[Congressional Record Volume 164, Number 67 (Wednesday, April 25, 2018)]
[House]
[Pages H3522-H3542]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
MUSIC MODERNIZATION ACT
Mr. GOODLATTE. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 5447) to modernize copyright law, and for other purposes, as
amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 5447
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Music
Modernization Act''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Rescission Of Unobligated Balances In The Department Of Justice
Assets Forfeiture Fund.
TITLE I--MUSIC LICENSING MODERNIZATION
Sec. 101. Short title.
Sec. 102. Blanket license for digital uses and mechanical licensing
collective.
Sec. 103. Amendments to section 114.
Sec. 104. Random assignment of rate court proceedings.
TITLE II--COMPENSATING LEGACY ARTISTS FOR THEIR SONGS, SERVICE, AND
IMPORTANT CONTRIBUTIONS TO SOCIETY
Sec. 201. Short title.
Sec. 202. Unauthorized digital performance of pre-1972 sound
recordings.
Sec. 203. Effective date.
TITLE III--ALLOCATION FOR MUSIC PRODUCERS
Sec. 301. Short title.
Sec. 302. Payment of statutory performance royalties.
Sec. 303. Effective date.
SEC. 2. RESCISSION OF UNOBLIGATED BALANCES IN THE DEPARTMENT
OF JUSTICE ASSETS FORFEITURE FUND.
Of the unobligated balances available under the Department
of Justice Assets Forfeiture Fund, $47,000,000 is hereby
permanently rescinded.
TITLE I--MUSIC LICENSING MODERNIZATION
SEC. 101. SHORT TITLE.
This title may be cited as the ``Musical Works
Modernization Act''.
SEC. 102. BLANKET LICENSE FOR DIGITAL USES AND MECHANICAL
LICENSING COLLECTIVE.
(a) Amendment.--Section 115 of title 17, United States
Code, is amended--
(1) in subsection (a)--
(A) by inserting ``in General'' after ``Availability and
Scope of Compulsory License'';
(B) by striking paragraph (1) and inserting the following
new paragraph:
``(1) Eligibility for compulsory license.--
``(A) Conditions for compulsory license.--A person may by
complying with the provisions of this section obtain a
compulsory license to make and distribute phonorecords of a
nondramatic musical work, including by means of digital
phonorecord delivery. A person may obtain a compulsory
license only if the primary purpose in making phonorecords of
the musical work is to distribute them to the public for
private use, including by means of digital phonorecord
delivery, and--
``(i) phonorecords of such musical work have previously
been distributed to the public in the United States under the
authority of the copyright owner of the work, including by
means of digital phonorecord delivery; or
``(ii) in the case of a digital music provider seeking to
make and distribute digital phonorecord deliveries of a sound
recording embodying a musical work under a compulsory license
for which clause (i) does not apply--
``(I) the first fixation of such sound recording was made
under the authority of the musical work copyright owner, and
sound recording copyright owner has the authority of the
musical work copyright owner to make and distribute digital
phonorecord deliveries embodying such work to the public in
the United States; and
``(II) the sound recording copyright owner or its
authorized distributor has authorized the digital music
provider to make and distribute digital phonorecord
deliveries of the sound recording to the public in the United
States.
``(B) Duplication of sound recording.--A person may not
obtain a compulsory license for the use of the work in the
making of phonorecords duplicating a sound recording fixed by
another, including by means of digital phonorecord delivery,
unless--
``(i) such sound recording was fixed lawfully; and
``(ii) the making of the phonorecords was authorized by the
owner of the copyright in the sound recording or, if the
sound recording was fixed before February 15, 1972, by any
person who fixed the sound recording pursuant to an express
license from the owner of the copyright in the musical work
or pursuant to a valid compulsory license for use of such
work in a sound recording.''; and
(C) in paragraph (2), by striking ``A compulsory license''
and inserting ``Musical arrangement.--A compulsory license'';
(2) by striking subsection (b) and inserting the following:
``(b) Procedures To Obtain a Compulsory License.--
``(1) Phonorecords other than digital phonorecord
deliveries.--A person who seeks to obtain a compulsory
license under subsection (a) to make and distribute
phonorecords of a musical work other than by means of digital
phonorecord delivery shall, before or within 30 calendar days
after making, and before distributing, any phonorecord of the
work, serve notice of intention to do so on the copyright
owner. If the registration or other public records of the
Copyright Office do not identify the copyright owner and
include an address at which notice can be served, it shall be
sufficient to file the notice of intention with the Copyright
Office. The notice shall comply, in form, content, and manner
of service, with requirements that the Register of Copyrights
shall prescribe by regulation.
``(2) Digital phonorecord deliveries.--A person who seeks
to obtain a compulsory license under subsection (a) to make
and distribute phonorecords of a musical work by means of
digital phonorecord delivery--
``(A) prior to the license availability date, shall, before
or within 30 calendar days after first making any such
digital phonorecord delivery, serve a notice of intention to
do so on the copyright owner (but may not file the notice
with the Copyright Office, even if the public records of the
Office do not identify the owner or the owner's address), and
such notice shall comply, in form, content, and manner of
service, with requirements that the Register of Copyrights
shall prescribe by regulation; or
``(B) on or after the license availability date, shall,
before making any such digital phonorecord delivery, follow
the procedure described in subsection (d)(2), except as
provided in paragraph (3).
``(3) Record company individual download licenses.--
Notwithstanding paragraph (2)(B), a record company may, on or
after the license availability date, obtain an individual
download license in accordance with the notice requirements
described in paragraph (2)(A) (except for the requirement
that notice occur prior to the license availability date). A
record company that obtains an individual download license as
permitted under this paragraph shall provide statements of
account and pay royalties as provided in subsection
(c)(2)(I).
``(4) Failure to obtain license.--
``(A) Phonorecords other than digital phonorecord
deliveries.--In the case of phonorecords made and distributed
other than by means of digital phonorecord delivery, the
failure to serve or file the notice of intention required by
paragraph (1) forecloses the possibility of a compulsory
license under paragraph (1). In the absence of a voluntary
license, the failure to obtain a compulsory license renders
the making and distribution of phonorecords actionable as
acts of infringement under section 501 and subject to the
remedies provided by sections 502 through 506.
``(B) Digital phonorecord deliveries.--
``(i) In the case of phonorecords made and distributed by
means of digital phonorecord delivery:
``(I) The failure to serve the notice of intention required
by paragraph (2)(A) or paragraph (3), as applicable,
forecloses the possibility of a compulsory license under such
paragraph.
``(II) The failure to comply with paragraph (2)(B)
forecloses the possibility of a blanket license for a period
of 3 years after the last calendar day on which the notice of
license was required to be submitted to the mechanical
licensing collective under such paragraph.
``(ii) In either case described in clause (i), in the
absence of a voluntary license, the failure to obtain a
compulsory license renders the making and distribution of
phonorecords by means of digital phonorecord delivery
actionable as acts of infringement under section 501 and
subject to the remedies provided by sections 502 through
506.'';
(3) by amending subsection (c) to read as follows:
``(c) General Conditions Applicable to Compulsory
License.--
``(1) Royalty payable under compulsory license.--
``(A) Identification requirement.--To be entitled to
receive royalties under a compulsory license obtained under
subsection (b)(1) the copyright owner must be identified in
the registration or other public records of the Copyright
Office. The owner is entitled to royalties for phonorecords
made and distributed after being so identified, but is not
entitled to recover for any phonorecords previously made and
distributed.
``(B) Royalty for phonorecords other than digital
phonorecord deliveries.--Except as provided by subparagraph
(A), for every phonorecord made and distributed under a
compulsory license under subsection (a) other than by means
of digital phonorecord delivery, with respect to each work
embodied in the phonorecord, the royalty shall be the royalty
prescribed under subparagraphs (D) through (F) and paragraph
(2)(A) and chapter 8 of this title. For purposes of this
subparagraph, a phonorecord is considered `distributed' if
the person exercising the compulsory license has voluntarily
and permanently parted with its possession.
``(C) Royalty for digital phonorecord deliveries.--For
every digital phonorecord delivery of a musical work made
under a
[[Page H3523]]
compulsory license under this section, the royalty payable
shall be the royalty prescribed under subparagraphs (D)
through (F) and paragraph (2)(A) and chapter 8 of this title.
``(D) Authority to negotiate.--Notwithstanding any
provision of the antitrust laws, any copyright owners of
nondramatic musical works and any persons entitled to obtain
a compulsory license under subsection (a) may negotiate and
agree upon the terms and rates of royalty payments under this
section and the proportionate division of fees paid among
copyright owners, and may designate common agents on a
nonexclusive basis to negotiate, agree to, pay or receive
such royalty payments. Such authority to negotiate the terms
and rates of royalty payments includes, but is not limited
to, the authority to negotiate the year during which the
royalty rates prescribed under this subparagraph and
subparagraphs (E) and (F) and paragraph (2)(A) and chapter 8
of this title shall next be determined.
``(E) Determination of reasonable rates and terms.--
Proceedings under chapter 8 shall determine reasonable rates
and terms of royalty payments for the activities specified by
this section during the period beginning with the effective
date of such rates and terms, but not earlier than January 1
of the second year following the year in which the petition
requesting the proceeding is filed, and ending on the
effective date of successor rates and terms, or such other
period as the parties may agree. Any copyright owners of
nondramatic musical works and any persons entitled to obtain
a compulsory license under subsection (a) may submit to the
Copyright Royalty Judges licenses covering such activities.
The parties to each proceeding shall bear their own costs.
``(F) Schedule of reasonable rates.--The schedule of
reasonable rates and terms determined by the Copyright
Royalty Judges shall, subject to paragraph (2)(A), be binding
on all copyright owners of nondramatic musical works and
persons entitled to obtain a compulsory license under
subsection (a) during the period specified in subparagraph
(E), such other period as may be determined pursuant to
subparagraphs (D) and (E), or such other period as the
parties may agree. The Copyright Royalty Judges shall
establish rates and terms that most clearly represent the
rates and terms that would have been negotiated in the
marketplace between a willing buyer and a willing seller. In
determining such rates and terms for digital phonorecord
deliveries, the Copyright Royalty Judges shall base their
decision on economic, competitive, and programming
information presented by the parties, including--
``(i) whether use of the compulsory licensee's service may
substitute for or may promote the sales of phonorecords or
otherwise may interfere with or may enhance the musical work
copyright owner's other streams of revenue from its musical
works; and
``(ii) the relative roles of the copyright owner and the
compulsory licensee in the copyrighted work and the service
made available to the public with respect to the relative
creative contribution, technological contribution, capital
investment, cost, and risk.
``(2) Additional terms and conditions.--
``(A) Voluntary licenses and contractual royalty rates.--
``(i) License agreements voluntarily negotiated at any time
between one or more copyright owners of nondramatic musical
works and one or more persons entitled to obtain a compulsory
license under subsection (a) shall be given effect in lieu of
any determination by the Copyright Royalty Judges. Subject to
clause (ii), the royalty rates determined pursuant to
subparagraphs (E) and (F) of paragraph (1) shall be given
effect as to digital phonorecord deliveries in lieu of any
contrary royalty rates specified in a contract pursuant to
which a recording artist who is the author of a nondramatic
musical work grants a license under that person's exclusive
rights in the musical work under paragraphs (1) and (3) of
section 106 or commits another person to grant a license in
that musical work under paragraphs (1) and (3) of section
106, to a person desiring to fix in a tangible medium of
expression a sound recording embodying the musical work.
``(ii) The second sentence of clause (i) shall not apply
to--
``(I) a contract entered into on or before June 22, 1995,
and not modified thereafter for the purpose of reducing the
royalty rates determined pursuant to subparagraphs (E) and
(F) of paragraph (1) or of increasing the number of musical
works within the scope of the contract covered by the reduced
rates, except if a contract entered into on or before June
22, 1995, is modified thereafter for the purpose of
increasing the number of musical works within the scope of
the contract, any contrary royalty rates specified in the
contract shall be given effect in lieu of royalty rates
determined pursuant to subparagraphs (E) and (F) of paragraph
(1) for the number of musical works within the scope of the
contract as of June 22, 1995; and
``(II) a contract entered into after the date that the
sound recording is fixed in a tangible medium of expression
substantially in a form intended for commercial release, if
at the time the contract is entered into, the recording
artist retains the right to grant licenses as to the musical
work under paragraphs (1) and (3) of section 106.
``(B) Sound recording information.--Except as provided in
section 1002(e) of this title, a digital phonorecord delivery
licensed under this paragraph shall be accompanied by the
information encoded in the sound recording, if any, by or
under the authority of the copyright owner of that sound
recording, that identifies the title of the sound recording,
the featured recording artist who performs on the sound
recording, and related information, including information
concerning the underlying musical work and its writer.
``(C) Infringement remedies.--
``(i) A digital phonorecord delivery of a sound recording
is actionable as an act of infringement under section 501,
and is fully subject to the remedies provided by sections 502
through 506, unless--
``(I) the digital phonorecord delivery has been authorized
by the sound recording copyright owner; and
``(II) the entity making the digital phonorecord delivery
has obtained a compulsory license under subsection (a) or has
otherwise been authorized by the musical work copyright
owner, or by a record company pursuant to an individual
download license, to make and distribute phonorecords of each
musical work embodied in the sound recording by means of
digital phonorecord delivery.
``(ii) Any cause of action under this subparagraph shall be
in addition to those available to the owner of the copyright
in the nondramatic musical work under subparagraph (J) and
section 106(4) and the owner of the copyright in the sound
recording under section 106(6).
``(D) Liability of sound recording owners.--The liability
of the copyright owner of a sound recording for infringement
of the copyright in a nondramatic musical work embodied in
the sound recording shall be determined in accordance with
applicable law, except that the owner of a copyright in a
sound recording shall not be liable for a digital phonorecord
delivery by a third party if the owner of the copyright in
the sound recording does not license the distribution of a
phonorecord of the nondramatic musical work.
``(E) Recording devices and media.--Nothing in section 1008
shall be construed to prevent the exercise of the rights and
remedies allowed by this paragraph, subparagraph (J), and
chapter 5 in the event of a digital phonorecord delivery,
except that no action alleging infringement of copyright may
be brought under this title against a manufacturer, importer
or distributor of a digital audio recording device, a digital
audio recording medium, an analog recording device, or an
analog recording medium, or against a consumer, based on the
actions described in such section.
``(F) Preservation of rights.--Nothing in this section
annuls or limits (i) the exclusive right to publicly perform
a sound recording or the musical work embodied therein,
including by means of a digital transmission, under sections
106(4) and 106(6), (ii) except for compulsory licensing under
the conditions specified by this section, the exclusive
rights to reproduce and distribute the sound recording and
the musical work embodied therein under sections 106(1) and
106(3), including by means of a digital phonorecord delivery,
or (iii) any other rights under any other provision of
section 106, or remedies available under this title, as such
rights or remedies exist either before or after the date of
enactment of the Digital Performance Right in Sound
Recordings Act of 1995.
``(G) Exempt transmissions and retransmissions.--The
provisions of this section concerning digital phonorecord
deliveries shall not apply to any exempt transmissions or
retransmissions under section 114(d)(1). The exemptions
created in section 114(d)(1) do not expand or reduce the
rights of copyright owners under section 106(1) through (5)
with respect to such transmissions and retransmissions.
``(H) Distribution by rental, lease, or lending.--A
compulsory license obtained under subsection (b)(1) to make
and distribute phonorecords includes the right of the maker
of such a phonorecord to distribute or authorize distribution
of such phonorecord, other than by means of a digital
phonorecord delivery, by rental, lease, or lending (or by
acts or practices in the nature of rental, lease, or
lending). With respect to each nondramatic musical work
embodied in the phonorecord, the royalty shall be a
proportion of the revenue received by the compulsory licensee
from every such act of distribution of the phonorecord under
this clause equal to the proportion of the revenue received
by the compulsory licensee from distribution of the
phonorecord under subsection (a)(1)(A)(ii)(II) that is
payable by a compulsory licensee under that clause and under
chapter 8. The Register of Copyrights shall issue regulations
to carry out the purpose of this clause.
``(I) Payment of royalties and statements of account.--
Except as provided in paragraphs (4)(A)(i) and (10)(B) of
subsection (d), royalty payments shall be made on or before
the twentieth day of each month and shall include all
royalties for the month next preceding. Each monthly payment
shall be made under oath and shall comply with requirements
that the Register of Copyrights shall prescribe by
regulation. The Register shall also prescribe regulations
under which detailed cumulative annual statements of account,
certified by a certified public accountant, shall be filed
for every compulsory license under subsection (a). The
regulations covering both the monthly and the annual
statements of account shall prescribe the form, content, and
manner of certification with respect to the number of records
made and the number of records distributed.
[[Page H3524]]
``(J) Notice of default and termination of compulsory
license.--In the case of a license obtained under subsection
(b)(1), (b)(2)(A), or (b)(3), if the copyright owner does not
receive the monthly payment and the monthly and annual
statements of account when due, the owner may give written
notice to the licensee that, unless the default is remedied
within thirty days from the date of the notice, the
compulsory license will be automatically terminated. Such
termination renders either the making or the distribution, or
both, of all phonorecords for which the royalty has not been
paid, actionable as acts of infringement under section 501
and fully subject to the remedies provided by sections 502
through 506. In the case of a license obtained under
subsection (b)(2)(B), license authority under the compulsory
license may be terminated as provided in subsection
(d)(4)(E).'';
(4) by amending subsection (d) to read as follows:
``(d) Blanket License for Digital Uses, Mechanical
Licensing Collective, and Digital Licensee Coordinator.--
``(1) Blanket license for digital uses.--
``(A) In general.--A digital music provider that qualifies
for a compulsory license under subsection (a) may, by
complying with the terms and conditions of this subsection,
obtain a blanket license from copyright owners through the
mechanical licensing collective to make and distribute
digital phonorecord deliveries of musical works through one
or more covered activities.
``(B) Included activities.--A blanket license--
``(i) covers all musical works (or shares of such works)
available for compulsory licensing under this section for
purposes of engaging in covered activities, except as
provided in subparagraph (C);
``(ii) includes the making and distribution of server,
intermediate, archival, and incidental reproductions of
musical works that are reasonable and necessary for the
digital music provider to engage in covered activities
licensed under this subsection, solely for the purpose of
engaging in such covered activities; and
``(iii) does not cover or include any rights or uses other
than those described in clauses (i) and (ii).
``(C) Other licenses.--A voluntary license for covered
activities entered into by or under the authority of one or
more copyright owners and one or more digital music
providers, or authority to make and distribute permanent
downloads of a musical work obtained by a digital music
provider from a sound recording copyright owner pursuant to
an individual download license, shall be given effect in lieu
of a blanket license under this subsection with respect to
the musical works (or shares thereof) covered by such
voluntary license or individual download authority and the
following conditions apply:
``(i) Where a voluntary license or individual download
license applies, the license authority provided under the
blanket license shall exclude any musical works (or shares
thereof) subject to the voluntary license or individual
download license.
``(ii) An entity engaged in covered activities under a
voluntary license or authority obtained pursuant to an
individual download license that is a significant nonblanket
licensee shall comply with paragraph (6)(A).
``(iii) The rates and terms of any voluntary license shall
be subject to the second sentence of clause (i) and clause
(ii) of subsection (c)(2)(A) and paragraph (9)(C), as
applicable.
``(D) Protection against infringement actions.--A digital
music provider that obtains and complies with the terms of a
valid blanket license under this subsection shall not be
subject to an action for infringement of the exclusive rights
provided by paragraphs (1) and (3) of section 106 under this
title arising from use of a musical work (or share thereof)
to engage in covered activities authorized by such license,
subject to paragraph (4)(E).
``(E) Other requirements and conditions apply.--Except as
expressly provided in this subsection, each requirement,
limitation, condition, privilege, right, and remedy otherwise
applicable to compulsory licenses under this section shall
apply to compulsory blanket licenses under this subsection.
``(2) Availability of blanket license.--
``(A) Procedure for obtaining license.--A digital music
provider may obtain a blanket license by submitting a notice
of license to the mechanical licensing collective that
specifies the particular covered activities in which the
digital music provider seeks to engage, as follows:
``(i) The notice of license shall comply in form and
substance with requirements that the Register of Copyrights
shall establish by regulation.
``(ii) Unless rejected in writing by the mechanical
licensing collective within 30 calendar days after receipt,
the blanket license shall be effective as of the date the
notice of license was sent by the digital music provider as
shown by a physical or electronic record.
``(iii) A notice of license may only be rejected by the
mechanical licensing collective if--
``(I) the digital music provider or notice of license does
not meet the requirements of this section or applicable
regulations, in which case the requirements at issue shall be
specified with reasonable particularity in the notice of
rejection; or
``(II) the digital music provider has had a blanket license
terminated by the mechanical licensing collective within the
past 3 years pursuant to paragraph (4)(E).
``(iv) If a notice of license is rejected under clause
(iii)(I), the digital music provider shall have 30 calendar
days after receipt of the notice of rejection to cure any
deficiency and submit an amended notice of license to the
mechanical licensing collective. If the deficiency has been
cured, the mechanical licensing collective shall so confirm
in writing, and the license shall be effective as of the date
that the original notice of license was provided by the
digital music provider.
``(v) A digital music provider that believes a notice of
license was improperly rejected by the mechanical licensing
collective may seek review of such rejection in Federal
district court. The district court shall determine the matter
de novo based on the record before the mechanical licensing
collective and any additional evidence presented by the
parties.
``(B) Blanket license effective date.--Blanket licenses
shall be made available by the mechanical licensing
collective on and after the license availability date. No
such license shall be effective prior to the license
availability date.
``(3) Mechanical licensing collective.--
``(A) In general.--The mechanical licensing collective
shall be a single entity that--
``(i) is a nonprofit, not owned by any other entity, that
is created by copyright owners to carry out responsibilities
under this subsection;
``(ii) is endorsed by and enjoys substantial support from
musical work copyright owners that together represent the
greatest percentage of the licensor market for uses of such
works in covered activities, as measured over the preceding 3
full calendar years;
``(iii) is able to demonstrate to the Register of
Copyrights that it has, or will have prior to the license
availability date, the administrative and technological
capabilities to perform the required functions of the
mechanical licensing collective under this subsection; and
``(iv) has been designated by the Register of Copyrights in
accordance with subparagraph (B).
``(B) Designation of mechanical licensing collective.--
``(i) Initial designation.--The Register of Copyrights
shall initially designate the mechanical licensing collective
within 9 months after the enactment date as follows:
``(I) Within 90 calendar days after the enactment date, the
Register shall publish notice in the Federal Register
soliciting information to assist in identifying the
appropriate entity to serve as the mechanical licensing
collective, including the name and affiliation of each member
of the board of directors described under subparagraph (D)(i)
and each committee established pursuant to clauses (iii),
(iv), and (v) of subparagraph (D).
``(II) After reviewing the information requested under
subclause (I) and making a designation, the Register shall
publish notice in the Federal Register setting forth the
identity of and contact information for the mechanical
licensing collective.
``(ii) Periodic review of designation.--Following the
initial designation of the mechanical licensing collective,
the Register shall, every 5 years, beginning with the fifth
full calendar year to commence after the initial designation,
publish notice in the Federal Register in the month of
January soliciting information concerning whether the
existing designation should be continued, or a different
entity meeting the criteria described in clauses (i) through
(iii) of subparagraph (A) shall be designated. Following
publication of such notice:
``(I) The Register shall, after reviewing the information
submitted and conducting additional proceedings as
appropriate, publish notice in the Federal Register of a
continuing designation or new designation of the mechanical
licensing collective, as the case may be, with any new
designation to be effective as of the first day of a month
that is no less than 6 months and no longer than 9 months
after the date of publication of such notice, as specified by
the Register.
``(II) If a new entity is designated as a mechanical
licensing collective, the Register shall adopt regulations to
govern the transfer of licenses, funds, records, data, and
administrative responsibilities from the existing mechanical
licensing collective to the new entity.
``(iii) Closest alternative designation.--If the Register
is unable to identify an entity that fulfills each of the
qualifications set forth in clauses (i) through (iii) of
subparagraph (A), the Register shall designate the entity
that most nearly fulfills such qualifications for purposes of
carrying out the responsibilities of the mechanical licensing
collective.
``(C) Authorities and functions.--
``(i) In general.--The mechanical licensing collective is
authorized to perform the following functions, subject to
more particular requirements as described in this subsection:
``(I) Offer and administer blanket licenses, including
receipt of notices of license and reports of usage from
digital music providers.
``(II) Collect and distribute royalties from digital music
providers for covered activities.
``(III) Engage in efforts to identify musical works (and
shares of such works) embodied in particular sound
recordings, and to identify and locate the copyright owners
of such musical works (and shares of such works).
[[Page H3525]]
``(IV) Maintain the musical works database and other
information relevant to the administration of licensing
activities under this section.
``(V) Administer a process by which copyright owners can
claim ownership of musical works (and shares of such works),
and a process by which royalties for works for which the
owner is not identified or located are equitably distributed
to known copyright owners.
``(VI) Administer collections of the administrative
assessment from digital music providers and significant
nonblanket licensees, including receipt of notices of
nonblanket activity.
``(VII) Invest in relevant resources, and arrange for
services of outside vendors and others, to support its
activities.
``(VIII) Engage in legal and other efforts to enforce
rights and obligations under this subsection, including by
filing bankruptcy proofs of claims for amounts owed under
licenses, and acting in coordination with the digital
licensee coordinator..
``(IX) Initiate and participate in proceedings before the
Copyright Royalty Judges to establish the administrative
assessment under this subsection.
``(X) Initiate and participate in proceedings before the
Copyright Office with respect to activities under this
subsection.
``(XI) Gather and provide documentation for use in
proceedings before the Copyright Royalty Judges to set rates
and terms under this section.
``(XII) Maintain records of its activities and engage in
and respond to audits described under this subsection.
``(XIII) Engage in such other activities as may be
necessary or appropriate to fulfill its responsibilities
under this subsection.
``(ii) Additional administrative activities.--Subject to
paragraph (11)(C) and clause (iii), the mechanical licensing
collective may also administer, or assist in administering,
voluntary licenses issued by or individual download licenses
obtained from copyright owners for uses of musical works, for
which the mechanical licensing collective shall charge
reasonable fees for such services.
``(iii) Restriction concerning public performance rights.--
The mechanical licensing collective may, pursuant to clause
(ii), provide administration services with respect to
voluntary licenses that include the right of public
performance in musical works, but may not itself negotiate or
grant licenses for the right of public performance in musical
works, and may not be the exclusive or nonexclusive assignee
or grantee of the right of public performance in musical
works.
``(iv) Restriction on lobbying.--The mechanical licensing
collective may not engage in government lobbying activities,
but may engage in the activities described in subclauses
(IX), (X), and (XI) of clause (i).
``(D) Governance.--
``(i) Board of directors.--The mechanical licensing
collective shall have a board of directors consisting of 14
voting members and 3 nonvoting members, as follows:
``(I) Ten voting members shall be representatives of music
publishers to which songwriters have assigned exclusive
rights of reproduction and distribution of musical works with
respect to covered activities and no such music publisher
member may be owned by, or under common control with, any
other board member.
``(II) Four voting members shall be professional
songwriters who have retained and exercise exclusive rights
of reproduction and distribution with respect to covered
activities with respect to musical works they have authored.
``(III) One nonvoting member shall be a representative of
the nonprofit trade association of music publishers that
represents the greatest percentage of the licensor market for
uses of musical works in covered activities, as measured over
the preceding 3 full calendar years.
``(IV) One nonvoting member shall be a representative of
the digital licensee coordinator, provided that a digital
licensee coordinator has been designated pursuant to
paragraph (5)(B). Otherwise, the nonvoting member shall be
the nonprofit trade association of digital licensees that
represents the greatest percentage of the licensee market for
uses of musical works in covered activities, as measured over
the preceding 3 full calendar years.
``(V) One nonvoting member shall be a representative of a
nationally recognized nonprofit trade association whose
primary mission is advocacy on behalf of songwriters in the
United States.
``(ii) Board meetings.--The board of directors shall meet
no less than 2 times per year and discuss matters pertinent
to the operations, including the mechanical licensing
collective budget.
``(iii) Operations advisory committee.--The board of
directors of the mechanical licensing collective shall
establish an operations advisory committee consisting of no
fewer than 6 members to make recommendations to the board of
directors concerning the operations of the mechanical
licensing collective, including the efficient investment in
and deployment of information technology and data resources.
Such committee shall have an equal number of members of the
committee who are--
``(I) musical work copyright owners who are appointed by
the board of directors of the mechanical licensing
collective; and
``(II) representatives of digital music providers who are
appointed by the digital licensee coordinator.
``(iv) Unclaimed royalties oversight committee.--The board
of directors of the mechanical licensing collective shall
establish and appoint an unclaimed royalties oversight
committee consisting of 10 members, 5 of which shall be
musical work copyright owners and 5 of which shall be
professional songwriters whose works are used in covered
activities.
``(v) Dispute resolution committee.--The board of directors
of the mechanical licensing collective shall establish and
appoint a dispute resolution committee consisting of no fewer
than 6 members, which committee shall include an equal number
of representatives of musical work copyright owners and
professional songwriters.
``(vi) Mechanical licensing collective annual report.--Not
later than June 30 of each year commencing after the license
availability date, the mechanical licensing collective shall
post, and make available online for a period of at least 3
years, an annual report that sets forth how the collective
operates, how royalties are collected and distributed, and
the collective total costs for the preceding calendar year.
At the time of posting, a copy of the report shall be
provided to the Register of Copyrights.
``(E) Musical works database.--
``(i) Establishment and maintenance of database.--The
mechanical licensing collective shall establish and maintain
a database containing information relating to musical works
(and shares of such works) and, to the extent known, the
identity and location of the copyright owners of such works
(and shares thereof) and the sound recordings in which the
musical works are embodied. In furtherance of maintaining
such database, the mechanical licensing collective shall
engage in efforts to identify the musical works embodied in
particular sound recordings, as well as to identify and
locate the copyright owners of such works (and shares
thereof), and update such data as appropriate.
``(ii) Matched works.--With respect to musical works (and
shares thereof) that have been matched to copyright owners,
the musical works database shall include--
``(I) the title of the musical work;
``(II) the copyright owner of the work (or share thereof),
and such owner's ownership percentage;
``(III) contact information for such copyright owner;
``(IV) to the extent reasonably available to the mechanical
licensing collective--
``(aa) the international standard musical work code for the
work; and
``(bb) identifying information for sound recordings in
which the musical work is embodied, including the name of the
sound recording, featured artist, sound recording copyright
owner, producer, international standard recording code, and
other information commonly used to assist in associating
sound recordings with musical works; and
``(V) such other information as the Register of Copyrights
may prescribe by regulation.
``(iii) Unmatched works.--With respect to unmatched musical
works (and shares of works) in the database, the musical
works database shall include--
``(I) to the extent reasonably available to the mechanical
licensing collective--
``(aa) the title of the musical work;
``(bb) the ownership percentage for which an owner has not
been identified;
``(cc) if a copyright owner has been identified but not
located, the identity of such owner and such owner's
ownership percentage;
``(dd) identifying information for sound recordings in
which the work is embodied, including sound recording name,
featured artist, sound recording copyright owner, producer,
international standard recording code, and other information
commonly used to assist in associating sound recordings with
musical works; and
``(ee) any additional information reported to the
mechanical licensing collective that may assist in
identifying the work; and
``(II) such other information relating to the identity and
ownership of musical works (and shares of such works) as the
Register of Copyrights may prescribe by regulation.
``(iv) Sound recording information.--Each musical work
copyright owner with any musical work listed in the musical
works database shall engage in commercially reasonable
efforts to deliver to the mechanical licensing collective,
including for use in the musical works database, to the
extent such information is not then available in the
database, information regarding the names of the sound
recordings in which that copyright owner's musical works (or
shares thereof) are embodied, to the extent practicable.
``(v) Accessibility of database.--The musical works
database shall be made available to members of the public in
a searchable, online format, free of charge. The mechanical
licensing collective shall make such database available in a
bulk, machine-readable format, through a widely available
software application, to the following entities:
``(I) Digital music providers operating under the authority
of valid notices of license, free of charge.
``(II) Significant nonblanket licensees in compliance with
their obligations under paragraph (6), free of charge.
``(III) Authorized vendors of the entities described in
subclauses (I) and (II), free of charge.
[[Page H3526]]
``(IV) The Register of Copyrights, free of charge (but the
Register shall not treat such database or any information
therein as a Government record).
``(V) Any member of the public, for a fee not to exceed the
marginal cost to the mechanical licensing collective of
providing the database to such person.
``(vi) Additional requirements.--The Register of Copyrights
shall establish requirements by regulations to ensure the
usability, interoperability, and usage restrictions of the
musical works database.
``(F) Notices of license and nonblanket activity.--
``(i) Notices of licenses.--The mechanical licensing
collective shall receive, review, and confirm or reject
notices of license from digital music providers, as provided
in paragraph (2)(A). The collective shall maintain a current,
publicly accessible list of blanket licenses that includes
contact information for the licensees and the effective dates
of such licenses.
``(ii) Notices of nonblanket activity.--The mechanical
licensing collective shall receive notices of nonblanket
activity from significant nonblanket licensees, as provided
in paragraph (6)(A). The collective shall maintain a current,
publicly accessible list of notices of nonblanket activity
that includes contact information for significant nonblanket
licensees and the dates of receipt of such notices.
``(G) Collection and distribution of royalties.--
``(i) In general.--Upon receiving reports of usage and
payments of royalties from digital music providers for
covered activities, the mechanical licensing collective
shall--
``(I) engage in efforts to--
``(aa) identify the musical works embodied in sound
recordings reflected in such reports, and the copyright
owners of such musical works (and shares thereof);
``(bb) confirm uses of musical works subject to voluntary
licenses and individual download licenses, and the
corresponding pro rata amounts to be deducted from royalties
that would otherwise be due under the blanket license; and
``(cc) confirm proper payment of royalties due;
``(II) distribute royalties to copyright owners in
accordance with the usage and other information contained in
such reports, as well as the ownership and other information
contained in the records of the collective; and
``(III) deposit into an interest-bearing account, as
provided in subparagraph (H)(ii), royalties that cannot be
distributed due to--
``(aa) an inability to identify or locate a copyright owner
of a musical work (or share thereof); or
``(bb) a pending dispute before the dispute resolution
committee of the mechanical licensing collective.
``(ii) Other collection efforts.--Any royalties recovered
by the mechanical licensing collective as a result of efforts
to enforce rights or obligations under a blanket license,
including through a bankruptcy proceeding or other legal
action, shall be distributed to copyright owners based on
available usage information and in accordance with the
procedures described in subclauses (I) and (II) of clause
(i), on a pro rata basis in proportion to the overall
percentage recovery of the total royalties owed, with any pro
rata share of royalties that cannot be distributed deposited
in an interest-bearing account as provided in subparagraph
(H)(ii).
``(H) Holding of accrued royalties.--
``(i) Holding period.--The mechanical licensing collective
shall hold accrued royalties associated with particular
musical works (and shares of works) that remain unmatched for
a period of at least 3 years after the date on which the
funds were received by the mechanical licensing collective,
or at least 3 years after the date on which they were accrued
by a digital music provider that subsequently transferred
such funds to the mechanical licensing collective pursuant to
paragraph (10)(B), whichever period expires sooner.
``(ii) Interest-bearing account.--Accrued royalties for
unmatched works (and shares thereof) shall be maintained by
the mechanical licensing collective in an interest-bearing
account that earns monthly interest at the Federal, short-
term rate, such interest to accrue for the benefit of
copyright owners entitled to payment of such accrued
royalties.
``(I) Musical works claiming process.--The mechanical
licensing collective shall publicize the existence of accrued
royalties for unmatched musical works (and shares of such
works) within 6 months of receiving a transfer of accrued
royalties for such works by publicly listing the works and
the procedures by which copyright owners may identify
themselves and provide ownership, contact, and other relevant
information to the mechanical licensing collective in order
to receive payment of accrued royalties. When a copyright
owner of an unmatched work (or share of a work) has been
identified and located in accordance with the procedures of
the mechanical licensing collective, the collective shall--
``(i) update the musical works database and its other
records accordingly; and
``(ii) provided that accrued royalties for the musical work
(or share thereof) have not yet been included in a
distribution pursuant to subparagraph (J)(i), pay such
accrued royalties and a proportionate amount of accrued
interest associated with that work (or share thereof) to the
copyright owner, accompanied by a cumulative statement of
account reflecting usage of such work and accrued royalties
based on information provided by digital music providers to
the mechanical licensing collective.
``(J) Distribution of unclaimed accrued royalties.--
``(i) Distribution procedures.--After the expiration of the
prescribed holding period for accrued royalties provided in
paragraph (H)(i), the mechanical licensing collective shall
distribute such accrued royalties, along with a proportionate
share of accrued interest, to copyright owners identified in
the records of the collective, subject to the following
requirements, and in accordance with the policies and
procedures established under clause (ii):
``(I) The first such distribution shall occur on or after
July 1 of the first full calendar year to commence after the
license availability date, with at least one such
distribution to take place during each calendar year
thereafter.
``(II) Copyright owners' payment shares for unclaimed
accrued royalties for particular reporting periods shall be
determined in a transparent and equitable manner based on
data indicating the relative market shares of such copyright
owners as reflected by royalty payments made by digital music
providers for covered activities for the periods in question,
including, in addition to royalty payments made to the
mechanical licensing collective, royalty payments made to
copyright owners under voluntary licenses and individual
download licenses for covered activities, to the extent such
information is available to the mechanical licensing
collective. In furtherance of the determination of equitable
market shares under this subparagraph--
``(aa) the mechanical licensing collective may require
copyright owners seeking distributions of unclaimed accrued
royalties to provide, or direct the provision of, information
concerning royalties received under voluntary licenses and
individual download licenses for covered activities, and
``(bb) the mechanical licensing collective shall take
appropriate steps to safeguard the confidentiality and
security of financial and other sensitive data used to
compute market shares in accordance with the confidentiality
provisions prescribed by the Register of Copyrights under
paragraph (12)(C).
``(ii) Establishment of distribution policies.--The
unclaimed royalties oversight committee established under
paragraph (3)(D)(iv) shall establish policies and procedures
for the distribution of unclaimed accrued royalties and
accrued interest in accordance with this subparagraph,
including the provision of usage data to copyright owners to
allocate payments and credits to songwriters pursuant to
clause (iv), subject to the approval of the board of
directors of the mechanical licensing collective.
``(iii) Advance notice of distributions.--The mechanical
licensing collective shall publicize a pending distribution
of unclaimed accrued royalties and accrued interest at least
90 calendar days in advance of such distribution.
``(iv) Songwriter payments.--Copyright owners that receive
a distribution of unclaimed accrued royalties and accrued
interest shall pay or credit a portion to songwriters (or the
authorized agents of songwriters) on whose behalf the
copyright owners license or administer musical works for
covered activities, in accordance with applicable contractual
terms, but notwithstanding any agreement to the contrary--
``(I) such payments and credits to songwriters shall be
allocated in proportion to reported usage of individual
musical works by digital music providers during the reporting
periods covered by the distribution from the mechanical
licensing collective; and
``(II) in no case shall the payment or credit to an
individual songwriter be less than 50 percent of the payment
received by the copyright owner attributable to usage of
musical works (or shares of works) of that songwriter.
``(K) Dispute resolution.--The dispute resolution committee
established under paragraph (3)(D)(v) shall address and
resolve in a timely and equitable manner disputes among
copyright owners relating to ownership interests in musical
works licensed under this section and allocation and
distribution of royalties by the mechanical licensing
collective, according to a process approved by the board of
directors of the mechanical licensing collective. Such
process--
``(i) shall include a mechanism to hold disputed funds in
accordance with the requirements described in subparagraph
(H)(ii) pending resolution of the dispute; and
``(ii) except as provided in paragraph (11)(D), shall not
affect any legal or equitable rights or remedies available to
any copyright owner or songwriter concerning ownership of,
and entitlement to royalties for, a musical work.
``(L) Verification of payments by mechanical licensing
collective.--
``(i) Verification process.--A copyright owner entitled to
receive payments of royalties for covered activities from the
mechanical licensing collective may, individually or with
other copyright owners, conduct an audit of the mechanical
licensing collective to verify the accuracy of royalty
payments by the mechanical licensing collective to such
copyright owner, as follows:
``(I) A copyright owner may audit the mechanical licensing
collective only once in a year for any or all of the prior 3
calendar
[[Page H3527]]
years, and may not audit records for any calendar year more
than once.
``(II) The audit shall be conducted by a qualified auditor,
who shall perform the audit during the ordinary course of
business by examining the books, records, and data of the
mechanical licensing collective, according to generally
accepted auditing standards and subject to applicable
confidentiality requirements prescribed by the Register of
Copyrights under paragraph (12)(C).
``(III) The mechanical licensing collective shall make such
books, records, and data available to the qualified auditor
and respond to reasonable requests for relevant information,
and shall use commercially reasonable efforts to facilitate
access to relevant information maintained by third parties.
``(IV) To commence the audit, any copyright owner shall
file with the Copyright Office a notice of intent to conduct
an audit of the mechanical licensing collective, identifying
the period of time to be audited, and shall simultaneously
deliver a copy of such notice to the mechanical licensing
collective. The Register of Copyrights shall cause the notice
of audit to be published in the Federal Register within 45
calendar days after receipt.
``(V) The qualified auditor shall determine the accuracy of
royalty payments, including whether an underpayment or
overpayment of royalties was made by the mechanical licensing
collective to each auditing copyright owner, but before
providing a final audit report to any such copyright owner,
the qualified auditor shall provide a tentative draft of the
report to the mechanical licensing collective and allow the
mechanical licensing collective a reasonable opportunity to
respond to the findings, including by clarifying issues and
correcting factual errors.
``(VI) The auditing copyright owner or owners shall bear
the cost of the audit. In case of an underpayment to any
copyright owner, the mechanical licensing collective shall
pay the amounts of any such underpayment to such auditing
copyright owner, as appropriate. In case of an overpayment by
the mechanical licensing collective, the mechanical licensing
collective may debit the account of the auditing copyright
owner or owners for such overpaid amounts, or such owner(s)
shall refund overpaid amounts to the mechanical licensing
collective, as appropriate.
``(ii) Alternative verification procedures.--Nothing in
this subparagraph shall preclude a copyright owner and the
mechanical licensing collective from agreeing to audit
procedures different from those described herein, but a
notice of the audit shall be provided to and published by the
Copyright Office as described in clause (i)(IV).
``(M) Records of mechanical licensing collective.--
``(i) Records maintenance.--The mechanical licensing
collective shall ensure that all material records of its
operations, including those relating to notices of license,
the administration of its claims process, reports of usage,
royalty payments, receipt and maintenance of accrued
royalties, royalty distribution processes, and legal matters,
are preserved and maintained in a secure and reliable manner,
with appropriate commercially reasonable safeguards against
unauthorized access, copying, and disclosure, and subject to
the confidentiality requirements prescribed by the Register
of Copyrights under paragraph (12)(C) for a period of no less
than 7 years after the date of creation or receipt, whichever
occurs later.
``(ii) Records access.--The mechanical licensing collective
shall provide prompt access to electronic and other records
pertaining to the administration of a copyright owner's
musical works upon reasonable written request of such owner
or the owner's authorized representative.
``(4) Terms and conditions of blanket license.--A blanket
license is subject to, and conditioned upon, the following
requirements:
``(A) Royalty reporting and payments.--
``(i) Monthly reports and payment.--A digital music
provider shall report and pay royalties to the mechanical
licensing collective under the blanket license on a monthly
basis in accordance with clause (ii) and subsection
(c)(2)(I), but the monthly reporting shall be due 45 calendar
days, rather than 20 calendar days, after the end of the
monthly reporting period.
``(ii) Data to be reported.--In reporting usage of musical
works to the mechanical licensing collective, a digital music
provider shall provide usage data for musical works used
under the blanket license and usage data for musical works
used in covered activities under voluntary licenses and
individual download licenses. In the report of usage, the
digital music provider shall--
``(I) with respect to each sound recording embodying a
musical work--
``(aa) provide identifying information for the sound
recording, including sound recording name, featured artist
and, to the extent acquired by the digital music provider in
connection with its use of sound recordings of musical works
to engage in covered activities, including pursuant to
subparagraph (B), producer, international standard recording
code, and other information commonly used in the industry to
identify sound recordings and match them to the musical works
the sound recordings embody;
``(bb) to the extent acquired by the digital music provider
in the metadata in connection with its use of sound
recordings of musical works to engage in covered activities,
including pursuant to subparagraph (B), provide information
concerning authorship and ownership of the applicable rights
in the musical work embodied in the sound recording
(including each songwriter, publisher name, and respective
ownership share) and the international standard musical work
code; and
``(cc) provide the number of digital phonorecord deliveries
of the sound recording, including limited downloads and
interactive streams;
``(II) identify and provide contact information for all
musical work copyright owners for works embodied in sound
recordings as to which a voluntary license, rather than the
blanket license, is in effect with respect to the uses being
reported; and
``(III) provide such other information as the Register of
Copyrights shall require by regulation.
``(iii) Format and maintenance of reports.--Reports of
usage provided by digital music providers to the mechanical
licensing collective shall be in a machine-readable format
that is compatible with the information technology systems of
the mechanical licensing collective and meets the
requirements of regulations adopted by the Register of
Copyrights. The Register shall also adopt regulations setting
forth requirements under which records of use shall be
maintained and made available to the mechanical licensing
collective by digital music providers engaged in covered
activities under a blanket license.
``(iv) Adoption of regulations.--The Register shall adopt
regulations--
``(I) setting forth requirements under which records of use
shall be maintained and made available to the mechanical
licensing collective by digital music providers engaged in
covered activities under a blanket license; and
``(II) regarding adjustments to reports of usage by digital
music providers, including mechanisms to account for
overpayment and underpayment of royalties in prior periods.
``(B) Collection of sound recording information.--A digital
music provider shall engage in good-faith, commercially
reasonable efforts to obtain from copyright owners of sound
recordings made available through the service of such digital
music provider--
``(i) sound recording copyright owners, producers,
international standard recording codes, and other information
commonly used in the industry to identify sound recordings
and match them to the musical works the sound recordings
embody; and
``(ii) information concerning the authorship and ownership
of musical works, including songwriters, publisher names,
ownership shares, and international standard musical work
codes.
``(C) Payment of administrative assessment.--A digital
music provider and any significant nonblanket licensee shall
pay the administrative assessment established under paragraph
(7)(D) in accordance with this subsection and applicable
regulations.
``(D) Verification of payments by digital music
providers.--
``(i) Verification process.--The mechanical licensing
collective may conduct an audit of a digital music provider
operating under the blanket license to verify the accuracy of
royalty payments by the digital music provider to the
mechanical licensing collective as follows:
``(I) The mechanical licensing collective may commence an
audit of a digital music provider no more than once in any 3-
calendar-year period to cover a verification period of no
more than the 3 full calendar years preceding the date of
commencement of the audit, and such audit may not audit
records for any such 3-year verification period more than
once.
``(II) The audit shall be conducted by a qualified auditor,
who shall perform the audit during the ordinary course of
business by examining the books, records, and data of the
digital music provider, according to generally accepted
auditing standards and subject to applicable confidentiality
requirements prescribed by the Register of Copyrights under
paragraph (12)(C).
``(III) The digital music provider shall make such books,
records, and data available to the qualified auditor and
respond to reasonable requests for relevant information, and
shall use commercially reasonable efforts to provide access
to relevant information maintained with respect to a digital
music provider by third parties.
``(IV) To commence the audit, the mechanical licensing
collective shall file with the Copyright Office a notice of
intent to conduct an audit of the digital music provider,
identifying the period of time to be audited, and shall
simultaneously deliver a copy of such notice to the digital
music provider. The Register of Copyrights shall cause the
notice of audit to be published in the Federal Register
within 45 calendar days after receipt.
``(V) The qualified auditor shall determine the accuracy of
royalty payments, including whether an underpayment or
overpayment of royalties was made by the digital music
provider to the mechanical licensing collective, but before
providing a final audit report to the mechanical licensing
collective, the qualified auditor shall provide a tentative
draft of the report to the digital music provider and allow
the digital music provider a reasonable opportunity to
respond to the findings, including by clarifying issues and
correcting factual errors.
``(VI) The mechanical licensing collective shall pay the
cost of the audit, unless the
[[Page H3528]]
qualified auditor determines that there was an underpayment
by the digital music provider of 10 percent or more, in which
case the digital music provider shall bear the reasonable
costs of the audit, in addition to paying the amount of any
underpayment to the mechanical licensing collective. In case
of an overpayment by the digital music provider, the
mechanical licensing collective shall provide a credit to the
account of the digital music provider.
``(VII) A digital music provider may not assert section 507
or any other Federal or State statute of limitations,
doctrine of laches or estoppel, or similar provision as a
defense to a legal action arising from an audit under this
subparagraph if such legal action is commenced no more than 6
years after the commencement of the audit that is the basis
for such action.
``(ii) Alternative verification procedures.--Nothing in
this subparagraph shall preclude the mechanical licensing
collective and a digital music provider from agreeing to
audit procedures different from those described herein, but a
notice of the audit shall be provided to and published by the
Copyright Office as described in clause (i)(IV).
``(E) Default under blanket license.--
``(i) Conditions of default.--A digital music provider
shall be in default under a blanket license if the digital
music provider--
``(I) fails to provide one or more monthly reports of usage
to the mechanical licensing collective when due;
``(II) fails to make a monthly royalty or late fee payment
to the mechanical licensing collective when due, in all or
material part;
``(III) provides one or more monthly reports of usage to
the mechanical licensing collective that, on the whole, is or
are materially deficient as a result of inaccurate, missing,
or unreadable data, where the correct data was available to
the digital music provider and required to be reported under
this section and applicable regulations;
``(IV) fails to pay the administrative assessment as
required under this subsection and applicable regulations; or
``(V) after being provided written notice by the mechanical
licensing collective, refuses to comply with any other
material term or condition of the blanket license under this
section for a period of 60 calendar days or longer.
``(ii) Notice of default and termination.--In case of a
default by a digital music provider, the mechanical licensing
collective may proceed to terminate the blanket license of
the digital music provider as follows:
``(I) The mechanical licensing collective shall provide
written notice to the digital music provider describing with
reasonable particularity the default and advising that unless
such default is cured within 60 calendar days after the date
of the notice, the blanket license will automatically
terminate at the end of that period.
``(II) If the digital music provider fails to remedy the
default within the 60-day period referenced in subclause (I),
the license shall terminate without any further action on the
part of the mechanical licensing collective. Such termination
renders the making of all digital phonorecord deliveries of
all musical works (and shares thereof) covered by the blanket
license for which the royalty or administrative assessment
has not been paid actionable as acts of infringement under
section 501 and subject to the remedies provided by sections
502 through 506.
``(iii) Notice to copyright owners.--The mechanical
licensing collective shall provide written notice of any
termination under this subparagraph to copyright owners of
affected works.
``(iv) Review by federal district court.--A digital music
provider that believes a blanket license was improperly
terminated by the mechanical licensing collective may seek
review of such termination in Federal district court. The
district court shall determine the matter de novo based on
the record before the mechanical licensing collective and any
additional supporting evidence presented by the parties.
``(5) Digital licensee coordinator.--
``(A) In general.--The digital licensee coordinator shall
be a single entity that--
``(i) is a nonprofit, not owned by any other entity, that
is created to carry out responsibilities under this
subsection;
``(ii) is endorsed by and enjoys substantial support from
digital music providers and significant nonblanket licensees
that together represent the greatest percentage of the
licensee market for uses of musical works in covered
activities, as measured over the preceding 3 calendar years;
``(iii) is able to demonstrate that it has, or will have
prior to the license availability date, the administrative
capabilities to perform the required functions of the digital
licensee coordinator under this subsection; and
``(iv) has been designated by the Register of Copyrights in
accordance with subparagraph (B).
``(B) Designation of digital licensee coordinator.--
``(i) Initial designation.--The Register of Copyrights
shall initially designate the digital licensee coordinator
within 9 months after the enactment date, in accordance with
the same procedure described for designation of the
mechanical licensing collective in paragraph (3)(B)(i).
``(ii) Periodic review of designation.--Following the
initial designation of the digital licensee coordinator, the
Register shall, every 5 years, beginning with the fifth full
calendar year to commence after the initial designation,
determine whether the existing designation should be
continued, or a different entity meeting the criteria
described in clauses (i) through (iii) of subparagraph (A)
should be designated, in accordance with the same procedure
described for the mechanical licensing collective in
paragraph (3)(B)(ii).
``(iii) Inability to designate.--If the Register is unable
to identify an entity that fulfills each of the
qualifications described in clauses (i) through (iii) of
subparagraph (A) to serve as the digital licensee
coordinator, the Register may decline to designate a digital
licensee coordinator. The Register's determination not to
designate a digital licensee coordinator shall not negate or
otherwise affect any provision of this subsection except to
the limited extent that a provision references the digital
licensee coordinator. In such case, the reference to the
digital licensee coordinator shall be without effect unless
and until a new digital licensee coordinator is designated.
``(C) Authorities and functions.--
``(i) In general.--The digital licensee coordinator is
authorized to perform the following functions, subject to
more particular requirements as described in this subsection:
``(I) Establish a governance structure, criteria for
membership, and any dues to be paid by its members.
``(II) Engage in efforts to enforce notice and payment
obligations with respect to the administrative assessment,
including by receiving information from and coordinating with
the mechanical licensing collective.
``(III) Initiate and participate in proceedings before the
Copyright Royalty Judges to establish the administrative
assessment under this subsection.
``(IV) Initiate and participate in proceedings before the
Copyright Office with respect to activities under this
subsection.
``(V) Gather and provide documentation for use in
proceedings before the Copyright Royalty Judges to set rates
and terms under this section.
``(VI) Maintain records of its activities.
``(VII) Engage in such other activities as may be necessary
or appropriate to fulfill its responsibilities under this
subsection.
``(ii) Restriction on lobbying.--The digital licensee
coordinator may not engage in government lobbying activities,
but may engage in the activities described in subclauses
(III), (IV), and (V) of clause (i).
``(6) Requirements for significant nonblanket licensees.--
``(A) In general.--
``(i) Notice of activity.--Not later than 45 calendar days
after the license availability date, or 45 calendar days
after the end of the first full calendar month in which an
entity initially qualifies as a significant nonblanket
licensee, whichever occurs later, a significant nonblanket
licensee shall submit a notice of nonblanket activity to the
mechanical licensing collective. The notice of nonblanket
activity shall comply in form and substance with requirements
that the Register of Copyrights shall establish by
regulation, and a copy shall be made available to the digital
licensee coordinator.
``(ii) Reporting and payment obligations.--The notice of
nonblanket activity submitted to the mechanical licensing
collective shall be accompanied by a report of usage that
contains the information described in paragraph (4)(A)(ii),
as well as any payment of the administrative assessment
required under this subsection and applicable regulations.
Thereafter, subject to clause (iii), a significant nonblanket
licensee shall continue to provide monthly reports of usage,
accompanied by any required payment of the administrative
assessment, to the mechanical licensing collective. Such
reports and payments shall be submitted not later than 45
calendar days after the end of the calendar month being
reported.
``(iii) Discontinuation of obligations.--An entity that has
submitted a notice of nonblanket activity to the mechanical
licensing collective that has ceased to qualify as a
significant nonblanket licensee may so notify the collective
in writing. In such case, as of the calendar month in which
such notice is provided, such entity shall no longer be
required to provide reports of usage or pay the
administrative assessment, but if such entity later qualifies
as a significant nonblanket licensee, such entity shall again
be required to comply with clauses (i) and (ii).
``(B) Reporting by mechanical licensing collective to
digital licensee coordinator.--
``(i) Monthly reports of noncompliant licensees.--The
mechanical licensing collective shall provide monthly reports
to the digital licensee coordinator setting forth any
significant nonblanket licensees of which the collective is
aware that have failed to comply with subparagraph (A).
``(ii) Treatment of confidential information.--The
mechanical licensing collective and digital licensee
coordinator shall take appropriate steps to safeguard the
confidentiality and security of financial and other sensitive
data shared under this subparagraph, in accordance with the
confidentiality requirements prescribed by the Register of
Copyrights under paragraph (12)(C).
``(C) Legal enforcement efforts.--
``(i) Federal court action.--Should the mechanical
licensing collective or digital licensee coordinator become
aware that a significant nonblanket licensee has failed to
[[Page H3529]]
comply with subparagraph (A), either may commence an action
in Federal district court for damages and injunctive relief.
If the significant nonblanket licensee is found liable, the
court shall, absent a finding of excusable neglect, award
damages in an amount equal to three times the total amount of
the unpaid administrative assessment and, notwithstanding
anything to the contrary in section 505, reasonable
attorney's fees and costs, as well as such other relief as
the court deems appropriate. In all other cases, the court
shall award relief as appropriate. Any recovery of damages
shall be payable to the mechanical licensing collective as an
offset to the collective total costs.
``(ii) Statute of limitations for enforcement action.--Any
action described in this subparagraph shall be commenced
within the time period described in section 507(b).
``(iii) Other rights and remedies preserved.--The ability
of the mechanical licensing collective or digital licensee
coordinator to bring an action under this subparagraph shall
in no way alter, limit or negate any other right or remedy
that may be available to any party at law or in equity.
``(7) Funding of mechanical licensing collective.--
``(A) In general.--The collective total costs shall be
funded by--
``(i) an administrative assessment, as such assessment is
established by the Copyright Royalty Judges pursuant to
subparagraph (D) from time to time, to be paid by--
``(I) digital music providers that are engaged, in all or
in part, in covered activities pursuant to a blanket license;
and
``(II) significant nonblanket licensees; and
``(ii) voluntary contributions from digital music providers
and significant nonblanket licensees as may be agreed with
copyright owners.
``(B) Voluntary contributions.--
``(i) Agreements concerning contributions.--Except as
provided in clause (ii), voluntary contributions by digital
music providers and significant nonblanket licensees shall be
determined by private negotiation and agreement, and the
following conditions apply:
``(I) The date and amount of each voluntary contribution to
the mechanical licensing collective shall be documented in a
writing signed by an authorized agent of the mechanical
licensing collective and the contributing party.
``(II) Such agreement shall be made available as required
in proceedings before the Copyright Royalty Judges to
establish or adjust the administrative assessment in
accordance with applicable statutory and regulatory
provisions and rulings of the Copyright Royalty Judges.
``(ii) Treatment of contributions.--Each such voluntary
contribution shall be treated for purposes of an
administrative assessment proceeding as an offset to the
collective total costs that would otherwise be recovered
through the administrative assessment. Any allocation or
reallocation of voluntary contributions between or among
individual digital music providers or significant nonblanket
licensees shall be a matter of private negotiation and
agreement among such parties and outside the scope of the
administrative assessment proceeding.
``(C) Interim application of accrued royalties.--In the
event that the administrative assessment, together with any
funding from voluntary contributions as provided in
subparagraphs (A) and (B), is inadequate to cover current
collective total costs, the collective, with approval of its
board of directors, may apply unclaimed accrued royalties on
an interim basis to defray such costs, subject to future
reimbursement of such royalties from future collections of
the assessment.
``(D) Determination of administrative assessment.--
``(i) Administrative assessment to cover collective total
costs.--The administrative assessment shall be used solely
and exclusively to fund the collective total costs.
``(ii) Separate proceeding before copyright royalty
judges.--The amount and terms of the administrative
assessment shall be determined and established in a separate
and independent proceeding before the Copyright Royalty
Judges, according to the procedures described in clauses
(iii) and (iv). The administrative assessment determined in
such proceeding shall--
``(I) be wholly independent of royalty rates and terms
applicable to digital music providers, which shall not be
taken into consideration in any manner in establishing the
administrative assessment;
``(II) be established by the Copyright Royalty Judges in an
amount that is calculated to defray the reasonable collective
total costs;
``(III) be assessed based on usage of musical works by
digital music providers and significant nonblanket licensees
in covered activities under both compulsory and nonblanket
licenses;
``(IV) may be in the form of a percentage of royalties
payable under this section for usage of musical works in
covered activities (regardless of whether a different rate
applies under a voluntary license), or any other usage-based
metric reasonably calculated to equitably allocate the
collective total costs across digital music providers and
significant nonblanket licensees engaged in covered
activities, but shall include as a component a minimum fee
for all digital music providers and significant nonblanket
licensees; and
``(V) take into consideration anticipated future collective
total costs and collections of the administrative assessment,
but also, as applicable--
``(aa) any portion of past actual collective total costs of
the mechanical licensing collective not funded by previous
collections of the administrative assessment or voluntary
contributions because such collections or contributions
together were insufficient to fund such costs;
``(bb) any past collections of the administrative
assessment and voluntary contributions that exceeded past
actual collective total costs, resulting in a surplus; and
``(cc) the amount of any voluntary contributions by digital
music providers or significant nonblanket licensees in
relevant periods, described in subparagraphs (A) and (B) of
paragraph (7).
``(iii) Initial administrative assessment.--The procedure
for establishing the initial administrative assessment shall
be as follows:
``(I) The Copyright Royalty Judges shall commence a
proceeding to establish the initial administrative assessment
within 9 months after the enactment date by publishing a
notice in the Federal Register seeking petitions to
participate.
``(II) The mechanical licensing collective and digital
licensee coordinator shall participate in such proceeding,
along with any interested copyright owners, digital music
providers or significant nonblanket licensees that have
notified the Copyright Royalty Judges of their desire to
participate.
``(III) The Copyright Royalty Judges shall establish a
schedule for submission by the parties of information that
may be relevant to establishing the administrative
assessment, including actual and anticipated collective total
costs of the mechanical licensing collective, actual and
anticipated collections from digital music providers and
significant nonblanket licensees, and documentation of
voluntary contributions, as well as a schedule for further
proceedings, which shall include a hearing, as they deem
appropriate.
``(IV) The initial administrative assessment shall be
determined, and such determination shall be published in the
Federal Register by the Copyright Royalty Judges, within 1
year after commencement of the proceeding described in this
clause. The determination shall be supported by a written
record. The initial administrative assessment shall be
effective as of the license availability date, and shall
continue in effect unless and until an adjusted
administrative assessment is established pursuant to an
adjustment proceeding under clause (iii).
``(iv) Adjustment of administrative assessment.--The
administrative assessment may be adjusted by the Copyright
Royalty Judges periodically, in accordance with the following
procedures:
``(I) No earlier than one year after the most recent
publication of a determination of the administrative
assessment by the Copyright Royalty Judges, the mechanical
licensing collective, the digital licensee coordinator, or
one or more interested copyright owners, digital music
providers, or significant nonblanket licensees, may file a
petition with the Copyright Royalty Judges in the month of
October to commence a proceeding to adjust the administrative
assessment.
``(II) Notice of the commencement of such proceeding shall
be published in the Federal Register in the month of November
following the filing of any petition, with a schedule of
requested information and additional proceedings, as
described in clause (iii)(III). The mechanical licensing
collective and digital licensee coordinator shall participate
in such proceeding, along with any interested copyright
owners, digital music providers, or significant nonblanket
licensees that have notified the Copyright Royalty Judges of
their desire to participate.
``(III) The determination of the adjusted administrative
assessment, which shall be supported by a written record,
shall be published in the Federal Register during November of
the calendar year following the commencement of the
proceeding. The adjusted administrative assessment shall take
effect January 1 of the year following such publication.
``(v) Adoption of voluntary agreements.--In lieu of
reaching their own determination based on evaluation of
relevant data, the Copyright Royalty Judges shall approve and
adopt a negotiated agreement to establish the amount and
terms of the administrative assessment that has been agreed
to by the mechanical licensing collective and the digital
licensee coordinator (or if none has been designated,
interested digital music providers and significant nonblanket
licensees representing more than half of the market for uses
of musical works in covered activities), but the Copyright
Royalty Judges shall have the discretion to reject any such
agreement for good cause shown. An administrative assessment
adopted under this clause shall apply to all digital music
providers and significant nonblanket licensees engaged in
covered activities during the period it is in effect.
``(vi) Continuing authority to amend.--The Copyright
Royalty Judges shall retain continuing authority to amend a
determination of an administrative assessment to correct
technical or clerical errors, or modify the terms of
implementation, for good cause, with any such amendment to be
published in the Federal Register.
[[Page H3530]]
``(vii) Appeal of administrative assessment.--The
determination of an administrative assessment by the
Copyright Royalty Judges shall be appealable, within 30
calendar days after publication in the Federal Register, to
the Court of Appeals for the District of Columbia Circuit by
any party that fully participated in the proceeding. The
administrative assessment as established by the Copyright
Royalty Judges shall remain in effect pending the final
outcome of any such appeal, and the mechanical licensing
collective, digital licensee coordinator, digital music
providers, and significant nonblanket licensees shall
implement appropriate financial or other measures within 3
months after any modification of the assessment to reflect
and account for such outcome.
``(viii) Regulations.--The Copyright Royalty Judges may
adopt regulations to govern the conduct of proceedings under
this paragraph.
``(8) Establishment of rates and terms under blanket
license.--
``(A) Restrictions on ratesetting participation.--Neither
the mechanical licensing collective nor the digital licensee
coordinator shall be a party to a proceeding described in
subsection (c)(1)(E), but either may gather and provide
financial and other information for the use of a party to
such a proceeding and comply with requests for information as
required under applicable statutory and regulatory provisions
and rulings of the Copyright Royalty Judges.
``(B) Application of late fees.--In any proceeding
described in subparagraph (A) in which the Copyright Royalty
Judges establish a late fee for late payment of royalties for
uses of musical works under this section, such fee shall
apply to covered activities under blanket licenses, as
follows:
``(i) Late fees for past due royalty payments shall accrue
from the due date for payment until payment is received by
the mechanical licensing collective.
``(ii) The availability of late fees shall in no way
prevent a copyright owner or the mechanical licensing
collective from asserting any other rights or remedies to
which such copyright owner or the mechanical licensing
collective may be entitled under this title.
``(C) Interim rate agreements in general.--For any covered
activity for which no rate or terms have been established by
the Copyright Royalty Judges, the mechanical licensing
collective and any digital music provider may agree to an
interim rate and terms for such activity under the blanket
license, and any such rate and terms--
``(i) shall be treated as nonprecedential and not cited or
relied upon in any ratesetting proceeding before the
Copyright Royalty Judges or any other tribunal; and
``(ii) shall automatically expire upon the establishment of
a rate and terms for such covered activity by the Copyright
Royalty Judges, under subsection (c)(1)(E).
``(D) Adjustments for interim rates.--The rate and terms
established by the Copyright Royalty Judges for a covered
activity to which an interim rate and terms have been agreed
under subparagraph (C) shall supersede the interim rate and
terms and apply retroactively to the inception of the
activity under the blanket license. In such case, within 3
months after the rate and terms established by the Copyright
Royalty Judges become effective--
``(i) if the rate established by the Copyright Royalty
Judges exceeds the interim rate, the digital music provider
shall pay to the mechanical licensing collective the amount
of any underpayment of royalties due; or
``(ii) if the interim rate exceeds the rate established by
the Copyright Royalty Judges, the mechanical licensing
collective shall credit the account of the digital music
provider for the amount of any overpayment of royalties due.
``(9) Transition to blanket licenses.--
``(A) Substitution of blanket license.--On the license
availability date, a blanket license shall, without any
interruption in license authority enjoyed by such digital
music provider, be automatically substituted for and
supersede any existing compulsory license previously obtained
under this section by the digital music provider from a
copyright owner to engage in one or more covered activities
with respect to a musical work, but the foregoing shall not
apply to any authority obtained from a record company
pursuant to a compulsory license to make and distribute
permanent downloads unless and until such record company
terminates such authority in writing to take effect at the
end of a monthly reporting period, with a copy to the
mechanical licensing collective.
``(B) Expiration of existing licenses.--Except to the
extent provided in subparagraph (A), on and after the license
availability date, licenses other than individual download
licenses obtained under this section for covered activities
prior to the license availability date shall no longer
continue in effect.
``(C) Treatment of voluntary licenses.--A voluntary license
for a covered activity in effect on the license availability
date will remain in effect unless and until the voluntary
license expires according to the terms of the voluntary
license, or the parties agree to amend or terminate the
voluntary license. In a case where a voluntary license for a
covered activity entered into before the license availability
date incorporates the terms of this section by reference, the
terms so incorporated (but not the rates) shall be those in
effect immediately prior to the license availability date,
and those terms shall continue to apply unless and until such
voluntary license is terminated or amended, or the parties
enter into a new voluntary license.
``(D) Further acceptance of notices for covered activities
by copyright office.--On and after the enactment date--
``(i) the Copyright Office shall no longer accept notices
of intention with respect to covered activities; and
``(ii) previously filed notices of intention will no longer
be effective or provide license authority with respect to
covered activities, but before the license availability date
there shall be no liability under section 501 for the
reproduction or distribution of a musical work (or share
thereof) in covered activities if a valid notice of intention
was filed for such work (or share) before the enactment date.
``(10) Prior unlicensed uses.--
``(A) Limitation on liability in general.--A copyright
owner that commences an action under section 501 on or after
January 1, 2018, against a digital music provider for the
infringement of the exclusive rights provided by paragraph
(1) or (3) of section 106 arising from the unauthorized
reproduction or distribution of a musical work by such
digital music provider in the course of engaging in covered
activities prior to the license availability date, shall, as
the copyright owner's sole and exclusive remedy against the
digital music provider, be eligible to recover the royalty
prescribed under subsection (c)(1)(C) and chapter 8 of this
title, from the digital music provider, provided that such
digital music provider can demonstrate compliance with the
requirements of subparagraph (B), as applicable. In all other
cases the limitation on liability under this subparagraph
shall not apply.
``(B) Requirements for limitation on liability.--The
following requirements shall apply on the enactment date and
through the end of the period that expires 90 days after the
license availability date to digital music providers seeking
to avail themselves of the limitation on liability described
in subparagraph (A):
``(i) No later than 30 calendar days after first making a
particular sound recording of a musical work available
through its service via one or more covered activities, or 30
calendar days after the enactment date, whichever occurs
later, a digital music provider shall engage in good-faith,
commercially reasonable efforts to identify and locate each
copyright owner of such musical work (or share thereof). Such
required matching efforts shall include the following:
``(I) Good-faith, commercially reasonable efforts to obtain
from the owner of the corresponding sound recording made
available through the digital music provider's service the
following information:
``(aa) Sound recording name, featured artist, sound
recording copyright owner, producer, international standard
recording code, and other information commonly used in the
industry to identify sound recordings and match them to the
musical works they embody.
``(bb) Any available musical work ownership information,
including each songwriter and publisher name, percentage
ownership share, and international standard musical work
code.
``(II) Employment of one or more bulk electronic matching
processes that are available to the digital music provider
through a third-party vendor on commercially reasonable
terms, but a digital music provider may rely on its own bulk
electronic matching process if it has capabilities comparable
to or better than those available from a third-party vendor
on commercially reasonable terms.
``(ii) The required matching efforts shall be repeated by
the digital music provider no less than once per month for so
long as the copyright owner remains unidentified or has not
been located.
``(iii) If the required matching efforts are successful in
identifying and locating a copyright owner of a musical work
(or share thereof) by the end of the calendar month in which
the digital music provider first makes use of the work, the
digital music provider shall provide statements of account
and pay royalties to such copyright owner in accordance with
this section and applicable regulations.
``(iv) If the copyright owner is not identified or located
by the end of the calendar month in which the digital music
provider first makes use of the work, the digital music
provider shall accrue and hold royalties calculated under the
applicable statutory rate in accordance with usage of the
work, from initial use of the work until the accrued
royalties can be paid to the copyright owner or are required
to be transferred to the mechanical licensing collective, as
follows:
``(I) Accrued royalties shall be maintained by the digital
music provider in accordance with generally accepted
accounting principles.
``(II) If a copyright owner of an unmatched musical work
(or share thereof) is identified and located by or to the
digital music provider before the license availability date,
the digital music provider shall--
``(aa) within 45 calendar days after the end of the
calendar month during which the copyright owner was
identified and located, pay the copyright owner all accrued
royalties, such payment to be accompanied by a cumulative
statement of account that includes all of the information
that would have been provided to the copyright owner had
[[Page H3531]]
the digital music provider been providing monthly statements
of account to the copyright owner from initial use of the
work in accordance with this section and applicable
regulations, including the requisite certification under
subsection (c)(2)(I);
``(bb) beginning with the accounting period following the
calendar month in which the copyright owner was identified
and located, and for all other accounting periods prior to
the license availability date, provide monthly statements of
account and pay royalties to the copyright owner as required
under this section and applicable regulations; and
``(cc) beginning with the monthly royalty reporting period
commencing on the license availability date, report usage and
pay royalties for such musical work (or share thereof) for
such reporting period and reporting periods thereafter to the
mechanical licensing collective, as required under this
subsection and applicable regulations.
``(III) If a copyright owner of an unmatched musical work
(or share thereof) is not identified and located by the
license availability date, the digital music provider shall--
``(aa) within 45 calendar days after the license
availability date, transfer all accrued royalties to the
mechanical licensing collective, such payment to be
accompanied by a cumulative statement of account that
includes all of the information that would have been provided
to the copyright owner had the digital music provider been
serving monthly statements of account on the copyright owner
from initial use of the work in accordance with this section
and applicable regulations, including the requisite
certification under subsection (c)(2)(I), and accompanied by
an additional certification by a duly authorized officer of
the digital music provider that the digital music provider
has fulfilled the requirements of clauses (i) and (ii) of
subparagraph (B) but has not been successful in locating or
identifying the copyright owner; and
``(bb) beginning with the monthly royalty reporting period
commencing on the license availability date, report usage and
pay royalties for such musical work (or share thereof) for
such period and reporting periods thereafter to the
mechanical licensing collective, as required under this
subsection and applicable regulations.
``(v) Suspension of late fees.--A digital music provider
that complies with the requirements of this paragraph with
respect to unmatched musical works (or shares of works) shall
not be liable for or accrue late fees for late payments of
royalties for such works until such time as the digital music
provider is required to begin paying monthly royalties to the
copyright owner or the mechanical licensing collective, as
applicable.
``(C) Adjusted statute of limitations.--Notwithstanding
anything to the contrary in section 507(b), with respect to
any claim of infringement of the exclusive rights provided by
paragraphs (1) and (3) of section 106 against a digital music
provider arising from the unauthorized reproduction or
distribution of a musical work by such digital music provider
to engage in covered activities that accrued no more than 3
years prior to the license availability date, such action may
be commenced within 3 years of the date the claim accrued, or
up to 2 years after the license availability date, whichever
is later.
``(D) Other rights and remedies preserved.--Except as
expressly provided in this paragraph, nothing in this
paragraph shall be construed to alter, limit, or negate any
right or remedy of a copyright owner with respect to
unauthorized use of a musical work.
``(11) Legal protections for licensing activities.--
``(A) Exemption for compulsory license activities.--The
antitrust exemption described in subsection (c)(1)(D) shall
apply to negotiations and agreements between and among
copyright owners and persons entitled to obtain a compulsory
license for covered activities, and common agents acting on
behalf of such copyright owners or persons, including with
respect to the administrative assessment established under
this subsection.
``(B) Limitation on common agent exemption.--
Notwithstanding the antitrust exemption provided in
subsection (c)(1)(D) and subparagraph (A) (except for the
administrative assessment referenced therein and except as
provided in paragraph (8)(C)), neither the mechanical
licensing collective nor the digital licensee coordinator
shall serve as a common agent with respect to the
establishment of royalty rates or terms under this section.
``(C) Antitrust exemption for administrative activities.--
Notwithstanding any provision of the antitrust laws,
copyright owners and persons entitled to obtain a compulsory
license under this section may designate the mechanical
licensing collective to administer voluntary licenses for the
reproduction or distribution of musical works in covered
activities on behalf of such copyright owners and persons,
but the following conditions apply:
``(i) Each copyright owner shall establish the royalty
rates and material terms of any such voluntary license
individually and not in agreement, combination, or concert
with any other copyright owner.
``(ii) Each person entitled to obtain a compulsory license
under this section shall establish the royalty rates and
material terms of any such voluntary license individually and
not in agreement, combination, or concert with any other
digital music provider.
``(iii) The mechanical licensing collective shall maintain
the confidentiality of the voluntary licenses in accordance
with the confidentiality provisions prescribed by the
Register of Copyrights under paragraph (12)(C).
``(D) Liability for good-faith activities.--The mechanical
licensing collective shall not be liable to any person or
entity based on a claim arising from its good-faith
administration of policies and procedures adopted and
implemented to carry out the responsibilities described in
subparagraphs (J) and (K) of paragraph (3), except to the
extent of correcting an underpayment or overpayment of
royalties as provided in paragraph (3)(L)(i)(VI), but the
collective may participate in a legal proceeding as a
stakeholder party if the collective is holding funds that are
the subject of a dispute between copyright owners. For
purposes of this subparagraph, `good-faith administration'
means administration in a manner that is not grossly
negligent.
``(E) Preemption of state property laws.--The holding and
distribution of funds by the mechanical licensing collective
in accordance with this subsection shall supersede and
preempt any State law (including common law) concerning
escheatment or abandoned property, or any analogous
provision, that might otherwise apply.
``(F) Rule of construction.--Except as expressly provided
in this subsection, nothing in this subsection shall negate
or limit the ability of any person to pursue an action in
Federal court against the mechanical licensing collective or
any other person based upon a claim arising under this title
or other applicable law.
``(12) Regulations.--
``(A) Adoption by register of copyrights and copyright
royalty judges.--The Register of Copyrights may conduct such
proceedings and adopt such regulations as may be necessary or
appropriate to effectuate the provisions of this subsection,
except for regulations concerning proceedings before the
Copyright Royalty Judges to establish the administrative
assessment, which shall be adopted by the Copyright Royalty
Judges.
``(B) Judicial review of regulations.--Except as provided
in paragraph (7)(D)(vii), regulations adopted under this
subsection shall be subject to judicial review pursuant to
chapter 7 of title 5.
``(C) Protection of confidential information.--The Register
of Copyrights shall adopt regulations to provide for the
appropriate procedures to ensure that confidential, private,
proprietary, or privileged information contained in the
records of the mechanical licensing collective and digital
licensee coordinator is not improperly disclosed or used,
including through any disclosure or use by the board of
directors or personnel of either entity, and specifically
including the unclaimed royalties oversight committee and the
dispute resolution committee of the mechanical licensing
collective.
``(13) Savings clauses.--
``(A) Limitation on activities and rights covered.--This
subsection applies solely to uses of musical works subject to
licensing under this section. The blanket license shall not
be construed to extend or apply to activities other than
covered activities or to rights other than the exclusive
rights of reproduction and distribution licensed under this
section, or serve or act as the basis to extend or expand the
compulsory license under this section to activities and
rights not covered by this section on the enactment date.
``(B) Rights of public performance not affected.--The
rights, protections, and immunities granted under this
subsection, the data concerning musical works collected and
made available under this subsection, and the definitions
described in subsection (e) shall not extend to, limit, or
otherwise affect any right of public performance in a musical
work.''; and
(5) by adding at the end the following new subsection:
``(e) Definitions.--As used in this section:
``(1) Accrued interest.--The term `accrued interest' means
interest accrued on accrued royalties, as described in
subsection (d)(3)(H)(ii).
``(2) Accrued royalties.--The term `accrued royalties'
means royalties accrued for the reproduction or distribution
of a musical work (or share thereof) in a covered activity,
calculated in accordance with the applicable royalty rate
under this section.
``(3) Administrative assessment.--The term `administrative
assessment' means the fee established pursuant to subsection
(d)(7)(D).
``(4) Audit.--The term `audit' means a royalty compliance
examination to verify the accuracy of royalty payments, or
the conduct of such an examination, as applicable.
``(5) Blanket license.--The term `blanket license' means a
compulsory license described in subsection (d)(1)(A) to
engage in covered activities.
``(6) Collective total costs.--The term `collective total
costs'--
``(A) means the total costs of establishing, maintaining,
and operating the mechanical licensing collective to fulfill
its statutory functions, including--
``(i) startup costs;
``(ii) financing, legal, and insurance costs;
``(iii) investments in information technology,
infrastructure, and other long-term resources;
``(iv) outside vendor costs;
[[Page H3532]]
``(v) costs of licensing, royalty administration, and
enforcement of rights;
``(vi) costs of bad debt; and
``(vii) costs of automated and manual efforts to identify
and locate copyright owners of musical works (and shares of
such musical works) and match sound recordings to the musical
works the sound recordings embody; and
``(B) does not include any added costs incurred by the
mechanical licensing collective to provide services under
voluntary licenses.
``(7) Covered activity.--The term `covered activity' means
the activity of making a digital phonorecord delivery of a
musical work, including in the form of a permanent download,
limited download, or interactive stream, where such activity
qualified for a compulsory license under this section.
``(8) Digital music provider.--The term `digital music
provider' means a person (or persons operating under the
authority of that person) that, with respect to a service
engaged in covered activities--
``(A) has a direct contractual, subscription, or other
economic relationship with end users of the service, or, if
no such relationship with end users exists, exercises direct
control over the provision of the service to end users;
``(B) is able to fully report on any revenues and
consideration generated by the service; and
``(C) is able to fully report on usage of sound recordings
of musical works by the service (or procure such reporting).
``(9) Digital licensee coordinator.--The term `digital
licensee coordinator' means the entity most recently
designated pursuant to subsection (d)(5).
``(10) Digital phonorecord delivery.--The term `digital
phonorecord delivery' means each individual delivery of a
phonorecord by digital transmission of a sound recording that
results in a specifically identifiable reproduction by or for
any transmission recipient of a phonorecord of that sound
recording, regardless of whether the digital transmission is
also a public performance of the sound recording or any
musical work embodied therein, and includes a permanent
download, a limited download, or an interactive stream. A
digital phonorecord delivery does not result from a real-
time, noninteractive subscription transmission of a sound
recording where no reproduction of the sound recording or the
musical work embodied therein is made from the inception of
the transmission through to its receipt by the transmission
recipient in order to make the sound recording audible. A
digital phonorecord delivery does not include the digital
transmission of sounds accompanying a motion picture or other
audiovisual work as defined in section 101 of this title.
``(11) Enactment date.--The term `enactment date' means the
date of the enactment of the Musical Works Modernization Act.
``(12) Individual download license.--The term `individual
download license' means a compulsory license obtained by a
record company to make and distribute, or authorize the
making and distribution of, permanent downloads embodying a
specific individual musical work.
``(13) Interactive stream.--The term `interactive stream'
means a digital transmission of a sound recording of a
musical work in the form of a stream, where the performance
of the sound recording by means of such transmission is not
exempt under section 114(d)(1) and does not in itself, or as
a result of a program in which it is included, qualify for
statutory licensing under section 114(d)(2). An interactive
stream is a digital phonorecord delivery.
``(14) Interested.--The term `interested', as applied to a
party seeking to participate in a proceeding under subsection
(d)(7)(D), is a party as to which the Copyright Royalty
Judges have not determined that the party lacks a significant
interest in such proceeding.
``(15) License availability date.--The term `license
availability date' means the next January 1 following the
expiration of the two-year period beginning on the enactment
date.
``(16) Limited download.--The term `limited download' means
a digital transmission of a sound recording of a musical work
in the form of a download, where such sound recording is
accessible for listening only for a limited amount of time or
specified number of times.
``(17) Matched.--The term `matched', as applied to a
musical work (or share thereof), means that the copyright
owner of such work (or share thereof) has been identified and
located.
``(18) Mechanical licensing collective.--The term
`mechanical licensing collective' means the entity most
recently designated as such by the Register of Copyrights
under subsection (d)(3).
``(19) Mechanical licensing collective budget.--The term
`mechanical licensing collective budget' means a statement of
the financial position of the mechanical licensing collective
for a fiscal year or quarter thereof based on estimates of
expenditures during the period and proposals for financing
them, including a calculation of the collective total costs.
``(20) Musical works database.--The term `musical works
database' means the database described in subsection
(d)(3)(E).
``(21) Nonprofit.--The term `nonprofit' means a nonprofit
created or organized in a State.
``(22) Notice of license.--The term `notice of license'
means a notice from a digital music provider provided under
subsection (d)(2)(A) for purposes of obtaining a blanket
license.
``(23) Notice of nonblanket activity.--The term `notice of
nonblanket activity' means a notice from a significant
nonblanket licensee provided under subsection (d)(6)(A) for
purposes of notifying the mechanical licensing collective
that the licensee has been engaging in covered activities.
``(24) Permanent download.--The term `permanent download'
means a digital transmission of a sound recording of a
musical work in the form of a download, where such sound
recording is accessible for listening without restriction as
to the amount of time or number of times it may be accessed.
``(25) Qualified auditor.--The term `qualified auditor'
means an independent, certified public accountant with
experience performing music royalty audits.
``(26) Record company.--The term `record company' means an
entity that invests in, produces, and markets sound
recordings of musical works, and distributes such sound
recordings for remuneration through multiple sales channels,
including a corporate affiliate of such an entity engaged in
distribution of sound recordings.
``(27) Report of usage.--The term `report of usage' means a
report reflecting an entity's usage of musical works in
covered activities described in subsection (d)(4)(A).
``(28) Required matching efforts.--The term `required
matching efforts' means efforts to identify and locate
copyright owners of musical works as described in subsection
(d)(10)(B)(i).
``(29) Service.--The term `service', as used in relation to
covered activities, means any site, facility, or offering by
or through which sound recordings of musical works are
digitally transmitted to members of the public.
``(30) Share.--The term `share', as applied to a musical
work, means a fractional ownership interest in such work.
``(31) Significant nonblanket licensee.--The term
`significant nonblanket licensee'--
``(A) means an entity, including a group of entities under
common ownership or control that, acting under the authority
of one or more voluntary licenses or individual download
licenses, offers a service engaged in covered activities, and
such entity or group of entities--
``(i) is not currently operating under a blanket license
and is not obligated to provide reports of usage reflecting
covered activities under subsection (d)(4)(A);
``(ii) has a direct contractual, subscription, or other
economic relationship with end users of the service or, if no
such relationship with end users exists, exercises direct
control over the provision of the service to end users; and
``(iii) either--
``(I) on any day in a calendar month, makes more than 5,000
different sound recordings of musical works available through
such service; or
``(II) derives revenue or other consideration in connection
with such covered activities greater than $50,000 in a
calendar month, or total revenue or other consideration
greater than $500,000 during the preceding 12 calendar
months; and
``(B) does not include--
``(i) an entity whose covered activity consists solely of
free-to-the-user streams of segments of sound recordings of
musical works that do not exceed 90 seconds in length, are
offered only to facilitate a licensed use of musical works
that is not a covered activity, and have no revenue directly
attributable to such streams constituting the covered
activity; or
``(ii) a `public broadcasting entity' as defined in section
118(f).
``(32) Songwriter.--The term `songwriter' means the author
of all or part of a musical work, including a composer or
lyricist.
``(33) State.--The term `State' means each State of the
United States, the District of Columbia, and each territory
or possession of the United States.
``(34) Unclaimed accrued royalties.--The term `unclaimed
accrued royalties' means accrued royalties eligible for
distribution under subsection (d)(3)(J).
``(35) Unmatched.--The term `unmatched', as applied to a
musical work (or share thereof), means that the copyright
owner of such work (or share thereof) has not been identified
or located.
``(36) Voluntary license.--The term `voluntary license'
means a license for use of a musical work (or share thereof)
other than a compulsory license obtained under this
section.''.
(b) Technical and Conforming Amendments to Section 801.--
Section 801(b) of title 17, United States Code, is amended--
(1) by redesignating paragraph (8) as paragraph (9); and
(2) by inserting after paragraph (7) the following new
paragraph:
``(8) To determine the administrative assessment to be paid
by digital music providers under section 115(d). The
provisions of section 115(d) shall apply to the conduct of
proceedings by the Copyright Royalty Judges under section
115(d) and not the procedures described in this section, or
section 803, 804, or 805.''.
(c) Effective Date of Amended Rate Setting Standard.--The
amendments made by subsections (a)(3)(D) and (b)(1) shall
apply to any proceeding before the Copyright Royalty
[[Page H3533]]
Judges that is pending on, or commenced on or after, the date
of the enactment of this Act.
(d) Technical and Conforming Amendments to Title 37, Part
385 of the Code of Federal Regulations.--Within 9 months
after the date of the enactment of this Act, the Copyright
Royalty Judges shall amend the regulations for section 115 in
part 385 of title 37, Code of Federal Regulations to conform
the definitions used in such part to the definitions of the
same terms described in section 115(e) of title 17, United
States Code, as amended by subsection (a). In so doing, the
Copyright Royalty Judges shall make adjustments to the
language of the regulations as necessary to achieve the same
purpose and effect as the original regulations with respect
to the rates and terms previously adopted by the Copyright
Royalty Judges.
SEC. 103. AMENDMENTS TO SECTION 114.
(a) Uniform Rate Standard.--Section 114(f) of title 17,
United States Code, is amended--
(1) by striking paragraphs (1) and (2) and inserting the
following:
``(1)(A) Proceedings under chapter 8 shall determine
reasonable rates and terms of royalty payments for
transmissions subject to statutory licensing under subsection
(d)(2) during the 5-year period beginning on January 1 of the
second year following the year in which the proceedings are
to be commenced pursuant to subparagraph (A) or (B) of
section 804(b)(3), as the case may be, or such other period
as the parties may agree. The parties to each proceeding
shall bear their own costs.
``(B) The schedule of reasonable rates and terms determined
by the Copyright Royalty Judges shall, subject to paragraph
(2), 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 period as the parties may agree. Such
rates and terms shall distinguish among the different types
of services then in operation and shall include a minimum fee
for each such type of service, such differences to be based
on criteria including the quantity and nature of the use of
sound recordings and the degree to which use of the service
may substitute for or may promote the purchase of
phonorecords by consumers. The Copyright Royalty Judges shall
establish rates and terms that most clearly represent the
rates and terms 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--
``(i) 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 may interfere
with or may enhance the sound recording copyright owner's
other streams of revenue from the copyright owner's sound
recordings; and
``(II) the relative roles of the copyright owner and the
transmitting entity 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
``(ii) may consider the rates and terms for comparable
types of audio transmission services and comparable
circumstances under voluntary license agreements.
``(C) The procedures under subparagraphs (A) and (B) shall
also be initiated pursuant to a petition filed by any sound
recording copyright owner 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 eligible nonsubscription services
and new subscription services, or preexisting 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.''; and
(2) by redesignating paragraphs (3), (4), and (5) as
paragraphs (2), (3), and (4), respectively.
(b) Repeal.--Subsection (i) of section 114 of title 17,
United States Code, is repealed.
(c) Use in Musical Work Proceedings.--
(1) In general.--License fees payable for the public
performance of sound recordings under section 106(6) of title
17, United States Code, shall not be taken into account in
any administrative, judicial, or other governmental
proceeding to set or adjust the royalties payable to musical
work copyright owners for the public performance of their
works except in such a proceeding to set or adjust royalties
for the public performance of musical works by means of a
digital audio transmission other than a transmission by a
broadcaster, and may be taken into account only with respect
to such digital audio transmission.
(2) Definitions.--In this subsection:
(A) Transmission by a broadcaster.--A ``transmission by a
broadcaster'' means a nonsubscription digital transmission
made by a terrestrial broadcast station on its own behalf, or
on the behalf of a terrestrial broadcast station under common
ownership or control, that is not part of an interactive
service or a music-intensive service comprising the
transmission of sound recordings customized for or
customizable by recipients or service users.
(B) Terrestrial broadcast station.--A ``terrestrial
broadcast station'' means a terrestrial, over-the-air radio
or television broadcast station, licensed as such by the
Federal Communications Commission, including an FM Translator
as defined in section 74.1231 of title 47, Code of Federal
Regulations, and whose primary business activities are
comprised of, and revenues are generated through,
terrestrial, over-the-air broadcast transmissions, or the
simultaneous or substantially-simultaneous digital
retransmission by the terrestrial, over-the-air broadcast
station of its over-the-air broadcast transmissions.
(d) Rule of Construction.--Subsection (c)(2) shall not be
given effect in interpreting provisions of title 17, United
States Code.
(e) Use in Sound Recording Proceedings.--The repeal of
section 114(i) of title 17, United States Code, by subsection
(b) shall not be taken into account in any proceeding to set
or adjust the rates and fees payable for the use of sound
recordings under section 112(e) or section 114(f) of such
title that is pending on, or commenced on or after, the date
of the enactment of this Act.
(f) Decisions and Precedents Not Affected.--The repeal of
section 114(i) of title 17, United States Code, by subsection
(b) shall not have any effect upon the decisions, or the
precedents established or relied upon, in any proceeding to
set or adjust the rates and fees payable for the use of sound
recordings under section 112(e) or section 114(f) of such
title before the date of the enactment of this Act.
(g) Technical and Conforming Amendments.--
(1) Section 114.--Section 114(f) of title 17, United States
Code, as amended by subsection (a), is further amended in
paragraph (4)(C), as so redesignated, by striking ``under
paragraph (4)'' and inserting ``under paragraph (3)''.
(2) Section 801.--Section 801(b)(1) of title 17, United
States Code, is amended by striking ``The rates applicable''
and all that follows though ``prevailing industry
practices.''.
(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''.
SEC. 104. RANDOM ASSIGNMENT OF RATE COURT PROCEEDINGS.
Section 137 of title 28, United States Code, is amended--
(1) by striking ``The business'' and inserting ``(a) In
General.--The business''; and
(2) by adding at the end the following new subsection:
``(b) Random Assignment of Rate Court Proceedings.--
``(1) In general.--
``(A) Determination of license fee.--Except as provided in
subparagraph (B), in the case of any performing rights
society subject to a consent decree, any application for the
determination of a license fee for the public performance of
music in accordance with the applicable consent decree shall
be made in the district court with jurisdiction over that
consent decree and randomly assigned to a judge of that
district court according to that court's rules for the
division of business among district judges currently in
effect or as may be amended from time to time, provided that
any such application shall not be assigned to--
``(i) a judge to whom continuing jurisdiction over any
performing rights society for any performing rights society
consent decree is assigned or has previously been assigned;
or
``(ii) a judge to whom another proceeding concerning an
application for the determination of a reasonable license fee
is assigned at the time of the filing of the application.
``(B) Exception.--Subparagraph (A) does not apply to an
application to determine reasonable license fees made by
individual proprietors under section 513 of title 17.
``(2) Rule of construction.--Nothing in paragraph (1) shall
modify the rights of any party to a consent decree or to a
proceeding to determine reasonable license fees, to make an
application for the construction of any provision of the
applicable consent decree. Such application shall be referred
to the judge to whom continuing jurisdiction over the
applicable consent decree is currently assigned. If any such
application is made in connection with a rate proceeding,
such rate proceeding shall be stayed until the final
determination of the construction application. Disputes in
connection with a rate proceeding about whether a licensee is
similarly situated to another licensee shall not be subject
to referral to the judge with continuing jurisdiction over
the applicable consent decree.''.
TITLE II--COMPENSATING LEGACY ARTISTS FOR THEIR SONGS, SERVICE, AND
IMPORTANT CONTRIBUTIONS TO SOCIETY
SEC. 201. SHORT TITLE.
This title may be cited as the ``Compensating Legacy
Artists for their Songs, Service, and Important Contributions
to Society Act'' or the ``CLASSICS Act''.
[[Page H3534]]
SEC. 202. UNAUTHORIZED DIGITAL PERFORMANCE OF PRE-1972 SOUND
RECORDINGS.
(a) Protection for Unauthorized Digital Performances.--
Title 17, United States Code, is amended by adding at the end
the following new chapter:
``CHAPTER 14--UNAUTHORIZED DIGITAL PERFORMANCE OF PRE-1972 SOUND
RECORDINGS
``Sec.
``1401. Unauthorized digital performance of pre-1972 sound recordings.
``Sec. 1401. Unauthorized digital performance of pre-1972
sound recordings
``(a) Unauthorized Acts.--Anyone who, before February 15,
2067, and without the consent of the rights owner, performs
publicly, by means of a digital audio transmission, a sound
recording fixed on or after January 1, 1923, and before
February 15, 1972, shall be subject to the remedies provided
in sections 502 through 505 to the same extent as an
infringer of copyright.
``(b) Certain Authorized Transmissions.--A digital audio
transmission of a sound recording fixed on or after January
1, 1923, and before February 15, 1972, shall, for purposes of
subsection (a), be considered to be authorized and made with
the consent of the rights owner if--
``(1) the transmission is made by a transmitting entity
that is publicly performing sound recordings fixed on or
after February 15, 1972, by means of digital audio
transmissions subject to section 114;
``(2) the transmission would satisfy the requirements for
statutory licensing under section 114(d)(2), or would be
exempt under section 114(d)(1), if the sound recording were
fixed on or after February 15, 1972;
``(3) in the case of a transmission that would not be
exempt under section 114(d)(1) as described in paragraph (2),
the transmitting entity pays statutory royalties and provides
notice of its use of the relevant sound recordings in the
same manner as is required by regulations adopted by the
Copyright Royalty Judges for sound recordings fixed on or
after February 15, 1972; and
``(4) in the case of a transmission that would not be
exempt under section 114(d)(1) as described in paragraph (2),
the transmitting entity otherwise satisfies the requirements
for statutory licensing under section 114(f)(4)(B).
``(c) Transmissions by Direct Licensing of Statutory
Services.--
``(1) In general.--A transmission of a sound recording
fixed on or after January 1, 1923, and before February 15,
1972, shall, for purposes of subsection (a), be considered to
be authorized and made with the consent of the rights owner
if such transmission is included in a license agreement
voluntarily negotiated at any time between the rights owner
and the entity performing the sound recording.
``(2) Payment of royalties to nonprofit collective.--To the
extent that such a license agreement entered into on or after
the date of the enactment of this section extends to digital
audio transmissions of a sound recording fixed on or after
January 1, 1923, and before February 15, 1972, that meet the
conditions of subsection (b), the licensee shall pay, to the
collective designated to distribute receipts from the
licensing of transmissions in accordance with section 114(f),
50 percent of the performance royalties for the transmissions
due under the license, with such royalties fully credited as
payments due under the license.
``(3) Distribution of royalties by collective.--The
collective described in paragraph (2) shall, in accordance
with subparagraphs (B) through (D) of section 114(g)(2), and
paragraphs (5) and (6) of section 114(g)), distribute the
royalties received under paragraph (2) under the license
described in paragraph (2). Such payments shall be the only
payments to which featured and nonfeatured artists are
entitled by virtue of the transmissions described in
paragraph (2) under the license.
``(4) Rule of construction.--This section does not prohibit
any other license from directing the licensee to pay other
royalties due to featured and nonfeatured artists for such
transmissions to the collective designated to distribute
receipts from the licensing of transmissions in accordance
with section 114(f).
``(d) Relationship to State Law.--
``(1) In general.--Nothing in this section shall be
construed to annul or limit any rights or remedies under the
common law or statutes of any State for sound recordings
fixed before February 15, 1972, except, notwithstanding
section 301(c), for the following:
``(A) This section preempts any claim of common law
copyright or equivalent right under the laws of any State
arising from any digital audio transmission that is made, on
and after the date of the enactment of this section, of a
sound recording fixed on or after January 1, 1923, and before
February 15, 1972.
``(B) This section preempts any claim of common law
copyright or equivalent right under the laws of any State
arising from any reproduction that is made, on and after the
date of the enactment of this section, of a sound recording
fixed on or after January 1, 1923, and before February 15,
1972, and that would satisfy the requirements for statutory
licensing under paragraphs (1) and (6) of section 112(e), if
the sound recording were fixed on or after February 15, 1972.
``(C) This section preempts any claim of common law
copyright or equivalent right under the laws of any State
arising from any digital audio transmission or reproduction
that is made, before the date of the enactment of this
section, of a sound recording fixed on or after January 1,
1923, and before February 15, 1972, if--
``(i) the digital audio transmission would have satisfied
the requirements for statutory licensing under section
114(d)(2) or been exempt under section 114(d)(1), or the
reproduction would have satisfied the requirements of section
112(e)(1), as the case may be, if the sound recording were
fixed on or after February 15, 1972; and
``(ii) except in the case of transmissions that would have
been exempt under section 114(d)(1), the transmitting entity,
before the end of the 270-day period beginning on the date of
the enactment of this section, pays statutory royalties and
provides notice of the use of the relevant sound recordings
in the same manner as is required by regulations adopted by
the Copyright Royalty Judges for sound recordings that are
protected under this title for all the digital audio
transmissions and reproductions satisfying the requirements
for statutory licensing under section 114(d)(2) and section
112(e)(1) during the 3 years prior to the date of the
enactment of this section.
``(2) Rule of construction for common law copyright.--For
purposes of subparagraphs (A) through (C) of paragraph (1), a
claim of common law copyright or equivalent right under the
laws of any State includes a claim that characterizes conduct
subject to such subparagraphs as an unlawful distribution,
act of record piracy, or similar violation.
``(3) Rule of construction for public performance rights.--
Nothing in this section shall be construed to recognize or
negate the existence of public performance rights in sound
recordings under the laws of any State.
``(e) Limitations on Remedies.--
``(1) Fair use; uses by libraries, archives, and
educational institutions.--The limitations on the exclusive
rights of a copyright owner described in sections 107, 108,
and 110(1) and (2) shall apply to a claim under subsection
(a) for the unauthorized performance of a sound recording
fixed on or after January 1, 1923, and before February 15,
1972.
``(2) Actions.--The limitations on actions described in
section 507 shall apply to a claim under subsection (a) for
the unauthorized performance of a sound recording fixed on or
after January 1, 1923, and before February 15, 1972.
``(3) Material online.--Section 512 shall apply to a claim
under subsection (a) for the unauthorized performance of a
sound recording fixed on or after January 1, 1923, and before
February 15, 1972.
``(4) Principles of equity.--Principles of equity apply to
remedies for a violation of this section to the same extent
as such principles apply to remedies for infringement of
copyright.
``(5) Filing requirement for statutory damages and
attorneys' fees.--
``(A) Filing of information on sound recordings.--
``(i) Filing requirement.--Except in the case of a
transmitting entity that has filed contact information for
that transmitting entity under subparagraph (B), in any
action under this section, an award of statutory damages or
of attorneys' fees under section 504 or 505 may be made with
respect to an unauthorized transmission of a sound recording
under subsection (a) only if--
``(I) the rights owner has filed with the Copyright Office
a schedule that specifies the title, artist, and rights owner
of the sound recording and contains such other information,
as practicable, as the Register of Copyrights prescribes by
regulation; and
``(II) the transmission is made after the end of the 90-day
period beginning on the date on which the information filed
under subclause (I) is indexed into the public records of the
Copyright Office.
``(ii) Regulations.--The Register of Copyrights shall,
before the end of the 180-day period beginning on the date of
the enactment of this section, issue regulations establishing
the form, content, and procedures for the filing of schedules
under clause (i). Such regulations shall provide that persons
may request that they receive timely notification of such
filings, and shall set forth the manner in which such
requests may be made.
``(B) Filing of contact information for transmitting
entities.--
``(i) Filing requirement.--The Register of Copyrights
shall, before the end of the 30-day period beginning on the
date of the enactment of this section, issue regulations
establishing the form, content, and procedures for the
filing, by any entity that, as of the date of the enactment
of this section, performs sound recordings fixed before
February 15, 1972, by means of digital audio transmissions,
of contact information for such entity.
``(ii) Time limit on filings.--The Register of Copyrights
may accept filings under clause (i) only until the 180th day
after the date of the enactment of this section.
``(iii) Limitation on statutory damages and attorneys'
fees.--
``(I) Limitation.--An award of statutory damages or of
attorneys' fees under section 504 or 505 may not be made,
against an entity that has filed contact information for that
entity under clause (i), with respect to an unauthorized
transmission by that entity of a sound recording under
subsection (a) if the transmission is made before the end of
the
[[Page H3535]]
90-day period beginning on the date on which the entity
receives a notice that--
``(aa) is sent by or on behalf of the rights owner of the
sound recording;
``(bb) states that the entity is not legally authorized to
transmit that sound recording under subsection (a); and
``(cc) identifies the sound recording in a schedule
conforming to the requirements prescribed by the regulations
issued under subparagraph (A)(ii).
``(II) Undeliverable notices.--In any case in which a
notice under subclause (I) is sent to an entity by mail or
courier service and the notice is returned to the sender
because the entity either is no longer located at the address
provided in the contact information filed under clause (i) or
has refused to accept delivery, or the notice is sent by
electronic mail and is undeliverable, the 90-day period under
subclause (I) shall begin on the date of the attempted
delivery.
``(C) Section 412.--Section 412 shall not limit an award of
statutory damages under section 504(c) or attorneys' fees
under section 505 with respect to an unauthorized
transmission of a sound recording under subsection (a).
``(6) Applicability of other provisions.--
``(A) In general.--Subject to subparagraph (B), no
provision of this title shall apply to or limit the remedies
available under this section except as otherwise provided in
this section.
``(B) Applicability of definitions.--Any term used in this
section that is defined in section 101 shall have the meaning
given that term in section 101.
``(f) Application of Section 230 Safe Harbor.--For purposes
of section 230 of the Communications Act of 1934 (47 U.S.C.
230), subsection (a) shall be considered to be a `law
pertaining to intellectual property' under subsection (e)(2)
of such section.
``(g) Rights Owner Defined.--In this section, the term
`rights owner' means the person who has the exclusive right
to reproduce a sound recording under the laws of any
State.''.
(b) Conforming Amendment.--The table of chapters for title
17, United States Code, is amended by adding at the end the
following new chapter:
``14. Unauthorized digital performance of pre-1972 sound rec1401''.....
SEC. 203. EFFECTIVE DATE.
This title and the amendments made by this title shall take
effect on the date of the enactment of this Act.
TITLE III--ALLOCATION FOR MUSIC PRODUCERS
SEC. 301. SHORT TITLE.
This title may be cited as the ``Allocation for Music
Producers Act'' or the ``AMP Act''.
SEC. 302. PAYMENT OF STATUTORY PERFORMANCE ROYALTIES.
(a) Letter of Direction.--Section 114(g) of title 17,
United States Code, is amended by adding at the end the
following new paragraph:
``(5) Letter of direction.--
``(A) In general.--A nonprofit collective designated by the
Copyright Royalty Judges to distribute receipts from the
licensing of transmissions in accordance with subsection (f)
shall adopt and reasonably implement a policy that provides,
in circumstances determined by the collective to be
appropriate, for acceptance of instructions from an artist
payee identified under subparagraph (A) or (D) of paragraph
(2) to distribute, to a producer, mixer, or sound engineer
who was part of the creative process that created a sound
recording, a portion of the payments to which the artist
payee would otherwise be entitled from the licensing of
transmissions of the sound recording. In this section, such
instructions shall be referred to as a `letter of direction'.
``(B) Acceptance of letter.--To the extent that the
collective accepts a letter of direction under subparagraph
(A), the person entitled to payment pursuant to the letter of
direction shall, during the period in which the letter of
direction is in effect and carried out by the collective, be
treated for all purposes as the owner of the right to receive
such payment, and the artist payee providing the letter of
direction to the collective shall be treated as having no
interest in such payment.
``(C) Authority of collective.--This paragraph shall not be
construed in such a manner so that the collective is not
authorized to accept or act upon payment instructions in
circumstances other than those to which this paragraph
applies.''.
(b) Additional Provisions for Recordings Fixed Before
November 1, 1995.--Section 114(g) of title 17, United States
Code, as amended by subsection (a), is further amended by
adding at the end the following new paragraph:
``(6) Sound recordings fixed before november 1, 1995.--
``(A) Payment absent letter of direction.--A nonprofit
collective designated by the Copyright Royalty Judges to
distribute receipts from the licensing of transmissions in
accordance with subsection (f) (in this paragraph referred to
as the `collective') shall adopt and reasonably implement a
policy that provides, in circumstances determined by the
collective to be appropriate, for the deduction of 2 percent
of all the receipts that are collected from the licensing of
transmissions of a sound recording fixed before November 1,
1995, but which is withdrawn from the amount otherwise
payable under paragraph (2)(D) to the recording artist or
artists featured on the sound recording (or the persons
conveying rights in the artists' performance in the sound
recording), and the distribution of such amount to one or
more persons described in subparagraph (B), after deduction
of costs described in paragraph (3) or (4), as applicable, if
each of the following requirements is met:
``(i) Certification of attempt to obtain a letter of
direction.--The person described in subparagraph (B) who is
to receive the distribution has certified to the collective,
under penalty of perjury, that--
``(I) for a period of at least 4 months, that person made
reasonable efforts to contact the artist payee for such sound
recording to request and obtain a letter of direction
instructing the collective to pay to that person a portion of
the royalties payable to the featured recording artist or
artists; and
``(II) during the period beginning on the date that person
began the reasonable efforts described in subclause (I) and
ending on the date of that person's certification to the
collective, the artist payee did not affirm or deny in
writing the request for a letter of direction.
``(ii) Collective attempt to contact artist.--After receipt
of the certification described in clause (i) and for a period
of at least 4 months before the collective's first
distribution to the person described in subparagraph (B), the
collective attempted, in a reasonable manner as determined by
the collective, to notify the artist payee of the
certification made by the person described in subparagraph
(B).
``(iii) No objection received.--The artist payee did not,
as of the date that is 10 business days before the date on
which the first distribution is made, submit to the
collective in writing an objection to the distribution.
``(B) Eligibility for payment.--A person shall be eligible
for payment under subparagraph (A) if the person--
``(i) is a producer, mixer, or sound engineer of the sound
recording;
``(ii) has entered into a written contract with a record
company involved in the creation or lawful exploitation of
the sound recording, or with the recording artist or artists
featured on the sound recording (or the persons conveying
rights in the artists' performance in the sound recording),
under which the person seeking payment is entitled to
participate in royalty payments that are based on the
exploitation of the sound recording and are payable from
royalties otherwise payable to the recording artist or
artists featured on the sound recording (or the persons
conveying rights in the artists' performance in the sound
recording);
``(iii) made a creative contribution to the creation of the
sound recording; and
``(iv) submits a written certification to the collective
stating, under penalty of perjury, that the person meets the
requirements in clauses (i) through (iii) and includes a true
copy of the contract described in clause (ii).
``(C) Multiple certifications.--Subject to subparagraph
(D), in a case in which more than one person described in
subparagraph (B) has met the requirements for a distribution
under subparagraph (A) with respect to a sound recording as
of the date that is 10 business days before the date on which
a distribution is made, the collective shall divide the 2
percent distribution equally among all such persons.
``(D) Objection to payment.--Not later than 10 business
days after the date on which the collective receives from the
artist payee a written objection to a distribution made
pursuant to subparagraph (A), the collective shall cease
making any further payment relating to such distribution. In
any case in which the collective has made one or more
distributions pursuant to subparagraph (A) to a person
described in subparagraph (B) before the date that is 10
business days after the date on which the collective receives
from the artist payee an objection to such distribution, the
objection shall not affect that person's entitlement to any
distribution made before the collective ceases such
distribution under this subparagraph.
``(E) Ownership of the right to receive payments.--To the
extent that the collective determines that a distribution
will be made under subparagraph (A) to a person described in
subparagraph (B), such person shall, during the period
covered by such distribution, be treated for all purposes as
the owner of the right to receive such payments, and the
artist payee to whom such payments would otherwise be payable
shall be treated as having no interest in such payments.
``(F) Artist payee defined.--In this paragraph, the term
`artist payee' means a person, other than a person described
in subparagraph (B), who owns the right to receive all or
part of the receipts payable under paragraph (2)(D) with
respect to a sound recording. In a case in which there are
multiple artist payees with respect to a sound recording, an
objection by one such payee shall apply only to that payee's
share of the receipts payable under paragraph (2)(D), and
does not preclude payment under subparagraph (A) from the
share of an artist payee that does not so object.''.
(c) Technical and Conforming Amendments.--Section 114(g) of
title 17, United States Code, as amended by subsections (a)
and (b), is further amended--
(1) in paragraph (2), by striking ``An agent designated''
and inserting ``Except as provided for in paragraph (6), a
nonprofit collective designated by the Copyright Royalty
Judges'';
[[Page H3536]]
(2) in paragraph (3)--
(A) by striking ``nonprofit agent designated'' and
inserting ``nonprofit collective designated by the Copyright
Royalty Judges'';
(B) by striking ``another designated agent'' and inserting
``another designated nonprofit collective''; and
(C) by striking ``agent'' and inserting ``collective'' each
subsequent place it appears;
(3) in paragraph (4)--
(A) by striking ``designated agent'' and inserting
``nonprofit collective''; and
(B) by striking ``agent'' and inserting ``collective'' each
subsequent place it appears; and
(4) by adding at the end the following new paragraph:
``(7) Preemption of state property laws.--The holding and
distribution of receipts under section 112 and this section
by a nonprofit collective designated by the Copyright Royalty
Judges in accordance with this subsection and regulations
adopted by the Copyright Royalty Judges shall supersede and
preempt any State law (including common law) concerning
escheatment or abandoned property, or any analogous
provision, that might otherwise apply.''.
SEC. 303. EFFECTIVE DATE.
(a) In General.--Except as provided in subsection (b), this
title and the amendments made by this title shall take effect
on the date of the enactment of this Act.
(b) Delayed Effective Date.--The effective date for
paragraphs (5)(B) and (6)(E) of section 114(g) of title 17,
United States Code, as added by section 302, shall be January
1, 2020.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Virginia (Mr. Goodlatte) and the gentleman from New York (Mr. Nadler)
each will control 20 minutes.
The Chair recognizes the gentleman from Virginia.
General Leave
Mr. GOODLATTE. Mr. Speaker, I ask unanimous consent that all Members
may have 5 legislative days within which to revise and extend their
remarks and include extraneous materials on H.R. 5447, currently under
consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Virginia?
There was no objection.
Mr. GOODLATTE. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, today, the House brings early 20th century music laws
for the analog era into the 21st century digital era. These changes are
a culmination of years of effort by interested parties as well as by
many members of the Judiciary Committee.
The problems and failures in our Nation's music laws have imposed
real financial costs upon artists and creators. Music is no longer
written on piano rolls and our laws shouldn't be based on that
technology any longer either.
Several years ago, the Judiciary Committee began a comprehensive
review of our Nation's copyright laws. We held dozens of hearings,
heard from over 100 witnesses, and traveled to multiple cities across
the country to hear directly from stakeholders who use these laws. This
review provided the foundation upon which several bills to reform our
copyright laws were constructed.
During the course of this review, we learned that our music licensing
laws were no longer working as intended for songwriters, artists, and
creators, or for the companies that deliver the music in innovative
ways for consumers.
Specifically, we have heard about several key problems, including a
dysfunctional mechanical licensing system that seems to generate more
paperwork and attorneys' fees than royalties; a need to provide
protection for pre-1972 performances; a lack of recognition in the law
for the creative input of producers, sound engineers, and mixers; and a
lack of a unified rate standard for music royalties.
The Judiciary Committee regularly hears from a variety of groups
interested in copyright law, and it will not surprise anyone to know
that, typically, not everyone agrees regarding what changes to title 17
are necessary. One person's problem may be another's benefit, and some
have preferred a broken system over an unknown change.
However, in a reflection of how bad our music statutes are, the
opposite is true with respect to the bill before us today. Every party
that has spoken about music recognizes the problems caused by our
current licensing framework and wants real solutions. The existing
music provisions of title 17 are simply that bad.
I tasked the industry to come together with a unified reform bill
and, to their credit, they delivered, albeit with an occasional bump
along the way. Today, the major players in the music industry are
unified in supporting comprehensive music licensing reform to bring the
state of our Nation's copyright laws into the digital age that the
industry itself has already transitioned to.
While no bill is perfect, by all accounts, this is a bill with
overwhelming consensus behind it. Groups that represent songwriters,
musical works copyright owners, digital music providers, individual
artists, sound recording copyright owners, artist guilds, and
performing rights organizations all support the bill.
The reasons for such widespread support are clear:
The Music Modernization Act boosts payments for copyright owners and
artists by shifting the reasonable costs of a new mechanical licensing
collective onto digital music services that, themselves, benefit from
reduced litigation costs as a result of other provisions in the bill.
Songwriters gain a seat at the table in seeing how their royalties
are collected and then allocated.
Pre-1972 artists who currently go unpaid will finally see royalties
for their creations, as will sound engineers, mixers, and producers.
The public benefits, too, by having immediate access to all music on
their favorite services. Furthermore, libraries and archives gain
educational and fair use access to pre-1972 works currently governed
under State law.
This bill is the work product of many stakeholders and many Members.
I want to highlight the work of several of my colleagues, including the
ranking member, who were leaders in working on the underlying
components of this bill.
I want to especially thank Mr. Collins and Mr. Jeffries for their
leadership on section 115 reform. I would like to thank Mr. Issa and
Mr. Nadler for their leadership on behalf of pre-1972 performers. I
would also like to thank Mr. Crowley and Mr. Rooney for their efforts
on behalf of producers, mixers, and sound engineers.
And last but not least, I would like to thank Ranking Member Nadler
for his leadership on these issues and for his willingness to partner
with me in putting these pieces together into a comprehensive and
consensus music licensing reform package.
Sometimes big pieces of legislation can come together only through
the efforts of a large number of people who invest their time in making
change happen, as so many Members and so many stakeholders in the music
and digital delivery communities have done. It also has to happen at
the right time.
I would note that only 1 week ago, GRAMMYs on the Hill brought
hundreds of artists to D.C. to explain to their own Members of Congress
how important an updated licensing system is to them. This bill
delivers that for them just 1 day before World Intellectual Property
Day, when we recognize the value of intellectual property and those who
create it. So I am on safe ground when I say that this bill fits right
into the perfect sweet spot on both timing and substance.
Mr. Speaker, I urge my colleagues to support this important piece of
legislation, and I reserve the balance of my time.
Mr. NADLER. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in support of the Music Modernization Act. I am
proud to partner with Chairman Goodlatte on this comprehensive bill
intended to resolve some longstanding inequities and inefficiencies in
the music marketplace. We have achieved consensus on this bill, which
passed out of the Judiciary Committee by a remarkable vote of 32-0.
The package includes the original Music Modernization Act, H.R. 4706,
introduced by Mr. Collins and Mr. Jeffries, which significantly reforms
the process for licensing mechanical reproduction royalties under
section 115 of the Copyright Act. It also includes a number of
provisions to ensure that songwriters and other music creators receive
fair market value for their work.
The package includes the CLASSICS Act, H.R. 3301, introduced by
Chairman
[[Page H3537]]
Issa and me, to resolve the dispute over payment to legacy artists for
pre-1972 works played on digital radio platforms.
For too long, many of our Nation's great cultural icons have been
unfairly denied compensation. That is why this measure is supported by
the NAACP and more than 300 major artists.
The bill includes the AMP Act, H.R. 831, introduced by Mr. Crowley
and Mr. Rooney, to simplify the payment of royalties to producers,
mixers, and engineers, recognizing in Federal copyright their important
contributions to the creation of music.
Several of these measures were included in the Fair Play Fair Pay
Act, H.R. 1836, a bipartisan bill I introduced with Representative
Marsha Blackburn, Chairman Issa, and Mr. Deutch, to create a uniform
system for sound recordings. They, along with Mr. Collins and Mr.
Jeffries, deserve a tremendous amount of credit for getting us to this
point.
We are at a unique moment in time where virtually all the industry
stakeholders have come together in support of a common music policy
agenda. The bill is supported by a broad coalition that includes
songwriters and artists, publishers and labels, and internet and
digital media companies such as Pandora, Spotify, Google, and Amazon.
I want to thank the members of my staff who worked for years to
resolve some very complex and sensitive issues to move this legislation
forward: Lisette Morton, Jason Everett, and David Greengrass. This is
an historic opportunity to accomplish a great deal that hasn't been
done in decades.
Mr. Speaker, I urge all of my colleagues to support the Music
Modernization Act, and I reserve the balance of my time.
{time} 1415
Mr. GOODLATTE. Mr. Speaker, I yield 5 minutes to the gentleman from
Georgia (Mr. Collins), a member of the Judiciary Committee and a key
legislator in making sure that this legislation moves forward. He has
worked very, very hard on it.
Mr. COLLINS of Georgia. Mr. Speaker, I rise today in support of H.R.
5447, the Music Modernization Act.
It has already been said that this bill combines critical pieces of
legislation to update our laws, including legislation that I authored,
the Music Modernization Act, but it also represents the CLASSICS Act,
the AMP Act, and rate standardization, things that have been negotiated
for a long period of time.
As we have looked at this and we have talked about it, this is a bill
today that comes to the floor with overwhelming support, not just on
this floor, not just in the committee where it passed 32-0. It comes to
this floor with an industry that many times couldn't even decide that
they wanted to talk to each other about things in their industry, but
who came together with overwhelming support and said this is where we
need to be.
I can remember when the chairman first laid out a vision that would
deal with copyright. Most thought it was a dream that would never
happen. In fact, some thought we would never even get text that people
could agree on. They were wrong, because we did.
I want to thank the leadership of Chairman Goodlatte and Ranking
Member Nadler for their tireless commitment to getting something done
on copyright, which ultimately got us here. I thank their staffs: Joe
Keeley, Lisette Morton, and Jason Everett.
Also in this, Mr. Speaker, there is someone whom I also want to thank
who, not only in this bill but in many others, epitomizes to me what is
good about this institution. The Music Modernization Act has put my
friend Hakeem Jeffries and I in, again, a leading role and is living
proof that a rural Member from northeast Georgia and a Democrat from
Brooklyn can find common ground. With Hakeem and I, we know that we can
come together with good product when we have the right intentions in
mind.
Senators Hatch and Alexander have been champions in the Senate, where
they have introduced companion legislation. Congressmen Issa, Rooney,
and Crowley have all been key players, and many from different States
have all taken part in this. As I have said earlier, they come from
many places: David Israelite with NMPA; Bart Herbison from Nashville
Songwriters Association International; Dina LaPolt, Michelle Lewis, and
Kay Hanley from SONA; Beth Mathews from ASCAP; Mike O'Neill from BMI;
Chris Harrison from Digital Media; Michael Beckerman from Internet
Association; Mitch Glazier from Recording Industry Association of
America; Todd Dupler and Darryl Friedman from Recording Academy; and
others, such as Rick Carnes, Mike Huppe, Curtis LeGeyt, and many
others; also my friends, one sitting behind me, Marsha Blackburn as
well, who has been at the forefront of this.
Mr. Speaker, before I finish up in just a little bit, I do need to
thank two more, and that is my staff, who have lived with me, who have
worked with me for a long time: Brendan Belair, my chief of staff, who
has kept us on target; and Sally Rose Larson. You couldn't meet a
better steel magnolia, who has shown herself to be such an invaluable
asset during this process.
Mr. Speaker, I want to end not with the bill. We will talk about it.
But what brought me to this point and what brought me to this area and
why this is so important today as we move forward for generations of
others: I want to take you back in time almost 40-plus years to a state
trooper's kid in north Georgia whose friends were books, whose friends
were music, a radio, and songs that came true. It was in there that
those songs that would come out, the music and lyrics, would take me to
places far away from northeast Georgia and let me travel the world long
before I could even drive a car.
When we talk about copyright and we talk about the creator's spirit,
it is about the creator's spirit, what comes out of their heart, that
comes out of their mind, that comes through their hands and out of
their mouths and into the lives that touch everyone of whom we become a
part.
This is about something bigger than ourselves. And my friend Hakeem
and all the rest who have worked on this show that this place, when put
properly forward, can touch the very soul of America. We have new ways
of hearing that music nowadays, long past a radio. And the digital
companies needed a place where they could give music to others, but
songwriters needed to be fairly compensated.
When I think of my friends who write music--Hakeem, we have talked to
so many--it is about hopes, it is about dreams, it is about everything
in this place. Any one of us in here would think of a song that could
make us think of the first time we fell in love, the first time we had
our heart broken, the first time we laid someone to rest, the first
time we got that joyful noise of a new job or a new hope.
Today, Mr. Speaker, we come carrying the dreams of those who have not
even yet understood a song, of those who have not yet understood a
melody. We carry those dreams into the future.
And I want to thank everybody who has been a part of this, because
today the song lives on, because it all begins with that emotion, with
that heart, and with that melody.
Mr. NADLER. Mr. Speaker, I yield 2 minutes to the gentleman from New
York (Mr. Jeffries), the Democratic lead sponsor of the original Music
Modernization Act.
Mr. JEFFRIES. Mr. Speaker, I thank my good friend, the distinguished
ranking member, for yielding, for his leadership, and, of course, to
the chairman of the committee and to so many other Members:
Representative Issa, Representative Rooney, and Representative Crowley
and many, many others who have worked hard on this particular piece of
legislation.
Of course, above all else, I want to thank my good friend and
colleague, Congressman Doug Collins, who has been a phenomenal leader
in bringing stakeholders together from across the music ecosystem,
bringing folks together from the digital industry, bringing the
National Association of Broadcasters together to help us reach this
moment where we have a consensus product that can ensure that the
people of America and the Nation can continue to enjoy the music we
have come to know and love.
Article 1, section 8, clause 8 of the United States Constitution
gives Congress the power to promote and create a robust intellectual
property system in order to, in the words of the Founding Fathers,
promote the progress of
[[Page H3538]]
science and useful arts. The Founding Fathers of this great Nation
understood that we should incentivize creative brilliance and
incentivize innovation and, in that context, that the creator should be
able to benefit from the fruits of their labor and, in doing so, will
continue to share their creative brilliance with the world.
In the context of music, we know that the manner in which we have
consumed music has changed over time: from vinyl to 8-track, from 8-
track to cassette, from cassette to CD, from CD to downloads, from
downloading to streaming. The manner in which we consume music has
changed, but the underlying brilliance and beauty and creativity of
that music remains the same.
Consistent with what the Founding Fathers have suggested, we need a
modern-day music licensing system, and that is what the MMA will
accomplish. I am thankful that it has brought together not just
stakeholders and industry, but it has brought together a Jerry Nadler
and a Chairman Goodlatte, a Darrell Issa and a Joe Crowley. It has
brought together a conservative Republican from Georgia and a
progressive Democrat from the people's republic of Brooklyn.
Music is a unifying force. It has the power to bring us together. We
should have the power to modernize our system on behalf of these
brilliant creators.
Mr. GOODLATTE. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman
from Florida (Mr. Rutherford), a member of the Judiciary Committee.
Mr. RUTHERFORD. Mr. Speaker, music has been an integral part of the
fabric of our culture for hundreds of years because it can capture a
moment in time and space like nothing else. You remember where you were
the first time you heard that special song, and time after time, it
takes you back to a moment and a place of significance in your life.
For me, Mr. Speaker, one of the most meaningful songs in my life is
``More Today Than Yesterday'' by The Spiral Starecase. It just so
happens that that song signifies the bond between my wife, Pat, and I
that we have shared now for over 45 years. And I can tell you, it is a
priceless reminder of our lives and so many special moments together.
And while we may not be able to put a price on a song's ability to
transport us to a memory, we can all agree that the creators of the
music we hold so dear should be fairly compensated for their craft.
That is why I am so pleased to support the Music Modernization Act,
which offers a long-overdue update to our copyright laws to account for
the changing ways we consume music. Songwriters, musicians, producers,
engineers, and artists should all have the opportunity to receive their
fair due. And I thank Chairman Goodlatte, Ranking Member Nadler, and
Representatives Collins and Jeffries for all their hard work to ensure
that our copyright laws are all singing from the same sheet of music.
Mr. NADLER. Mr. Speaker, I yield 2 minutes to the gentleman from
Florida (Mr. Deutch), one of the Democratic lead sponsors of this bill
as well as of the Fair Play Fair Pay Act and the CLASSICS Act.
Mr. DEUTCH. Mr. Speaker, I thank the ranking member and the chairman
for their leadership. I thank Congressman Jeffries and Congressman
Collins for helping to shepherd the bill to this point.
It is a pleasure to vote on these much-needed consensus reforms.
Consensus on copyright has been difficult. It has been difficult to
forge between the various interests represented in the content and the
tech communities but, fortunately, we now have consensus. Much of that
has been borne out of true necessity, the technological demands of
licensing tens of millions of songs and streaming services, and much of
it has been borne out of basic fairness. Recording artists,
songwriters, producers, and engineers deserve to be paid for their
creativity and genius; and digital services deserve more certainty in
their operations. The current system is broken.
As someone who cares deeply about music and the incredible people who
are a part of making it and who understands the importance of the
intersection of technology and creative works that benefit all American
music fans, I really feel privileged to be part of this process of
modernizing our copyright laws. The Music Modernization Act does not
include everything that I have supported to bring fairness and 21st-
century sophistication to the copyright laws, but it takes big steps
forward toward those goals.
I am hopeful that, with this bill, it will help to ensure that we all
continue to benefit from the amazing artists of yesterday and today and
the innovative technologies that bring them into our lives.
Mr. Speaker, I urge my colleagues to support the Music Modernization
Act.
Mr. GOODLATTE. Mr. Speaker, at this time I yield 2\1/2\ minutes to
the gentlewoman from Tennessee (Mrs. Blackburn), who is from music-
loving Tennessee and a great champion for the music industry and people
who love music around our country.
Mrs. BLACKBURN. Mr. Speaker, what an honor it is to stand here today
and to celebrate the bipartisan work that has been done on this
legislation and to bring it to this point.
Indeed, this is something on which we can all agree: that the
creative community, these wonderful creators, have that constitutional
protection to what they create, the right to be compensated for their
creation. And I am so appreciative that that has already been mentioned
in this debate.
Chairman Goodlatte said I come from music-loving Tennessee, and
indeed I do. And we are so pleased that we are known as Music City and
that, whether it is classical music or country or gospel, that you are
going to hear music from every hill and every valley. And we treasure
that creative community and protecting that product that they do
create.
Now, one of the things that has happened through time: With the
change of delivery systems, it has become more difficult for these
artists and these creators and the support network around them, the
engineers, those who work on producing this product, to be
appropriately compensated. This bill, as Doug Collins mentioned, has
been in the works for years; and the CLASSICS Act, to take care of
those who are now no longer able to tour and to make certain that they
and their heirs are able to be compensated for that music that they
have created.
One thing to bear in mind: Songwriters and musicians are truly small-
business people. They work for themselves. Their stock and trade is
their idea. And they have the right to commercialize that idea and to
be compensated. The Music Modernization Act and the different bills
that it brings together to update this system, to protect those
copyrights, and to make certain that the creators are compensated, has
been a collaborative effort.
{time} 1430
Chairman Goodlatte and Congressman Collins have been to Nashville
several times to meet with stakeholders and to hear their stories
firsthand. We are grateful for that, we are grateful for the
bipartisanship, and we are very grateful for the passage of this
legislation.
Mr. NADLER. Mr. Speaker, I yield 2 minutes to the gentleman from
Georgia (Mr. Johnson), the ranking member of the Committee on the
Judiciary Subcommittee on Courts, Intellectual Property, and the
Internet.
Mr. JOHNSON of Georgia. Mr. Speaker, I rise in support of the Music
Modernization Act, and I am also proud to be a cosponsor. This
comprehensive music bill will help create an efficient and fair music
licensing system.
Currently, streaming services have to obtain licenses on a song-by-
song basis. The Music Modernization Act would reform section 115 of the
Copyright Act by establishing a collective to offer blanket licenses to
streaming services for mechanical rights.
Under current law, only sound recordings made after 1972 receive
payments from digital radio services under Federal law. This bill would
benefit legacy artists and music creators who recorded music before
1972 by establishing royalty payments whenever their music is played on
digital radio.
That is why this section of the bill is supported by Dionne Warwick,
Duke Fakir of the Four Tops, Tina Turner, and the estates of Miles
Davis and Otis Redding, among many others. The bill provides producers
a right to collect
[[Page H3539]]
digital royalties and provides a process for studio professionals to
receive royalties for their contributions to the creation of music.
This bill would, for the first time, add producers and engineers who
play an important role in the creation of sound recordings to the U.S.
copyright law.
Music organizations representing U.S. music publishers, record
labels, songwriters, composers, artists, and performance rights
organizations support this bill. The reforms made by this bill are
critical because the royalty system has not kept pace with the digital
age. These changes will benefit consumers, creators, and the entire
music marketplace.
I urge my colleagues to vote for this bill. I commend the efforts of
Doug Collins, Hakeem Jeffries, and Chairman Goodlatte, as well as
Ranking Member Nadler for shepherding this legislation to this point.
Mr. GOODLATTE. Mr. Speaker, may I ask how much time I have left?
The SPEAKER pro tempore. The gentleman from Virginia has 5\1/2\
minutes remaining. The gentleman from New York has 12 minutes
remaining.
Mr. GOODLATTE. Mr. Speaker, I reserve the balance of my time.
Mr. NADLER. Mr. Speaker, I yield 2 minutes to the gentleman from
Rhode Island (Mr. Cicilline).
Mr. CICILLINE. Mr. Speaker, I rise today in support of the Music
Modernization Act. I am proud to be a cosponsor of this bill.
I am proud to come from the great State of Rhode Island, the State
that sent the great Senator Claiborne Pell to Washington. It was
Senator Pell who authored the bill that established the National
Endowment for the Arts and the National Endowment for the Humanities.
Senator Pell knew that the greatness of our Nation is not only
defined by the strength of our military or the value of our GDP, but by
our ability to promote and protect our culture and history through the
arts and humanities.
In keeping with that tradition today, Congress moves to make sure
that artists and their creations are protected under the Music
Modernization Act. Music has always been a part of our culture and
history. The power of music has brought people together in moments of
celebration and soothed people in difficult times. Music transcends
political, ethnic, and religious boundaries.
The Music Modernization Act is the culmination of years of debate and
negotiation with various stakeholders. We held dozens of hearings and
heard from artists, producers, and industry experts to develop a
solution that reflects the changing landscape of how people consume
music and ensures creators are fairly compensated.
From the start, we were committed to making sure this bill was
bipartisan and a compromise that everyone could support. Within the
music community, this legislation brought together an unprecedented
coalition of music publishers, record labels, songwriters, composers,
artists, and performance rights organizations.
The result was a bill that is meant for the digital age and
recognizes the contributions that many people are involved in during
the creation of a song. For the first time, this bill will set up a
collective that can give out blanket mechanical licenses to streaming
services and ensure proper payments to songwriters and publishers.
Importantly, this bill also ensures compensation for pre-1972 artists
who have been left out of the Federal copyright system for far too
long. It also provides a clearer process for engineers, mixers, and
producers to collect royalties.
It has been a privilege to be a part of this historic moment. I urge
all of my colleagues to support the Music Modernization Act, and I want
to thank Mr. Jeffries, Mr. Collins, Mr. Deutch, Chairman Goodlatte, and
Ranking Member Nadler for their extraordinary leadership in
accomplishing what is not only significant for our committee but
significant for our ability to hear and appreciate and continue to
nurture our souls with the beauty of music.
Mr. GOODLATTE. Mr. Speaker, I yield 2\1/2\ minutes to the gentleman
from Tennessee (Mr. Roe), another Member from music-loving Tennessee
and the chairman of the Veterans' Affairs Committee.
Mr. ROE of Tennessee. Mr. Speaker, I rise today in support of H.R.
5447, the Music Modernization Act, a bipartisan bill that will finally
update our Nation's copyright laws and correct a terrible injustice
that threatens the future of quality music.
Music has changed, perhaps, more than any other industry over the
past 50 years. When the Copyright Act of 1976 was signed into law, most
people got their music on a vinyl record. I still like vinyl, I might
add. Today, you can instantly stream music to your phone from any
number of services at the touch of a button. That Copyright Act might
have been what was needed at the time, but it never could have
anticipated the radical shift in how music was consumed over the past,
even in the last 10 years.
For far too long, hardworking songwriters have been penalized under
the old system and have been paid only pennies on the dollar for their
creative works, even though their songs may have been streamed millions
of times every second around the world.
Garth Brooks' iconic song, ``The Dance,'' has been streamed tens of
millions of times; and the songwriter, Tony Arata, who wrote that
beautiful song, was paid a few hundred dollars. That is ridiculous, and
it is wrong.
Under the current system, the creative geniuses that write this music
won't be able to make a living doing what they love doing, which is
writing great songs. The Music Modernization Act seeks to fix this
discrepancy and properly recognize the hard work these songwriters put
into their craft before they simply stop writing music because they can
no longer earn enough money to survive.
As a musician myself, I understand what songwriters and performers go
through when getting a song out for the world to hear, and it is time
we recognize the contributions the songwriters make to the creative
process. This bill was supported by the entire music industry:
songwriters, record labels, music publishers, streaming services, just
to name a few. It isn't often that we have a truly bipartisan and
widely supported piece of legislation to consider, but with this bill,
we have the opportunity and can change the lives of some of our
Nation's most talented people for the better.
I strongly support H.R. 5447 and encourage all of my colleagues to
listen to their favorite song one more time before coming to the floor
and think of the person who wrote it, think about what it means, then
support this bill and truly make a difference in someone's life.
Mr. NADLER. Mr. Speaker, I yield 2 minutes to the gentlewoman from
Texas (Ms. Jackson Lee), a senior member of the Judiciary Committee.
Ms. JACKSON LEE. Mr. Speaker, I thank the gentleman very much for
yielding, and I make the very point that there are three Members on
this floor today from the Judiciary Committee who have an enormous
amount of seniority, who have seen the long journey that our talented
genius-based musical icons in our Nation have traveled to come to this
point, and so I say congratulations.
In the markup, I indicated that there was a harmonious sound coming
from the Judiciary Committee and that it was evident that we could work
together in a bipartisan manner.
I thank the chairman, Mr. Goodlatte, and the ranking member, Mr.
Nadler, who have been intimately involved; and I am reminded of all of
those who have come in and out of my office through the years as I
served on the Courts, Intellectual Property, and the Internet Committee
some years back and that they were still traveling even in this year,
2018.
So I applaud Mr. Collins and Mr. Jeffries for providing that musical
tone. This is a very important bill. It is an important bill because it
was an inconsistent patchwork that governed the industry that was in
dire need of reframing, and the MMA 2018 addresses that patchwork. And
specifically, under title II, it finally gives a just compensation to
those artists who recorded works prior to 1972.
First and foremost, the MMA is a proposition that is supported by
both the majority of songwriters and publishers and the digital service
providers.
Secondly, it modernizes the process and brings music licensing into
the 21st century--long overdue.
[[Page H3540]]
Third, it puts unclaimed royalties in the hands of the content
community, rather than sitting with digital services. It streamlines
the streamline.
Fourth, it finally creates a comprehensive database, and confidence
grows in the market.
And for all of those individuals who provided us the joy that was
earlier mentioned, it creates a formalized body run by publishers that
administer the law, the mechanical licensing and compositions streamed
on services like Spotify and Apple Music, and others; it changes the
procedure by which millions of songs are made available; and it funds
the creation of a comprehensive database, but, more importantly, it
helps those who prerecord it.
My tribute to Aretha Franklin, Dionne Warwick, the late Jackie
Wilson, Duke Fakir, The Shirelles, French Family in Houston, Bun B,
Trae tha Truth, and the late Crickets, the Ebony singers in Houston,
the Houston Grand Opera, Mrs. Barbara Tucker, End Jazz, Jason Moran,
Kirk Whalum, Howard Harris, Imani children's band, Kashmere jazz band;
and, of course, gospel, Kirk Clark, Kathy Taylor, Michael McCain, and
Georgia Adams. Houston is a hub, Mr. Speaker, and we are celebrating
because of this bill. I congratulate everyone.
Mr. Speaker, I rise in support of the Music Modernization Act of 2018
(MMA) of which I am an original cosponsor.
This bill has arrived at its current state through the diligent work
of various stakeholders involved, including the music industry,
congressional staff, and Members of Congress.
Hours of debate, negotiation, and deliberation have yielded a product
of cooperation and compromise.
I commend the industry and the parties involved in drafting this
bipartisan solution--it is rare that this committee reaches such
agreements when considering major legislation.
Houston, being a music hub with its Grammy Award winning orchestra
and Grammy nominated rappers including my dear friend Bun B from
Underground Kingz, will certainly benefit from this legislation
becoming law.
The exemplary efforts exhibited by the music industry in this
instance, with the goal of solving problems and addressing a wide
variety of stakeholder concerns, are a model that this committee and
this Congress should use as inspiration to best serve the American
people.
The need for this legislation is clear; much of the current licensing
system was established in an analog era, with non-digital physical
recordings done song-by-song, using compulsory licenses first
established in 1909.
In addition, artists who recorded works prior to 1972 do not receive
any digital performance royalties under federal law, and current
statute does not ensure that non-recording artists such as producers,
sound engineers, and mixers receive revenue from webcasts of their
work.
The inconsistent patchwork that governs the industry is in dire need
of reframing and the MMA 2018 addresses that patchwork and specifically
under Title II, finally gives just compensation to those artists who
recorded works prior to 1972.
With the MMA, Congress is fulfilling its duty to provide order and
guidance to the faulty program currently in place.
The United States has the most innovative and influential music
culture in the world, but its legal framework for music licensing dates
back to the age of the Victrola.
There is a widespread perception from across the industry that this
complex framework is under strain and needs updating.
The last general revision of the Copyright Act took place in 1976
following a lengthy and comprehensive review process carried out by
Congress, the Copyright Office, and interested parties.
Congress significantly amended the Act in 1995, with the Digital
Performance Right in Sound Recordings Act (``DPRSRA''), and 1998, with
the Digital Millennium Copyright Act (``DMCA''), to address emerging
issues of the digital age.
While the current Copyright Act reflects many sound and enduring
principles, and has enabled the internet to flourish, it could not have
foreseen all of today's technologies and the myriad ways consumers and
others engage with music in the digital environment.
First and foremost, the MMA is a proposition that is supported by
both a majority of songwriters and publishers and the (Digital Service
Providers)--two groups who rarely agree.
Secondly, it ``modernizes'' the process and brings music licensing
into the 21st century.
Instead of bulk Notices of Intention--the environmentally unfriendly
process of sending actual physical letters of intent to each publisher
for each share of each song--the licensing will be done electronically.
Third, it puts unclaimed royalties in the hands of the content
community, rather than sitting with the Digital Service Providers.
Fourth, it finally creates a comprehensive database.
While various companies and services have a version of a database,
U.S. publishers have not agreed on one that is both comprehensive and
accurate.
As part of the MMA, the digital service providers will pay for the
creation and maintenance of a database that will finally put all
mechanical licensing information in one place that is accessible to
all.
Finally, it provides streaming services with confidence that, if they
follow the process, they can accurately and comprehensively license all
the musical works on their service without fear of billion dollar
lawsuits against them.
And confidence grows markets and boosts economy.
A number of interested music industry groups have come together to
create a consensus bill that makes several major changes including:
Title I--Music Modernization Act.
The Music Modernization act creates a formalized body, run by
publishers, that administers the ``mechanical licensing'' of
compositions streamed on services like Spotify and Apple Music (these
companies are referred as Digital Service Providers or DSPs).
The bill reflects how modern digital music services operate by
creating a blanket licensing system to quickly license and pay for
musical work copyrights.
It changes the procedure by which millions of songs are made
available for streaming on these services and limits the liability a
service can incur if it adheres to the new process.
Discusses music litigation that generates legal settlements in favor
of simply ensuring that artists and copyright owners are paid in the
first place without such litigation.
The MMA funds the creation of a comprehensive database with buy in
from all the major publishers and digital service providers.
Ends the flawed U.S. Copyright Office bulk notice of intent system
that allows royalties to go unpaid.
The bill also creates a new evidentiary standard by which the
performance rights organizations American Society of Composers,
Authors, and Publishers (ASCAP) and Broadcast Music Incorporated (BMI)
can argue better rates for the performance of musical works on DSPs.
It implements uniform rate setting standards to be used by the
Copyright Royalty Board for all music services.
The bill shifts the costs of the new licensing collective created by
the bill to those who benefit from the collective--the licensees.
The MMA updates how certain rate court cases are assigned in the
Southern District of New York.
Title II--Compensating Legacy Artists for their Songs, Service, and
Important Contributions to Society (CLASSICS) Act provides a public
performance right for pre-1972 recordings.
Title III--The Allocation for Music Producers (AMP) Act ensures that
record producers, sound engineers, and other creative professionals
receive compensation for their work
I urge my colleagues to join me in support of the MMA.
Mr. GOODLATTE. Mr. Speaker, I reserve the balance of my time.
Mr. NADLER. Mr. Speaker, I yield 2 minutes to the gentlewoman from
California (Ms. Bass).
Ms. BASS. Mr. Speaker, I rise today in support of the Music
Modernization Act. I also come from one of those districts that is a
hub.
After meeting with songwriters and producers in my district and
listening to their testimony before the House Judiciary Committee, it
is clear we risk losing the next generation of songwriters if we do not
address the rate standards for digital streaming.
Recently, I met with world-renown songwriter, Paul Williams, and I
have had open discussions with hundreds of songwriters from around the
country. Songwriters from my district have voiced that it is nearly
impossible to earn a fair income via digital streaming. They are
usually not the famous performers and cannot go on tour to earn a
living.
Over 50 percent of their income is derived from licensing performance
rights to their music. One of my constituents, Michelle Lewis, shared
that she made just $3.78 for 1.3 million streams of her work on one
streaming service. As the Grammy Award winning artist and songwriter
Ne-Yo stated: ``Even if you write a hit song that's streamed millions
of times, you're still not going to earn enough to pay the rent from
streaming. And that's where the entire industry is moving,'' which
[[Page H3541]]
is why I support the Songwriters Equity Act, AMP, the CLASSICS Act, and
MMA.
MMA also closes a loophole, which has negatively impacted early music
icons of Motown, jazz, blues, and rock and roll. According to Grammy
Award winning artist Dionne Warwick: ``How could it be that 1979's
`I'll Never Love This Way Again' receive compensation, but 1969's `I'll
Never Fall in Love Again' . . . does not?''
Recently, legacy songwriter and performer Darlene Love visited my
office to express her support for closing the legacy loophole. Born in
Los Angeles, she was inducted into the Rock and Roll Hall of Fame in
2011. She sang backup for Elvis, Aretha Franklin, and Frank Sinatra.
After decades of listening to her hard work being streamed without
being compensated, with the passage of MMA, she and other songwriters
will finally have access to the fair compensation they deserve.
If we are serious about supporting a next generation of songwriters,
then we must continue to address antiquated, though well-intentioned,
laws.
Mr. GOODLATTE. Mr. Speaker, I yield 2 minutes to the gentleman from
Ohio (Mr. Chabot), a member of the Judiciary Committee and chairman of
the Small Business Committee.
Mr. CHABOT. Mr. Speaker, I rise today to express my continued support
for this legislation. A lot of hard work has gone into this legislation
over the years, and the result is an unprecedented level of consensus
from a broad coalition of stakeholders in the music industry who don't
always agree.
{time} 1445
This legislation, I think, will prove to be a great benefit to music
consumers, creators, and producers alike.
The way we listen to and experience music is much different today
than it was when the Copyright Act was enacted back in 1976. As a
result, our copyright laws have become outdated and are, in many ways,
insufficient for the music industry in the 21st century. This
legislation provides much-needed updates to bring music licensing into
the digital age, particularly improving market efficiencies and
transparency to reflect the modern music marketplace.
So again, I thank the chairman, ranking member, and various sponsors
of the underlying pieces of legislation included in this bill.
Mr. Speaker, I urge my colleagues to support this bill.
Mr. NADLER. Mr. Speaker, I yield 1 minute to the gentleman from
California (Mr. Ted Lieu).
Mr. TED LIEU of California. Mr. Speaker, as has been said, music is
the lifeblood of culture that can transform world views, transport
listeners, and inspire social movements.
Ensuring that the law keeps up with music and its changing forms is
crucial. With the support of music publishers, artists, songwriters,
streaming services, and other stakeholders, the Music Modernization Act
will propel the music industry into the 21st century and beyond. I am
proud to be an original cosponsor of the act.
I want to thank Chairman Goodlatte, Ranking Member Nadler, as well as
Representatives Collins, Jeffries, and others for their hard work on
this bill.
As the Representative for California's 33rd Congressional District,
these issues hit close to home. My district sits at the heart of
California's music industry. It is home to thousands of brilliant
songwriters, publishers, engineers, record producers, recording
artists, and musicians.
I am proud to have worked with such a unique and engaged community.
They make up different threads of the industry's fabric, but share a
common goal of developing solutions to some of the most complex and
longstanding copyright issues facing our country. Today, we honor that
legacy by moving Federal music copyright forward.
Mr. Speaker, I urge my colleagues to support this bill.
Mr. GOODLATTE. Mr. Speaker, I reserve the balance of my time.
Mr. NADLER. Mr. Speaker, how much time do I have remaining, please?
The SPEAKER pro tempore. The gentleman from New York has 5 minutes
remaining. The gentleman from Virginia has 2 minutes remaining.
Mr. NADLER. Mr. Speaker, I yield 1 minute to the gentlewoman from
California (Ms. Judy Chu).
Ms. JUDY CHU of California. Mr. Speaker, I rise in strong support of
the Music Modernization Act. As co-chair of the Congressional Creative
Rights Caucus, I am proud to stand with my colleagues to support this
consensus bill that aims to modernize our copyright law.
Music is at the heart of how we experience life. We count on the
right song to help us express a moment better than we could ourselves.
For music creators, their works help them support their families,
keep a roof over their head, and food on the table. But, for far too
long, I have heard from songwriters whose compensation was less than
pennies in digital play for number one hits, and I have heard from
music legends who are touring well into their seventies because their
works created before 1972 are not eligible for royalties on digital
broadcasts.
This bill will help bring our copyright law into the digital era and
address the gaps that prevent creators from receiving fair compensation
for their work. Mr. Speaker, I urge my colleagues to vote for this
bill. The lives of our most treasured creators depend on it.
Mr. GOODLATTE. Mr. Speaker, I continue to reserve the balance of my
time.
Mr. NADLER. Mr. Speaker, I yield 2 minutes to the gentleman from New
York (Mr. Crowley), the distinguished Democratic Caucus chair and the
lead sponsor of the AMP Act, which is included in this package.
Mr. CROWLEY. Mr. Speaker, I thank my friend and colleague from New
York (Mr. Nadler) for yielding.
Mr. Speaker, I thank Chairman Goodlatte, Ranking Member Nadler,
Congressman Doug Collins, Congressman Hakeem Jeffries, and all of my
friends on the Judiciary Committee for working in such a bipartisan
fashion to get this important bill to the floor.
We all remember the iconic tune from the 1970s, ``I Write the
Songs.'' First performed by Captain and Tennille and made popular by
David Cassidy and, of course, Barry Manilow, the song encapsulates the
universality of music.
While we rightly celebrate the artists and singers behind these hits
and these great songs, there often are a number of individuals who work
just as hard to make that song a hit. Because to make a great song, you
need not just the writers and the singers, but also engineers,
technicians, and producers, people like my friend Mike Clink, as well
as Darrell Brown. They may not be as famous as Guns N' Roses or LeAnn
Rimes, the folks they helped produce, but they are equally important
when it comes to the process of making that music. But they are not
often given the credit or compensation they so rightly deserve.
With this bill, that will finally change. We are making important
updates to music copyright law to make sure that everyone with a role
in making hits that get stuck in our heads gets paid for their fair
share.
I am especially glad that my bill, the Allocation for Music
Producers, or AMP Act, is included in this package. I thank my
colleague across the aisle, Tom Rooney, for working with me to help the
many people who work so hard to make perfect the iconic recordings we
hear every day.
This bill will, for the first time, make mention of engineers and
producers in copyright law and provide a system for them to be directly
paid for the hard work that they do.
As a musician and songwriter myself, I am so glad to see bipartisan
agreement around these important issues. I am proud to see all of the
various folks in the recording industry coalesce around these critical
fixes, and I am proud to vote today in support of fair compensation for
creators in the music industry.
Mr. GOODLATTE. Mr. Speaker, I continue to reserve the balance of my
time.
Mr. NADLER. Mr. Speaker, I yield 1 minute to the gentleman from
Tennessee (Mr. Cohen).
Mr. COHEN. Mr. Speaker, I thank Mr. Nadler for yielding. I appreciate
the work of Mr. Goodlatte and the other sponsors, Mr. Nadler and
everybody else.
This was really an issue where we showed that Congress can be
productive, can get something done, working
[[Page H3542]]
with all of the different groups and bringing them together. It is a
successful effort.
Music is very important to my hometown of Memphis, which, of course,
is the hometown of Elvis Presley, where Sam Phillips put Elvis in the
studio at Sun Records and produced the rock and roll that Chuck Berry
and Little Richard had been playing but had not really reached a lot of
people's ears. It did, and it set the world on fire. It brought a
change in music and an appreciation for it.
In Memphis, we have had Isaac Hayes, who did so much; Sam and Dave;
David Porter; and many, many Memphians who participated.
But I have personal friends in Warren Zevon, Jackson Browne, and J.D.
Souther, who were great songwriters and performers and have not
received, necessarily, their financial due as they should, and
fairness, and this will get them done.
As Mr. Crowley mentioned, it will get engineers and producers payment
for their work to help create these musical creations that people love.
Mr. Speaker, I thank all of the sponsors and appreciate the fact that
I was able to participate and support it and be a cosponsor.
Mr. GOODLATTE. Mr. Speaker, I continue to reserve the balance of my
time.
Mr. NADLER. Mr. Speaker, I yield 1 minute to the gentleman from Texas
(Mr. Doggett).
Mr. DOGGETT. Mr. Speaker, my hometown of Austin, Texas, is modestly
known as the ``Live Music Capital of the World.'' The title is well
justified, from the South by Southwest music festival in the spring, to
Austin City Limits on a couple of weekends in October. It is a
wonderful place for live music.
It is the musicians and those who support them in technical ways--
weekday, weekend, and in between--that make this industry so vital and
who contribute so much to our local economy.
This piece of legislation is a step in the right direction. There is
much more that needs to be done to ensure that our musicians and all
who are involved in the creative economy get their fair compensation.
I am pleased this step is taken because these are really not only
talented and creative people, but small-business people, and they
deserve to have the property that they generate--their talent, their
music, that adds so much joy to our lives--fairly compensated. This is
a good step forward, and I certainly support the legislation.
Mr. NADLER. Mr. Speaker, I yield back the balance of my time.
Mr. GOODLATTE. Mr. Speaker, may I inquire how much time is remaining.
The SPEAKER pro tempore (Mr. Lamborn). The gentleman from Virginia
has 2 minutes remaining.
Mr. GOODLATTE. Mr. Speaker, I yield myself the balance of my time to
close.
Mr. Speaker, this is landmark legislation that has been decades in
coming. We have not had a significant review of our music licensing and
copyright laws in many, many, many years.
There are many people to be thanked, including the staff of the
Judiciary Committee on both sides of the aisle. I particularly want to
recognize Joe Keeley, who is the chief counsel of the Courts,
Intellectual Property, and the Internet Subcommittee.
I also want to thank the leadership of the committee who have worked
for many, many years on intellectual property issues: Shelley Husband,
the chief of staff and general counsel; and Branden Ritchie, the chief
counsel of the committee.
Time doesn't allow me to recognize everyone, but I especially want to
recognize the Courts, Intellectual Property, and the Internet
Subcommittee vice chairman, Doug Collins. He and his staff have put
literally hundreds and hundreds of hours into aspects of this
legislation, and I want to personally thank him for that work as well.
This legislation has very strong, bipartisan support. It is supported
by groups that look at intellectual property issues across the
ideological spectrum, and it is nearly universally supported by the
music industry, the technology companies, and others that provide the
platforms on which that music is performed.
It is going to more fairly treat so many sectors of the music
industry that it would be a shame not to see this legislation pass the
House with a very strong, bipartisan vote, go to the Senate, pass
there, and then on to the President's desk, where I have every
confidence it will be signed into law.
During the course of many years of review of our copyright laws, we
learned that our music licensing laws were no longer working as
intended for songwriters, artists, and creators, people behind the
scenes for the companies that deliver the music in innovative ways to
our consumers.
The Music Modernization Act, a product of the Judiciary Committee's
comprehensive copyright review, is a bipartisan bill. I urge my
colleagues to join together and pass it and send it to the Senate.
Mr. Speaker, I yield back the balance of my time.
Mrs. TORRES. Mr. Speaker, I rise in support of H.R. 5447, The Music
Modernization Act. Mr. Speaker, there is broad, bipartisan agreement
that current music licensing laws no longer meet the needs of creators
and music providers in the digital age. Southern California has
established itself as a leader in the entertainment industry, and
supporting our artists and music industry is a job creator for my
constituents.
This bill would address the inefficiencies in the music industry's
licensing system by establishing uniformity in the licensing process.
Licenses will now be managed by one entity which in turn would be paid
for by the licensees. In addition to an increase in efficiency, the
Music Modernization Act would foster a more transparent relationship
between creators and music platforms. Information regarding music owed
royalties would be easily accessible through the database created by
the Music Modernization Act. This transparency will surely improve the
working relationship between creators and music platforms and aid the
music industry's innovation process.
Most importantly, this bill would establish a uniformed rate that
would allow song writers and artists to receive fair market pay for
their ideas and creations.
As a society, we value the work and products of artists, creators,
and the music industry. For years now, creators, and music providers
have spoken out about the outdated music licensing process and the
issues they repeatedly face because of its flawed system. It is only
fair that we address these inefficiencies and bring the music
industries' processes in accordance with the digital age.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Virginia (Mr. Goodlatte) that the House suspend the
rules and pass the bill, H.R. 5447, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mr. GOODLATTE. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on this motion will be postponed.
____________________