) Section 114(f).--Section 114(f) of title 17, United 
        States Code (as amended by subsection (e)), is further 
        amended--
                    (A) in paragraph (1)(B), in the first sentence, by 
                striking ``paragraph (3)'' and inserting ``paragraph 
                (2)''; and
                    (B) in paragraph (4)(C), by striking ``under 
                paragraph (4)'' and inserting ``under paragraph (3)''.
            (2) Section 114(j).--Section 114(j)(6) of title 17, United 
        States Code, is amended by striking ``retransmissions of 
        broadcast transmissions'' and inserting ``broadcast 
        transmissions and retransmissions of broadcast transmissions''.
            (3) Section 804.--Section 804(b)(3)(C) of title 17, United 
        States Code, is amended--
                    (A) in clause (i), by striking ``and 
                114(f)(2)(C)'';
                    (B) in clause (iii)(II), by striking 
                ``114(f)(4)(B)(ii)'' and inserting 
                ``114(f)(3)(B)(ii)''; and
                    (C) in clause (iv), by striking ``or 114(f)(2)(C), 
                as the case may be''.

<DELETED>SEC. 3. SPECIAL TREATMENT FOR SMALL, NONCOMMERCIAL, 
              EDUCATIONAL, AND RELIGIOUS STATIONS AND CERTAIN 
              USES.</DELETED>

<DELETED>    (a) Small, Noncommercial, Educational, and Religious Radio 
Stations.--</DELETED>
        <DELETED>    (1) In general.--Section 114(f)(2) of title 17, 
        United States Code, is amended by adding at the end the 
        following:</DELETED>
        <DELETED>    ``(D) Notwithstanding the provisions of 
        subparagraphs (A) through (C), each individual terrestrial 
        broadcast station that has gross revenues in any calendar year 
        of less than $1,250,000 may elect to pay for its over-the-air 
        nonsubscription broadcast transmissions a royalty fee of $5,000 
        per year, in lieu of the amount such station would otherwise be 
        required to pay under this paragraph. Such royalty fee shall 
        not be taken into account in determining royalty rates in a 
        proceeding under chapter 8, or in any other administrative, 
        judicial, or other Federal Government proceeding.</DELETED>
        <DELETED>    ``(E) Notwithstanding the provisions of 
        subparagraphs (A) through (C), each individual terrestrial 
        broadcast station that is a public broadcasting entity as 
        defined in section 118(f) may elect to pay for its over-the-air 
        nonsubscription broadcast transmissions a royalty fee of $1,000 
        per year, in lieu of the amount such station would otherwise be 
        required to pay under this paragraph. Such royalty fee shall 
        not be taken into account in determining royalty rates in a 
        proceeding under chapter 8, or in any other administrative, 
        judicial, or other Federal Government proceeding.''.</DELETED>

SEC. 3. SPECIAL TREATMENT FOR SMALL, NONCOMMERCIAL, EDUCATIONAL, AND 
              RELIGIOUS STATIONS AND CERTAIN USES.

    (a) Small, Noncommercial, Educational, and Religious Radio 
Stations.--
            (1) In general.--Section 114(f)(1) of title 17, United 
        States Code, as redesignated by section 2(e), is amended by 
        adding at the end the following:
                    ``(D)(i) Notwithstanding the provisions of 
                subparagraphs (A) through (C), each individual 
                terrestrial broadcast station that has gross revenues 
                within a range specified in clause (ii) may elect to 
                pay for its over-the-air nonsubscription broadcast 
                transmissions a royalty fee as provided in clause (ii), 
                in lieu of the amount such station would otherwise be 
                required to pay under this paragraph. Such royalty fee 
                shall not be taken into account in determining royalty 
                rates in a proceeding under chapter 8, or in any other 
                administrative, judicial, or other Federal Government 
                proceeding.
                    ``(ii) As provided in clause (i), each individual 
                terrestrial broadcast station that has gross revenues 
                in any calendar year of--
                            ``(I) less than $50,000 may elect to pay 
                        for its over-the-air nonsubscription broadcast 
                        transmissions a royalty fee of $100 per year;
                            ``(II) at least $50,000 but less than 
                        $100,000 may elect to pay for its over-the-air 
                        nonsubscription broadcast transmissions a 
                        royalty fee of $500 per year;
                            ``(III) at least $100,000 but less than 
                        $500,000 may elect to pay for its over-the-air 
                        nonsubscription broadcast transmissions a 
                        royalty fee of $2,500 per year; and
                            ``(IV) at least $500,000 but less than 
                        $1,250,000 may elect to pay for its over-the-
                        air nonsubscription broadcast transmissions a 
                        royalty fee of $5,000 per year.
                    ``(E)(i) Notwithstanding the provisions of 
                subparagraphs (A) through (C), each individual 
                terrestrial broadcast station that is a public 
                broadcasting entity as defined in section 118(f) and 
                that has gross revenues within a range specified in 
                clause (ii) may elect to pay for its over-the-air 
                nonsubscription broadcast transmissions a royalty fee 
                as provided in clause (ii), in lieu of the amount such 
                station would otherwise be required to pay under this 
                paragraph. Such royalty fee shall not be taken into 
                account in determining royalty rates in a proceeding 
                under chapter 8, or in any other administrative, 
                judicial, or other Federal Government proceeding.
                    ``(ii) As provided in clause (i), each individual 
                terrestrial broadcast station that is a public 
                broadcasting entity as defined in section 118(f) and 
                has gross receipts in any calendar year of--
                            ``(I) less than $50,000 may elect to pay 
                        for its over-the-air nonsubscription broadcast 
                        transmissions a royalty fee of $100 per year;
                            ``(II) at least $50,000 but less than 
                        $100,000 may elect to pay for its over-the-air 
                        nonsubscription broadcast transmissions a 
                        royalty fee of $500 per year; and
                            ``(III) $100,000 or more may elect to pay 
                        for its over-the-air nonsubscription broadcast 
                        transmissions a royalty fee of $1,000 per year.
                    ``(F) Notwithstanding the provisions of 
                subparagraphs (A) through (E), each individual 
                terrestrial broadcast station that had total gross 
                revenues during the 4 full calendar quarters 
                immediately preceding the date of enactment of the 
                Performance Rights Act of--
                            ``(i) less than $5,000,000 shall not be 
                        required to pay a royalty under this paragraph 
                        during the 3 years immediately following the 
                        date of enactment of the Performance Rights 
                        Act; and
                            ``(ii) $5,000,000 or more shall not be 
                        required to pay a royalty under this paragraph 
                        during the 1 year immediately following the 
                        date of enactment of the Performance Rights 
                        Act.
                The provisions of this subparagraph shall not be taken 
                into account in determining royalty rates in a 
                proceeding under chapter 8, or in any other 
                administrative, judicial, or other Federal Government 
                proceeding.''.
            (2) Payment date.--A payment under subparagraph (D) or (E) 
        of section <DELETED>114(f)(2)</DELETED>114(f)(1) of title 17, 
        United States Code, as added by paragraph (1), shall not be due 
        until the due date of the first royalty payments for 
        nonsubscription broadcast transmissions that are determined, 
        after the date of the enactment of this Act, under such section 
        <DELETED>114(f)(2)</DELETED>114(f)(1) by reason of the 
        amendment made by section 2(b)(2) of this Act.
    (b) Transmission of Religious Services; Incidental Uses of Music.--
Section 114(d)(1) of title 17, United States Code, as amended by 
section 2(b), is further amended by inserting the following before 
subparagraph (B):
                    ``(A) an eligible nonsubscription transmission of--
                            ``(i) services at a place of worship or 
                        other religious assembly; 
                        <DELETED>and</DELETED>or
                            ``(ii) an incidental use of a musical sound 
                        recording;''.

SEC. 4. AVAILABILITY OF PER PROGRAM LICENSE.

    Section <DELETED>114(f)(2)(B) of title 17, United States 
Code</DELETED>114(f)(1)(B) of title 17, United States Code, as 
redesignated by section 2(e), is amended by inserting after the second 
sentence the following new sentence: ``Such rates and terms shall 
include a per program license option for terrestrial broadcast stations 
that make limited feature uses of sound recordings.''.

<DELETED>SEC. 5. NO HARMFUL EFFECTS ON SONGWRITERS.</DELETED>

<DELETED>    (a) Preservation of Royalties on Underlying Works.--
Section 114(i) of title 17, United States Code, is amended in the 
second sentence by striking ``It is the intent of Congress that 
royalties'' and inserting ``Royalties''.</DELETED>
<DELETED>    (b) Public Performance Rights and Royalties.--Nothing in 
this Act shall adversely affect in any respect the public performance 
rights of or royalties payable to songwriters or copyright owners of 
musical works.</DELETED>

SEC. 5. NO HARMFUL EFFECTS ON SONGWRITERS.

    (a) No Adverse Affect on License Fees for Underlying Musical Works; 
Necessity for Other Licenses.--
            (1) In general.--Section 114(i) of title 17, United States 
        Code, is amended to read as follows:
    ``(i) No Adverse Affect on License Fees for Underlying Musical 
Works; Necessity for Other Licenses.--
            ``(1) No adverse affect on license fees for underlying 
        musical works.--License fees payable for the public performance 
        of sound recordings under section 106(6) shall not be cited, 
        taken into account, or otherwise used in any administrative, 
        judicial, or other governmental forum or proceeding, or 
        otherwise, to set or adjust the license fees payable to 
        copyright owners of musical works or their representatives for 
        the public performance of their works, for the purpose of 
        reducing or adversely affecting such license fees. License fees 
        payable to copyright owners for the public performance of their 
        musical works shall not be reduced or adversely affected in any 
        respect as a result of the rights granted by section 106(6).
            ``(2) Necessity for other licenses.--Notwithstanding the 
        grant by an owner of copyright in a sound recording of an 
        exclusive or nonexclusive license of the right under section 
        106(6) to perform the work publicly, a licensee of that sound 
        recording may not publicly perform such sound recording unless 
        a license has been granted for the public performance of any 
        copyrighted musical work contained in the sound recording. Such 
        license to publicly perform the copyrighted musical work may be 
        granted either by a performing rights society representing the 
        copyright owner or by the copyright owner.''.
            (2) Conforming amendment.--Section 114(d)(3)(C) of title 
        17, United States Code, is hereby repealed.
    (b) Public Performance Rights and Royalties.--Nothing in this Act 
or the amendments made by this Act shall adversely affect in any 
respect the public performance rights of or royalties payable to 
songwriters or copyright owners of musical works.
    (c) Preservation of Royalties on Underlying Works Publicly 
Performed by Terrestrial Broadcast Stations.--Section 114(f) of title 
17, United States Code, is amended by adding at the end the following 
new paragraph:
            ``(5) Notwithstanding any other provision of this section, 
        under no circumstances shall the rates established by the 
        Copyright Royalty Judges for the public performance of sound 
        recordings be cited, taken into account, or otherwise used in 
        any administrative, judicial, or other governmental forum or 
        proceeding, or otherwise, to reduce or adversely affect the 
        license fees payable to copyright owners of musical works or 
        their representatives for the public performance of their works 
        by terrestrial broadcast stations, and such license fees for 
        the public performance of musical works shall be independent of 
        license fees paid for the public performance of sound 
        recordings.''.

SEC. 6. PAYMENT OF CERTAIN ROYALTIES.

    Section 114(g) of title 17, United States Code, is amended--
            (1) by amending paragraph (1) to read as follows:
            ``(1) Except in the case of a transmission to which 
        paragraph (5) applies or a transmission licensed under a 
        statutory license in accordance with subsection (f) of this 
        section, the following shall apply:
                    ``(A) A featured recording artist who performs on a 
                sound recording that has been licensed for public 
                performance by means of an audio transmission shall be 
                entitled to receive payments from the copyright owner 
                of the sound recording in accordance with the terms of 
                the artist's contract.
                    ``(B)(i) In a case in which the copyright owner of 
                a sound recording has licensed the sound recording for 
                the public performance of the sound recording by means 
                of an audio transmission, the copyright owner shall 
                deposit 1 percent of the receipts from the license with 
                the American Federation of Musicians and American 
                Federation of Television and Radio Artists Intellectual 
                Property Rights Distribution Fund (or any successor 
                entity) (in this subparagraph referred to as the 
                `Fund') to be distributed to nonfeatured performers who 
                have performed on sound recordings. The sound recording 
                copyright owner shall make such deposits for receipts 
                received during the first half of a calendar year by 
                August 15 and for receipts received during the second 
                half of a calendar year by February 15 of the following 
                calendar year.
                    ``(ii) A sound recording copyright owner shall 
                include with deposits under clause (i) information 
                regarding the amount of such deposits attributable to 
                each licensee and, subject to obtaining consent, if 
                necessary, from such licensee, for each sound recording 
                performed by means of an audio transmission by such 
                licensee during the applicable time period, and to the 
                extent included in the accounting reports provided by 
                the licensee to the sound recording copyright owner--
                            ``(I) the identity of the artist;
                            ``(II) the International Standard Recording 
                        Code of the sound recording;
                            ``(III) the title of the sound recording;
                            ``(IV) the number of times the sound 
                        recording was transmitted; and
                            ``(V) the total amount of receipts 
                        collected from that licensee.
                    ``(iii) The Fund shall make the distributions 
                described in clause (i) as follows: 50 percent shall be 
                paid to nonfeatured musicians (whether or not members 
                of the American Federation of Musicians) and 50 percent 
                shall be paid to nonfeatured vocalists (whether or not 
                members of the American Federation of Television and 
                Radio Artists). The Fund may, prior to making such 
                distributions, deduct the reasonable costs related to 
                making such distributions.
                    ``(iv) The sound recording copyright owner shall 
                not be required to provide any additional information 
                to the Fund other than what is required under this 
                subparagraph. Sound recording copyright owners shall 
                use reasonable good faith efforts to include in all 
                relevant licenses a requirement to report the 
                information identified in subclauses (I) through (V) of 
                clause (ii). Amounts required under clause (i) that are 
                not paid by the date specified in such clause shall be 
                subject to interest at the rate of 6 percent per annum 
                for each day of nonpayment after the date the payment 
                was due.'';
            (2) in paragraph (2)(A), by striking ``digital''; and
            (3) by adding at the end the following new paragraph:
            ``(5) Notwithstanding paragraph (1), to the extent that a 
        license granted by the copyright owner of a sound recording to 
        a transmitting entity eligible for a statutory license as 
        specified by subsection (d)(2) extends to such entity's 
        transmissions otherwise licensable under a statutory license in 
        accordance with subsection (f), such entity shall pay to the 
        agent designated to distribute statutory licensing receipts 
        from the licensing of transmissions in accordance with 
        subsection (f), 50 percent of the total royalties that such 
        entity is required, pursuant to the applicable license 
        agreement, to pay for such transmissions otherwise licensable 
        under a statutory license in accordance with subsection (f). 
        That agent shall distribute such payments in proportion to the 
        distributions provided in subparagraphs (B) through (D) of 
        paragraph (2), and such payments shall be the sole payments to 
        which featured and nonfeatured artists are entitled by virtue 
        of such transmissions under the direct license with such 
        entity.''.

SEC. 7. EPHEMERAL RECORDINGS ROYALTY.

    Section 112(e)(4) of title 17, United States Code, is amended to 
read as follows:
            ``(4)(A) 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. Such rates shall include a minimum fee for 
        each type of service offered by transmitting organizations.
            ``(B) With respect to phonorecords made pursuant to this 
        subsection to facilitate transmissions of public performances 
        under the limitation on exclusive rights specified by section 
        114(d)(1)(C)(iv), the Copyright Royalty Judges shall establish 
        rates that most clearly represent the fees that would have been 
        negotiated in the marketplace between a willing buyer and a 
        willing seller. In determining such rates and terms, the 
        Copyright Royalty Judges shall base their decision on economic, 
        competitive, and programming information presented by the 
        parties, including--
                    ``(i) whether use of the service may substitute for 
                or may promote the sales of phonorecords or otherwise 
                interferes with or enhances the copyright owner's 
                traditional streams of revenue;
                    ``(ii) the relative roles of the copyright owner 
                and the transmitting organization in the copyrighted 
                work and the service made available to the public with 
                respect to relative creative contribution, 
                technological contribution, capital investment, cost, 
                and risk; and
                    ``(iii) rates and terms under voluntary license 
                agreements described in paragraphs (2) and (3).
            ``(C) With respect to phonorecords made pursuant to this 
        subsection to facilitate transmissions of public performances 
        under a statutory license in accordance with section 114(f)--
                    ``(i) the Copyright Royalty Judges shall establish 
                rates and terms by application of the applicable 
                standard in section 114(f) covering both the applicable 
                public performances, and the making of phonorecords 
                pursuant to this subsection solely to facilitate such 
                public performances, together; and
                    ``(ii) the royalty payable under this subsection 
                for the making of phonorecords used by the transmitting 
                organization solely to facilitate transmissions for 
                which it pays royalties established as provided in 
                clause (i) shall constitute 5 percent of such payments.
            ``(D) The Copyright Royalty Judges shall also establish 
        requirements by which copyright owners may receive reasonable 
        notice of the use of their sound recordings under this section, 
        and under which records of such use shall be kept and made 
        available by transmitting organizations entitled to obtain a 
        statutory license under this subsection.''.
                                                       Calendar No. 181

111th CONGRESS

  1st Session

                                 S. 379

_______________________________________________________________________

                                 A BILL

    To provide fair compensation to artists for use of their sound 
                              recordings.

_______________________________________________________________________

                            October 15, 2009

                        Reported with amendments