[Congressional Record (Bound Edition), Volume 150 (2004), Part 15]
[Senate]
[Pages 20921-20937]
[From the U.S. Government Publishing Office, www.gpo.gov]




         COPYRIGHT ROYALTY AND DISTRIBUTION REFORM ACT OF 2004

  Ms. COLLINS. Madam President, I ask unanimous consent that the Senate 
proceed to the immediate consideration of Calendar No. 744, H.R. 1417.
  The PRESIDING OFFICER. The clerk will report the bill by title.
  The assistant legislative clerk read as follows:

       A bill (H.R. 1417) to amend title 17, United States Code, 
     to replace copyright arbitration royalty panels with 
     Copyright Royalty Judges, and for other purposes.

  There being no objection, the Senate proceeded to consider the bill, 
which had been reported from the Committee on the Judiciary with an 
amendment to strike all after the enacting clause and insert in lieu 
thereof the following:
  (Insert the part printed in italic.)

                               H.R. 1417

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

     [SECTION 1. SHORT TITLE.

       [This Act may be cited as the ``Copyright Royalty and 
     Distribution Reform Act of 2004''.

     [SEC. 2. REFERENCE.

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

     [SEC. 3. COPYRIGHT ROYALTY JUDGE AND STAFF.

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

         [``CHAPTER 8--PROCEEDINGS BY COPYRIGHT ROYALTY JUDGES

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

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

       [``(a) Appointment.--The Librarian of Congress shall 
     appoint 3 full-time Copyright Royalty Judges, and shall 
     appoint one of the three as the Chief Copyright Royalty 
     Judge. In making such appointments, the Librarian shall 
     consult with the Register of Copyrights.
       [``(b) Functions.--Subject to the provisions of this 
     chapter, the functions of the Copyright Royalty Judges shall 
     be as follows:
       [``(1) To make determinations and adjustments of reasonable 
     terms and rates of royalty payments as provided in sections 
     112(e), 114, 115, 116, 118, 119 and 1004. The rates 
     applicable under sections 114(f)(1)(B), 115, and 116 shall be 
     calculated to achieve the following objectives:
       [``(A) To maximize the availability of creative works to 
     the public.
       [``(B) To afford the copyright owner a fair return for his 
     or her creative work and the copyright user a fair income 
     under existing economic conditions.
       [``(C) To reflect the relative roles of the copyright owner 
     and the copyright user in the product made available to the 
     public with respect to relative creative contribution, 
     technological contribution, capital investment, cost, risk, 
     and contribution to the opening of new markets for creative 
     expression and media for their communication.
       [``(D) To minimize any disruptive impact on the structure 
     of the industries involved and on generally prevailing 
     industry practices.
       [``(2) To make determinations concerning the adjustment of 
     the copyright royalty rates under section 111 solely in 
     accordance with the following provisions:
       [``(A) The rates established by section 111(d)(1)(B) may be 
     adjusted to reflect--
       [``(i) national monetary inflation or deflation; or
       [``(ii) changes in the average rates charged cable 
     subscribers for the basic service of providing secondary 
     transmissions to maintain the real constant dollar level of 
     the royalty fee per subscriber which existed as of the date 
     of October 19, 1976,

     [except that--
       [``(I) if the average rates charged cable system 
     subscribers for the basic service of providing secondary 
     transmissions are changed so that the average rates exceed 
     national monetary inflation, no change in the rates 
     established by section 111(d)(1)(B) shall be permitted; and

[[Page 20922]]

       [``(II) no increase in the royalty fee shall be permitted 
     based on any reduction in the average number of distant 
     signal equivalents per subscriber.

     [The Copyright Royalty Judges may consider all factors 
     relating to the maintenance of such level of payments, 
     including, as an extenuating factor, whether the industry has 
     been restrained by subscriber rate regulating authorities 
     from increasing the rates for the basic service of providing 
     secondary transmissions.
       [``(B) In the event that the rules and regulations of the 
     Federal Communications Commission are amended at any time 
     after April 8, 1976, to permit the carriage by cable systems 
     of additional television broadcast signals beyond the local 
     service area of the primary transmitters of such signals, the 
     royalty rates established by section 111(d)(1)(B) may be 
     adjusted to insure that the rates for the additional distant 
     signal equivalents resulting from such carriage are 
     reasonable in the light of the changes effected by the 
     amendment to such rules and regulations. In determining the 
     reasonableness of rates proposed following an amendment of 
     Federal Communications Commission rules and regulations, the 
     Copyright Royalty Judges shall consider, among other factors, 
     the economic impact on copyright owners and users; except 
     that no adjustment in royalty rates shall be made under this 
     subparagraph with respect to any distant signal equivalent or 
     fraction thereof represented by--
       [``(i) carriage of any signal permitted under the rules and 
     regulations of the Federal Communications Commission in 
     effect on April 15, 1976, or the carriage of a signal of the 
     same type (that is, independent, network, or noncommercial 
     educational) substituted for such permitted signal; or
       [``(ii) a television broadcast signal first carried after 
     April 15, 1976, pursuant to an individual waiver of the rules 
     and regulations of the Federal Communications Commission, as 
     such rules and regulations were in effect on April 15, 1976.
       [``(C) In the event of any change in the rules and 
     regulations of the Federal Communications Commission with 
     respect to syndicated and sports program exclusivity after 
     April 15, 1976, the rates established by section 111(d)(1)(B) 
     may be adjusted to assure that such rates are reasonable in 
     light of the changes to such rules and regulations, but any 
     such adjustment shall apply only to the affected television 
     broadcast signals carried on those systems affected by the 
     change.
       [``(D) The gross receipts limitations established by 
     section 111(d)(1)(C) and (D) shall be adjusted to reflect 
     national monetary inflation or deflation or changes in the 
     average rates charged cable system subscribers for the basic 
     service of providing secondary transmissions to maintain the 
     real constant dollar value of the exemption provided by such 
     section, and the royalty rate specified therein shall not be 
     subject to adjustment.
       [``(3)(A) To authorize the distribution, under sections 
     111, 119, and 1007, of those royalty fees collected under 
     sections 111, 119, and 1005, as the case may be, to the 
     extent that the Copyright Royalty Judges have found that the 
     distribution of such fees is not subject to controversy.
       [``(B) In cases where the Copyright Royalty Judges 
     determine that controversy exists, the Copyright Royalty 
     Judges shall determine the distribution of such fees, 
     including partial distributions, in accordance with section 
     111, 119, or 1007, as the case may be.
       [``(C) the Copyright Royalty Judges shall make a partial 
     distribution of such fees during the pendency of the 
     proceeding under subparagraph (B) if all participants under 
     section 803(b)(2) in the proceeding that are entitled to 
     receive those fees that are to be partially distributed--
       [``(i) agree to such partial distribution;
       [``(ii) sign an agreement obligating them to return any 
     excess amounts to the extent necessary to comply with the 
     final determination on the distribution of the fees made 
     under subparagraph (B); and
       [``(iii) file the agreement with the Copyright Royalty 
     Judges.
       [``(D) The Copyright Royalty Judges and any other officer 
     or employee acting in good faith in distributing funds under 
     subparagraph (C) shall not be held liable for the payment of 
     any excess fees under subparagraph (C). The Copyright Royalty 
     Judges shall, at the time the final determination is made, 
     calculate any such excess amounts.
       [``(4) To accept or reject royalty claims filed under 
     section 111, 119, and 1007, on the basis of timeliness or the 
     failure to establish the basis for a claim.
       [``(5) To accept or reject rate adjustment petitions as 
     provided in section 804 and petitions to participate as 
     provided in section 803(b)(1) and (2).
       [``(6) To determine the status of a digital audio recording 
     device or a digital audio interface device under sections 
     1002 and 1003, as provided in section 1010.
       [``(7)(A) To adopt as the basis for statutory terms and 
     rates or as a basis for the distribution of statutory royalty 
     payments, an agreement concerning such matters reached among 
     some or all of the participants in a proceeding at any time 
     during the proceeding, except that--
       [``(i) the Copyright Royalty Judges shall provide to the 
     other participants in the proceeding under section 803(b)(2) 
     that would be bound by the terms, rates, distribution, or 
     other determination set by the agreement an opportunity to 
     comment on the agreement and object to its adoption as the 
     basis for statutory terms and rates or as a basis for the 
     distribution of statutory royalty payments, as the case may 
     be; and
       [``(ii) the Copyright Royalty Judges may decline to adopt 
     the agreement as the basis for statutory terms and rates or 
     as the basis for the distribution of statutory royalty 
     payments, as the case may be, if any other participant 
     described in subparagraph (A) objects to the agreement and 
     the Copyright Royalty Judges find, based on the record before 
     them, that the agreement is not likely to meet the statutory 
     standard for setting the terms and rates, or for distributing 
     the royalty payments, as the case may be.
       [``(B) License agreements voluntarily negotiated pursuant 
     to section 112(e)(5), 114(f)(3), 115(c)(3)(E)(i), 116(c), or 
     118(b)(2) that do not result in statutory terms and rates 
     shall not be subject to clauses (i) and (ii) of subparagraph 
     (A).
       [``(c) Rulings.--The Copyright Royalty Judges may make any 
     necessary procedural or evidentiary rulings in any proceeding 
     under this chapter and may, before commencing a proceeding 
     under this chapter, make any such rulings that would apply to 
     the proceedings conducted by the Copyright Royalty Judges. 
     The Copyright Royalty Judges may consult with the Register of 
     Copyrights in making any rulings under section 802(f)(1).
       [``(d) Administrative Support.--The Librarian of Congress 
     shall provide the Copyright Royalty Judges with the necessary 
     administrative services related to proceedings under this 
     chapter.
       [``(e) Location in Library of Congress.--The offices of the 
     Copyright Royalty Judges and staff shall be in the Library of 
     Congress.

     [``Sec. 802. Copyright Royalty Judgeships; staff

       [``(a) Qualifications of Copyright Royalty Judges.--Each 
     Copyright Royalty Judge shall be an attorney who has at least 
     7 years of legal experience. The Chief Copyright Royalty 
     Judge shall have at least 5 years of experience in 
     adjudications, arbitrations, or court trials. Of the other 
     two Copyright Royalty Judges, one shall have significant 
     knowledge of copyright law, and the other shall have 
     significant knowledge of economics. An individual may serve 
     as a Copyright Royalty Judge only if the individual is free 
     of any financial conflict of interest under subsection (h). 
     In this subsection, `adjudication' has the meaning given that 
     term in section 551 of title 5, but does not include 
     mediation.
       [``(b) Staff.--The Chief Copyright Royalty Judge shall hire 
     3 full-time staff members to assist the Copyright Royalty 
     Judges in performing their functions.
       [``(c) Terms.--The terms of the Copyright Royalty Judges 
     shall each be 6 years, except of the individuals first 
     appointed, the Chief Copyright Royalty Judge shall be 
     appointed to a term of 6 years, and of the remaining 
     Copyright Royalty Judges, one shall be appointed to a term of 
     2 years, and the other shall be appointed to a term of 4 
     years. An individual serving as a Copyright Royalty Judge may 
     be reappointed to subsequent terms. The term of a Copyright 
     Royalty Judge shall begin when the term of the predecessor of 
     that Copyright Royalty Judge ends. When the term of office of 
     a Copyright Royalty Judge ends, the individual serving that 
     term may continue to serve until a successor is selected.
       [``(d) Vacancies or Incapacity.--
       [``(1) Vacancies.--If a vacancy should occur in the 
     position of Copyright Royalty Judge, the Librarian of 
     Congress shall act expeditiously to fill the vacancy, and may 
     appoint an interim Copyright Royalty Judge to serve until 
     another Copyright Royalty Judge is appointed under this 
     section. An individual appointed to fill the vacancy 
     occurring before the expiration of the term for which the 
     predecessor of that individual was appointed shall be 
     appointed for the remainder of that term.
       [``(2) Incapacity.--In the case in which a Copyright 
     Royalty Judge is temporarily unable to perform his or her 
     duties, the Librarian of Congress may appoint an interim 
     Copyright Royalty Judge to perform such duties during the 
     period of such incapacity.
       [``(e) Compensation.--
       [``(1) Judges.--The Chief Copyright Royalty Judge shall 
     receive compensation at the rate of basic pay payable for 
     level AL-1 for administrative law judges pursuant to section 
     5372(b) of title 5, and each of the other two Copyright 
     Royalty Judges shall receive compensation at the rate of 
     basic pay payable for level AL-2 for administrative law 
     judges pursuant to such section. The compensation of the 
     Copyright Royalty Judges shall not be subject to any 
     regulations adopted by the Office of Personnel Management 
     pursuant to its authority under section 5376(b)(1) of title 
     5.
       [``(2) Staff members.--Of the staff members appointed under 
     subsection (b)--
       [``(A) the rate of pay of one staff member shall be not 
     more than the basic rate of pay payable for GS-15 of the 
     General Schedule;
       [``(B) the rate of pay of one staff member shall be not 
     less than the basic rate of pay payable for GS-13 of the 
     General Schedule

[[Page 20923]]

     and not more than the basic rate of pay payable for GS-14 of 
     such Schedule; and
       [``(C) the rate of pay for the third staff member shall be 
     not less than the basic rate of pay payable for GS-8 of the 
     General Schedule and not more than the basic rate of pay 
     payable for GS-11 of such Schedule.
       [``(f) Independence of Copyright Royalty Judge.--
       [``(1) In making determinations.--
       [``(A) In general.--Subject to subparagraph (B), the 
     Copyright Royalty Judges shall have full independence in 
     making determinations concerning adjustments and 
     determinations of copyright royalty rates and terms, the 
     distribution of copyright royalties, the acceptance or 
     rejection of royalty claims, rate adjustment petitions, and 
     petitions to participate, and in issuing other rulings under 
     this title, except that the Copyright Royalty Judges may 
     consult with the Register of Copyrights on any matter other 
     than a question of fact. Any such consultations between the 
     Copyright Royalty Judges and the Register of Copyright on any 
     question of law shall be in writing or on the record.
       [``(B) Novel questions.--(i) Notwithstanding the provisions 
     of subparagraph (A), in any case in which the Copyright 
     Royalty Judges in a proceeding under this title are presented 
     with a novel question of law concerning an interpretation of 
     those provisions of this title that are the subject of the 
     proceeding, the Copyright Royalty Judges shall request the 
     Register of Copyrights, in writing, to submit a written 
     opinion on the resolution of such novel question. The 
     Register shall submit and make public that opinion within 
     such time period as the Copyright Royalty Judges may 
     prescribe. Any consultations under this subparagraph between 
     the Copyright Royalty Judges and the Register of Copyrights 
     shall be in writing or on the record. The opinion of the 
     Register shall not be binding on the Copyright Royalty 
     Judges, but the Copyright Royalty Judges shall take the 
     opinion of the Register into account in making the judges' 
     determination on the question concerned.
       [``(ii) In clause (i), a `novel question of law' is a 
     question of law that has not been determined in prior 
     decisions, determinations, and rulings described in section 
     803(a).
       [``(2) Performance appraisals.--
       [``(A) In general.--Notwithstanding any other provision of 
     law or any regulation of the Library of Congress, and subject 
     to subparagraph (B), the Copyright Royalty Judges shall not 
     receive performance appraisals.
       [``(B) Relating to sanction or removal.--To the extent that 
     the Librarian of Congress adopts regulations under subsection 
     (h) relating to the sanction or removal of a Copyright 
     Royalty Judge and such regulations require documentation to 
     establish the cause of such sanction or removal, the 
     Copyright Royalty Judge may receive an appraisal related 
     specifically to the cause of the sanction or removal.
       [``(g) Inconsistent Duties Barred.--No Copyright Royalty 
     Judge may undertake duties inconsistent with his or her 
     duties and responsibilities as Copyright Royalty Judge.
       [``(h) Standards of Conduct.--The Librarian of Congress 
     shall adopt regulations regarding the standards of conduct, 
     including financial conflict of interest and restrictions 
     against ex parte communications, which shall govern the 
     Copyright Royalty Judges and the proceedings under this 
     chapter.
       [``(i) Removal or Sanction.--The Librarian of Congress may 
     sanction or remove a Copyright Royalty Judge for violation of 
     the standards of conduct adopted under subsection (h), 
     misconduct, neglect of duty, or any disqualifying physical or 
     mental disability. Any such sanction or removal may be made 
     only after notice and opportunity for a hearing, but the 
     Librarian of Congress may suspend the Copyright Royalty Judge 
     during the pendency of such hearing. The Librarian shall 
     appoint an interim Copyright Royalty Judge during the period 
     of any such suspension.

     [``Sec. 803. Proceedings of Copyright Royalty Judges

       [``(a) Proceedings.--
       [``(1) In general.--The Copyright Royalty Judges shall act 
     in accordance with this title, and to the extent not 
     inconsistent with this title, in accordance with subchapter 
     II of chapter 5 of title 5, in carrying out the purposes set 
     forth in section 801. The Copyright Royalty Judges shall act 
     in accordance with regulations issued by the Copyright 
     Royalty Judges and on the basis of a fully documented written 
     record, prior decisions of the Copyright Royalty Tribunal, 
     prior copyright arbitration royalty panel determinations, 
     rulings by the Librarian of Congress before the effective 
     date of the Copyright Royalty and Distribution Reform Act of 
     2004, prior determinations of Copyright Royalty Judges under 
     this chapter, and decisions of the court in appeals under 
     this chapter before, on, or after such effective date. Any 
     participant in a proceeding under subsection (b)(2) may 
     submit relevant information and proposals to the Copyright 
     Royalty Judges.
       [``(2) Judges acting as panel and individually.--The 
     Copyright Royalty Judges shall preside over hearings in 
     proceedings under this chapter en banc. The Chief Copyright 
     Royalty Judge may designate a Copyright Royalty Judge to 
     preside individually over such collateral and administrative 
     proceedings, and over such proceedings under paragraphs (1) 
     through (5) of subsection (b), as the Chief Judge considers 
     appropriate.
       [``(3) Determinations.--Final determinations of the 
     Copyright Royalty Judges in proceedings under this chapter 
     shall be made by majority vote. A Copyright Royalty Judge 
     dissenting from the majority on any determination under this 
     chapter may issue his or her dissenting opinion, which shall 
     be included with the determination.
       [``(b) Procedures.--
       [``(1) Initiation.--
       [``(A) Call for petitions to participate.--(i) Promptly 
     upon the filing of a petition for a rate adjustment or 
     determination under section 804(a) or 804(b)(8), or by no 
     later than January 5 of a year specified in section 804 for 
     the commencement of a proceeding if a petition has not been 
     filed by that date, the Copyright Royalty Judges shall cause 
     to be published in the Federal Register notice of 
     commencement of proceedings under this chapter calling for 
     the filing of petitions to participate in a proceeding under 
     this chapter for the purpose of making the relevant 
     determination under section 111, 112, 114, 115, 116, 118, 
     119, 1004 or 1007, as the case may be.
       [``(ii) Petitions to participate shall be filed by no later 
     than 30 days after publication of notice of commencement of a 
     proceeding, under clause (i), except that the Copyright 
     Royalty Judges may, for substantial good cause shown and if 
     there is no prejudice to the participants that have already 
     filed petitions, accept late petitions to participate at any 
     time up to the date that is 90 days before the date on which 
     participants in the proceeding are to file their written 
     direct statements.
       [``(B) Petitions to participate.--Each petition to 
     participate in a proceeding shall describe the petitioner's 
     interest in the subject matter of the proceeding. Parties 
     with similar interests may file a single petition to 
     participate.
       [``(2) Participation in general.--Subject to paragraph (4), 
     a person may participate in a proceeding under this chapter, 
     including through the submission of briefs or other 
     information, only if--
       [``(A) that person has filed a petition to participate in 
     accordance with paragraph (1) (either individually or as a 
     group under paragraph (1)(B)), together with a filing fee of 
     $150;
       [``(B) the Copyright Royalty Judges have not determined 
     that the petition to participate is facially invalid; and
       [``(C) the Copyright Royalty Judges have not determined, 
     sua sponte or on the motion of another participant in the 
     proceeding, that the person lacks a significant interest in 
     the proceeding.
       [``(3) Voluntary negotiation period.--
       [``(A) In general.--Promptly after the date for filing of 
     petitions to participate in a proceeding, the Copyright 
     Royalty Judges shall make available to all participants in 
     the proceeding a list of such participants and shall initiate 
     a voluntary negotiation period among the participants.
       [``(B) Length of proceedings.--The voluntary negotiation 
     period initiated under subparagraph (A) shall be 3 months.
       [``(C) Determination of subsequent proceedings.--At the 
     close of the voluntary negotiation proceedings, the Copyright 
     Royalty Judges shall, if further proceedings under this 
     chapter are necessary, determine whether and to what extent 
     paragraphs (4) and (5) will apply to the parties.
       [``(4) Small claims procedure in distribution 
     proceedings.--
       [``(A) In general.--If, in a proceeding under this chapter 
     to determine the distribution of royalties, a participant in 
     the proceeding asserts that the contested amount of the claim 
     is $10,000 or less, the Copyright Royalty Judges shall decide 
     the controversy on the basis of the filing in writing of the 
     initial claim, the initial response by any opposing 
     participant, and one additional response by each such party. 
     The participant asserting the claim shall not be required to 
     pay the filing fee under paragraph (2).
       [``(B) Bad faith inflation of claim.--If the Copyright 
     Royalty Judges determine that a participant asserts in bad 
     faith an amount in controversy in excess of $10,000 for the 
     purpose of avoiding a determination under the procedure set 
     forth in subparagraph (A), the Copyright Royalty Judges shall 
     impose a fine on that participant in an amount not to exceed 
     the difference between the actual amount distributed and the 
     amount asserted by the participant.
       [``(5) Paper proceedings in ratemaking proceedings.--The 
     Copyright Royalty Judges in proceedings under this chapter to 
     determine royalty rates may decide, sua sponte or upon motion 
     of a participant, to determine issues on the basis of initial 
     filings in writing, initial responses by any opposing 
     participant, and one additional response by each such 
     participant. Prior to making such decision to proceed on such 
     a paper record only, the Copyright Royalty Judges shall offer 
     to all parties to the proceeding the opportunity to comment 
     on the decision. The procedure under this paragraph--

[[Page 20924]]

       [``(A) shall be applied in cases in which there is no 
     genuine issue of material fact, there is no need for 
     evidentiary hearings, and all participants in the proceeding 
     agree in writing to the procedure; and
       [``(B) may be applied under such other circumstances as the 
     Copyright Royalty Judges consider appropriate.
       [``(6) Regulations.--
       [``(A) In general.--The Copyright Royalty Judges may issue 
     regulations to carry out their functions under this title. 
     Not later than 120 days after Copyright Royalty Judges or 
     interim Copyright Royalty Judges, as the case may be, are 
     first appointed after the enactment of the Copyright Royalty 
     and Distribution Reform Act of 2004, such judges shall issue 
     regulations to govern proceedings under this chapter.
       [``(B) Interim regulations.--Until regulations are adopted 
     under subparagraph (A), the Copyright Royalty Judges shall 
     apply the regulations in effect under this chapter on the day 
     before the effective date of the Copyright Royalty and 
     Distribution Reform Act of 2004, to the extent such 
     regulations are not inconsistent with this chapter, except 
     that functions carried out under such regulations by the 
     Librarian of Congress, the Register of Copyrights, or 
     copyright arbitration royalty panels that, as of such date of 
     enactment, are to be carried out by the Copyright Royalty 
     Judges under this chapter, shall be carried out by the 
     Copyright Royalty Judges under such regulations.
       [``(C) Requirements.--Regulations issued under subparagraph 
     (A) shall include the following:
       [``(i) The written direct statements of all participants in 
     a proceeding under paragraph (2) shall be filed by a date 
     specified by the Copyright Royalty Judges, which may be no 
     earlier than four months, and no later than five months, 
     after the end of the voluntary negotiation period under 
     paragraph (3). Notwithstanding the preceding sentence, a 
     participant in a proceeding may, within 15 days after the end 
     of the discovery period specified in clause (iii), file an 
     amended written direct statement based on new information 
     received during the discovery process.
       [``(ii)(I) Following the submission to the Copyright 
     Royalty Judges of written direct statements by the 
     participants in a proceeding under paragraph (2), the judges 
     shall meet with the participants for the purpose of setting a 
     schedule for conducting and completing discovery. Such 
     schedule shall be determined by the Copyright Royalty Judges.
       [``(II) In this chapter, the term `written direct 
     statements' means witness statements, testimony, and exhibits 
     to be presented in the proceedings, and such other 
     information that is necessary to establish terms and rates, 
     or the distribution of royalty payments, as the case may be, 
     as set forth in regulations issued by the Copyright Royalty 
     Judges.
       [``(iii) Hearsay may be admitted in proceedings under this 
     chapter to the extent deemed appropriate by the Copyright 
     Royalty Judges.
       [``(iv) Discovery in such proceedings shall be permitted 
     for a period of 60 days, except for discovery ordered by the 
     Copyright Royalty Judges in connection with the resolution of 
     motions, orders and disputes pending at the end of such 
     period.
       [``(v) Any participant under paragraph (2) in a proceeding 
     under this chapter to determine royalty rates may, upon 
     written notice, seek discovery of information and materials 
     relevant and material to the proceeding. Any objection to any 
     such discovery request shall be resolved by a motion or 
     request to compel discovery made to the Copyright Royalty 
     Judges. Each motion or request to compel discovery shall be 
     determined by the Copyright Royalty Judges, or by a Copyright 
     Royalty Judge when permitted under subsection (a)(2), who may 
     approve the request only if the evidence that would be 
     produced is relevant and material. A Copyright Royalty Judge 
     may refuse a request to compel discovery of evidence that has 
     been found to be relevant and material, only upon good cause 
     shown. For purposes of the preceding sentence, the basis for 
     `good cause' may only be that--

       [``(I) the discovery sought is unreasonably cumulative or 
     duplicative, or is obtainable from another source that is 
     more convenient, less burdensome, or less expensive;
       [``(II) the participant seeking discovery has had ample 
     opportunity by discovery in the action to obtain the 
     information sought; or
       [``(III) the burden or expense of the proposed discovery 
     outweighs its likely benefit, taking into account the needs 
     and resources of the participants, the importance of the 
     issues at stake, and the importance of the proposed discovery 
     in resolving the issues.

       [``(vi) The rules in effect on the day before the effective 
     date of the Copyright Royalty and Distribution Reform Act of 
     2004, relating to discovery in proceedings under this title 
     to determine the distribution of royalty fees, shall continue 
     to apply to such proceedings on and after such effective 
     date.
       [``(vii) The Copyright Royalty Judges may issue subpoenas 
     requiring the production of evidence or witnesses, but only 
     if the evidence requested to be produced or that would be 
     proffered by the witness is relevant and material.
       [``(viii) The Copyright Royalty Judges shall order a 
     settlement conference among the participants in the 
     proceeding to facilitate the presentation of offers of 
     settlement among the participants. The settlement conference 
     shall be held during a 21-day period following the end of the 
     discovery period.
       [``(c) Determination of Copyright Royalty Judges.--
       [``(1) Timing.--The Copyright Royalty Judges shall issue 
     their determination in a proceeding not later than 11 months 
     after the conclusion of the 21-day settlement conference 
     period under subsection (b)(3)(C)(vi), but, in the case of a 
     proceeding to determine successors to rates or terms that 
     expire on a specified date, in no event later than 15 days 
     before the expiration of the then current statutory rates and 
     terms.
       [``(2) Rehearings.--
       [``(A) In general.--The Copyright Royalty Judges may, in 
     exceptional cases, upon motion of a participant under 
     subsection (b)(2), order a rehearing, after the determination 
     in a proceeding is issued under paragraph (1), on such 
     matters as the Copyright Royalty Judges determine to be 
     appropriate.
       [``(B) Timing for filing motion.--Any motion for a 
     rehearing under subparagraph (A) may only be filed within 15 
     days after the date on which the Copyright Royalty Judges 
     deliver their initial determination concerning rates and 
     terms to the participants in the proceeding.
       [``(C) Participation by opposing party not required.--In 
     any case in which a rehearing is ordered, any opposing party 
     shall not be required to participate in the rehearing.
       [``(D) No negative inference.--No negative inference shall 
     be drawn from lack of participation in a rehearing.
       [``(E) Continuity of rates and terms.--(i) If the decision 
     of the Copyright Royalty Judges on any motion for a rehearing 
     is not rendered before the expiration of the statutory rates 
     and terms that were previously in effect, in the case of a 
     proceeding to determine successors to rates and terms that 
     expire on a specified date, then--
       [``(I) the initial determination of the Copyright Royalty 
     Judges that is the subject of the rehearing motion shall be 
     effective as of the day following the date on which the rates 
     and terms that were previously in effect expire; and
       [``(II) in the case of a proceeding under section 
     114(f)(1)(C) or 114(f)(2)(C), royalty rates and terms shall, 
     for purposes of section 114(f)(4)(B), be deemed to have been 
     set at those rates and terms contained in the initial 
     determination of the Copyright Royalty Judges that is the 
     subject of the rehearing motion, as of the date of that 
     determination.
       [``(ii) The pendency of a motion for a rehearing under this 
     paragraph shall not relieve persons obligated to make royalty 
     payments who would be affected by the determination on that 
     motion from providing the statements of account and any 
     reports of use, to the extent required, and paying the 
     royalties required under the relevant determination or 
     regulations.
       [``(iii) Notwithstanding clause (ii), whenever royalties 
     described in clause (ii) are paid to a person other than the 
     Copyright Office, the entity designated by the Copyright 
     Royalty Judges to which such royalties are paid by the 
     copyright user (and any successor thereto) shall, within 60 
     days after the motion for rehearing is resolved or, if the 
     motion is granted, within 60 days after the rehearing is 
     concluded, return any excess amounts previously paid to the 
     extent necessary to comply with the final determination of 
     royalty rates by the Copyright Royalty Judges.
       [``(3) Contents of determination.--A determination of the 
     Copyright Royalty Judges shall be accompanied by the written 
     record, and shall set forth the facts that the Copyright 
     Royalty Judges found relevant to their determination. Among 
     other terms adopted in a determination, the Copyright Royalty 
     Judges may specify notice and recordkeeping requirements of 
     users of the copyrights at issue that apply in lieu of those 
     that would otherwise apply under regulations.
       [``(4) Continuing jurisdiction.--The Copyright Royalty 
     Judges may amend the determination or the regulations issued 
     pursuant to the determination in order to correct any 
     technical errors in the determination or to respond to 
     unforeseen circumstances that preclude the proper 
     effectuation of the determination.
       [``(5) Protective order.--The Copyright Royalty Judges may 
     issue such orders as may be appropriate to protect 
     confidential information, including orders excluding 
     confidential information from the record of the determination 
     that is published or made available to the public, except 
     that any terms or rates of royalty payments or distributions 
     may not be excluded.
       [``(6) Publication of determination.--The Librarian of 
     Congress shall cause the determination, and any corrections 
     thereto, to be published in the Federal Register. The 
     Librarian of Congress shall also publicize the determination 
     and corrections in such other manner as the Librarian 
     considers appropriate, including, but not limited to, 
     publication on the Internet. The Librarian of Congress shall 
     also make the determination,

[[Page 20925]]

     corrections, and the accompanying record available for public 
     inspection and copying.
       [``(d) Judicial Review.--
       [``(1) Appeal.--Any determination of the Copyright Royalty 
     Judges under subsection (c) may, within 30 days after the 
     publication of the determination in the Federal Register, be 
     appealed, to the United States Court of Appeals for the 
     District of Columbia Circuit, by any aggrieved participant in 
     the proceeding under subsection (b)(2) who fully participated 
     in the proceeding and who would be bound by the 
     determination. If no appeal is brought within that 30-day 
     period, the determination of the Copyright Royalty Judges 
     shall be final, and the royalty fee or determination with 
     respect to the distribution of fees, as the case may be, 
     shall take effect as set forth in paragraph (2).
       [``(2) Effect of rates.--
       [``(A) Expiration on specified date.--When this title 
     provides that the royalty rates and terms that were 
     previously in effect are to expire on a specified date, any 
     adjustment or determination by the Copyright Royalty Judges 
     of successor rates and terms for an ensuing statutory license 
     period shall be effective as of the day following the date of 
     expiration of the rates and terms that were previously in 
     effect, even if the determination of the Copyright Royalty 
     Judges is rendered on a later date.
       [``(B) Other cases.--In cases where rates and terms do not 
     expire on a specified date or have not yet been established, 
     successor or new rates or terms shall take effect on the 
     first day of the second month that begins after the 
     publication of the determination of the Copyright Royalty 
     Judges in the Federal Register, except as otherwise provided 
     in this title, and the rates and terms previously in effect, 
     to the extent applicable, shall remain in effect until such 
     successor rates and terms become effective.
       [``(C) Obligation to make payments.--(i) The pendency of an 
     appeal under this subsection shall not relieve persons 
     obligated to make royalty payments under section 111, 112, 
     114, 115, 116, 118, 119, or 1003, who would be affected by 
     the determination on appeal, from providing the statements of 
     account (and any report of use, to the extent required) and 
     paying the royalties required under the relevant 
     determination or regulations.
       [``(ii) Notwithstanding clause (i), whenever royalties 
     described in clause (i) are paid to a person other than the 
     Copyright Office, the entity designated by the Copyright 
     Royalty Judges to which such royalties are paid by the 
     copyright user (and any successor thereto) shall, within 60 
     days after the final resolution of the appeal, return any 
     excess amounts previously paid (and interest thereon, if 
     ordered pursuant to paragraph (3)) to the extent necessary to 
     comply with the final determination of royalty rates on 
     appeal.
       [``(3) Jurisdiction of court.--If the court, pursuant to 
     section 706 of title 5, modifies or vacates a determination 
     of the Copyright Royalty Judges, the court may enter its own 
     determination with respect to the amount or distribution of 
     royalty fees and costs, and order the repayment of any excess 
     fees, the payment of any underpaid fees, and the payment of 
     interest pertaining respectively thereto, in accordance with 
     its final judgment. The court may also vacate the 
     determination of the Copyright Royalty Judges and remand the 
     case to the Copyright Royalty Judges for further proceedings 
     in accordance with subsection (a).
       [``(e) Administrative Matters.--
       [``(1) Deduction of costs of library of congress and 
     copyright office from filing fees.--
       [``(A) Deduction from filing fees.--The Librarian of 
     Congress may, to the extent not otherwise provided under this 
     title, deduct from the filing fees collected under subsection 
     (b) for a particular proceeding under this chapter the 
     reasonable costs incurred by the Librarian of Congress, the 
     Copyright Office, and the Copyright Royalty Judges in 
     conducting that proceeding, other than the salaries of the 
     Copyright Royalty Judges and the 3 staff members appointed 
     under section 802(b).
       [``(B) Authorization of appropriations.--There are 
     authorized to be appropriated such sums as may be necessary 
     to pay the costs of proceedings under this chapter not 
     covered by the filing fees collected under subsection (b). 
     All funds made available pursuant to this subparagraph shall 
     remain available until expended.
       [``(2) Positions required for administration of compulsory 
     licensing.--Section 307 of the Legislative Branch 
     Appropriations Act, 1994, shall not apply to employee 
     positions in the Library of Congress that are required to be 
     filled in order to carry out section 111, 112, 114, 115, 116, 
     118, or 119 or chapter 10.

     [``Sec. 804. Institution of proceedings

       [``(a) Filing of Petition.--With respect to proceedings 
     referred to in paragraphs (1) and (2) of section 801(b) 
     concerning the determination or adjustment of royalty rates 
     as provided in sections 111, 112, 114, 115, 116, 118, and 
     1004, during the calendar years specified in the schedule set 
     forth in subsection (b), any owner or user of a copyrighted 
     work whose royalty rates are specified by this title, or are 
     established under this chapter before or after the enactment 
     of the Copyright Royalty and Distribution Reform Act of 2004, 
     may file a petition with the Copyright Royalty Judges 
     declaring that the petitioner requests a determination or 
     adjustment of the rate. The Copyright Royalty Judges shall 
     make a determination as to whether the petitioner has such a 
     significant interest in the royalty rate in which a 
     determination or adjustment is requested. If the Copyright 
     Royalty Judges determine that the petitioner has such a 
     significant interest, the Copyright Royalty Judges shall 
     cause notice of this determination, with the reasons 
     therefor, to be published in the Federal Register, together 
     with the notice of commencement of proceedings under this 
     chapter. With respect to proceedings under paragraph (1) of 
     section 801(b) concerning the determination or adjustment of 
     royalty rates as provided in sections 112 and 114, during the 
     calendar years specified in the schedule set forth in 
     subsection (b), the Copyright Royalty Judges shall cause 
     notice of commencement of proceedings under this chapter to 
     be published in the Federal Register as provided in section 
     803(b)(1)(A).
       [``(b) Timing of Proceedings.--
       [``(1) Section 111 proceedings.--(A) A petition described 
     in subsection (a) to initiate proceedings under section 
     801(b)(2) concerning the adjustment of royalty rates under 
     section 111 to which subparagraph (A) or (D) of section 
     801(b)(2) applies may be filed during the year 2005 and in 
     each subsequent fifth calendar year.
       [``(B) In order to initiate proceedings under section 
     801(b)(2) concerning the adjustment of royalty rates under 
     section 111 to which subparagraph (B) or (C) of section 
     801(b)(2) applies, within 12 months after an event described 
     in either of those subsections, any owner or user of a 
     copyrighted work whose royalty rates are specified by section 
     111, or by a rate established under this chapter before or 
     after the enactment of the Copyright Royalty and Distribution 
     Reform Act of 2004, may file a petition with the Copyright 
     Royalty Judges declaring that the petitioner requests an 
     adjustment of the rate. The Copyright Royalty Judges shall 
     then proceed as set forth in subsection (a) of this section. 
     Any change in royalty rates made under this chapter pursuant 
     to this subparagraph may be reconsidered in the year 2005, 
     and each fifth calendar year thereafter, in accordance with 
     the provisions in section 801(b)(3)(B) or (C), as the case 
     may be. A petition for adjustment of rates under section 
     11(d)(1)(B) as a result of a change is the rules and 
     regulations of the Federal Communications Commission shall 
     set forth the change on which the petition is based.
       [``(C) Any adjustment of royalty rates under section 111 
     shall take effect as of the first accounting period 
     commencing after the publication of the determination of the 
     Copyright Royalty Judges in the Federal Register, or on such 
     other date as is specified in that determination.
       [``(2) Certain section 112 proceedings.--Proceedings under 
     this chapter shall be commenced in the year 2007 to determine 
     reasonable terms and rates of royalty payments for the 
     activities described in section 112(e)(1) relating to the 
     limitation on exclusive rights specified by section 
     114(d)(1)(C)(iv), to become effective on January 1, 2009. 
     Such proceedings shall be repeated in each subsequent fifth 
     calendar year.
       [``(3) Section 114 and corresponding 112 proceedings.--
       [``(A) For eligible nonsubscription services and new 
     subscription services.--Proceedings under this chapter shall 
     be commenced as soon as practicable after the effective date 
     of the Copyright Royalty and Distribution Reform Act of 2004 
     to determine reasonable terms and rates of royalty payments 
     under sections 114 and 112 for the activities of eligible 
     nonsubscription transmission services and new subscription 
     services, to be effective for the period beginning on January 
     1, 2006, and ending on December 31, 2010. Such proceedings 
     shall next be commenced in January 2009 to determine 
     reasonable terms and rates of royalty payments, to become 
     effective on January 1, 2011. Thereafter, such proceedings 
     shall be repeated in each subsequent fifth calendar year.
       [``(B) For preexisting subscription and satellite digital 
     audio radio services.--Proceedings under this chapter shall 
     be commenced in January 2006 to determine reasonable terms 
     and rates of royalty payments under sections 114 and 112 for 
     the activities of preexisting subscription services, to be 
     effective during the period beginning on January 1, 2008, and 
     ending on December 31, 2012, and preexisting satellite 
     digital audio radio services, to be effective during the 
     period beginning on January 1, 2007, and ending on December 
     31, 2012. Such proceedings shall next be commenced in 2011 to 
     determine reasonable terms and rates of royalty payments, to 
     become effective on January 1, 2013. Thereafter, such 
     proceedings shall be repeated in each subsequent fifth 
     calendar year.
       [``(C)(i) Notwithstanding any other provision of this 
     chapter, this subparagraph shall govern proceedings commenced 
     pursuant to sections 114(f)(1)(C) and 114(f)(2)(C) concerning 
     new types of services.
       [``(ii) Not later than 30 days after a petition to 
     determine rates and terms for a new type of service that is 
     filed by any copyright

[[Page 20926]]

     owner of sound recordings, or such new type of service, 
     indicating that such new type of service is or is about to 
     become operational, the Copyright Royalty Judges shall issue 
     a notice for a proceeding to determine rates and terms for 
     such service.
       [``(iii) The proceeding shall follow the schedule set forth 
     in such subsections (b), (c), and (d) of section 803, except 
     that--
       [``(I) the determination shall be issued by not later than 
     24 months after the publication of the notice under clause 
     (ii); and
       [``(II) the decision shall take effect as provided in 
     subsections (c)(2) and (d)(2) of section 803 and section 
     114(f)(4)(B)(ii) and (C).
       [``(iv) The rates and terms shall remain in effect for the 
     period set forth in section 114(f)(1)(C) or 114(f)(2)(C), as 
     the case may be.
       [``(4) Section 115 proceedings.--A petition described in 
     subsection (a) to initiate proceedings under section 
     801(b)(1) concerning the adjustment or determination of 
     royalty rates as provided in section 115 may be filed in the 
     year 2006 and in each subsequent fifth calendar year, or at 
     such other times as the parties have agreed under section 
     115(c)(3)(B) and (C).
       [``(5) Section 116 proceedings.--(A) A petition described 
     in subsection (a) to initiate proceedings under section 
     801(b) concerning the determination of royalty rates and 
     terms as provided in section 116 may be filed at any time 
     within 1 year after negotiated licenses authorized by section 
     116 are terminated or expire and are not replaced by 
     subsequent agreements.
       [``(B) If a negotiated license authorized by section 116 is 
     terminated or expires and is not replaced by another such 
     license agreement which provides permission to use a quantity 
     of musical works not substantially smaller than the quantity 
     of such works performed on coin-operated phonorecord players 
     during the 1-year period ending March 1, 1989, the Copyright 
     Royalty Judges shall, upon petition filed under paragraph (1) 
     within 1 year after such termination or expiration, commence 
     a proceeding to promptly establish an interim royalty rate or 
     rates for the public performance by means of a coin-operated 
     phonorecord player of nondramatic musical works embodied in 
     phonorecords which had been subject to the terminated or 
     expired negotiated license agreement. Such rate or rates 
     shall be the same as the last such rate or rates and shall 
     remain in force until the conclusion of proceedings by the 
     Copyright Royalty Judges, in accordance with section 803, to 
     adjust the royalty rates applicable to such works, or until 
     superseded by a new negotiated license agreement, as provided 
     in section 116(b).
       [``(6) Section 118 proceedings.--A petition described in 
     subsection (a) to initiate proceedings under section 
     801(b)(1) concerning the determination of reasonable terms 
     and rates of royalty payments as provided in section 118 may 
     be filed in the year 2006 and in each subsequent fifth 
     calendar year.
       [``(7) Section 1004 proceedings.--A petition described in 
     subsection (a) to initiate proceedings under section 
     801(b)(1) concerning the adjustment of reasonable royalty 
     rates under section 1004 may be filed as provided in section 
     1004(a)(3).
       [``(8) Proceedings concerning distribution of royalty 
     fees.--With respect to proceedings under section 801(b)(3) 
     concerning the distribution of royalty fees in certain 
     circumstances under section 111, 116, 119, or 1007, the 
     Copyright Royalty Judges shall, upon a determination that a 
     controversy exists concerning such distribution, cause to be 
     published in the Federal Register notice of commencement of 
     proceedings under this chapter.

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

       [``Any rates or terms under this title that--
       [``(1) are agreed to by participants to a proceeding under 
     section 803(b)(2),
       [``(2) are adopted by the Copyright Royalty Judges as part 
     of a determination under this chapter, and
       [``(3) are in effect for a period shorter than would 
     otherwise apply under a determination pursuant to this 
     chapter,

     [shall remain in effect for such period of time as would 
     otherwise apply under such determination, except that the 
     Copyright Royalty Judges shall adjust the rates pursuant to 
     the voluntary negotiations to reflect national monetary 
     inflation during the additional period the rates remain in 
     effect.''.
       [(b) Conforming Amendment.--The table of chapters for title 
     17, United States Code, is amended by striking the item 
     relating to chapter 8 and inserting the following:

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

     [SEC. 4. DEFINITION.

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

     [SEC. 5. TECHNICAL AMENDMENTS.

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

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

       [(C) in subparagraph (C), by striking ``Librarian of 
     Congress'' and inserting ``Copyright Royalty Judges''.
       [(b) Ephemeral Recordings.--Section 112(e) is amended--
       [(1) in paragraph (3)--
       [(A) by amending the first sentence to read as follows: 
     ``Voluntary negotiation proceedings initiated pursuant to 
     section 804(a) for the purpose of determining reasonable 
     terms and rates of royalty payments for the activities 
     specified by paragraph (1) shall cover the 5-year period 
     beginning on January 1 of the second year following the year 
     in which the proceedings are commenced, or such other period 
     as the parties may agree.''; and
       [(B) in the third sentence, by striking ``Librarian of 
     Congress'' and inserting ``Copyright Royalty Judges'';
       [(2) in paragraph (4)--
       [(A) by amending the first sentence to read as follows: 
     ``In the absence of license agreements negotiated under 
     paragraphs (2) and (3), the Copyright Royalty Judges shall 
     commence a proceeding pursuant to chapter 8 to determine and 
     publish in the Federal Register a schedule of reasonable 
     rates and terms which, subject to paragraph (5), shall be 
     binding on all copyright owners of sound recordings and 
     transmitting organizations entitled to a statutory license 
     under this subsection during the 5-year period specified in 
     paragraph (3), or such other period as the parties may 
     agree.'';
       [(B) by striking ``copyright arbitration royalty panel'' 
     each subsequent place it appears and inserting ``Copyright 
     Royalty Judges'';
       [(C) in the fourth sentence, by striking ``its decision'' 
     and inserting ``their decision''; and
       [(D) in the last sentence, by striking ``Librarian of 
     Congress'' and inserting ``Copyright Royalty Judges'';
       [(3) in paragraph (5), by striking ``or decision by the 
     Librarian of Congress'' and inserting ``, decision by the 
     Librarian of Congress, or determination by the Copyright 
     Royalty Judges'';
       [(4) by striking paragraph (6) and redesignating paragraphs 
     (7), (8), and (9), as paragraphs (6), (7), and (8), 
     respectively; and
       [(5) in paragraph (6)(A), as so redesignated, by striking 
     ``Librarian of Congress'' and inserting ``Copyright Royalty 
     Judges''.
       [(c) Scope of Exclusive Rights in Sound Recordings.--
     Section 114(f) is amended--
       [(1) in paragraph (1)--
       [(A) in subparagraph (A)--
       [(i) by amending the first sentence to read as follows: 
     ``Voluntary negotiation proceedings initiated pursuant to 
     section 804(a) for the purpose of determining reasonable 
     terms and rates of royalty payments for subscription 
     transmissions by preexisting subscription services and 
     transmissions by preexisting satellite digital audio radio 
     services shall cover the 5-year period beginning on January 1 
     of the year following the second year in which the 
     proceedings are commenced, except where differential 
     transitional periods are provided in section 804(b)(3), or 
     such other period as the parties may agree.''; and
       [(ii) in the third sentence, by striking ``Librarian of 
     Congress'' and inserting ``Copyright Royalty Judges'';
       [(B) in subparagraph (B)--
       [(i) by amending the first sentence to read as follows: 
     ``In the absence of license agreements negotiated under 
     subparagraph (A), the Copyright Royalty Judges shall commence 
     a proceeding pursuant to chapter 8 to determine and publish 
     in the Federal Register a schedule of rates and terms which, 
     subject to paragraph (3), shall be binding on all copyright 
     owners of sound recordings and entities performing sound 
     recordings affected by this paragraph during the 5-year 
     period specified in subparagraph (A), or such other date as 
     the parties may agree.''; and
       [(ii) in the second sentence, by striking ``copyright 
     arbitration royalty panel'' and inserting ``Copyright Royalty 
     Judges''; and
       [(C) by amending subparagraph (C) to read as follows:
       [``(C) The procedures under subparagraphs (A) and (B) also 
     shall be initiated pursuant to a petition filed by any 
     copyright owners of sound recordings, any preexisting 
     subscription services, or any preexisting satellite digital 
     audio radio services indicating that a new type of 
     subscription digital audio transmission service on which 
     sound recordings are performed is or is about to become

[[Page 20927]]

     operational, for the purpose of determining reasonable terms 
     and rates of royalty payments with respect to such new type 
     of transmission service for the period beginning with the 
     inception of such new type of service and ending on the date 
     on which the royalty rates and terms for subscription digital 
     audio transmission services most recently determined under 
     subparagraph (A) or (B) and chapter 8 expire, or such other 
     period as the parties may agree.'';
       [(2) in paragraph (2)--
       [(A) in subparagraph (A)--
       [(i) by amending the first sentence to read as follows: 
     ``Voluntary negotiation proceedings initiated pursuant to 
     section 804(a) for the purpose of determining reasonable 
     terms and rates of royalty payments for public performances 
     of sound recordings by means of eligible nonsubscription 
     transmissions and transmissions by new subscription services 
     specified by subsection (d)(2) shall cover the 5-year period 
     beginning on January 1 of the second year following the year 
     in which the proceedings are commenced, except where 
     different transitional periods are provided in section 
     804(b)(3)(A), or such other period as the parties may 
     agree.''; and
       [(ii) in the third sentence, by striking ``Librarian of 
     Congress'' and inserting ``Copyright Royalty Judges'';
       [(B) in subparagraph (B)--
       [(i) by amending the first sentence to read as follows: 
     ``In the absence of license agreements negotiated under 
     subparagraph (A), the Copyright Royalty Judges shall commence 
     a proceeding pursuant to chapter 8 to determine and publish 
     in the Federal Register a schedule of rates and terms which, 
     subject to paragraph (3), shall be binding on all copyright 
     owners of sound recordings and entities performing sound 
     recordings affected by this paragraph during the period 
     specified in subparagraph (A), or such other period as the 
     parties may agree.''; and
       [(ii) by striking ``copyright arbitration royalty panel'' 
     each subsequent place it appears and inserting ``Copyright 
     Royalty Judges''; and
       [(C) by amending subparagraph (C) to read as follows:
       [``(C) The procedures under subparagraphs (A) and (B) shall 
     also be initiated pursuant to a petition filed by any 
     copyright owners of sound recordings or any eligible 
     nonsubscription service or new subscription service 
     indicating that a new type of eligible nonsubscription 
     service or new subscription service on which sound recordings 
     are performed is or is about to become operational, for the 
     purpose of determining reasonable terms and rates of royalty 
     payments with respect to such new type of service for the 
     period beginning with the inception of such new type of 
     service and ending on the date on which the royalty rates and 
     terms for preexisting subscription digital audio transmission 
     services or preexisting satellite digital radio audio 
     services, as the case may be, most recently determined under 
     subparagraph (A) or (B) and chapter 8 expire, or such other 
     period as the parties may agree.'';
       [(3) in paragraph (3), by striking ``or decision by the 
     Librarian of Congress'' and inserting ``, decision by the 
     Librarian of Congress, or determination by the Copyright 
     Royalty Judges''; and
       [(4) in paragraph (4), by striking ``Librarian of 
     Congress'' each place it appears and inserting ``Copyright 
     Royalty Judges''.
       [(d) Phonorecords of Nondramatic Musical Works.--Section 
     115(c)(3) is amended--
       [(1) in subparagraph (A)(ii), by striking ``(F)'' and 
     inserting ``(E)'';
       [(2) in subparagraph (B)--
       [(A) by striking ``under this paragraph'' and inserting 
     ``under this section''; and
       [(B) by striking ``subparagraphs (B) through (F)'' and 
     inserting ``this subparagraph and subparagraphs (B) through 
     (E)'';
       [(3) in subparagraph (C)--
       [(A) by amending the first sentence to read as follows: 
     ``Voluntary negotiation proceedings initiated pursuant to a 
     petition filed under section 804(a) for the purpose of 
     determining reasonable terms and rates of royalty payments 
     for the activities specified by this section shall cover the 
     period beginning with the effective date of such terms and 
     rates, but not earlier than January 1 of the second year 
     following the year in which the petition is filed, and ending 
     on the effective date of successor terms and rates, or such 
     other period as the parties may agree.''; and
       [(B) in the third sentence, by striking ``Librarian of 
     Congress'' and inserting ``Copyright Royalty Judges'';
       [(4) in subparagraph (D)--
       [(A) by amending the first sentence to read as follows: 
     ``In the absence of license agreements negotiated under 
     subparagraphs (B) and (C), the Copyright Royalty Judges shall 
     commence proceedings pursuant to chapter 8 to determine and 
     publish in the Federal Register a schedule of rates and terms 
     which, subject to subparagraph (E), shall be binding on all 
     copyright owners of nondramatic musical works and persons 
     entitled to obtain a compulsory license under subsection 
     (a)(1) during the period specified in subparagraph (C) or 
     such other period as may be determined pursuant to 
     subparagraphs (B) and (C), or such other period as the 
     parties may agree.'';
       [(B) in the third sentence, by striking ``copyright 
     arbitration royalty panel'' and inserting ``Copyright Royalty 
     Judges''; and
       [(C) in the last sentence, by striking ``Librarian of 
     Congress'' and inserting ``Copyright Royalty Judges'';
       [(5) in subparagraph (E)--
       [(A) in clause (i)--
       [(i) in the first sentence, by striking ``the Librarian of 
     Congress'' and inserting ``a copyright arbitration royalty 
     panel, the Librarian of Congress, or the Copyright Royalty 
     Judges''; and
       [(ii) in the second sentence, by striking ``(C), (D) or (F) 
     shall be given effect'' and inserting ``(C) or (D) shall be 
     given effect as to digital phonorecord deliveries''; and
       [(B) in clause (ii)(I), by striking ``(C), (D) or (F)'' 
     each place it appears and inserting ``(C) or (D)''; and
       [(6) by striking subparagraph (F) and redesignating 
     subparagraphs (G) through (L) as subparagraphs (F) through 
     (K), respectively.
       [(e) Coin-Operated Phonorecord Players.--Section 116 is 
     amended--
       [(1) in subsection (b), by amending paragraph (2) to read 
     as follows:
       [``(2) Chapter 8 proceeding.--Parties not subject to such a 
     negotiation may have the terms and rates and the division of 
     fees described in paragraph (1) determined in a proceeding in 
     accordance with the provisions of chapter 8.''; and
       [(2) in subsection (c)--
       [(A) in the subsection heading, by striking ``Copyright 
     Arbitration Royalty Panel Determinations'' and inserting 
     ``Determinations by Copyright Royalty Judges''; and
       [(B) by striking ``a copyright arbitration royalty panel'' 
     and inserting ``the Copyright Royalty Judges''.
       [(f) Use of Certain Works in Connection With Noncommercial 
     Broadcasting.--Section 118 is amended--
       [(1) in subsection (b)--
       [(A) in paragraph (1)--
       [(i) in the first sentence, by striking ``Librarian of 
     Congress'' and inserting ``Copyright Royalty Judges''; and
       [(ii) by striking the second and third sentences;
       [(B) in paragraph (2), by striking ``the Librarian of 
     Congress:'' and all that follows through the end of the 
     sentence and inserting ``a copyright arbitration royalty 
     panel, the Librarian of Congress, or the Copyright Royalty 
     Judge, if copies of such agreements are filed with the 
     Copyright Royalty Judges within 30 days of execution in 
     accordance with regulations that the Copyright Royalty Judges 
     shall issue.''; and
       [(C) in paragraph (3)--
       [(i) in the second sentence--

       [(I) by striking ``copyright arbitration royalty panel'' 
     and inserting ``Copyright Royalty Judges''; and

       [(II) by striking ``paragraph (2).'' and inserting 
     ``paragraph (2) or (3).'';

       [(ii) in the last sentence, by striking ```Librarian of 
     Congress'' and inserting ``Copyright Royalty Judges''; and
       [(iii) by striking ``(3) In'' and all that follows through 
     the end of the first sentence and inserting the following:
       [``(3) Voluntary negotiation proceedings initiated pursuant 
     to a petition filed under section 804(a) for the purpose of 
     determining a schedule of terms and rates of royalty payments 
     by public broadcasting entities to copyright owners in works 
     specified by this subsection and the proportionate division 
     of fees paid among various copyright owners shall cover the 
     5-year period beginning on January 1 of the second year 
     following the year in which the petition is filed. The 
     parties to each negotiation proceeding shall bear their own 
     costs.
       [``(4) In the absence of license agreements negotiated 
     under paragraph (2) or (3), the Copyright Royalty Judges 
     shall, pursuant to chapter 8, conduct a proceeding to 
     determine and publish in the Federal Register a schedule of 
     rates and terms which, subject to paragraph (2), shall be 
     binding on all owners of copyright in works specified by this 
     subsection and public broadcasting entities, regardless of 
     whether such copyright owners have submitted proposals to the 
     Copyright Royalty Judges.'';
       [(2) by striking subsection (c) and redesignating 
     subsections (d) through (g) as subsections (c) through (f), 
     respectively;
       [(3) in subsection (c), as so redesignated, in the matter 
     preceding paragraph (1)--
       [(A) by striking ``(b)(2)'' and inserting ``(b)(2) or 
     (3)'';
       [(B) by striking ``(b)(3)'' and inserting ``(b)(4)''; and
       [(C) by striking ``a copyright arbitration royalty panel'' 
     and inserting ``the Copyright Royalty Judges'';
       [(4) in subsection (d), as so redesignated--
       [(A) by striking ``in the Copyright Office'' and inserting 
     ``with the Copyright Royalty Judges''; and
       [(B) by striking ``Register of Copyrights'' and inserting 
     ``Copyright Royalty Judges''; and
       [(5) in subsection (f), as so redesignated, by striking 
     ``(d)'' and inserting ``(c)''.
       [(g) Secondary Transmissions by Satellite Carriers.--
     Section 119(b) is amended--
       [(1) in paragraph (3), by striking ``Librarian of 
     Congress'' and inserting ``Copyright Royalty Judges''; and

[[Page 20928]]

       [(2) in paragraph (4)--
       [(A) in subparagraph (A), by striking ``Librarian of 
     Congress'' each place it appears and inserting ``Copyright 
     Royalty Judges''; and
       [(B) by amending subparagraphs (B) and (C) to read as 
     follows:
       [``(B) Determination of controversy; distributions.--After 
     the first day of August of each year, the Copyright Royalty 
     Judges shall determine whether there exists a controversy 
     concerning the distribution of royalty fees. If the Copyright 
     Royalty Judges determine that no such controversy exists, the 
     Librarian of Congress shall, after deducting reasonable 
     administrative costs under this paragraph, distribute such 
     fees to the copyright owners entitled to receive them, or to 
     their designated agents. If the Copyright Royalty Judges find 
     the existence of a controversy, the Copyright Royalty Judges 
     shall, pursuant to chapter 8 of this title, conduct a 
     proceeding to determine the distribution of royalty fees.
       [``(C) Withholding of fees during controversy.--During the 
     pendency of any proceeding under this subsection, the 
     Copyright Royalty Judges shall withhold from distribution an 
     amount sufficient to satisfy all claims with respect to which 
     a controversy exists, subject to any distributions made under 
     section 801(b)(3).''.
       [(h) Digital Audio Recording Devices.--
       [(1) Royalty payments.--Section 1004(a)(3) is amended by 
     striking ``Librarian of Congress'' each place it appears and 
     inserting ``Copyright Royalty Judges''.
       [(2) Entitlement to royalty payments.--Section 1006(c) is 
     amended by striking ``Librarian of Congress shall convene a 
     copyright arbitration royalty panel which'' and inserting 
     ``Copyright Royalty Judges''.
       [(3) Procedures for distributing royalty payments.--Section 
     1007 is amended--
       [(A) in subsection (a), by amending paragraph (1) to read 
     as follows:
       [``(1) Filing of claims.--During the first 2 months of each 
     calendar year, every interested copyright party seeking to 
     receive royalty payments to which such party is entitled 
     under section 1006 shall file with the Copyright Royalty 
     Judges a claim for payments collected during the preceding 
     year in such form and manner as the Copyright Royalty Judges 
     shall prescribe by regulation.''; and
       [(B) by amending subsections (b) and (c) to read as 
     follows:
       [``(b) Distribution of Payments in the Absence of a 
     Dispute.--After the period established for the filing of 
     claims under subsection (a), in each year, the Copyright 
     Royalty Judges shall determine whether there exists a 
     controversy concerning the distribution of royalty payments 
     under section 1006(c). If the Copyright Royalty Judges 
     determine that no such controversy exists, the Librarian of 
     Congress shall, within 30 days after such determination, 
     authorize the distribution of the royalty payments as set 
     forth in the agreements regarding the distribution of royalty 
     payments entered into pursuant to subsection (a). The 
     Librarian of Congress shall, before such royalty payments are 
     distributed, deduct the reasonable administrative costs 
     incurred by the Librarian under this section.
       [``(c) Resolution of Disputes.--If the Copyright Royalty 
     Judges find the existence of a controversy, the Copyright 
     Royalty Judges shall, pursuant to chapter 8 of this title, 
     conduct a proceeding to determine the distribution of royalty 
     payments. During the pendency of such a proceeding, the 
     Copyright Royalty Judges shall withhold from distribution an 
     amount sufficient to satisfy all claims with respect to which 
     a controversy exists, but shall, to the extent feasible, 
     authorize the distribution of any amounts that are not in 
     controversy. The Librarian of Congress shall, before such 
     royalty payments are distributed, deduct the reasonable 
     administrative costs incurred by the Librarian under this 
     section.''.
       [(4) Determination of certain disputes.--(A) Section 1010 
     is amended to read as follows:

     [``Sec. 1010. Determination of certain disputes

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

[``1010. Determination of certain disputes.''.

     [SEC. 6. EFFECTIVE DATE AND TRANSITION PROVISIONS.

       [(a) Effective Date.--This Act and the amendments made by 
     this Act shall take effect 6 months after the date of the 
     enactment of this Act, except that the Librarian of Congress 
     shall appoint interim Copyright Royalty Judges under section 
     802(d) of title 17, United States Code, as amended by this 
     Act, within 90 days after such date of enactment to carry out 
     the functions of the Copyright Royalty Judges under title 17, 
     United States Code, to the extent that Copyright Royalty 
     Judges provided for in section 801(a) of title 17, United 
     States Code, as amended by this Act, have not been appointed 
     before the end of that 90-day period.
       [(b) Transition Provisions.--
       [(1) In general.--Subject to paragraph (2), the amendments 
     made by this Act shall not affect any proceedings commenced, 
     petitions filed, or voluntary agreements entered into before 
     the enactment of this Act under the provisions of title 17, 
     United States Code, amended by this Act, and pending on such 
     date of enactment. Such proceedings shall continue, 
     determinations made in such proceedings, and appeals taken 
     therefrom, as if this Act had not been enacted, and shall 
     continue in effect until modified under title 17, United 
     States Code, as amended by this Act. Such petitions filed and 
     voluntary agreements entered into shall remain in effect as 
     if this Act had not been enacted.
       [(2) Effective periods for certain ratemaking 
     proceedings.--Notwithstanding paragraph (1), terms and rates 
     in effect under section 114(f)(2) or 112(e) of title 17, 
     United States Code, for new subscription services, eligible 
     nonsubscription services, and services exempt under section 
     114(d)(1)(C)(iv) of such title for the period 2003 through 
     2004, and any rates published in the Federal Register under 
     the authority of the Small Webcaster Settlement Act of 2002 
     for the years 2003 through 2004, shall be effective until the 
     first applicable effective date for successor terms and rates 
     specified in section 804(b)(2) or (3)(A) of title 17, United 
     States Code, or until such later date as the parties may 
     agree. Any proceeding commenced before the enactment of this 
     Act pursuant to section 114(f)(2) and chapter 8 of title 17, 
     United States Code, to adjust or determine such rates and 
     terms for periods following 2004 shall be terminated upon the 
     enactment of this Act and shall be null and void.
       [(c) Existing Appropriations.--Any funds made available in 
     an appropriations Act before the date of the enactment of 
     this Act to carry out chapter 8 of title 17, United States 
     Code, shall be available to the extent necessary to carry out 
     this section.]

     SECTION 1. SHORT TITLE.

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

     SEC. 2. REFERENCE.

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

     SEC. 3. COPYRIGHT ROYALTY JUDGE AND STAFF.

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

          ``CHAPTER 8--PROCEEDINGS BY COPYRIGHT ROYALTY JUDGES

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

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

       ``(a) Appointment.--Upon the recommendation of the Register 
     of Copyrights, the Librarian of Congress shall appoint 3 
     full-time Copyright Royalty Judges, and shall appoint 1 of 
     the 3 as the Chief Copyright Royalty Judge.

[[Page 20929]]

       ``(b) Functions.--Subject to the provisions of this 
     chapter, the functions of the Copyright Royalty Judges shall 
     be as follows:
       ``(1) To make determinations and adjustments of reasonable 
     terms and rates of royalty payments as provided in sections 
     112(e), 114, 115, 116, 118, 119 and 1004. The rates 
     applicable under sections 114(f)(1)(B), 115, and 116 shall be 
     calculated to achieve the following objectives:
       ``(A) To maximize the availability of creative works to the 
     public.
       ``(B) To afford the copyright owner a fair return for his 
     or her creative work and the copyright user a fair income 
     under existing economic conditions.
       ``(C) To reflect the relative roles of the copyright owner 
     and the copyright user in the product made available to the 
     public with respect to relative creative contribution, 
     technological contribution, capital investment, cost, risk, 
     and contribution to the opening of new markets for creative 
     expression and media for their communication.
       ``(D) To minimize any disruptive impact on the structure of 
     the industries involved and on generally prevailing industry 
     practices.
       ``(2) To make determinations concerning the adjustment of 
     the copyright royalty rates under section 111 solely in 
     accordance with the following provisions:
       ``(A) The rates established by section 111(d)(1)(B) may be 
     adjusted to reflect--
       ``(i) national monetary inflation or deflation; or
       ``(ii) changes in the average rates charged cable 
     subscribers for the basic service of providing secondary 
     transmissions to maintain the real constant dollar level of 
     the royalty fee per subscriber which existed as of the date 
     of October 19, 1976,

     except that--
       ``(I) if the average rates charged cable system subscribers 
     for the basic service of providing secondary transmissions 
     are changed so that the average rates exceed national 
     monetary inflation, no change in the rates established by 
     section 111(d)(1)(B) shall be permitted; and
       ``(II) no increase in the royalty fee shall be permitted 
     based on any reduction in the average number of distant 
     signal equivalents per subscriber.

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

     ``Sec. 802. Copyright Royalty Judgeships; staff

       ``(a) Qualifications of Copyright Royalty Judges.--
       ``(1) In general.--Each Copyright Royalty Judge shall be an 
     attorney who has at least 7 years of legal experience. The 
     Chief Copyright Royalty Judge shall have at least 5 years of 
     experience in adjudications, arbitrations, or court trials. 
     Of the other two Copyright Royalty Judges, one shall have 
     significant knowledge of copyright law, and the other shall 
     have significant knowledge of economics. An individual may 
     serve as a Copyright Royalty Judge only if the individual is 
     free of any financial conflict of interest under subsection 
     (h).
       ``(2) Definition.--In this subsection, the term 
     `adjudication' has the meaning given that term in section 551 
     of title 5, but does not include mediation.
       ``(b) Staff.--The Chief Copyright Royalty Judge shall hire 
     3 full-time staff members to assist the Copyright Royalty 
     Judges in performing their functions.
       ``(c) Terms.--The terms of the Copyright Royalty Judges 
     shall each be 6 years, except of the

[[Page 20930]]

     individuals first appointed, the Chief Copyright Royalty 
     Judge shall be appointed to a term of 6 years, and of the 
     remaining Copyright Royalty Judges, one shall be appointed to 
     a term of 2 years, and the other shall be appointed to a term 
     of 4 years. An individual serving as a Copyright Royalty 
     Judge may be reappointed to subsequent terms. The term of a 
     Copyright Royalty Judge shall begin when the term of the 
     predecessor of that Copyright Royalty Judge ends. When the 
     term of office of a Copyright Royalty Judge ends, the 
     individual serving that term may continue to serve until a 
     successor is selected.
       ``(d) Vacancies or Incapacity.--
       ``(1) Vacancies.--If a vacancy should occur in the position 
     of Copyright Royalty Judge, the Librarian of Congress shall 
     act expeditiously to fill the vacancy, and may appoint an 
     interim Copyright Royalty Judge to serve until another 
     Copyright Royalty Judge is appointed under this section. An 
     individual appointed to fill the vacancy occurring before the 
     expiration of the term for which the predecessor of that 
     individual was appointed shall be appointed for the remainder 
     of that term.
       ``(2) Incapacity.--In the case in which a Copyright Royalty 
     Judge is temporarily unable to perform his or her duties, the 
     Librarian of Congress may appoint an interim Copyright 
     Royalty Judge to perform such duties during the period of 
     such incapacity.
       ``(e) Compensation.--
       ``(1) Judges.--The Chief Copyright Royalty Judge shall 
     receive compensation at the rate of basic pay payable for 
     level AL-1 for administrative law judges pursuant to section 
     5372(b) of title 5, and each of the other two Copyright 
     Royalty Judges shall receive compensation at the rate of 
     basic pay payable for level AL-2 for administrative law 
     judges pursuant to such section. The compensation of the 
     Copyright Royalty Judges shall not be subject to any 
     regulations adopted by the Office of Personnel Management 
     pursuant to its authority under section 5376(b)(1) of title 
     5.
       ``(2) Staff members.--Of the staff members appointed under 
     subsection (b)--
       ``(A) the rate of pay of one staff member shall be not more 
     than the basic rate of pay payable for level 10 of GS-15 of 
     the General Schedule;
       ``(B) the rate of pay of one staff member shall be not less 
     than the basic rate of pay payable for GS-13 of the General 
     Schedule and not more than the basic rate of pay payable for 
     level 10 of GS-14 of such Schedule; and
       ``(C) the rate of pay for the third staff member shall be 
     not less than the basic rate of pay payable for GS-8 of the 
     General Schedule and not more than the basic rate of pay 
     payable for level 10 of GS-11 of such Schedule.
       ``(3) Locality pay.--All rates of pay referred to under 
     this subsection shall include locality pay.
       ``(f) Independence of Copyright Royalty Judge.--
       ``(1) In making determinations.--
       ``(A) In general.--Subject to subparagraph (B), the 
     Copyright Royalty Judges shall have full independence in 
     making determinations concerning adjustments and 
     determinations of copyright royalty rates and terms, the 
     distribution of copyright royalties, the acceptance or 
     rejection of royalty claims, rate adjustment petitions, and 
     petitions to participate, and in issuing other rulings under 
     this title, except that the Copyright Royalty Judges may 
     consult with the Register of Copyrights on any matter other 
     than a question of fact. A Copyright Royalty Judge or Judges, 
     or by motion to the Copyright Royalty Judge or Judges, any 
     participant in a proceeding may request a determination of 
     the resolution by the Register of Copyrights on any material 
     question of substantive law (not including questions of 
     procedure before the Copyright Royalty Judges, the ultimate 
     adjustments and determinations of copyright royalty rates and 
     terms, the ultimate distribution of copyright royalties, or 
     the acceptance or rejection of royalty claims, rate 
     adjustment petitions, or petitions to participate) concerning 
     an interpretation or construction of those provisions of this 
     title that are the subject of the proceeding. Any such motion 
     requesting a written decision by the Register of Copyrights 
     shall be in writing or on the record, and reasonable 
     provision shall be made for comment by the participants in 
     the proceeding in such a way as to minimize duplication and 
     delay. Except as provided in subparagraph (B), the Register 
     of Copyrights shall deliver to the Copyright Royalty Judges 
     his or her decision within 14 days of receipt by the Register 
     of Copyrights of all of the briefs or comments of the 
     participants. Such decision shall be in writing and shall be 
     included by the Copyright Royalty Judges in the record that 
     accompanies their final determination. If such a decision is 
     timely delivered to the Register of Copyrights, the Copyright 
     Royalty Judges shall apply the legal determinations embodied 
     in the decision of the Register of Copyrights in resolving 
     material questions of substantive law.
       ``(B) Novel questions.--(i) In any case in which a novel 
     question of law concerning an interpretation of those 
     provisions of this title that are the subject of the 
     proceeding is presented, the Copyright Royalty Judges shall 
     request a decision of the Register of Copyrights, in writing, 
     to resolve such novel question. To the extent practicable, 
     provision shall be made for comment on such request by the 
     participants in the proceeding, in such a way as to minimize 
     duplication and delay. The Register shall transmit his or her 
     decision to the Copyright Royalty Judges within 30 days of 
     receipt by the Register of Copyrights of all of the briefs or 
     comments of the participants. Such decision shall be in 
     writing and included by the Copyright Royalty Judges in the 
     record that accompanies their final determination. If such a 
     decision is timely transmitted, the Copyright Royalty Judges 
     shall apply the legal determinations embodied in the decision 
     of the Register of Copyrights in resolving material questions 
     of substantive law.
       ``(ii) In clause (i), a `novel question of law' is a 
     question of law that has not been determined in prior 
     decisions, determinations, and rulings described in section 
     803(a).
       ``(C) Consultation.--Notwithstanding the provisions of 
     subparagraph (A), the Copyright Royalty Judges shall consult 
     with the Register of Copyrights with respect to any 
     determination or ruling that would require that any act be 
     performed by the Copyright Office, and any such determination 
     or ruling shall not be binding upon the Register of 
     Copyrights.
       ``(D) Sua sponte review of legal conclusions by the 
     register of copyrights.--The Register of Copyrights may 
     review for legal error the resolution by the Copyright 
     Royalty Judges of a material question of substantive law 
     under this title that underlies or is contained in a final 
     determination of the Copyright Royalty Judges. If the 
     Register of Copyrights concludes, after taking into 
     consideration the views of the participants in the 
     proceeding, that any resolution reached by the Copyright 
     Royalty Judges was in material error, the Register of 
     Copyrights shall issue a written decision correcting such 
     legal error, which shall be made part of the record of the 
     proceeding. Additionally, the Register of Copyrights shall 
     cause to be published in the Federal Register such written 
     decision together with a specific identification of the legal 
     conclusion of the Copyright Royalty Judges that is determined 
     to be erroneous. As to conclusions of substantive law 
     involving an interpretation of the statutory provisions of 
     this title, the decision of the Register of Copyrights shall 
     be binding upon the Copyright Royalty Judges in subsequent 
     proceedings under this chapter. When a decision has been 
     rendered pursuant to subsection 802(f)(1)(D), the Register of 
     Copyrights may, on the basis of and in accordance with such 
     decision, intervene as of right in any appeal of a final 
     determination of the Copyright Royalty Judges pursuant to 
     section 803(d) in the United States Court of Appeals for the 
     District of Columbia Circuit. If, prior to intervening in 
     such an appeal, the Register of Copyrights gives notification 
     and undertakes to consult with the Attorney General with 
     respect to such intervention, and the Attorney General fails 
     within reasonable period after receipt of such notification 
     to intervene in such appeal, the Register of Copyrights may 
     intervene in such appeal in his or her own name by any 
     attorney designated by the Register of Copyrights for such 
     purpose. Intervention by the Register of Copyrights in his or 
     her own name shall not preclude the Attorney General from 
     intervening on behalf of the United States in such an appeal 
     as may be otherwise provided or required by law.
       ``(E) Effect on judicial review.--Nothing in this section 
     shall be interpreted to alter the standard applied by a court 
     in reviewing legal determinations involving an interpretation 
     or construction of the provisions of this title or to affect 
     the extent to which any construction or interpretation of the 
     provisions of this title shall be accorded deference by a 
     reviewing court.
       ``(2) Performance appraisals.--
       ``(A) In general.--Notwithstanding any other provision of 
     law or any regulation of the Library of Congress, and subject 
     to subparagraph (B), the Copyright Royalty Judges shall not 
     receive performance appraisals.
       ``(B) Relating to sanction or removal.--To the extent that 
     the Librarian of Congress adopts regulations under subsection 
     (h) relating to the sanction or removal of a Copyright 
     Royalty Judge and such regulations require documentation to 
     establish the cause of such sanction or removal, the 
     Copyright Royalty Judge may receive an appraisal related 
     specifically to the cause of the sanction or removal.
       ``(g) Inconsistent Duties Barred.--No Copyright Royalty 
     Judge may undertake duties that conflict with his or her 
     duties and responsibilities as a Copyright Royalty Judge.
       ``(h) Standards of Conduct.--The Librarian of Congress 
     shall adopt regulations regarding the standards of conduct, 
     including financial conflict of interest and restrictions 
     against ex parte communications, which shall govern the 
     Copyright Royalty Judges and the proceedings under this 
     chapter.
       ``(i) Removal or Sanction.--The Librarian of Congress may 
     sanction or remove a Copyright Royalty Judge for violation of 
     the standards of conduct adopted under subsection (h), 
     misconduct, neglect of duty, or any disqualifying physical or 
     mental disability. Any such sanction or removal may be made 
     only after notice and opportunity for a hearing, but the 
     Librarian of Congress may suspend the Copyright Royalty Judge 
     during the pendency of such hearing. The Librarian shall 
     appoint an interim Copyright Royalty Judge during the period 
     of any such suspension.

     ``Sec. 803. Proceedings of Copyright Royalty Judges

       ``(a) Proceedings.--
       ``(1) In general.--The Copyright Royalty Judges shall act 
     in accordance with regulations issued by the Copyright 
     Royalty Judges and the Librarian of Congress, and on the 
     basis of a written record, prior determinations of the 
     Copyright Royalty Tribunal, Librarian of Congress, copyright 
     arbitration royalty panels, the Register of Copyrights, and 
     the Copyright Royalty Judges (to the extent those 
     determinations

[[Page 20931]]

     are not inconsistent with a decision of the Register of 
     Copyrights that was timely delivered pursuant to subsection 
     802(f)(1)(D)), under this chapter, and decisions of the court 
     of appeals under this chapter before, on, or after the 
     effective date of the Copyright Royalty and Distribution 
     Reform Act of 2004.
       ``(2) Judges acting as panel and individually.--The 
     Copyright Royalty Judges shall preside over hearings in 
     proceedings under this chapter en banc. The Chief Copyright 
     Royalty Judge may designate a Copyright Royalty Judge to 
     preside individually over such collateral and administrative 
     proceedings, and over such proceedings under paragraphs (1) 
     through (5) of subsection (b), as the Chief Judge considers 
     appropriate.
       ``(3) Determinations.--Final determinations of the 
     Copyright Royalty Judges in proceedings under this chapter 
     shall be made by majority vote. A Copyright Royalty Judge 
     dissenting from the majority on any determination under this 
     chapter may issue his or her dissenting opinion, which shall 
     be included with the determination.
       ``(b) Procedures.--
       ``(1) Initiation.--
       ``(A) Call for petitions to participate.--(i) Promptly upon 
     the filing of a petition for a rate adjustment or upon a 
     determination made under section 804(a) or as provided under 
     section 804(b)(8), or by no later than January 5 of a year 
     specified in section 804 for the commencement of a proceeding 
     if a petition has not been filed by that date, the Copyright 
     Royalty Judges shall cause to be published in the Federal 
     Register notice of commencement of proceedings under this 
     chapter calling for the filing of petitions to participate in 
     a proceeding under this chapter for the purpose of making the 
     relevant determination under section 111, 112, 114, 115, 116, 
     118, 119, 1004, or 1007, as the case may be.
       ``(ii) Petitions to participate shall be filed by no later 
     than 30 days after publication of notice of commencement of a 
     proceeding, under clause (i), except that the Copyright 
     Royalty Judges may, for substantial good cause shown and if 
     there is no prejudice to the participants that have already 
     filed petitions, accept late petitions to participate at any 
     time up to the date that is 90 days before the date on which 
     participants in the proceeding are to file their written 
     direct statements. Notwithstanding the preceding sentence, 
     petitioners whose petitions are filed more than 30 days after 
     publication of notice of commencement of a proceeding are not 
     eligible to object to a settlement reached during the 
     voluntary negotiation period under section 803(b)(3), and any 
     objection filed by such a petitioner shall not be taken into 
     account by the Copyright Royalty Judges.
       ``(B) Petitions to participate.--Each petition to 
     participate in a proceeding shall describe the petitioner's 
     interest in the subject matter of the proceeding. Parties 
     with similar interests may file a single petition to 
     participate.
       ``(2) Participation in general.--Subject to paragraph (4), 
     a person may participate in a proceeding under this chapter, 
     including through the submission of briefs or other 
     information, only if--
       ``(A) that person has filed a petition to participate in 
     accordance with paragraph (1) (either individually or as a 
     group under paragraph (1)(B)), together with a filing fee of 
     $150;
       ``(B) the Copyright Royalty Judges have not determined that 
     the petition to participate is facially invalid; and
       ``(C) the Copyright Royalty Judges have not determined, sua 
     sponte or on the motion of another participant in the 
     proceeding, that the person lacks a significant interest in 
     the proceeding.
       ``(3) Voluntary negotiation period.--
       ``(A) In general.--Promptly after the date for filing of 
     petitions to participate in a proceeding, the Copyright 
     Royalty Judges shall make available to all participants in 
     the proceeding a list of such participants and shall initiate 
     a voluntary negotiation period among the participants.
       ``(B) Length of proceedings.--The voluntary negotiation 
     period initiated under subparagraph (A) shall be 3 months.
       ``(C) Determination of subsequent proceedings.--At the 
     close of the voluntary negotiation proceedings, the Copyright 
     Royalty Judges shall, if further proceedings under this 
     chapter are necessary, determine whether and to what extent 
     paragraphs (4) and (5) will apply to the parties.
       ``(4) Small claims procedure in distribution proceedings.--
       ``(A) In general.--If, in a proceeding under this chapter 
     to determine the distribution of royalties, a participant in 
     the proceeding asserts a claim in the amount of $10,000 or 
     less, the Copyright Royalty Judges shall decide the 
     controversy on the basis of the filing of the written direct 
     statement by the participant, the response by any opposing 
     participant, and 1 additional response by each such party. 
     The participant asserting the claim shall not be required to 
     pay the filing fee under paragraph (2).
       ``(B) Bad faith inflation of claim.--If the Copyright 
     Royalty Judges determine that a participant asserts in bad 
     faith an amount in controversy in excess of $10,000 for the 
     purpose of avoiding a determination under the procedure set 
     forth in subparagraph (A), the Copyright Royalty Judges shall 
     impose a fine on that participant in an amount not to exceed 
     the difference between the actual amount distributed and the 
     amount asserted by the participant.
       ``(5) Paper proceedings.--The Copyright Royalty Judges in 
     proceedings under this chapter may decide, sua sponte or upon 
     motion of a participant, to determine issues on the basis of 
     the filing of the written direct statement by the 
     participant, the response by any opposing participant, and 
     one additional response by each such participant. Prior to 
     making such decision to proceed on such a paper record only, 
     the Copyright Royalty Judges shall offer to all parties to 
     the proceeding the opportunity to comment on the decision. 
     The procedure under this paragraph--
       ``(A) shall be applied in cases in which there is no 
     genuine issue of material fact, there is no need for 
     evidentiary hearings, and all participants in the proceeding 
     agree in writing to the procedure; and
       ``(B) may be applied under such other circumstances as the 
     Copyright Royalty Judges consider appropriate.
       ``(6) Regulations.--
       ``(A) In general.--The Copyright Royalty Judges may issue 
     regulations to carry out their functions under this title. 
     All regulations issued by the Copyright Royalty Judges are 
     subject to the approval of the Librarian of Congress. Not 
     later than 120 days after Copyright Royalty Judges or interim 
     Copyright Royalty Judges, as the case may be, are first 
     appointed after the enactment of the Copyright Royalty and 
     Distribution Reform Act of 2004, such judges shall issue 
     regulations to govern proceedings under this chapter.
       ``(B) Interim regulations.--Until regulations are adopted 
     under subparagraph (A), the Copyright Royalty Judges shall 
     apply the regulations in effect under this chapter on the day 
     before the effective date of the Copyright Royalty and 
     Distribution Reform Act of 2004, to the extent such 
     regulations are not inconsistent with this chapter, except 
     that functions carried out under such regulations by the 
     Librarian of Congress, the Register of Copyrights, or 
     copyright arbitration royalty panels that, as of such date of 
     enactment, are to be carried out by the Copyright Royalty 
     Judges under this chapter, shall be carried out by the 
     Copyright Royalty Judges under such regulations.
       ``(C) Requirements.--Regulations issued under subparagraph 
     (A) shall include the following:
       ``(i) The written direct statements of all participants in 
     a proceeding under paragraph (2) shall be filed by a date 
     specified by the Copyright Royalty Judges, which may be no 
     earlier than four months, and no later than five months, 
     after the end of the voluntary negotiation period under 
     paragraph (3). Notwithstanding the preceding sentence, the 
     Copyright Royalty Judges may allow a participant in a 
     proceeding to file an amended written direct statement based 
     on new information received during the discovery process, 
     within 15 days after the end of the discovery period 
     specified in clause (iii).
       ``(ii)(I) Following the submission to the Copyright Royalty 
     Judges of written direct statements by the participants in a 
     proceeding under paragraph (2), the judges shall meet with 
     the participants for the purpose of setting a schedule for 
     conducting and completing discovery. Such schedule shall be 
     determined by the Copyright Royalty Judges.
       ``(II) In this chapter, the term `written direct 
     statements' means witness statements, testimony, and exhibits 
     to be presented in the proceedings, and such other 
     information that is necessary to establish terms and rates, 
     or the distribution of royalty payments, as the case may be, 
     as set forth in regulations issued by the Copyright Royalty 
     Judges.
       ``(iii) Hearsay may be admitted in proceedings under this 
     chapter to the extent deemed appropriate by the Copyright 
     Royalty Judges.
       ``(iv) Discovery in such proceedings shall be permitted for 
     a period of 60 days, except for discovery ordered by the 
     Copyright Royalty Judges in connection with the resolution of 
     motions, orders and disputes pending at the end of such 
     period.
       ``(v) Any participant under paragraph (2) in a proceeding 
     under this chapter to determine royalty rates may request of 
     an opposing participant nonprivileged documents directly 
     related to the written direct statement of that participant. 
     Any objection to such a request shall be resolved by a motion 
     or request to compel production made to the Copyright Royalty 
     Judges according to regulations adopted by the Copyright 
     Royalty Judges. Each motion or request to compel discovery 
     shall be determined by the Copyright Royalty Judges, or by a 
     Copyright Royalty Judge when permitted under subsection 
     (a)(2). Upon such motion, the Copyright Royalty Judges may 
     order discovery pursuant to regulations established under 
     this paragraph.
       ``(vi) Any participant under paragraph (2) in a proceeding 
     under this chapter to determine royalty rates may, upon a 
     written motion to the Copyright Royalty Judges, request of an 
     opposing participant or witness other relevant information 
     and materials if absent the discovery sought the moving party 
     would be prejudiced or the Copyright Royalty Judges' 
     resolution of the proceeding would be substantially impaired. 
     Absent a showing of substantial good cause or demonstration 
     of a likelihood of substantial prejudice, no participant in a 
     proceeding may take more than 3 depositions and propound more 
     than 10 interrogatories in that proceeding. Absent such a 
     showing, the total number of depositions ordered in such a 
     proceeding shall not exceed 10, and the total number of 
     interrogatories shall not exceed 25 in each proceeding. In 
     determining whether discovery will be granted under this 
     clause, the Copyright Royalty Judges may consider--

[[Page 20932]]

       ``(I) whether the information sought would serve to protect 
     the integrity of the proceeding, to prevent substantial 
     prejudice to any participant, or to correct a material 
     misrepresentation or omission by any participant;
       ``(II) whether the burden or expense of producing the 
     requested information or materials outweighs the likely 
     benefit, taking into account the needs and resources of the 
     participants, the importance of the issues at stake, and the 
     probative value of the requested information or materials in 
     resolving such issues;
       ``(III) whether the requested information or materials 
     would be unreasonably cumulative or duplicative, or are 
     obtainable from another source that is more convenient, less 
     burdensome, or less expensive; and
       ``(IV) whether the participant seeking discovery has had 
     ample opportunity by discovery in the proceeding or by other 
     means to obtain the information sought.

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

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

       ``(ii) Notwithstanding clause (i), whenever royalties 
     described in clause (i) are paid to a person other than the 
     Copyright Office, the entity designated by the Copyright 
     Royalty Judges to which such royalties are paid by the 
     copyright user (and any successor thereto) shall, within 60 
     days after the final resolution of the appeal, return any 
     excess amounts previously paid (and interest thereon, if 
     ordered pursuant to paragraph (3)) to the extent necessary to 
     comply with the final determination of royalty rates on 
     appeal.
       ``(3) Jurisdiction of court.--If the court, pursuant to 
     section 706 of title 5, modifies or vacates a determination 
     of the Copyright Royalty

[[Page 20933]]

     Judges, the court may enter its own determination with 
     respect to the amount or distribution of royalty fees and 
     costs, and order the repayment of any excess fees, the 
     payment of any underpaid fees, and the payment of interest 
     pertaining respectively thereto, in accordance with its final 
     judgment. The court may also vacate the determination of the 
     Copyright Royalty Judges and remand the case to the Copyright 
     Royalty Judges for further proceedings in accordance with 
     subsection (a).
       ``(e) Administrative Matters.--
       ``(1) Deduction of costs of library of congress and 
     copyright office from filing fees.--
       ``(A) Deduction from filing fees.--The Librarian of 
     Congress may, to the extent not otherwise provided under this 
     title, deduct from the filing fees collected under subsection 
     (b) for a particular proceeding under this chapter the 
     reasonable costs incurred by the Librarian of Congress, the 
     Copyright Office, and the Copyright Royalty Judges in 
     conducting that proceeding, other than the salaries of the 
     Copyright Royalty Judges and the 3 staff members appointed 
     under section 802(b).
       ``(B) Authorization of appropriations.--There are 
     authorized to be appropriated such sums as may be necessary 
     to pay the costs incurred under this chapter not covered by 
     the filing fees collected under subsection (b). All funds 
     made available pursuant to this subparagraph shall remain 
     available until expended.
       ``(2) Positions required for administration of compulsory 
     licensing.--Section 307 of the Legislative Branch 
     Appropriations Act, 1994, shall not apply to employee 
     positions in the Library of Congress that are required to be 
     filled in order to carry out section 111, 112, 114, 115, 116, 
     118, or 119 or chapter 10.

     ``Sec. 804. Institution of proceedings

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

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

       ``Any rates or terms under this title that--
       ``(1) are agreed to by participants to a proceeding under 
     section 803(b)(3),
       ``(2) are adopted by the Copyright Royalty Judges as part 
     of a determination under this chapter, and

[[Page 20934]]

       ``(3) are in effect for a period shorter than would 
     otherwise apply under a determination pursuant to this 
     chapter,

     shall remain in effect for such period of time as would 
     otherwise apply under such determination, except that the 
     Copyright Royalty Judges shall adjust the rates pursuant to 
     the voluntary negotiations to reflect national monetary 
     inflation during the additional period the rates remain in 
     effect.''.
       (b) Conforming Amendment.--The table of chapters for title 
     17, United States Code, is amended by striking the item 
     relating to chapter 8 and inserting the following:

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

     SEC. 4. DEFINITION.

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

     SEC. 5. TECHNICAL AMENDMENTS.

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

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

       (C) in subparagraph (C), by striking ``Librarian of 
     Congress'' and inserting ``Copyright Royalty Judges''.
       (b) Ephemeral Recordings.--Section 112(e) is amended--
       (1) in paragraph (3)--
       (A) by amending the first sentence to read as follows: 
     ``Proceedings under chapter 8 shall determine reasonable 
     rates and terms of royalty payments for the activities 
     specified by paragraph (1) during the 5-year periods 
     beginning on January 1 of the second year following the year 
     in which the proceedings are to be commenced, or such other 
     periods as the parties may agree.''; and
       (B) by striking the second sentence;
       (C) in the third sentence, by striking ``Librarian of 
     Congress'' and inserting ``Copyright Royalty Judges''; and
       (D) in the fourth sentence, by striking ``negotiation'';
       (2) in paragraph (4)--
       (A) by amending the first sentence to read as follows: 
     ``The schedule of reasonable rates and terms determined by 
     the Copyright Royalty Judges shall, subject to paragraph (5), 
     be binding on all copyright owners of sound recordings and 
     transmitting organizations entitled to a statutory license 
     under this subsection during the 5-year period specified in 
     paragraph (3), or such other period as the parties may 
     agree.'';
       (B) by striking ``copyright arbitration royalty panel'' 
     each subsequent place it appears and inserting ``Copyright 
     Royalty Judges'';
       (C) in the fourth sentence, by striking ``its decision'' 
     and inserting ``their decision'';
       (D) in the fifth sentence, by striking ``negotiated as 
     provided'' and inserting ``described''; and
       (E) in the last sentence, by striking ``Librarian of 
     Congress'' and inserting ``Copyright Royalty Judges'';
       (3) in paragraph (5), by striking ``or decision by the 
     Librarian of Congress'' and inserting ``, decision by the 
     Librarian of Congress, or determination by the Copyright 
     Royalty Judges'';
       (4) by striking paragraph (6) and redesignating paragraphs 
     (7), (8), and (9), as paragraphs (6), (7), and (8), 
     respectively; and
       (5) in paragraph (6)(A), as so redesignated, by striking 
     ``Librarian of Congress'' and inserting ``Copyright Royalty 
     Judges''.
       (c) Scope of Exclusive Rights in Sound Recordings.--Section 
     114(f) is amended--
       (1) in paragraph (1)--
       (A) in subparagraph (A)--
       (i) by amending the first sentence to read as follows: 
     ``Proceedings under chapter 8 shall determine reasonable 
     rates and terms of royalty payments for subscription 
     transmissions by preexisting subscription services and 
     transmissions by preexisting satellite digital audio radio 
     services specified by subsection (d)(2) during 5-year periods 
     beginning on January 1 of the second year following the year 
     in which the proceedings are to be commenced, except where 
     different transitional periods are provided in section 
     804(b), or such periods as the parties may agree.'';
       (ii) in the third sentence, by striking ``Librarian of 
     Congress'' and inserting ``Copyright Royalty Judges''; and
       (iii) in the fourth sentence, by striking ``negotiation'';
       (B) in subparagraph (B)--
       (i) by amending the first sentence to read as follows: 
     ``The schedule of reasonable rates and terms determined by 
     the Copyright Royalty Judges shall, subject to paragraph (3), 
     be binding on all copyright owners of sound recordings and 
     entities performing sound recordings affected by this 
     paragraph during the 5-year period specified in subparagraph 
     (A), a transitional period provided in section 804(b), or 
     such other period as the parties may agree.'';
       (ii) in the second sentence, by striking ``copyright 
     arbitration royalty panel'' and inserting ``Copyright Royalty 
     Judges''; and
       (iii) in the second sentence, by striking ``negotiated as 
     provided'' and inserting ``described''; and
       (C) by amending subparagraph (C) to read as follows:
       ``(C) The procedures under subparagraphs (A) and (B) also 
     shall be initiated pursuant to a petition filed by any 
     copyright owners of sound recordings, any preexisting 
     subscription services, or any preexisting satellite digital 
     audio radio services indicating that a new type of 
     subscription digital audio transmission service on which 
     sound recordings are performed is or is about to become 
     operational, for the purpose of determining reasonable terms 
     and rates of royalty payments with respect to such new type 
     of transmission service for the period beginning with the 
     inception of such new type of service and ending on the date 
     on which the royalty rates and terms for subscription digital 
     audio transmission services most recently determined under 
     subparagraph (A) or (B) and chapter 8 expire, or such other 
     period as the parties may agree.'';
       (2) in paragraph (2)--
       (A) in subparagraph (A)--
       (i) by amending the first paragraph to read as follows: 
     ``Proceedings under chapter 8 shall determine reasonable 
     rates and terms of royalty payments for subscription 
     transmissions by preexisting subscription services and 
     transmissions by preexisting satellite digital audio radio 
     services specified by subsection (d)(2) during 5-year periods 
     beginning on January 1 of the second year following the year 
     in which the proceedings are to be commenced, except where 
     different transitional periods are provided in section 
     804(b), or such periods as the parties may agree.'';
       (ii) in the third sentence, by striking ``Librarian of 
     Congress'' and inserting ``Copyright Royalty Judges''; and
       (iii) in the fourth sentence, by striking ``negotiation'';
       (B) in subparagraph (B)--
       (i) by amending the first sentence to read as follows: 
     ``The schedule of reasonable rates and terms determined by 
     the Copyright Royalty Judges shall, subject to paragraph (3), 
     be binding on all copyright owners of sound recordings and 
     entities performing sound recordings affected by this 
     paragraph during the 5-year period specified in subparagraph 
     (A), a transitional period provided in section 804(b), or 
     such other period as the parties may agree.'';
       (ii) by striking ``copyright arbitration royalty panel'' 
     each subsequent place it appears and inserting ``Copyright 
     Royalty Judges''; and
       (iii) in the last sentence by striking ``negotiated as 
     provided'' and inserting ``described in''; and
       (C) by amending subparagraph (C) to read as follows:
       ``(C) The procedures under subparagraphs (A) and (B) shall 
     also be initiated pursuant to a petition filed by any 
     copyright owners of sound recordings or any eligible 
     nonsubscription service or new subscription service 
     indicating that a new type of eligible nonsubscription 
     service or new subscription service on which sound recordings 
     are performed is or is about to become operational, for the 
     purpose of determining reasonable terms and rates of royalty 
     payments with respect to such new type of service for the 
     period beginning with the inception of such new type of 
     service and ending on the date on which the royalty rates and 
     terms for preexisting subscription digital audio transmission 
     services or preexisting satellite digital radio audio 
     services, as the case may be, most recently determined under 
     subparagraph (A) or (B) and chapter 8 expire, or such other 
     period as the parties may agree.'';
       (3) in paragraph (3), by striking ``or decision by the 
     Librarian of Congress'' and inserting ``, decision by the 
     Librarian of Congress, or determination by the Copyright 
     Royalty Judges''; and
       (4) in paragraph (4)--
       (A) by striking ``Librarian of Congress'' each place it 
     appears and inserting ``Copyright Royalty Judges''; and
       (B) by adding after the first sentence ``The notice and 
     recordkeeping rules in effect on the day before the effective 
     date of the Copyright Royalty and Distribution Reform Act of 
     2004 shall remain in effect until new regulations are 
     promulgated by the Copyright Royalty Judges. If new 
     regulations are promulgated under this subparagraph, the 
     Copyright Royalty Judges shall take into account the 
     substance and effect of the rules in effect on the day before 
     the effective date of the Copyright Royalty and Distribution 
     Reform Act of 2004 and shall, to the extent practicable, 
     avoid significant disruption of the function of the 
     designated agents that are authorized to collect and 
     distribute royalty fees as such functions exist on the day 
     prior to the effective date of this Act.''.
       (d) Phonorecords of Nondramatic Musical Works.--Section 
     115(c)(3) is amended--
       (1) in subparagraph (A)(ii), by striking ``(F)'' and 
     inserting ``(E)'';
       (2) in subparagraph (B)--

[[Page 20935]]

       (A) by striking ``under this paragraph'' and inserting 
     ``under this section''; and
       (B) by striking ``subparagraphs (B) through (F)'' and 
     inserting ``this subparagraph and subparagraphs (B) through 
     (E)'';
       (3) in subparagraph (C)--
       (A) by amending the first sentence to read as follows: 
     ``Proceedings under chapter 8 shall determine reasonable 
     rates and terms of royalty payments for the activities 
     specified by this section during periods beginning with the 
     effective date of such rates and terms, but not earlier than 
     January 1 of the second year following the year in which the 
     petition requesting the proceeding is filed, and ending on 
     the effective date of successor rates and terms, or such 
     other period as the parties may agree.'';
       (B) in the third sentence, by striking ``Librarian of 
     Congress'' and inserting ``Copyright Royalty Judges''; and
       (C) in the fourth sentence, by striking ``negotiation'';
       (4) in subparagraph (D)--
       (A) by amending the first sentence to read as follows: 
     ``The schedule of reasonable rates and terms determined by 
     the Copyright Royalty Judges shall, subject to subparagraph 
     (E), be binding on all copyright owners of nondramatic 
     musical works and persons entitled to obtain a compulsory 
     license under subsection (a)(1) during the period specified 
     in subparagraph (C), such other period as may be determined 
     pursuant to subparagraphs (B) and (C), or such other period 
     as the parties may agree.'';
       (B) in the third sentence, by striking ``copyright 
     arbitration royalty panel'' and inserting ``Copyright Royalty 
     Judges''; and
       (C) in the third sentence, by striking ``negotiated as 
     provided in subparagraphs (B) and (C)'' and inserting 
     ``described'';
       (5) in subparagraph (E)--
       (A) in clause (i)--
       (i) in the first sentence, by striking ``Librarian of 
     Congress'' and inserting ``Librarian of Congress, Copyright 
     Royalty Judges, or a copyright arbitration royalty panel to 
     the extent those determinations were accepted by the 
     Librarian of Congress''; and
       (ii) in the second sentence, by striking ``(C), (D) or (F) 
     shall be given effect'' and inserting ``(C) or (D) shall be 
     given effect as to digital phonorecord deliveries''; and
       (B) in clause (ii)(I), by striking ``(C), (D) or (F)'' each 
     place it appears and inserting ``(C) or (D)''; and
       (6) by striking subparagraph (F) and redesignating 
     subparagraphs (G) through (L) as subparagraphs (F) through 
     (K), respectively.
       (e) Coin-Operated Phonorecord Players.--Section 116 is 
     amended--
       (1) in subsection (b), by amending paragraph (2) to read as 
     follows:
       ``(2) Chapter 8 proceeding.--Parties not subject to such a 
     negotiation may have the terms and rates and the division of 
     fees described in paragraph (1) determined in a proceeding in 
     accordance with the provisions of chapter 8.''; and
       (2) in subsection (c)--
       (A) in the subsection heading, by striking ``Copyright 
     Arbitration Royalty Panel Determinations'' and inserting 
     ``Determinations by Copyright Royalty Judges''; and
       (B) by striking ``a copyright arbitration royalty panel'' 
     and inserting ``the Copyright Royalty Judges''.
       (f) Use of Certain Works in Connection With Noncommercial 
     Broadcasting.--Section 118 is amended--
       (1) in subsection (b)--
       (A) in paragraph (1)--
       (i) in the first sentence, by striking ``Librarian of 
     Congress'' and inserting ``Copyright Royalty Judges''; and
       (ii) by striking the second and third sentences;
       (B) in paragraph (2), by striking ``Librarian of 
     Congress:'' and all that follows through the end of the 
     sentence and inserting ``Librarian of Congress, a copyright 
     arbitration royalty panel, or the Copyright Royalty Judges, 
     to the extent that they were accepted by the Librarian of 
     Congress, if copies of such agreements are filed with the 
     Copyright Royalty Judges within 30 days of execution in 
     accordance with regulations that the Copyright Royalty Judges 
     shall issue.''; and
       (C) in paragraph (3)--
       (i) in the second sentence--

       (I) by striking ``copyright arbitration royalty panel'' and 
     inserting ``Copyright Royalty Judges''; and

       (II) by striking ``paragraph (2).'' and inserting 
     ``paragraph (2) or (3).'';

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

[[Page 20936]]



     ``Sec. 1010. Determination of certain disputes

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

``1010. Determination of certain disputes.''.

     SEC. 6. EFFECTIVE DATE AND TRANSITION PROVISIONS.

       (a) Effective Date.--This Act and the amendments made by 
     this Act shall take effect 6 months after the date of the 
     enactment of this Act, except that the Librarian of Congress 
     shall appoint 1 or more interim Copyright Royalty Judges 
     under section 802(d) of title 17, United States Code, as 
     amended by this Act, within 90 days after such date of 
     enactment to carry out the functions of the Copyright Royalty 
     Judges under title 17, United States Code, to the extent that 
     Copyright Royalty Judges provided for in section 801(a) of 
     title 17, United States Code, as amended by this Act, have 
     not been appointed before the end of that 90-day period.
       (b) Transition Provisions.--
       (1) In general.--Subject to paragraphs (2) and (3), the 
     amendments made by this Act shall not affect any proceedings 
     commenced, petitions filed, or voluntary agreements entered 
     into before the enactment of this Act under the provisions of 
     title 17, United States Code, amended by this Act, and 
     pending on such date of enactment. Such proceedings shall 
     continue, determinations made in such proceedings, and 
     appeals taken therefrom, as if this Act had not been enacted, 
     and shall continue in effect until modified under title 17, 
     United States Code, as amended by this Act. Such petitions 
     filed and voluntary agreements entered into shall remain in 
     effect as if this Act had not been enacted. For the purposes 
     of this paragraph, the Librarian of Congress may determine 
     whether a proceeding has commenced.
       (2) Pending proceedings.--Notwithstanding paragraph (1), 
     any proceeding commenced before the enactment of this Act may 
     be terminated by the Librarian of Congress, with the approval 
     of the Copyright Royalty Judges. In such cases, the Copyright 
     Royalty Judges shall initiate a new proceeding in accordance 
     with regulations adopted pursuant to section 803(b)(6) of 
     title 17, United States Code.
       (3) Effective periods for certain ratemaking proceedings.--
     Notwithstanding paragraph (1), terms and rates in effect 
     under section 114(f)(2) or 112(e) of title 17, United States 
     Code, for new subscription services, eligible nonsubscription 
     services, and services exempt under section 114(d)(1)(C)(iv) 
     of such title for the period 2003 through 2004, and any rates 
     published in the Federal Register under the authority of the 
     Small Webcaster Settlement Act of 2002 for the years 2003 
     through 2004, shall be effective until the later of the first 
     applicable effective date for successor terms and rates 
     specified in section 804(b)(2) or (3)(A) of title 17, United 
     States Code, or until such later date as the parties may 
     agree or the Copyright Royalty Judges may establish. If 
     successor terms and rates have not yet been established by 
     such date, licensees shall continue to make royalty payments 
     at the rates and on the terms previously in effect, subject 
     to retroactive adjustment when successor rates and terms for 
     such services are established.
       (c) Existing Appropriations.--Any funds made available in 
     an appropriations Act before the effective date of this Act 
     to carry out chapter 8 of title 17, United States Code, shall 
     be available to the extent necessary to carry out this 
     section.
  Mr. HATCH. Mr. President, I am pleased that the Senate is considering 
the Hatch-Leahy substitute to H.R. 1417, the ``Copyright Royalty and 
Distribution Reform Act of 2004,'' which provides a much-needed 
overhaul of the process by which statutory royalty rates are determined 
and the manner in which the fees paid pursuant to statutory licenses 
are distributed to copyright holders.
  The extensive reforms made this bill are important to virtual all the 
participants in the process, and I hope that my colleagues will consent 
to move this bill without delay.
  The measure we are considering today represents a recently-reached 
compromise which I am hopeful can be enacted without delay.
  Because the areas of disagreement with H.R. 1417 were relatively 
narrow in scope, the Hatch-Leahy substitute to H.R. 1417 retains most 
of the House-passed bill, but does contain a few important changes that 
are the product of several months of negotiations and discussions 
between the Hatch and Leahy offices and various stakeholders. The most 
significant substantive change involves the scope of available 
discovery in ratemaking proceedings. The changes to the discovery 
provisions are self-explanatory, so I will not belabor them here.
  This bill responds to widespread dissatisfaction among the 
participants in the current system involving Copyright Arbitration 
Royalty Panels--or ``CARPs''. I will refrain from going into detail 
about this highly-technical bill--which many would find about as 
interesting as watching astroturf grow--and will simply express my firm 
belief that it addresses many of the legitimate concerns expressed by 
the stakeholders, the members of the House and Senate Judiciary 
Committees, and the many others that have provided valuable input and 
that lent us their expertise during the legislative process. I am 
content simply to refer my colleagues to the comprehensive and detailed 
committee report drafted by the House if they desire an explanation of 
the concerns and problems this legislation addresses.
  While we were not able to reach absolute consensus on a few difficult 
issues, for the most part this legislation reflects broad agreement on 
the fundamental changes that are required to make the existing CARP 
process more efficient, logical, and--some would content--bearable by 
participants.
  In conclusion, I would be remiss if I did not publicly recognize that 
this legislation is the product of some very hard work by our 
counterparts in the House. Chairman Sensenbrenner, Chairman Smith, and 
Representative Berman deserve much of the credit for building a near 
consensus on this bill and for moving it through the House. I commend 
them for their bicameral, bipartisan approach to this legislation and 
for the hard work put in by their respective staffs.
  In particular, I would like to thank Blaine Merritt, David Whitney, 
and Alec French for their hard work.
  I would also like to thank Marybeth Peters, the Register of 
Copyrights, and David O. Carson, the General Counsel of the Copyright 
Office, for providing invaluable technical assistance to members in 
both chambers of Congress on this complicated bill.
  I would be equally remiss if I did not recognize the outstanding 
efforts of some in the Senate, including Senator Leahy and his staff--
in particular Susan Davies, Rich Phillips, and Dan Fine--for their 
efforts on this bill. I also commend Mary Foden and Dave Jones of my 
staff for their hard work and their efforts to build a consensus around 
the bill in the Senate.
  With that, I will urge my colleagues to vote for H.R. 1417 with the 
Hatch-Leahy substitute.
  Mr. LEAHY. Mr. President, I am pleased that the Senate is taking up 
and passing the Copyright Royalty and Distribution Reform Act of 2004. 
I have been working to reform the copyright royalty arbitration 
procedures for several years. As early as 2002, I noted in a Judiciary 
Committee hearing that there was widespread dissatisfaction with the 
current law.
  In particular, we heard the testimony of Frank Schliemann of Onion 
River

[[Page 20937]]

Radio of Montpelier, VT. Mr. Schliemann noted that many small 
webcasters could not afford to take part in CARP proceedings, even 
though their livelihoods would depend on the outcome. We also heard 
from Billy Strauss, president of Websound, another small webcaster in 
Brattleboro, VT. Mr. Strauss noted many of the structural problems that 
plagued the old CARP procedures. In addition, I have been concerned 
that the current procedures are often hindered by unreasonable delays, 
and the outcomes subject to manipulation.
  The Copyright Royalty and Distribution Reform Act responds to these 
concerns. It replaces arbitrators, who serve for only one CARP 
procedure and are paid by the parties, with full-time administrative 
judges. As a result, the financial burden of taking part in a CARP 
procedure is alleviated. In addition, all parties can rest assured that 
there will be continuity and stability in the resolution of these 
proceedings. At the same time, this bill preserves the traditional role 
of the Register of Copyrights. This bill also resolves longstanding 
disputes over the availability of discovery. Because discovery is 
available where it is needed, the copyright royalty judges will have 
the information necessary to render a correct determination but the 
costs of discovery will be kept to a minimum.
  I am pleased to have cosponsored with Senator Hatch the amendment in 
the nature of a substitute to the House bill. I thank Chairman 
Sensenbrenner, Chairman Smith, and Congressman Berman for their 
leadership in this matter. We believe that in adopting this version of 
the House bill, H.R. 1417, we will be able to move to final passage 
without delay. It is time these important reforms were implemented.
  Ms. COLLINS. Madam President, I ask unanimous consent that the 
amendment that is at the desk be agreed to, the committee-reported 
substitute, as amended, be agreed to, the bill, as amended, be read a 
third time and passed, the motions to reconsider be laid upon the 
table, en bloc, and that any statements relating to the bill be printed 
in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment (No. 3975) was agreed to.
  (The amendment is printed in today's Record under ``Text of 
Amendments.'')
  The committee amendment, in the nature of a substitute, as amended, 
was agreed to.
  The bill (H.R. 1417), as amended, was read the third time and passed.

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