[115th Congress Public Law 264]
[From the U.S. Government Publishing Office]



[[Page 3675]]

                      ORRIN G. HATCH-BOB GOODLATTE

                         MUSIC MODERNIZATION ACT

[[Page 132 STAT. 3676]]

Public Law 115-264
115th Congress

                                 An Act


 
  To modernize copyright law, and for other purposes. <<NOTE: Oct. 11, 
                         2018 -  [H.R. 1551]>> 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, <<NOTE: Orrin G. Hatch-
Bob Goodlatte Music Modernization Act.>> 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.-- <<NOTE: 17 USC 101 note.>> This Act may be cited 
as the ``Orrin G. Hatch-Bob Goodlatte Music Modernization Act''.

    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Customs user fees.

                 TITLE I--MUSIC LICENSING MODERNIZATION

Sec. 101. Short title.
Sec. 102. Blanket license for digital uses and mechanical licensing 
           collective.
Sec. 103. Amendments to section 114.
Sec. 104. Random assignment of rate court proceedings.
Sec. 105. Performing rights society consent decrees.
Sec. 106. Effective date.

                TITLE II--CLASSICS PROTECTION AND ACCESS

Sec. 201. Short title.
Sec. 202. Unauthorized use of pre-1972 sound recordings.

                TITLE III--ALLOCATION FOR MUSIC PRODUCERS

Sec. 301. Short title.
Sec. 302. Payment of statutory performance royalties.
Sec. 303. Effective date.

                         TITLE IV--SEVERABILITY

Sec. 401. Severability.

SEC. 2. CUSTOMS USER FEES.

    Section 13031(j)(3)(A) of the Consolidated Omnibus Budget 
Reconciliation Act of 1985 (19 U.S.C. 58c(j)(3)(A)) is amended by 
striking ``October 13, 2027'' and inserting ``October 20, 2027''.

  TITLE I-- <<NOTE: Musical Works Modernization Act.>> MUSIC LICENSING 
MODERNIZATION
SEC. 101. <<NOTE: 17 USC 101 note.>>  SHORT TITLE.

    This title may be cited as the ``Musical Works Modernization Act''.

[[Page 132 STAT. 3677]]

SEC. 102. BLANKET LICENSE FOR DIGITAL USES AND MECHANICAL 
                        LICENSING COLLECTIVE.

    (a) Amendment.--Section 115 of title 17, United States Code, is 
amended--
            (1) in subsection (a)--
                    (A) in the subsection heading, by inserting ``in 
                General'' after ``Availability and Scope of Compulsory 
                License'';
                    (B) by striking paragraph (1) and inserting the 
                following:
            ``(1) Eligibility for compulsory license.--
                    ``(A) Conditions for compulsory license.--A person 
                may by complying with the provisions of this section 
                obtain a compulsory license to make and distribute 
                phonorecords of a nondramatic musical work, including by 
                means of digital phonorecord delivery. A person may 
                obtain a compulsory license only if the primary purpose 
                in making phonorecords of the musical work is to 
                distribute them to the public for private use, including 
                by means of digital phonorecord delivery, and--
                          ``(i) phonorecords of such musical work have 
                      previously been distributed to the public in the 
                      United States under the authority of the copyright 
                      owner of the work, including by means of digital 
                      phonorecord delivery; or
                          ``(ii) in the case of a digital music provider 
                      seeking to make and distribute digital phonorecord 
                      deliveries of a sound recording embodying a 
                      musical work under a compulsory license for which 
                      clause (i) does not apply--
                                    ``(I) the first fixation of such 
                                sound recording was made under the 
                                authority of the musical work copyright 
                                owner, and the sound recording copyright 
                                owner has the authority of the musical 
                                work copyright owner to make and 
                                distribute digital phonorecord 
                                deliveries embodying such work to the 
                                public in the United States; and
                                    ``(II) the sound recording copyright 
                                owner, or the authorized distributor of 
                                the sound recording copyright owner, has 
                                authorized the digital music provider to 
                                make and distribute digital phonorecord 
                                deliveries of the sound recording to the 
                                public in the United States.
                    ``(B) Duplication of sound recording.--A person may 
                not obtain a compulsory license for the use of the work 
                in the making of phonorecords duplicating a sound 
                recording fixed by another, including by means of 
                digital phonorecord delivery, unless--
                          ``(i) such sound recording was fixed lawfully; 
                      and
                          ``(ii) the making of the phonorecords was 
                      authorized by the owner of the copyright in the 
                      sound recording or, if the sound recording was 
                      fixed before February 15, 1972, by any person who 
                      fixed the sound recording pursuant to an express 
                      license from the owner of the copyright in the 
                      musical work or pursuant to a valid compulsory 
                      license for use of such work in a sound 
                      recording.''; and

[[Page 132 STAT. 3678]]

                    (C) in paragraph (2), by striking ``A compulsory 
                license'' and inserting ``Musical arrangement.--A 
                compulsory license'';
            (2) by striking subsection (b) and inserting the following:

    ``(b) <<NOTE: Deadlines. Notices.>>  Procedures To Obtain a 
Compulsory License.--
            ``(1) Phonorecords other than digital phonorecord 
        deliveries.--A person who seeks to obtain a compulsory license 
        under subsection (a) to make and distribute phonorecords of a 
        musical work other than by means of digital phonorecord delivery 
        shall, before, or not later than 30 calendar days after, making, 
        and before distributing, any phonorecord of the work, serve 
        notice of intention to do so on the copyright owner. If the 
        registration or other public records of the Copyright Office do 
        not identify the copyright owner and include an address at which 
        notice can be served, it shall be sufficient to file the notice 
        of intention with the Copyright 
        Office. <<NOTE: Compliance. Regulations.>>  The notice shall 
        comply, in form, content, and manner of service, with 
        requirements that the Register of Copyrights shall prescribe by 
        regulation.
            ``(2) Digital phonorecord deliveries.--A person who seeks to 
        obtain a compulsory license under subsection (a) to make and 
        distribute phonorecords of a musical work by means of digital 
        phonorecord delivery--
                    ``(A) <<NOTE: Compliance. Regulations.>>  prior to 
                the license availability date, shall, before, or not 
                later than 30 calendar days after, first making any such 
                digital phonorecord delivery, serve a notice of 
                intention to do so on the copyright owner (but may not 
                file the notice with the Copyright Office, even if the 
                public records of the Office do not identify the owner 
                or the owner's address), and such notice shall comply, 
                in form, content, and manner of service, with 
                requirements that the Register of Copyrights shall 
                prescribe by regulation; or
                    ``(B) on or after the license availability date, 
                shall, before making any such digital phonorecord 
                delivery, follow the procedure described in subsection 
                (d)(2), except as provided in paragraph (3).
            ``(3) Record company individual download licenses.--
        Notwithstanding paragraph (2)(B), a record company may, on or 
        after the license availability date, obtain an individual 
        download license in accordance with the notice requirements 
        described in paragraph (2)(A) (except for the requirement that 
        notice occur prior to the license availability 
        date). <<NOTE: Account statements. Royalties.>>  A record 
        company that obtains an individual download license as permitted 
        under this paragraph shall provide statements of account and pay 
        royalties as provided in subsection (c)(2)(I).
            ``(4) Failure to obtain license.--
                    ``(A) Phonorecords other than digital phonorecord 
                deliveries.--In the case of phonorecords made and 
                distributed other than by means of digital phonorecord 
                delivery, the failure to serve or file the notice of 
                intention required by paragraph (1) forecloses the 
                possibility of a compulsory license under paragraph (1). 
                In the absence of a voluntary license, the failure to 
                obtain a compulsory license renders the making and 
                distribution of

[[Page 132 STAT. 3679]]

                phonorecords actionable as acts of infringement under 
                section 501 and subject to the remedies provided by 
                sections 502 through 506.
                    ``(B) Digital phonorecord deliveries.--
                          ``(i) In general.--In the case of phonorecords 
                      made and distributed by means of digital 
                      phonorecord delivery:
                                    ``(I) The failure to serve the 
                                notice of intention required by 
                                paragraph (2)(A) or paragraph (3), as 
                                applicable, forecloses the possibility 
                                of a compulsory license under such 
                                paragraph.
                                    ``(II) <<NOTE: Time period.>>  The 
                                failure to comply with paragraph (2)(B) 
                                forecloses the possibility of a blanket 
                                license for a period of 3 years after 
                                the last calendar day on which the 
                                notice of license was required to be 
                                submitted to the mechanical licensing 
                                collective under such paragraph.
                          ``(ii) Effect of failure.--In either case 
                      described in subclause (I) or (II) of clause (i), 
                      in the absence of a voluntary license, the failure 
                      to obtain a compulsory license renders the making 
                      and distribution of phonorecords by means of 
                      digital phonorecord delivery actionable as acts of 
                      infringement under section 501 and subject to the 
                      remedies provided by sections 502 through 506.'';
            (3) by amending subsection (c) to read as follows:

    ``(c) General Conditions Applicable to Compulsory License.--
            ``(1) Royalty payable under compulsory license.--
                    ``(A) Identification requirement.--To be entitled to 
                receive royalties under a compulsory license obtained 
                under subsection (b)(1) the copyright owner must be 
                identified in the registration or other public records 
                of the Copyright Office. The owner is entitled to 
                royalties for phonorecords made and distributed after 
                being so identified, but is not entitled to recover for 
                any phonorecords previously made and distributed.
                    ``(B) Royalty for phonorecords other than digital 
                phonorecord deliveries.--Except as provided by 
                subparagraph (A), for every phonorecord made and 
                distributed under a compulsory license under subsection 
                (a) other than by means of digital phonorecord delivery, 
                with respect to each work embodied in the phonorecord, 
                the royalty shall be the royalty prescribed under 
                subparagraphs (D) through (F), paragraph (2)(A), and 
                chapter 8. For purposes of this subparagraph, a 
                phonorecord is considered `distributed' if the person 
                exercising the compulsory license has voluntarily and 
                permanently parted with its possession.
                    ``(C) Royalty for digital phonorecord deliveries.--
                For every digital phonorecord delivery of a musical work 
                made under a compulsory license under this section, the 
                royalty payable shall be the royalty prescribed under 
                subparagraphs (D) through (F), paragraph (2)(A), and 
                chapter 8.
                    ``(D) Authority to negotiate.--Notwithstanding any 
                provision of the antitrust laws, any copyright owners of 
                nondramatic musical works and any persons entitled to

[[Page 132 STAT. 3680]]

                obtain a compulsory license under subsection (a) may 
                negotiate and agree upon the terms and rates of royalty 
                payments under this section and the proportionate 
                division of fees paid among copyright owners, and may 
                designate common agents on a nonexclusive basis to 
                negotiate, agree to, pay or receive such royalty 
                payments. Such authority to negotiate the terms and 
                rates of royalty payments includes, but is not limited 
                to, the authority to negotiate the year during which the 
                royalty rates prescribed under this subparagraph, 
                subparagraphs (E) and (F), paragraph (2)(A), and chapter 
                8 shall next be determined.
                    ``(E) Determination of reasonable rates and terms.-- 
                <<NOTE: Time period.>> Proceedings under chapter 8 shall 
                determine reasonable rates and terms of royalty payments 
                for the activities specified by this section during the 
                period beginning with the effective date of such rates 
                and terms, but not earlier than January 1 of the second 
                year following the year in which the petition requesting 
                the proceeding is filed, and ending on the effective 
                date of successor rates and terms, or such other period 
                as the parties may agree. Any copyright owners of 
                nondramatic musical works and any persons entitled to 
                obtain a compulsory license under subsection (a) may 
                submit to the Copyright Royalty Judges licenses covering 
                such activities. The parties to each proceeding shall 
                bear their own costs.
                    ``(F) Schedule of reasonable rates.--The schedule of 
                reasonable rates and terms determined by the Copyright 
                Royalty Judges shall, subject to paragraph (2)(A), be 
                binding on all copyright owners of nondramatic musical 
                works and persons entitled to obtain a compulsory 
                license under subsection (a) during the period specified 
                in subparagraph (E), such other period as may be 
                determined pursuant to subparagraphs (D) and (E), or 
                such other period as the parties may agree. The 
                Copyright Royalty Judges shall establish rates and terms 
                that most clearly represent the rates and terms that 
                would have been negotiated in the marketplace between a 
                willing buyer and a willing seller. In determining such 
                rates and terms for digital phonorecord deliveries, the 
                Copyright Royalty Judges shall base their decision on 
                economic, competitive, and programming information 
                presented by the parties, including--
                          ``(i) whether use of the compulsory licensee's 
                      service may substitute for or may promote the 
                      sales of phonorecords or otherwise may interfere 
                      with or may enhance the musical work copyright 
                      owner's other streams of revenue from its musical 
                      works; and
                          ``(ii) the relative roles of the copyright 
                      owner and the compulsory licensee in the 
                      copyrighted work and the service made available to 
                      the public with respect to the relative creative 
                      contribution, technological contribution, capital 
                      investment, cost, and risk.
            ``(2) Additional terms and conditions.--
                    ``(A) Voluntary licenses and contractual royalty 
                rates.--
                          ``(i) In general.--License agreements 
                      voluntarily negotiated at any time between one or 
                      more copyright owners of nondramatic musical works 
                      and one or more

[[Page 132 STAT. 3681]]

                      persons entitled to obtain a compulsory license 
                      under subsection (a) shall be given effect in lieu 
                      of any determination by the Copyright Royalty 
                      Judges. Subject to clause (ii), the royalty rates 
                      determined pursuant to subparagraphs (E) and (F) 
                      of paragraph (1) shall be given effect as to 
                      digital phonorecord deliveries in lieu of any 
                      contrary royalty rates specified in a contract 
                      pursuant to which a recording artist who is the 
                      author of a nondramatic musical work grants a 
                      license under that person's exclusive rights in 
                      the musical work under paragraphs (1) and (3) of 
                      section 106 or commits another person to grant a 
                      license in that musical work under paragraphs (1) 
                      and (3) of section 106, to a person desiring to 
                      fix in a tangible medium of expression a sound 
                      recording embodying the musical work.
                          ``(ii) Applicability.--The second sentence of 
                      clause (i) shall not apply to--
                                    ``(I) <<NOTE: Effective date.>>  a 
                                contract entered into on or before June 
                                22, 1995, and not modified thereafter 
                                for the purpose of reducing the royalty 
                                rates determined pursuant to 
                                subparagraphs (E) and (F) of paragraph 
                                (1) or of increasing the number of 
                                musical works within the scope of the 
                                contract covered by the reduced rates, 
                                except if a contract entered into on or 
                                before June 22, 1995, is modified 
                                thereafter for the purpose of increasing 
                                the number of musical works within the 
                                scope of the contract, any contrary 
                                royalty rates specified in the contract 
                                shall be given effect in lieu of royalty 
                                rates determined pursuant to 
                                subparagraphs (E) and (F) of paragraph 
                                (1) for the number of musical works 
                                within the scope of the contract as of 
                                June 22, 1995; and
                                    ``(II) a contract entered into after 
                                the date that the sound recording is 
                                fixed in a tangible medium of expression 
                                substantially in a form intended for 
                                commercial release, if at the time the 
                                contract is entered into, the recording 
                                artist retains the right to grant 
                                licenses as to the musical work under 
                                paragraphs (1) and (3) of section 106.
                    ``(B) Sound recording information.--Except as 
                provided in section 1002(e), a digital phonorecord 
                delivery licensed under this paragraph shall be 
                accompanied by the information encoded in the sound 
                recording, if any, by or under the authority of the 
                copyright owner of that sound recording, that identifies 
                the title of the sound recording, the featured recording 
                artist who performs on the sound recording, and related 
                information, including information concerning the 
                underlying musical work and its writer.
                    ``(C) Infringement remedies.--
                          ``(i) In general.--A digital phonorecord 
                      delivery of a sound recording is actionable as an 
                      act of infringement under section 501, and is 
                      fully subject to the remedies provided by sections 
                      502 through 506, unless--

[[Page 132 STAT. 3682]]

                                    ``(I) the digital phonorecord 
                                delivery has been authorized by the 
                                sound recording copyright owner; and
                                    ``(II) the entity making the digital 
                                phonorecord delivery has obtained a 
                                compulsory license under subsection (a) 
                                or has otherwise been authorized by the 
                                musical work copyright owner, or by a 
                                record company pursuant to an individual 
                                download license, to make and distribute 
                                phonorecords of each musical work 
                                embodied in the sound recording by means 
                                of digital phonorecord delivery.
                          ``(ii) Other remedies.--Any cause of action 
                      under this subparagraph shall be in addition to 
                      those available to the owner of the copyright in 
                      the nondramatic musical work under subparagraph 
                      (J) and section 106(4) and the owner of the 
                      copyright in the sound recording under section 
                      106(6).
                    ``(D) Liability of sound recording owners.--The 
                liability of the copyright owner of a sound recording 
                for infringement of the copyright in a nondramatic 
                musical work embodied in the sound recording shall be 
                determined in accordance with applicable law, except 
                that the owner of a copyright in a sound recording shall 
                not be liable for a digital phonorecord delivery by a 
                third party if the owner of the copyright in the sound 
                recording does not license the distribution of a 
                phonorecord of the nondramatic musical work.
                    ``(E) Recording devices and media.--Nothing in 
                section 1008 shall be construed to prevent the exercise 
                of the rights and remedies allowed by this paragraph, 
                subparagraph (J), and chapter 5 in the event of a 
                digital phonorecord delivery, except that no action 
                alleging infringement of copyright may be brought under 
                this title against a manufacturer, importer or 
                distributor of a digital audio recording device, a 
                digital audio recording medium, an analog recording 
                device, or an analog recording medium, or against a 
                consumer, based on the actions described in such 
                section.
                    ``(F) Preservation of rights.--Nothing in this 
                section annuls or limits--
                          ``(i) the exclusive right to publicly perform 
                      a sound recording or the musical work embodied 
                      therein, including by means of a digital 
                      transmission, under paragraphs (4) and (6) of 
                      section 106;
                          ``(ii) except for compulsory licensing under 
                      the conditions specified by this section, the 
                      exclusive rights to reproduce and distribute the 
                      sound recording and the musical work embodied 
                      therein under paragraphs (1) and (3) of section 
                      106, including by means of a digital phonorecord 
                      delivery; or
                          ``(iii) any other rights under any other 
                      provision of section 106, or remedies available 
                      under this title, as such rights or remedies exist 
                      before, on, or after the date of enactment of the 
                      Digital Performance Right in Sound Recordings Act 
                      of 1995.

[[Page 132 STAT. 3683]]

                    ``(G) Exempt transmissions and retransmissions.--The 
                provisions of this section concerning digital 
                phonorecord deliveries shall not apply to any exempt 
                transmissions or retransmissions under section 
                114(d)(1). The exemptions created in section 114(d)(1) 
                do not expand or reduce the rights of copyright owners 
                under paragraphs (1) through (5) of section 106 with 
                respect to such transmissions and retransmissions.
                    ``(H) Distribution by rental, lease, or lending.--A 
                compulsory license obtained under subsection (b)(1) to 
                make and distribute phonorecords includes the right of 
                the maker of such a phonorecord to distribute or 
                authorize distribution of such phonorecord, other than 
                by means of a digital phonorecord delivery, by rental, 
                lease, or lending (or by acts or practices in the nature 
                of rental, lease, or lending). With respect to each 
                nondramatic musical work embodied in the phonorecord, 
                the royalty shall be a proportion of the revenue 
                received by the compulsory licensee from every such act 
                of distribution of the phonorecord under this clause 
                equal to the proportion of the revenue received by the 
                compulsory licensee from distribution of the phonorecord 
                under subsection (a)(1)(A)(ii)(II) that is payable by a 
                compulsory licensee under that clause and under chapter 
                8. <<NOTE: Regulations.>>  The Register of Copyrights 
                shall issue regulations to carry out the purpose of this 
                subparagraph.
                    ``(I) Payment of royalties and statements of 
                account.--Except as provided in paragraphs (4)(A)(i) and 
                (10)(B) of subsection (d), royalty payments shall be 
                made on or before the twentieth day of each month and 
                shall include all royalties for the month next 
                preceding. Each monthly payment shall be made under oath 
                and shall comply with requirements that the Register of 
                Copyrights shall prescribe by 
                regulation. <<NOTE: Regulations. Certification.>>  The 
                Register shall also prescribe regulations under which 
                detailed cumulative annual statements of account, 
                certified by a certified public accountant, shall be 
                filed for every compulsory license under subsection (a). 
                The regulations covering both the monthly and the annual 
                statements of account shall prescribe the form, content, 
                and manner of certification with respect to the number 
                of records made and the number of records distributed.
                    ``(J) Notice of default and termination of 
                compulsory license.-- <<NOTE: Deadline.>> In the case of 
                a license obtained under paragraph (1), (2)(A), or (3) 
                of subsection (b), if the copyright owner does not 
                receive the monthly payment and the monthly and annual 
                statements of account when due, the owner may give 
                written notice to the licensee that, unless the default 
                is remedied not later than 30 days after the date on 
                which the notice is sent, the compulsory license will be 
                automatically terminated. Such termination renders 
                either the making or the distribution, or both, of all 
                phonorecords for which the royalty has not been paid, 
                actionable as acts of infringement under section 501 and 
                fully subject to the remedies provided by sections 502 
                through 506. In the case of a license obtained under 
                subsection (b)(2)(B), license authority under the 
                compulsory

[[Page 132 STAT. 3684]]

                license may be terminated as provided in subsection 
                (d)(4)(E).'';
            (4) by amending subsection (d) to read as follows:

    ``(d) Blanket License for Digital Uses, Mechanical Licensing 
Collective, and Digital Licensee Coordinator.--
            ``(1) Blanket license for digital uses.--
                    ``(A) In general.-- <<NOTE: Compliance.>> A digital 
                music provider that qualifies for a compulsory license 
                under subsection (a) may, by complying with the terms 
                and conditions of this subsection, obtain a blanket 
                license from copyright owners through the mechanical 
                licensing collective to make and distribute digital 
                phonorecord deliveries of musical works through one or 
                more covered activities.
                    ``(B) Included activities.--A blanket license--
                          ``(i) covers all musical works (or shares of 
                      such works) available for compulsory licensing 
                      under this section for purposes of engaging in 
                      covered activities, except as provided in 
                      subparagraph (C);
                          ``(ii) includes the making and distribution of 
                      server, intermediate, archival, and incidental 
                      reproductions of musical works that are reasonable 
                      and necessary for the digital music provider to 
                      engage in covered activities licensed under this 
                      subsection, solely for the purpose of engaging in 
                      such covered activities; and
                          ``(iii) does not cover or include any rights 
                      or uses other than those described in clauses (i) 
                      and (ii).
                    ``(C) Other licenses.--A voluntary license for 
                covered activities entered into by or under the 
                authority of 1 or more copyright owners and 1 or more 
                digital music providers, or authority to make and 
                distribute permanent downloads of a musical work 
                obtained by a digital music provider from a sound 
                recording copyright owner pursuant to an individual 
                download license, shall be given effect in lieu of a 
                blanket license under this subsection with respect to 
                the musical works (or shares thereof) covered by such 
                voluntary license or individual download authority and 
                the following conditions apply:
                          ``(i) Where a voluntary license or individual 
                      download license applies, the license authority 
                      provided under the blanket license shall exclude 
                      any musical works (or shares thereof) subject to 
                      the voluntary license or individual download 
                      license.
                          ``(ii) An entity engaged in covered activities 
                      under a voluntary license or authority obtained 
                      pursuant to an individual download license that is 
                      a significant nonblanket licensee shall comply 
                      with paragraph (6)(A).
                          ``(iii) The rates and terms of any voluntary 
                      license shall be subject to the second sentence of 
                      clause (i) and clause (ii) of subsection (c)(2)(A) 
                      and paragraph (9)(C), as applicable.
                    ``(D) Protection against infringement actions.--A 
                digital music provider that obtains and complies with 
                the terms of a valid blanket license under this 
                subsection shall not be subject to an action for 
                infringement of the exclusive rights provided by 
                paragraphs (1) and (3) of section 106 under this title 
                arising from use of a musical

[[Page 132 STAT. 3685]]

                work (or share thereof) to engage in covered activities 
                authorized by such license, subject to paragraph (4)(E).
                    ``(E) Other requirements and conditions apply.--
                Except as expressly provided in this subsection, each 
                requirement, limitation, condition, privilege, right, 
                and remedy otherwise applicable to compulsory licenses 
                under this section shall apply to compulsory blanket 
                licenses under this subsection.
            ``(2) Availability of blanket license.--
                    ``(A) Procedure for obtaining license.-- 
                <<NOTE: Notices.>> A digital music provider may obtain a 
                blanket license by submitting a notice of license to the 
                mechanical licensing collective that specifies the 
                particular covered activities in which the digital music 
                provider seeks to engage, as follows:
                          ``(i) <<NOTE: Compliance. Regulations.>>  The 
                      notice of license shall comply in form and 
                      substance with requirements that the Register of 
                      Copyrights shall establish by regulation.
                          ``(ii) <<NOTE: Deadline. Effective date.>>  
                      Unless rejected in writing by the mechanical 
                      licensing collective not later than 30 calendar 
                      days after the date on which the mechanical 
                      licensing collective receives the notice, the 
                      blanket license shall be effective as of the date 
                      on which the notice of license was sent by the 
                      digital music provider, as shown by a physical or 
                      electronic record.
                          ``(iii) A notice of license may only be 
                      rejected by the mechanical licensing collective 
                      if--
                                    ``(I) the digital music provider or 
                                notice of license does not meet the 
                                requirements of this section or 
                                applicable regulations, in which case 
                                the requirements at issue shall be 
                                specified with reasonable particularity 
                                in the notice of rejection; or
                                    ``(II) <<NOTE: Time period.>>  the 
                                digital music provider has had a blanket 
                                license terminated by the mechanical 
                                licensing collective during the 3-year 
                                period preceding the date on which the 
                                mechanical licensing collective receives 
                                the notice pursuant to paragraph (4)(E).
                          ``(iv) <<NOTE: Deadline.>>  If a notice of 
                      license is rejected under clause (iii)(I), the 
                      digital music provider shall have 30 calendar days 
                      after receipt of the notice of rejection to cure 
                      any deficiency and submit an amended notice of 
                      license to the mechanical licensing collective. If 
                      the deficiency has been cured, the mechanical 
                      licensing collective shall so confirm in writing, 
                      and the license shall be effective as of the date 
                      that the original notice of license was provided 
                      by the digital music provider.
                          ``(v) <<NOTE: Review. Courts.>>  A digital 
                      music provider that believes a notice of license 
                      was improperly rejected by the mechanical 
                      licensing collective may seek review of such 
                      rejection in an appropriate district court of the 
                      United States. 
                      The <<NOTE: Determination.>> district court shall 
                      determine the matter de novo based on the record 
                      before the mechanical licensing collective and any 
                      additional evidence presented by the parties.
                    ``(B) Blanket license effective date.--Blanket 
                licenses shall be made available by the mechanical 
                licensing

[[Page 132 STAT. 3686]]

                collective on and after the license availability date. 
                No such license shall be effective prior to the license 
                availability date.
            ``(3) Mechanical licensing collective.--
                    ``(A) In general.--The mechanical licensing 
                collective shall be a single entity that--
                          ``(i) is a nonprofit entity, not owned by any 
                      other entity, that is created by copyright owners 
                      to carry out responsibilities under this 
                      subsection;
                          ``(ii) is endorsed by, and enjoys substantial 
                      support from, musical work copyright owners that 
                      together represent the greatest percentage of the 
                      licensor market for uses of such works in covered 
                      activities, as measured over the preceding 3 full 
                      calendar years;
                          ``(iii) is able to demonstrate to the Register 
                      of Copyrights that the entity has, or will have 
                      prior to the license availability date, the 
                      administrative and technological capabilities to 
                      perform the required functions of the mechanical 
                      licensing collective under this subsection and 
                      that is governed by a board of directors in 
                      accordance with subparagraph (D)(i); and
                          ``(iv) has been designated by the Register of 
                      Copyrights, with the approval of the Librarian of 
                      Congress pursuant to section 702, in accordance 
                      with subparagraph (B).
                    ``(B) <<NOTE: Notices. Federal Register, 
                publications.>>  Designation of mechanical licensing 
                collective.--
                          ``(i) Initial designation.-- 
                      <<NOTE: Deadlines.>> Not later than 270 days after 
                      the enactment date, the Register of Copyrights 
                      shall initially designate the mechanical licensing 
                      collective as follows:
                                    ``(I) Not later than 90 calendar 
                                days after the enactment date, the 
                                Register shall publish notice in the 
                                Federal Register soliciting information 
                                to assist in identifying the appropriate 
                                entity to serve as the mechanical 
                                licensing collective, including the name 
                                and affiliation of each member of the 
                                board of directors described under 
                                subparagraph (D)(i) and each committee 
                                established pursuant to clauses (iii), 
                                (iv), and (v) of subparagraph (D).
                                    ``(II) <<NOTE: Review.>>  After 
                                reviewing the information requested 
                                under subclause (I) and making a 
                                designation, the Register shall publish 
                                notice in the Federal Register setting 
                                forth--
                                            ``(aa) the identity of and 
                                        contact information for the 
                                        mechanical licensing collective; 
                                        and
                                            ``(bb) the reasons for the 
                                        designation.
                          ``(ii) Periodic review of designation.--
                      Following the initial designation of the 
                      mechanical licensing collective, the Register 
                      shall, every 5 years, beginning with the fifth 
                      full calendar year to commence after the initial 
                      designation, publish notice in the Federal 
                      Register in the month of January soliciting 
                      information concerning whether the existing 
                      designation should be continued, or a different 
                      entity meeting the criteria described in clauses 
                      (i) through (iii) of subparagraph

[[Page 132 STAT. 3687]]

                      (A) shall be designated. Following publication of 
                      such notice, the Register shall--
                                    ``(I) <<NOTE: Effective date.>>  
                                after reviewing the information 
                                submitted and conducting additional 
                                proceedings as appropriate, publish 
                                notice in the Federal Register of a 
                                continuing designation or new 
                                designation of the mechanical licensing 
                                collective, as the case may be, and the 
                                reasons for such a designation, with any 
                                new designation to be effective as of 
                                the first day of a month that is not 
                                less than 6 months and not longer than 9 
                                months after the date on which the 
                                Register publishes the notice, as 
                                specified by the Register; and
                                    ``(II) <<NOTE: Regulations.>>  if a 
                                new entity is designated as the 
                                mechanical licensing collective, adopt 
                                regulations to govern the transfer of 
                                licenses, funds, records, data, and 
                                administrative responsibilities from the 
                                existing mechanical licensing collective 
                                to the new entity.
                          ``(iii) Closest alternative designation.--If 
                      the Register is unable to identify an entity that 
                      fulfills each of the qualifications set forth in 
                      clauses (i) through (iii) of subparagraph (A), the 
                      Register shall designate the entity that most 
                      nearly fulfills such qualifications for purposes 
                      of carrying out the responsibilities of the 
                      mechanical licensing collective.
                    ``(C) Authorities and functions.--
                          ``(i) In general.--The mechanical licensing 
                      collective is authorized to perform the following 
                      functions, subject to more particular requirements 
                      as described in this subsection:
                                    ``(I) Offer and administer blanket 
                                licenses, including receipt of notices 
                                of license and reports of usage from 
                                digital music providers.
                                    ``(II) <<NOTE: Royalties.>>  Collect 
                                and distribute royalties from digital 
                                music providers for covered activities.
                                    ``(III) Engage in efforts to 
                                identify musical works (and shares of 
                                such works) embodied in particular sound 
                                recordings, and to identify and locate 
                                the copyright owners of such musical 
                                works (and shares of such works).
                                    ``(IV) <<NOTE: Database.>>  Maintain 
                                the musical works database and other 
                                information relevant to the 
                                administration of licensing activities 
                                under this section.
                                    ``(V) <<NOTE: Royalties.>>  
                                Administer a process by which copyright 
                                owners can claim ownership of musical 
                                works (and shares of such works), and a 
                                process by which royalties for works for 
                                which the owner is not identified or 
                                located are equitably distributed to 
                                known copyright owners.
                                    ``(VI) Administer collections of the 
                                administrative assessment from digital 
                                music providers and significant 
                                nonblanket licensees, including receipt 
                                of notices of nonblanket activity.
                                    ``(VII) Invest in relevant 
                                resources, and arrange for services of 
                                outside vendors and others,

[[Page 132 STAT. 3688]]

                                to support the activities of the 
                                mechanical licensing collective.
                                    ``(VIII) <<NOTE: Coordination.>>  
                                Engage in legal and other efforts to 
                                enforce rights and obligations under 
                                this subsection, including by filing 
                                bankruptcy proofs of claims for amounts 
                                owed under licenses, and acting in 
                                coordination with the digital licensee 
                                coordinator.
                                    ``(IX) <<NOTE: Proceedings.>>  
                                Initiate and participate in proceedings 
                                before the Copyright Royalty Judges to 
                                establish the administrative assessment 
                                under this subsection.
                                    ``(X) <<NOTE: Proceedings.>>  
                                Initiate and participate in proceedings 
                                before the Copyright Office with respect 
                                to activities under this subsection.
                                    ``(XI) Gather and provide 
                                documentation for use in proceedings 
                                before the Copyright Royalty Judges to 
                                set rates and terms under this section.
                                    ``(XII) Maintain records of the 
                                activities of the mechanical licensing 
                                collective and engage in and respond to 
                                audits described in this subsection.
                                    ``(XIII) Engage in such other 
                                activities as may be necessary or 
                                appropriate to fulfill the 
                                responsibilities of the mechanical 
                                licensing collective under this 
                                subsection.
                          ``(ii) Restrictions concerning licensing and 
                      administrative activities.--With respect to the 
                      administration of licenses, except as provided in 
                      clauses (i) and (iii) and subparagraph (E)(v), the 
                      mechanical licensing collective may only--
                                    ``(I) issue blanket licenses 
                                pursuant to subsection (d)(1); and
                                    ``(II) <<NOTE: Royalties.>>  
                                administer blanket licenses for 
                                reproduction or distribution rights in 
                                musical works for covered activities, 
                                including collecting and distributing 
                                royalties, pursuant to blanket licenses.
                          ``(iii) <<NOTE: Royalties.>>  Additional 
                      administrative activities.--Subject to paragraph 
                      (11)(C), the mechanical licensing collective may 
                      also administer, including by collecting and 
                      distributing royalties, voluntary licenses issued 
                      by, or individual download licenses obtained from, 
                      copyright owners only for reproduction or 
                      distribution rights in musical works for covered 
                      activities, for which the mechanical licensing 
                      collective shall charge reasonable fees for such 
                      services.
                          ``(iv) Restriction on lobbying.--The 
                      mechanical licensing collective may not engage in 
                      government lobbying activities, but may engage in 
                      the activities described in subclauses (IX), (X), 
                      and (XI) of clause (i).
                    ``(D) Governance.--
                          ``(i) Board of directors.--The mechanical 
                      licensing collective shall have a board of 
                      directors consisting of 14 voting members and 3 
                      nonvoting members, as follows:
                                    ``(I) Ten voting members shall be 
                                representatives of music publishers--

[[Page 132 STAT. 3689]]

                                            ``(aa) to which songwriters 
                                        have assigned exclusive rights 
                                        of reproduction and distribution 
                                        of musical works with respect to 
                                        covered activities; and
                                            ``(bb) none of which may be 
                                        owned by, or under common 
                                        control with, any other board 
                                        member.
                                    ``(II) Four voting members shall be 
                                professional songwriters who have 
                                retained and exercise exclusive rights 
                                of reproduction and distribution with 
                                respect to covered activities with 
                                respect to musical works they have 
                                authored.
                                    ``(III) One nonvoting member shall 
                                be a representative of the nonprofit 
                                trade association of music publishers 
                                that represents the greatest percentage 
                                of the licensor market for uses of 
                                musical works in covered activities, as 
                                measured for the 3-year period preceding 
                                the date on which the member is 
                                appointed.
                                    ``(IV) One nonvoting member shall be 
                                a representative of the digital licensee 
                                coordinator, provided that a digital 
                                licensee coordinator has been designated 
                                pursuant to paragraph (5)(B). Otherwise, 
                                the nonvoting member shall be the 
                                nonprofit trade association of digital 
                                licensees that represents the greatest 
                                percentage of the licensee market for 
                                uses of musical works in covered 
                                activities, as measured over the 
                                preceding 3 full calendar years.
                                    ``(V) One nonvoting member shall be 
                                a representative of a nationally 
                                recognized nonprofit trade association 
                                whose primary mission is advocacy on 
                                behalf of songwriters in the United 
                                States.
                          ``(ii) Bylaws.--
                                    ``(I) Establishment.-- 
                                <<NOTE: Deadline.>> Not later than 1 
                                year after the date on which the 
                                mechanical licensing collective is 
                                initially designated by the Register of 
                                Copyrights under subparagraph (B)(i), 
                                the collective shall establish bylaws to 
                                determine issues relating to the 
                                governance of the collective, including, 
                                but not limited to--
                                            ``(aa) the length of the 
                                        term for each member of the 
                                        board of directors;
                                            ``(bb) the staggering of the 
                                        terms of the members of the 
                                        board of directors;
                                            ``(cc) a process for filling 
                                        a seat on the board of directors 
                                        that is vacated before the end 
                                        of the term with respect to that 
                                        seat;
                                            ``(dd) a process for 
                                        electing a member to the board 
                                        of directors; and
                                            ``(ee) a management 
                                        structure for daily operation of 
                                        the collective.
                                    ``(II) Public availability.--The 
                                mechanical licensing collective shall 
                                make the bylaws established under 
                                subclause (I) available to the public.

[[Page 132 STAT. 3690]]

                          ``(iii) Board meetings.--The board of 
                      directors shall meet not less frequently than 
                      biannually and discuss matters pertinent to the 
                      operations of the mechanical licensing collective, 
                      including the mechanical licensing collective 
                      budget.
                          ``(iv) Operations advisory committee.-- 
                      <<NOTE: Recommenda- tions.>> The board of 
                      directors of the mechanical licensing collective 
                      shall establish an operations advisory committee 
                      consisting of not fewer than 6 members to make 
                      recommendations to the board of directors 
                      concerning the operations of the mechanical 
                      licensing collective, including the efficient 
                      investment in and deployment of information 
                      technology and data resources. Such committee 
                      shall have an equal number of members of the 
                      committee who are--
                                    ``(I) musical work copyright owners 
                                who are appointed by the board of 
                                directors of the mechanical licensing 
                                collective; and
                                    ``(II) representatives of digital 
                                music providers who are appointed by the 
                                digital licensee coordinator.
                          ``(v) <<NOTE: Appointments.>>  Unclaimed 
                      royalties oversight committee.--The board of 
                      directors of the mechanical licensing collective 
                      shall establish and appoint an unclaimed royalties 
                      oversight committee consisting of 10 members, 5 of 
                      which shall be musical work copyright owners and 5 
                      of which shall be professional songwriters whose 
                      works are used in covered activities.
                          ``(vi) Dispute resolution 
                      committee. <<NOTE: Appointments.>> --The board of 
                      directors of the mechanical licensing collective 
                      shall establish and appoint a dispute resolution 
                      committee that shall--
                                    ``(I) consist of not fewer than 6 
                                members; and
                                    ``(II) include an equal number of 
                                representatives of musical work 
                                copyright owners and professional 
                                songwriters.
                          ``(vii) Mechanical licensing collective annual 
                      report.--
                                    ``(I) In general.-- <<NOTE: Web 
                                posting. Time period.>> Not later than 
                                June 30 of each year commencing after 
                                the license availability date, the 
                                mechanical licensing collective shall 
                                post, and make available online for a 
                                period of not less than 3 years, an 
                                annual report that sets forth 
                                information regarding--
                                            ``(aa) the operational and 
                                        licensing practices of the 
                                        collective;
                                            ``(bb) how royalties are 
                                        collected and distributed;
                                            ``(cc) budgeting and 
                                        expenditures;
                                            ``(dd) the collective total 
                                        costs for the preceding calendar 
                                        year;
                                            ``(ee) the projected annual 
                                        mechanical licensing collective 
                                        budget;
                                            ``(ff) aggregated royalty 
                                        receipts and payments;

[[Page 132 STAT. 3691]]

                                            ``(gg) expenses that are 
                                        more than 10 percent of the 
                                        annual mechanical licensing 
                                        collective budget; and
                                            ``(hh) the efforts of the 
                                        collective to locate and 
                                        identify copyright owners of 
                                        unmatched musical works (and 
                                        shares of works).
                                    ``(II) Submission.--On the date on 
                                which the mechanical licensing 
                                collective posts each report required 
                                under subclause (I), the collective 
                                shall provide a copy of the report to 
                                the Register of Copyrights.
                          ``(viii) Independent officers.--An individual 
                      serving as an officer of the mechanical licensing 
                      collective may not, at the same time, also be an 
                      employee or agent of any member of the board of 
                      directors of the collective or any entity 
                      represented by a member of the board of directors, 
                      as described in clause (i).
                          ``(ix) Oversight and accountability.--
                                    ``(I) In general.--The mechanical 
                                licensing collective shall--
                                            ``(aa) ensure that the 
                                        policies and practices of the 
                                        collective are transparent and 
                                        accountable;
                                            ``(bb) identify a point of 
                                        contact for publisher inquiries 
                                        and complaints with timely 
                                        redress; and
                                            ``(cc) <<NOTE: Royalties.>>  
                                        establish an anti-comingling 
                                        policy for funds not collected 
                                        under this section and royalties 
                                        collected under this section.
                                    ``(II) Audits.--
                                            ``(aa) In general.-- 
                                        <<NOTE: Effective 
                                        dates.>> Beginning in the fourth 
                                        full calendar year that begins 
                                        after the initial designation of 
                                        the mechanical licensing 
                                        collective by the Register of 
                                        Copyrights under subparagraph 
                                        (B)(i), and in every fifth 
                                        calendar year thereafter, the 
                                        collective shall retain a 
                                        qualified auditor that shall--
                                                ``(AA) examine the 
                                            books, records, and 
                                            operations of the 
                                            collective;
                                                
                                            ``(BB) <<NOTE: Reports.>>  
                                            prepare a report for the 
                                            board of directors of the 
                                            collective with respect to 
                                            the matters described in 
                                            item (bb); and
                                                ``(CC) not later than 
                                            December 31 of the year in 
                                            which the qualified auditor 
                                            is retained, deliver the 
                                            report described in subitem 
                                            (BB) to the board of 
                                            directors of the collective.
                                            ``(bb) Matters addressed.--
                                        Each report prepared under item 
                                        (aa) shall address the 
                                        implementation and efficacy of 
                                        procedures of the mechanical 
                                        licensing collective--
                                                
                                            ``(AA) <<NOTE: Royalties.>>  
                                            for the receipt, handling, 
                                            and distribution of royalty 
                                            funds, including any amounts 
                                            held as unclaimed royalties;
                                                ``(BB) to guard against 
                                            fraud, abuse, waste, and the 
                                            unreasonable use of funds; 
                                            and

[[Page 132 STAT. 3692]]

                                                ``(CC) to protect the 
                                            confidentiality of 
                                            financial, proprietary, and 
                                            other sensitive information.
                                            ``(cc) Public 
                                        availability.--With respect to 
                                        each report prepared under item 
                                        (aa), the mechanical licensing 
                                        collective shall--
                                                ``(AA) submit the report 
                                            to the Register of 
                                            Copyrights; and
                                                ``(BB) make the report 
                                            available to the public.
                    ``(E) Musical works database.--
                          ``(i) Establishment and maintenance of 
                      database.--The mechanical licensing collective 
                      shall establish and maintain a database containing 
                      information relating to musical works (and shares 
                      of such works) and, to the extent known, the 
                      identity and location of the copyright owners of 
                      such works (and shares thereof) and the sound 
                      recordings in which the musical works are 
                      embodied. In furtherance of maintaining such 
                      database, the mechanical licensing collective 
                      shall engage in efforts to identify the musical 
                      works embodied in particular sound recordings, as 
                      well as to identify and locate the copyright 
                      owners of such works (and shares thereof), and 
                      update such data as appropriate.
                          ``(ii) Matched works.--With respect to musical 
                      works (and shares thereof) that have been matched 
                      to copyright owners, the musical works database 
                      shall include--
                                    ``(I) the title of the musical work;
                                    ``(II) the copyright owner of the 
                                work (or share thereof), and the 
                                ownership percentage of that owner;
                                    ``(III) contact information for such 
                                copyright owner;
                                    ``(IV) to the extent reasonably 
                                available to the mechanical licensing 
                                collective--
                                            ``(aa) the international 
                                        standard musical work code for 
                                        the work; and
                                            ``(bb) identifying 
                                        information for sound recordings 
                                        in which the musical work is 
                                        embodied, including the name of 
                                        the sound recording, featured 
                                        artist, sound recording 
                                        copyright owner, producer, 
                                        international standard recording 
                                        code, and other information 
                                        commonly used to assist in 
                                        associating sound recordings 
                                        with musical works; and
                                    ``(V) such other information as the 
                                Register of Copyrights may prescribe by 
                                regulation.
                          ``(iii) Unmatched works.--With respect to 
                      unmatched musical works (and shares of works) in 
                      the database, the musical works database shall 
                      include--
                                    ``(I) to the extent reasonably 
                                available to the mechanical licensing 
                                collective--
                                            ``(aa) the title of the 
                                        musical work;

[[Page 132 STAT. 3693]]

                                            ``(bb) the ownership 
                                        percentage for which an owner 
                                        has not been identified;
                                            ``(cc) if a copyright owner 
                                        has been identified but not 
                                        located, the identity of such 
                                        owner and the ownership 
                                        percentage of that owner;
                                            ``(dd) identifying 
                                        information for sound recordings 
                                        in which the work is embodied, 
                                        including sound recording name, 
                                        featured artist, sound recording 
                                        copyright owner, producer, 
                                        international standard recording 
                                        code, and other information 
                                        commonly used to assist in 
                                        associating sound recordings 
                                        with musical works; and
                                            ``(ee) any additional 
                                        information reported to the 
                                        mechanical licensing collective 
                                        that may assist in identifying 
                                        the work; and
                                    ``(II) such other information 
                                relating to the identity and ownership 
                                of musical works (and shares of such 
                                works) as the Register of Copyrights may 
                                prescribe by regulation.
                          ``(iv) Sound recording information.--Each 
                      musical work copyright owner with any musical work 
                      listed in the musical works database shall engage 
                      in commercially reasonable efforts to deliver to 
                      the mechanical licensing collective, including for 
                      use in the musical works database, to the extent 
                      such information is not then available in the 
                      database, information regarding the names of the 
                      sound recordings in which that copyright owner's 
                      musical works (or shares thereof) are embodied, to 
                      the extent practicable.
                          ``(v) Accessibility of database.-- 
                      <<NOTE: Public information.>> The musical works 
                      database shall be made available to members of the 
                      public in a searchable, online format, free of 
                      charge. The mechanical licensing collective shall 
                      make such database available in a bulk, machine-
                      readable format, through a widely available 
                      software application, to the following entities:
                                    ``(I) Digital music providers 
                                operating under the authority of valid 
                                notices of license, free of charge.
                                    ``(II) Significant nonblanket 
                                licensees in compliance with their 
                                obligations under paragraph (6), free of 
                                charge.
                                    ``(III) Authorized vendors of the 
                                entities described in subclauses (I) and 
                                (II), free of charge.
                                    ``(IV) The Register of Copyrights, 
                                free of charge (but the Register shall 
                                not treat such database or any 
                                information therein as a Government 
                                record).
                                    ``(V) Any other person or entity for 
                                a fee not to exceed the marginal cost to 
                                the mechanical licensing collective of 
                                providing the database to such person or 
                                entity.
                          ``(vi) Additional requirements.-- 
                      <<NOTE: Regulations.>> The Register of Copyrights 
                      shall establish requirements by regulations

[[Page 132 STAT. 3694]]

                      to ensure the usability, interoperability, and 
                      usage restrictions of the musical works database.
                    ``(F) <<NOTE: Public information. Lists.>>  Notices 
                of license and nonblanket activity.--
                          ``(i) Notices of licenses.--The mechanical 
                      licensing collective shall receive, review, and 
                      confirm or reject notices of license from digital 
                      music providers, as provided in paragraph (2)(A). 
                      The collective shall maintain a current, publicly 
                      accessible list of blanket licenses that includes 
                      contact information for the licensees and the 
                      effective dates of such licenses.
                          ``(ii) Notices of nonblanket activity.--The 
                      mechanical licensing collective shall receive 
                      notices of nonblanket activity from significant 
                      nonblanket licensees, as provided in paragraph 
                      (6)(A). The collective shall maintain a current, 
                      publicly accessible list of notices of nonblanket 
                      activity that includes contact information for 
                      significant nonblanket licensees and the dates of 
                      receipt of such notices.
                    ``(G) Collection and distribution of royalties.--
                          ``(i) In general.--Upon receiving reports of 
                      usage and payments of royalties from digital music 
                      providers for covered activities, the mechanical 
                      licensing collective shall--
                                    ``(I) engage in efforts to--
                                            ``(aa) identify the musical 
                                        works embodied in sound 
                                        recordings reflected in such 
                                        reports, and the copyright 
                                        owners of such musical works 
                                        (and shares thereof);
                                            ``(bb) confirm uses of 
                                        musical works subject to 
                                        voluntary licenses and 
                                        individual download licenses, 
                                        and the corresponding pro rata 
                                        amounts to be deducted from 
                                        royalties that would otherwise 
                                        be due under the blanket 
                                        license; and
                                            ``(cc) confirm proper 
                                        payment of royalties due;
                                    ``(II) distribute royalties to 
                                copyright owners in accordance with the 
                                usage and other information contained in 
                                such reports, as well as the ownership 
                                and other information contained in the 
                                records of the collective; and
                                    ``(III) deposit into an interest-
                                bearing account, as provided in 
                                subparagraph (H)(ii), royalties that 
                                cannot be distributed due to--
                                            ``(aa) an inability to 
                                        identify or locate a copyright 
                                        owner of a musical work (or 
                                        share thereof); or
                                            ``(bb) a pending dispute 
                                        before the dispute resolution 
                                        committee of the mechanical 
                                        licensing collective.
                          ``(ii) Other collection efforts.--Any 
                      royalties recovered by the mechanical licensing 
                      collective as a result of efforts to enforce 
                      rights or obligations under a blanket license, 
                      including through a bankruptcy proceeding or other 
                      legal action, shall be distributed to copyright 
                      owners based on available usage information and in 
                      accordance with the procedures described in

[[Page 132 STAT. 3695]]

                      subclauses (I) and (II) of clause (i), on a pro 
                      rata basis in proportion to the overall percentage 
                      recovery of the total royalties owed, with any pro 
                      rata share of royalties that cannot be distributed 
                      deposited in an interest-bearing account as 
                      provided in subparagraph (H)(ii).
                    ``(H) Holding of accrued royalties.--
                          ``(i) Holding period.--The mechanical 
                      licensing collective shall hold accrued royalties 
                      associated with particular musical works (and 
                      shares of works) that remain unmatched for a 
                      period of not less than 3 years after the date on 
                      which the funds were received by the mechanical 
                      licensing collective, or not less than 3 years 
                      after the date on which the funds were accrued by 
                      a digital music provider that subsequently 
                      transferred such funds to the mechanical licensing 
                      collective pursuant to paragraph (10)(B), 
                      whichever period expires sooner.
                          ``(ii) Interest-bearing account.--Accrued 
                      royalties for unmatched works (and shares thereof) 
                      shall be maintained by the mechanical licensing 
                      collective in an interest-bearing account that 
                      earns monthly interest--
                                    ``(I) at the Federal, short-term 
                                rate; and
                                    ``(II) that accrues for the benefit 
                                of copyright owners entitled to payment 
                                of such accrued royalties.
                    ``(I) Musical works claiming process.--When a 
                copyright owner of an unmatched work (or share of a 
                work) has been identified and located in accordance with 
                the procedures of the mechanical licensing collective, 
                the collective shall--
                          ``(i) update the musical works database and 
                      the other records of the collective accordingly; 
                      and
                          ``(ii) <<NOTE: Royalties.>>  provided that 
                      accrued royalties for the musical work (or share 
                      thereof) have not yet been included in a 
                      distribution pursuant to subparagraph (J)(i), pay 
                      such accrued royalties and a proportionate amount 
                      of accrued interest associated with that work (or 
                      share thereof) to the copyright owner, accompanied 
                      by a cumulative statement of account reflecting 
                      usage of such work and accrued royalties based on 
                      information provided by digital music providers to 
                      the mechanical licensing collective.
                    ``(J) Distribution of unclaimed accrued royalties.--
                          ``(i) Distribution procedures.--After the 
                      expiration of the prescribed holding period for 
                      accrued royalties provided in subparagraph (H)(i), 
                      the mechanical licensing collective shall 
                      distribute such accrued royalties, along with a 
                      proportionate share of accrued interest, to 
                      copyright owners identified in the records of the 
                      collective, subject to the following requirements, 
                      and in accordance with the policies and procedures 
                      established under clause (ii):
                                    ``(I) <<NOTE: Effective date.>>  The 
                                first such distribution shall occur on 
                                or after January 1 of the second full 
                                calendar

[[Page 132 STAT. 3696]]

                                year to commence after the license 
                                availability date, with not less than 1 
                                such distribution to take place during 
                                each calendar year thereafter.
                                    ``(II) <<NOTE: Determination.>>  
                                Copyright owners' payment shares for 
                                unclaimed accrued royalties for 
                                particular reporting periods shall be 
                                determined in a transparent and 
                                equitable manner based on data 
                                indicating the relative market shares of 
                                such copyright owners as reflected in 
                                reports of usage provided by digital 
                                music providers for covered activities 
                                for the periods in question, including, 
                                in addition to usage data provided to 
                                the mechanical licensing collective, 
                                usage data provided to copyright owners 
                                under voluntary licenses and individual 
                                download licenses for covered 
                                activities, to the extent such 
                                information is available to the 
                                mechanical licensing collective. In 
                                furtherance of the determination of 
                                equitable market shares under this 
                                subparagraph--
                                            ``(aa) the mechanical 
                                        licensing collective may require 
                                        copyright owners seeking 
                                        distributions of unclaimed 
                                        accrued royalties to provide, or 
                                        direct the provision of, 
                                        information concerning the usage 
                                        of musical works under voluntary 
                                        licenses and individual download 
                                        licenses for covered activities; 
                                        and
                                            ``(bb) the mechanical 
                                        licensing collective shall take 
                                        appropriate steps to safeguard 
                                        the confidentiality and security 
                                        of usage, financial, and other 
                                        sensitive data used to compute 
                                        market shares in accordance with 
                                        the confidentiality provisions 
                                        prescribed by the Register of 
                                        Copyrights under paragraph 
                                        (12)(C).
                          ``(ii) Establishment of distribution 
                      policies.--The unclaimed royalties oversight 
                      committee established under subparagraph (D)(v) 
                      shall establish policies and procedures for the 
                      distribution of unclaimed accrued royalties and 
                      accrued interest in accordance with this 
                      subparagraph, including the provision of usage 
                      data to copyright owners to allocate payments and 
                      credits to songwriters pursuant to clause (iv), 
                      subject to the approval of the board of directors 
                      of the mechanical licensing collective.
                          ``(iii) Public notice of unclaimed accrued 
                      royalties.--The mechanical licensing collective 
                      shall--
                                    ``(I) maintain a publicly accessible 
                                online facility with contact information 
                                for the collective that lists unmatched 
                                musical works (and shares of works), 
                                through which a copyright owner may 
                                assert an ownership claim with respect 
                                to such a work (and a share of such a 
                                work);
                                    ``(II) engage in diligent, good-
                                faith efforts to publicize, throughout 
                                the music industry--

[[Page 132 STAT. 3697]]

                                            ``(aa) the existence of the 
                                        collective and the ability to 
                                        claim unclaimed accrued 
                                        royalties for unmatched musical 
                                        works (and shares of such works) 
                                        held by the collective;
                                            ``(bb) the procedures by 
                                        which copyright owners may 
                                        identify themselves and provide 
                                        contact, ownership, and other 
                                        relevant information to the 
                                        collective in order to receive 
                                        payments of accrued royalties;
                                            ``(cc) <<NOTE: Deadline.>>  
                                        any transfer of accrued 
                                        royalties for musical works 
                                        under paragraph (10)(B), not 
                                        later than 180 days after the 
                                        date on which the transfer is 
                                        received; and
                                            ``(dd) <<NOTE: Time 
                                        period.>>  any pending 
                                        distribution of unclaimed 
                                        accrued royalties and accrued 
                                        interest, not less than 90 days 
                                        before the date on which the 
                                        distribution is made; and
                                    ``(III) as appropriate, participate 
                                in music industry conferences and events 
                                for the purpose of publicizing the 
                                matters described in subclause (II).
                          ``(iv) Songwriter payments.--Copyright owners 
                      that receive a distribution of unclaimed accrued 
                      royalties and accrued interest shall pay or credit 
                      a portion to songwriters (or the authorized agents 
                      of songwriters) on whose behalf the copyright 
                      owners license or administer musical works for 
                      covered activities, in accordance with applicable 
                      contractual terms, but notwithstanding any 
                      agreement to the contrary--
                                    ``(I) such payments and credits to 
                                songwriters shall be allocated in 
                                proportion to reported usage of 
                                individual musical works by digital 
                                music providers during the reporting 
                                periods covered by the distribution from 
                                the mechanical licensing collective; and
                                    ``(II) in no case shall the payment 
                                or credit to an individual songwriter be 
                                less than 50 percent of the payment 
                                received by the copyright owner 
                                attributable to usage of musical works 
                                (or shares of works) of that songwriter.
                    ``(K) Dispute resolution.--The dispute resolution 
                committee established under subparagraph (D)(vi) shall 
                establish policies and procedures--
                          ``(i) for copyright owners to address in a 
                      timely and equitable manner disputes relating to 
                      ownership interests in musical works licensed 
                      under this section and allocation and distribution 
                      of royalties by the mechanical licensing 
                      collective, subject to the approval of the board 
                      of directors of the mechanical licensing 
                      collective;
                          ``(ii) that shall include a mechanism to hold 
                      disputed funds in accordance with the requirements 
                      described in subparagraph (H)(ii) pending 
                      resolution of the dispute; and
                          ``(iii) except as provided in paragraph 
                      (11)(D), that shall not affect any legal or 
                      equitable rights or remedies available to any 
                      copyright owner or songwriter

[[Page 132 STAT. 3698]]

                      concerning ownership of, and entitlement to 
                      royalties for, a musical work.
                    ``(L) Verification of payments by mechanical 
                licensing collective.--
                          ``(i) Verification process.-- 
                      <<NOTE: Audits.>> A copyright owner entitled to 
                      receive payments of royalties for covered 
                      activities from the mechanical licensing 
                      collective may, individually or with other 
                      copyright owners, conduct an audit of the 
                      mechanical licensing collective to verify the 
                      accuracy of royalty payments by the mechanical 
                      licensing collective to such copyright owner, as 
                      follows:
                                    ``(I) <<NOTE: Time periods.>>  A 
                                copyright owner may audit the mechanical 
                                licensing collective only once in a year 
                                for any or all of the 3 calendar years 
                                preceding the year in which the audit is 
                                commenced, and may not audit records for 
                                any calendar year more than once.
                                    ``(II) The audit shall be conducted 
                                by a qualified auditor, who shall 
                                perform the audit during the ordinary 
                                course of business by examining the 
                                books, records, and data of the 
                                mechanical licensing collective, 
                                according to generally accepted auditing 
                                standards and subject to applicable 
                                confidentiality requirements prescribed 
                                by the Register of Copyrights under 
                                paragraph (12)(C).
                                    ``(III) The mechanical licensing 
                                collective shall make such books, 
                                records, and data available to the 
                                qualified auditor and respond to 
                                reasonable requests for relevant 
                                information, and shall use commercially 
                                reasonable efforts to facilitate access 
                                to relevant information maintained by 
                                third parties.
                                    ``(IV) <<NOTE: Notice.>>  To 
                                commence the audit, any copyright owner 
                                shall file with the Copyright Office a 
                                notice of intent to conduct an audit of 
                                the mechanical licensing collective, 
                                identifying the period of time to be 
                                audited, and shall simultaneously 
                                deliver a copy of such notice to the 
                                mechanical licensing 
                                collective. <<NOTE: Federal Register, 
                                publication. Deadline.>>  The Register 
                                of Copyrights shall cause the notice of 
                                audit to be published in the Federal 
                                Register not later than 45 calendar days 
                                after the date on which the notice is 
                                received.
                                    
                                ``(V) <<NOTE: Determination. Reports.>>  
                                The qualified auditor shall determine 
                                the accuracy of royalty payments, 
                                including whether an underpayment or 
                                overpayment of royalties was made by the 
                                mechanical licensing collective to each 
                                auditing copyright owner, except that, 
                                before providing a final audit report to 
                                any such copyright owner, the qualified 
                                auditor shall provide a tentative draft 
                                of the report to the mechanical 
                                licensing collective and allow the 
                                mechanical licensing collective a 
                                reasonable opportunity to respond to the 
                                findings, including by clarifying issues 
                                and correcting factual errors.
                                    ``(VI) The auditing copyright owner 
                                or owners shall bear the cost of the 
                                audit. In case of an underpayment to any 
                                copyright owner, the

[[Page 132 STAT. 3699]]

                                mechanical licensing collective shall 
                                pay the amounts of any such underpayment 
                                to such auditing copyright owner, as 
                                appropriate. In case of an overpayment 
                                by the mechanical licensing collective, 
                                the mechanical licensing collective may 
                                debit the account of the auditing 
                                copyright owner or owners for such 
                                overpaid amounts, or such owner or 
                                owners shall refund overpaid amounts to 
                                the mechanical licensing collective, as 
                                appropriate.
                          ``(ii) <<NOTE: Notice.>>  Alternative 
                      verification procedures.--Nothing in this 
                      subparagraph shall preclude a copyright owner and 
                      the mechanical licensing collective from agreeing 
                      to audit procedures different from those described 
                      in this subparagraph, except that a notice of the 
                      audit shall be provided to and published by the 
                      Copyright Office as described in clause (i)(IV).
                    ``(M) Records of mechanical licensing collective.--
                          ``(i) Records maintenance.-- <<NOTE: Time 
                      period.>> The mechanical licensing collective 
                      shall ensure that all material records of the 
                      operations of the mechanical licensing collective, 
                      including those relating to notices of license, 
                      the administration of the claims process of the 
                      mechanical licensing collective, reports of usage, 
                      royalty payments, receipt and maintenance of 
                      accrued royalties, royalty distribution processes, 
                      and legal matters, are preserved and maintained in 
                      a secure and reliable manner, with appropriate 
                      commercially reasonable safeguards against 
                      unauthorized access, copying, and disclosure, and 
                      subject to the confidentiality requirements 
                      prescribed by the Register of Copyrights under 
                      paragraph (12)(C) for a period of not less than 7 
                      years after the date of creation or receipt, 
                      whichever occurs later.
                          ``(ii) Records access.--The mechanical 
                      licensing collective shall provide prompt access 
                      to electronic and other records pertaining to the 
                      administration of a copyright owner's musical 
                      works upon reasonable written request of the owner 
                      or the authorized representative of the owner.
            ``(4) Terms and conditions of blanket license.--A blanket 
        license is subject to, and conditioned upon, the following 
        requirements:
                    ``(A) Royalty reporting and payments.--
                          ``(i) Monthly reports and payment.--A digital 
                      music provider shall report and pay royalties to 
                      the mechanical licensing collective under the 
                      blanket license on a monthly basis in accordance 
                      with clause (ii) and subsection (c)(2)(I), except 
                      that the monthly reporting shall be due on the 
                      date that is 45 calendar days, rather than 20 
                      calendar days, after the end of the monthly 
                      reporting period.
                          ``(ii) Data to be reported.--In reporting 
                      usage of musical works to the mechanical licensing 
                      collective, a digital music provider shall provide 
                      usage data for musical works used under the 
                      blanket license and

[[Page 132 STAT. 3700]]

                      usage data for musical works used in covered 
                      activities under voluntary licenses and individual 
                      download licenses. In the report of usage, the 
                      digital music provider shall--
                                    ``(I) with respect to each sound 
                                recording embodying a musical work--
                                            ``(aa) provide identifying 
                                        information for the sound 
                                        recording, including sound 
                                        recording name, featured artist, 
                                        and, to the extent acquired by 
                                        the digital music provider in 
                                        connection with its use of sound 
                                        recordings of musical works to 
                                        engage in covered activities, 
                                        including pursuant to 
                                        subparagraph (B), sound 
                                        recording copyright owner, 
                                        producer, international standard 
                                        recording code, and other 
                                        information commonly used in the 
                                        industry to identify sound 
                                        recordings and match them to the 
                                        musical works the sound 
                                        recordings embody;
                                            ``(bb) to the extent 
                                        acquired by the digital music 
                                        provider in the metadata 
                                        provided by sound recording 
                                        copyright owners or other 
                                        licensors of sound recordings in 
                                        connection with the use of sound 
                                        recordings of musical works to 
                                        engage in covered activities, 
                                        including pursuant to 
                                        subparagraph (B), provide 
                                        information concerning 
                                        authorship and ownership of the 
                                        applicable rights in the musical 
                                        work embodied in the sound 
                                        recording (including each 
                                        songwriter, publisher name, and 
                                        respective ownership share) and 
                                        the international standard 
                                        musical work code; and
                                            ``(cc) provide the number of 
                                        digital phonorecord deliveries 
                                        of the sound recording, 
                                        including limited downloads and 
                                        interactive streams;
                                    ``(II) identify and provide contact 
                                information for all musical work 
                                copyright owners for works embodied in 
                                sound recordings as to which a voluntary 
                                license, rather than the blanket 
                                license, is in effect with respect to 
                                the uses being reported; and
                                    ``(III) provide such other 
                                information as the Register of 
                                Copyrights shall require by regulation.
                          ``(iii) <<NOTE: Regulations.>>  Format and 
                      maintenance of reports.--Reports of usage provided 
                      by digital music providers to the mechanical 
                      licensing collective shall be in a machine-
                      readable format that is compatible with the 
                      information technology systems of the mechanical 
                      licensing collective and meets the requirements of 
                      regulations adopted by the Register of Copyrights. 
                      The Register shall also adopt regulations setting 
                      forth requirements under which records of use 
                      shall be maintained and made available to the 
                      mechanical licensing collective by digital music 
                      providers engaged in covered activities under a 
                      blanket license.

[[Page 132 STAT. 3701]]

                          ``(iv) Adoption of regulations.--The Register 
                      of Copyrights shall adopt regulations--
                                    ``(I) setting forth requirements 
                                under which records of use shall be 
                                maintained and made available to the 
                                mechanical licensing collective by 
                                digital music providers engaged in 
                                covered activities under a blanket 
                                license; and
                                    ``(II) regarding adjustments to 
                                reports of usage by digital music 
                                providers, including mechanisms to 
                                account for overpayment and underpayment 
                                of royalties in prior periods.
                    ``(B) Collection of sound recording information.--A 
                digital music provider shall engage in good-faith, 
                commercially reasonable efforts to obtain from sound 
                recording copyright owners and other licensors of sound 
                recordings made available through the service of such 
                digital music provider information concerning--
                          ``(i) sound recording copyright owners, 
                      producers, international standard recording codes, 
                      and other information commonly used in the 
                      industry to identify sound recordings and match 
                      them to the musical works the sound recordings 
                      embody; and
                          ``(ii) the authorship and ownership of musical 
                      works, including songwriters, publisher names, 
                      ownership shares, and international standard 
                      musical work codes.
                    ``(C) Payment of administrative assessment.--A 
                digital music provider and any significant nonblanket 
                licensee shall pay the administrative assessment 
                established under paragraph (7)(D) in accordance with 
                this subsection and applicable regulations.
                    ``(D) Verification of payments by digital music 
                providers.--
                          ``(i) Verification process.-- 
                      <<NOTE: Audits.>> The mechanical licensing 
                      collective may conduct an audit of a digital music 
                      provider operating under the blanket license to 
                      verify the accuracy of royalty payments by the 
                      digital music provider to the mechanical licensing 
                      collective as follows:
                                    ``(I) <<NOTE: Time periods.>>  The 
                                mechanical licensing collective may 
                                commence an audit of a digital music 
                                provider not more frequently than once 
                                in any 3-calendar-year period to cover a 
                                verification period of not more than the 
                                3 full calendar years preceding the date 
                                of commencement of the audit, and such 
                                audit may not audit records for any such 
                                3-year verification period more than 
                                once.
                                    ``(II) The audit shall be conducted 
                                by a qualified auditor, who shall 
                                perform the audit during the ordinary 
                                course of business by examining the 
                                books, records, and data of the digital 
                                music provider, according to generally 
                                accepted auditing standards and subject 
                                to applicable confidentiality 
                                requirements prescribed by the Register 
                                of Copyrights under paragraph (12)(C).
                                    ``(III) The digital music provider 
                                shall make such books, records, and data 
                                available to the

[[Page 132 STAT. 3702]]

                                qualified auditor and respond to 
                                reasonable requests for relevant 
                                information, and shall use commercially 
                                reasonable efforts to provide access to 
                                relevant information maintained with 
                                respect to a digital music provider by 
                                third parties.
                                    ``(IV) <<NOTE: Notice.>>  To 
                                commence the audit, the mechanical 
                                licensing collective shall file with the 
                                Copyright Office a notice of intent to 
                                conduct an audit of the digital music 
                                provider, identifying the period of time 
                                to be audited, and shall simultaneously 
                                deliver a copy of such notice to the 
                                digital music provider. <<NOTE: Federal 
                                Register, publication. Deadline.>>  The 
                                Register of Copyrights shall cause the 
                                notice of audit to be published in the 
                                Federal Register not later than 45 
                                calendar days after the date on which 
                                notice is received.
                                    
                                ``(V) <<NOTE: Determination. Reports.>>  
                                The qualified auditor shall determine 
                                the accuracy of royalty payments, 
                                including whether an underpayment or 
                                overpayment of royalties was made by the 
                                digital music provider to the mechanical 
                                licensing collective, except that, 
                                before providing a final audit report to 
                                the mechanical licensing collective, the 
                                qualified auditor shall provide a 
                                tentative draft of the report to the 
                                digital music provider and allow the 
                                digital music provider a reasonable 
                                opportunity to respond to the findings, 
                                including by clarifying issues and 
                                correcting factual errors.
                                    ``(VI) The mechanical licensing 
                                collective shall pay the cost of the 
                                audit, unless the qualified auditor 
                                determines that there was an 
                                underpayment by the digital music 
                                provider of not less than 10 percent, in 
                                which case the digital music provider 
                                shall bear the reasonable costs of the 
                                audit, in addition to paying the amount 
                                of any underpayment to the mechanical 
                                licensing collective. In case of an 
                                overpayment by the digital music 
                                provider, the mechanical licensing 
                                collective shall provide a credit to the 
                                account of the digital music provider.
                                    ``(VII) <<NOTE: Effective date.>>  A 
                                digital music provider may not assert 
                                section 507 or any other Federal or 
                                State statute of limitations, doctrine 
                                of laches or estoppel, or similar 
                                provision as a defense to a legal action 
                                arising from an audit under this 
                                subparagraph if such legal action is 
                                commenced not more than 6 years after 
                                the commencement of the audit that is 
                                the basis for such action.
                          ``(ii) Alternative verification procedures.--
                      Nothing in this subparagraph shall preclude the 
                      mechanical licensing collective and a digital 
                      music provider from agreeing to audit procedures 
                      different from those described in this 
                      subparagraph, except that a notice of the audit 
                      shall be provided to and published by the 
                      Copyright Office as described in clause (i)(IV).
                    ``(E) Default under blanket license.--

[[Page 132 STAT. 3703]]

                          ``(i) Conditions of default.--A digital music 
                      provider shall be in default under a blanket 
                      license if the digital music provider--
                                    ``(I) fails to provide 1 or more 
                                monthly reports of usage to the 
                                mechanical licensing collective when 
                                due;
                                    ``(II) fails to make a monthly 
                                royalty or late fee payment to the 
                                mechanical licensing collective when 
                                due, in all or material part;
                                    ``(III) provides 1 or more monthly 
                                reports of usage to the mechanical 
                                licensing collective that, on the whole, 
                                is or are materially deficient as a 
                                result of inaccurate, missing, or 
                                unreadable data, where the correct data 
                                was available to the digital music 
                                provider and required to be reported 
                                under this section and applicable 
                                regulations;
                                    ``(IV) fails to pay the 
                                administrative assessment as required 
                                under this subsection and applicable 
                                regulations; or
                                    ``(V) <<NOTE: Time period.>>  after 
                                being provided written notice by the 
                                mechanical licensing collective, refuses 
                                to comply with any other material term 
                                or condition of the blanket license 
                                under this section for a period of not 
                                less than 60 calendar days.
                          ``(ii) Notice of default and termination.--In 
                      case of a default by a digital music provider, the 
                      mechanical licensing collective may proceed to 
                      terminate the blanket license of the digital music 
                      provider as follows:
                                    ``(I) <<NOTE: Deadline.>>  The 
                                mechanical licensing collective shall 
                                provide written notice to the digital 
                                music provider describing with 
                                reasonable particularity the default and 
                                advising that unless such default is 
                                cured not later than 60 calendar days 
                                after the date of the notice, the 
                                blanket license will automatically 
                                terminate at the end of that period.
                                    ``(II) If the digital music provider 
                                fails to remedy the default before the 
                                end of the 60-day period described in 
                                subclause (I), the license shall 
                                terminate without any further action on 
                                the part of the mechanical licensing 
                                collective. Such termination renders the 
                                making of all digital phonorecord 
                                deliveries of all musical works (and 
                                shares thereof) covered by the blanket 
                                license for which the royalty or 
                                administrative assessment has not been 
                                paid actionable as acts of infringement 
                                under section 501 and subject to the 
                                remedies provided by sections 502 
                                through 506.
                          ``(iii) Notice to copyright owners.--The 
                      mechanical licensing collective shall provide 
                      written notice of any termination under this 
                      subparagraph to copyright owners of affected 
                      works.
                          ``(iv) Review by federal district court.-- 
                      <<NOTE: Courts.>> A digital music provider that 
                      believes a blanket license was improperly 
                      terminated by the mechanical licensing collective 
                      may seek review of such termination in an 
                      appropriate district court of the United 
                      States. <<NOTE: Determination.>>  The

[[Page 132 STAT. 3704]]

                      district court shall determine the matter de novo 
                      based on the record before the mechanical 
                      licensing collective and any additional supporting 
                      evidence presented by the parties.
            ``(5) Digital licensee coordinator.--
                    ``(A) In general.--The digital licensee coordinator 
                shall be a single entity that--
                          ``(i) is a nonprofit, not owned by any other 
                      entity, that is created to carry out 
                      responsibilities under this subsection;
                          ``(ii) is endorsed by and enjoys substantial 
                      support from digital music providers and 
                      significant nonblanket licensees that together 
                      represent the greatest percentage of the licensee 
                      market for uses of musical works in covered 
                      activities, as measured over the preceding 3 
                      calendar years;
                          ``(iii) is able to demonstrate that it has, or 
                      will have prior to the license availability date, 
                      the administrative capabilities to perform the 
                      required functions of the digital licensee 
                      coordinator under this subsection; and
                          ``(iv) has been designated by the Register of 
                      Copyrights, with the approval of the Librarian of 
                      Congress pursuant to section 702, in accordance 
                      with subparagraph (B).
                    ``(B) Designation of digital licensee coordinator.--
                          ``(i) Initial designation.-- 
                      <<NOTE: Deadline.>> The Register of Copyrights 
                      shall initially designate the digital licensee 
                      coordinator not later than 270 days after the 
                      enactment date, in accordance with the same 
                      procedure described for designation of the 
                      mechanical licensing collective in paragraph 
                      (3)(B)(i).
                          ``(ii) Periodic review of designation.-- 
                      <<NOTE: Time periods.>> Following the initial 
                      designation of the digital licensee coordinator, 
                      the Register of Copyrights shall, every 5 years, 
                      beginning with the fifth full calendar year to 
                      commence after the initial designation, determine 
                      whether the existing designation should be 
                      continued, or a different entity meeting the 
                      criteria described in clauses (i) through (iii) of 
                      subparagraph (A) should be designated, in 
                      accordance with the same procedure described for 
                      the mechanical licensing collective in paragraph 
                      (3)(B)(ii).
                          ``(iii) Inability to designate.--If the 
                      Register of Copyrights is unable to identify an 
                      entity that fulfills each of the qualifications 
                      described in clauses (i) through (iii) of 
                      subparagraph (A) to serve as the digital licensee 
                      coordinator, the Register may decline to designate 
                      a digital licensee coordinator. The determination 
                      of the Register not to designate a digital 
                      licensee coordinator shall not negate or otherwise 
                      affect any provision of this subsection except to 
                      the limited extent that a provision references the 
                      digital licensee coordinator. In such case, the 
                      reference to the digital licensee coordinator 
                      shall be without effect unless and until a new 
                      digital licensee coordinator is designated.

[[Page 132 STAT. 3705]]

                    ``(C) Authorities and functions.--
                          ``(i) In general.--The digital licensee 
                      coordinator is authorized to perform the following 
                      functions, subject to more particular requirements 
                      as described in this subsection:
                                    ``(I) <<NOTE: Criteria.>>  Establish 
                                a governance structure, criteria for 
                                membership, and any dues to be paid by 
                                its members.
                                    ``(II) Engage in efforts to enforce 
                                notice and payment obligations with 
                                respect to the administrative 
                                assessment, including by receiving 
                                information from and coordinating with 
                                the mechanical licensing collective.
                                    ``(III) <<NOTE: Proceedings.>>  
                                Initiate and participate in proceedings 
                                before the Copyright Royalty Judges to 
                                establish the administrative assessment 
                                under this subsection.
                                    ``(IV) <<NOTE: Proceedings.>>  
                                Initiate and participate in proceedings 
                                before the Copyright Office with respect 
                                to activities under this subsection.
                                    ``(V) Gather and provide 
                                documentation for use in proceedings 
                                before the Copyright Royalty Judges to 
                                set rates and terms under this section.
                                    ``(VI) Maintain records of its 
                                activities.
                                    ``(VII) Assist in publicizing the 
                                existence of the mechanical licensing 
                                collective and the ability of copyright 
                                owners to claim royalties for unmatched 
                                musical works (and shares of works) 
                                through the collective.
                                    ``(VIII) Engage in such other 
                                activities as may be necessary or 
                                appropriate to fulfill its 
                                responsibilities under this subsection.
                          ``(ii) Restriction on lobbying.--The digital 
                      licensee coordinator may not engage in government 
                      lobbying activities, but may engage in the 
                      activities described in subclauses (III), (IV), 
                      and (V) of clause (i).
                          ``(iii) Assistance with publicity for 
                      unclaimed royalties.--The digital licensee 
                      coordinator shall make reasonable, good-faith 
                      efforts to assist the mechanical licensing 
                      collective in the efforts of the collective to 
                      locate and identify copyright owners of unmatched 
                      musical works (and shares of such works) by 
                      encouraging digital music providers to publicize 
                      the existence of the collective and the ability of 
                      copyright owners to claim unclaimed accrued 
                      royalties, including by--
                                    ``(I) <<NOTE: Web posting.>>  
                                posting contact information for the 
                                collective at reasonably prominent 
                                locations on digital music provider 
                                websites and applications; and
                                    ``(II) conducting in-person outreach 
                                activities with songwriters.
            ``(6) Requirements for significant nonblanket licensees.--
                    ``(A) In general.--
                          ``(i) Notice of activity.-- 
                      <<NOTE: Deadline.>> Not later than 45 calendar 
                      days after the license availability date, or 45

[[Page 132 STAT. 3706]]

                      calendar days after the end of the first full 
                      calendar month in which an entity initially 
                      qualifies as a significant nonblanket licensee, 
                      whichever occurs later, a significant nonblanket 
                      licensee shall submit a notice of nonblanket 
                      activity to the mechanical licensing 
                      collective. <<NOTE: Compliance. Regulations.>>  
                      The notice of nonblanket activity shall comply in 
                      form and substance with requirements that the 
                      Register of Copyrights shall establish by 
                      regulation, and a copy shall be made available to 
                      the digital licensee coordinator.
                          ``(ii) Reporting and payment obligations.--The 
                      notice of nonblanket activity submitted to the 
                      mechanical licensing collective shall be 
                      accompanied by a report of usage that contains the 
                      information described in paragraph (4)(A)(ii), as 
                      well as any payment of the administrative 
                      assessment required under this subsection and 
                      applicable regulations. Thereafter, subject to 
                      clause (iii), a significant nonblanket licensee 
                      shall continue to provide monthly reports of 
                      usage, accompanied by any required payment of the 
                      administrative assessment, to the mechanical 
                      licensing collective. Such reports and payments 
                      shall be submitted not later than 45 calendar days 
                      after the end of the calendar month being 
                      reported.
                          ``(iii) Discontinuation of obligations.-- 
                      <<NOTE: Notification.>> An entity that has 
                      submitted a notice of nonblanket activity to the 
                      mechanical licensing collective that has ceased to 
                      qualify as a significant nonblanket licensee may 
                      so notify the collective in writing. In such case, 
                      as of the calendar month in which such notice is 
                      provided, such entity shall no longer be required 
                      to provide reports of usage or pay the 
                      administrative assessment, but if such entity 
                      later qualifies as a significant nonblanket 
                      licensee, such entity shall again be required to 
                      comply with clauses (i) and (ii).
                    ``(B) Reporting by mechanical licensing collective 
                to digital licensee coordinator.--
                          ``(i) Monthly reports of noncompliant 
                      licensees.--The mechanical licensing collective 
                      shall provide monthly reports to the digital 
                      licensee coordinator setting forth any significant 
                      nonblanket licensees of which the collective is 
                      aware that have failed to comply with subparagraph 
                      (A).
                          ``(ii) Treatment of confidential 
                      information.--The mechanical licensing collective 
                      and digital licensee coordinator shall take 
                      appropriate steps to safeguard the confidentiality 
                      and security of financial and other sensitive data 
                      shared under this subparagraph, in accordance with 
                      the confidentiality requirements prescribed by the 
                      Register of Copyrights under paragraph (12)(C).
                    ``(C) Legal enforcement efforts.--
                          ``(i) Federal court action.--Should the 
                      mechanical licensing collective or digital 
                      licensee coordinator become aware that a 
                      significant nonblanket licensee has failed to 
                      comply with subparagraph (A), either may commence 
                      an action in an appropriate district

[[Page 132 STAT. 3707]]

                      court of the United States for damages and 
                      injunctive relief. If the significant nonblanket 
                      licensee is found liable, the court shall, absent 
                      a finding of excusable neglect, award damages in 
                      an amount equal to three times the total amount of 
                      the unpaid administrative assessment and, 
                      notwithstanding anything to the contrary in 
                      section 505, reasonable attorney's fees and costs, 
                      as well as such other relief as the court 
                      determines appropriate. In all other cases, the 
                      court shall award relief as appropriate. Any 
                      recovery of damages shall be payable to the 
                      mechanical licensing collective as an offset to 
                      the collective total costs.
                          ``(ii) Statute of limitations for enforcement 
                      action.--Any action described in this subparagraph 
                      shall be commenced within the time period 
                      described in section 507(b).
                          ``(iii) Other rights and remedies preserved.--
                      The ability of the mechanical licensing collective 
                      or digital licensee coordinator to bring an action 
                      under this subparagraph shall in no way alter, 
                      limit or negate any other right or remedy that may 
                      be available to any party at law or in equity.
            ``(7) Funding of mechanical licensing collective.--
                    ``(A) In general.--The collective total costs shall 
                be funded by--
                          ``(i) an administrative assessment, as such 
                      assessment is established by the Copyright Royalty 
                      Judges pursuant to subparagraph (D) from time to 
                      time, to be paid by--
                                    ``(I) digital music providers that 
                                are engaged, in all or in part, in 
                                covered activities pursuant to a blanket 
                                license; and
                                    ``(II) significant nonblanket 
                                licensees; and
                          ``(ii) voluntary contributions from digital 
                      music providers and significant nonblanket 
                      licensees as may be agreed with copyright owners.
                    ``(B) Voluntary contributions.--
                          ``(i) Agreements concerning contributions.--
                      Except as provided in clause (ii), voluntary 
                      contributions by digital music providers and 
                      significant nonblanket licensees shall be 
                      determined by private negotiation and agreement, 
                      and the following conditions apply:
                                    ``(I) The date and amount of each 
                                voluntary contribution to the mechanical 
                                licensing collective shall be documented 
                                in a writing signed by an authorized 
                                agent of the mechanical licensing 
                                collective and the contributing party.
                                    ``(II) Such agreement shall be made 
                                available as required in proceedings 
                                before the Copyright Royalty Judges to 
                                establish or adjust the administrative 
                                assessment in accordance with applicable 
                                statutory and regulatory provisions and 
                                rulings of the Copyright Royalty Judges.
                          ``(ii) Treatment of contributions.--Each 
                      voluntary contribution described in clause (i) 
                      shall be treated for purposes of an administrative 
                      assessment

[[Page 132 STAT. 3708]]

                      proceeding as an offset to the collective total 
                      costs that would otherwise be recovered through 
                      the administrative assessment. Any allocation or 
                      reallocation of voluntary contributions between or 
                      among individual digital music providers or 
                      significant nonblanket licensees shall be a matter 
                      of private negotiation and agreement among such 
                      parties and outside the scope of the 
                      administrative assessment proceeding.
                    ``(C) Interim application of accrued royalties.--In 
                the event that the administrative assessment, together 
                with any funding from voluntary contributions as 
                provided in subparagraphs (A) and (B), is inadequate to 
                cover current collective total costs, the collective, 
                with approval of its board of directors, may apply 
                unclaimed accrued royalties on an interim basis to 
                defray such costs, subject to future reimbursement of 
                such royalties from future collections of the 
                assessment.
                    ``(D) Determination of administrative assessment.--
                          ``(i) Administrative assessment to cover 
                      collective total costs.--The administrative 
                      assessment shall be used solely and exclusively to 
                      fund the collective total costs.
                          ``(ii) Separate proceeding before copyright 
                      royalty judges.--The amount and terms of the 
                      administrative assessment shall be determined and 
                      established in a separate and independent 
                      proceeding before the Copyright Royalty Judges, 
                      according to the procedures described in clauses 
                      (iii) and (iv). The administrative assessment 
                      determined in such proceeding shall--
                                    ``(I) be wholly independent of 
                                royalty rates and terms applicable to 
                                digital music providers, which shall not 
                                be taken into consideration in any 
                                manner in establishing the 
                                administrative assessment;
                                    ``(II) be established by the 
                                Copyright Royalty Judges in an amount 
                                that is calculated to defray the 
                                reasonable collective total costs;
                                    ``(III) be assessed based on usage 
                                of musical works by digital music 
                                providers and significant nonblanket 
                                licensees in covered activities under 
                                both compulsory and nonblanket licenses;
                                    ``(IV) may be in the form of a 
                                percentage of royalties payable under 
                                this section for usage of musical works 
                                in covered activities (regardless of 
                                whether a different rate applies under a 
                                voluntary license), or any other usage-
                                based metric reasonably calculated to 
                                equitably allocate the collective total 
                                costs across digital music providers and 
                                significant nonblanket licensees engaged 
                                in covered activities, and shall include 
                                as a component a minimum fee for all 
                                digital music providers and significant 
                                nonblanket licensees; and
                                    ``(V) take into consideration 
                                anticipated future collective total 
                                costs and collections of the 
                                administrative assessment, including, as 
                                applicable--

[[Page 132 STAT. 3709]]

                                            ``(aa) any portion of past 
                                        actual collective total costs of 
                                        the mechanical licensing 
                                        collective not funded by 
                                        previous collections of the 
                                        administrative assessment or 
                                        voluntary contributions because 
                                        such collections or 
                                        contributions together were 
                                        insufficient to fund such costs;
                                            ``(bb) any past collections 
                                        of the administrative assessment 
                                        and voluntary contributions that 
                                        exceeded past actual collective 
                                        total costs, resulting in a 
                                        surplus; and
                                            ``(cc) the amount of any 
                                        voluntary contributions by 
                                        digital music providers or 
                                        significant nonblanket licensees 
                                        in relevant periods, described 
                                        in subparagraphs (A) and (B) of 
                                        paragraph (7).
                          ``(iii) Initial administrative assessment.-- 
                      <<NOTE: Procedures.>> The procedure for 
                      establishing the initial administrative assessment 
                      shall be as follows:
                                    
                                `` <<NOTE: Deadline. Proceedings. Notice.
                                 Federal Register, publication.>> (I) 
                                Not later than 270 days after the 
                                enactment date, the Copyright Royalty 
                                Judges shall commence a proceeding to 
                                establish the initial administrative 
                                assessment by publishing a notice in the 
                                Federal Register seeking petitions to 
                                participate.
                                    ``(II) The mechanical licensing 
                                collective and digital licensee 
                                coordinator shall participate in the 
                                proceeding described in subclause (I), 
                                along with any interested copyright 
                                owners, digital music providers or 
                                significant nonblanket licensees that 
                                have notified the Copyright Royalty 
                                Judges of their desire to participate.
                                    
                                ``(III) <<NOTE: Schedule. Hearings.>>  
                                The Copyright Royalty Judges shall 
                                establish a schedule for submission by 
                                the parties of information that may be 
                                relevant to establishing the 
                                administrative assessment, including 
                                actual and anticipated collective total 
                                costs of the mechanical licensing 
                                collective, actual and anticipated 
                                collections from digital music providers 
                                and significant nonblanket licensees, 
                                and documentation of voluntary 
                                contributions, as well as a schedule for 
                                further proceedings, which shall include 
                                a hearing, as the Copyright Royalty 
                                Judges determine appropriate.
                                    `` <<NOTE: Determination. Federal 
                                Register, publication. Deadline.>> (IV) 
                                The initial administrative assessment 
                                shall be determined, and such 
                                determination shall be published in the 
                                Federal Register by the Copyright 
                                Royalty Judges, not later than 1 year 
                                after commencement of the proceeding 
                                described in this clause. The 
                                determination shall be supported by a 
                                written record. <<NOTE: Effective 
                                date.>>  The initial administrative 
                                assessment shall be effective as of the 
                                license availability date, and shall 
                                continue in effect unless and until an 
                                adjusted administrative assessment is 
                                established pursuant to an adjustment 
                                proceeding under clause (iv).

[[Page 132 STAT. 3710]]

                          ``(iv) <<NOTE: Federal Register, 
                      publications.>>  Adjustment of administrative 
                      assessment.--The administrative assessment may be 
                      adjusted by the Copyright Royalty Judges 
                      periodically, in accordance with the following 
                      procedures:
                                    `` <<NOTE: Time period. Effective 
                                date.>> (I) Not earlier than 1 year 
                                after the most recent publication of a 
                                determination of the administrative 
                                assessment by the Copyright Royalty 
                                Judges, the mechanical licensing 
                                collective, the digital licensee 
                                coordinator, or one or more interested 
                                copyright owners, digital music 
                                providers, or significant nonblanket 
                                licensees, may file a petition with the 
                                Copyright Royalty Judges in the month of 
                                May to commence a proceeding to adjust 
                                the administrative assessment.
                                    `` <<NOTE: Notice.>> (II) Notice of 
                                the commencement of such proceeding 
                                shall be published in the Federal 
                                Register in the month of June following 
                                the filing of any petition, with a 
                                schedule of requested information and 
                                additional proceedings, as described in 
                                clause (iii)(III). The mechanical 
                                licensing collective and digital 
                                licensee coordinator shall participate 
                                in such proceeding, along with any 
                                interested copyright owners, digital 
                                music providers, or significant 
                                nonblanket licensees that have notified 
                                the Copyright Royalty Judges of their 
                                desire to participate.
                                    ``(III) <<NOTE: Determination.>>  
                                The determination of the adjusted 
                                administrative assessment, which shall 
                                be supported by a written record, shall 
                                be published in the Federal Register 
                                during June of the calendar year 
                                following the commencement of the 
                                proceeding. <<NOTE: Effective date.>>  
                                The adjusted administrative assessment 
                                shall take effect January 1 of the year 
                                following such publication.
                          ``(v) Adoption of voluntary agreements.--In 
                      lieu of reaching their own determination based on 
                      evaluation of relevant data, the Copyright Royalty 
                      Judges shall approve and adopt a negotiated 
                      agreement to establish the amount and terms of the 
                      administrative assessment that has been agreed to 
                      by the mechanical licensing collective and the 
                      digital licensee coordinator (or if none has been 
                      designated, interested digital music providers and 
                      significant nonblanket licensees representing more 
                      than half of the market for uses of musical works 
                      in covered activities), except that the Copyright 
                      Royalty Judges shall have the discretion to reject 
                      any such agreement for good cause shown. 
                      An <<NOTE: Applicability.>> administrative 
                      assessment adopted under this clause shall apply 
                      to all digital music providers and significant 
                      nonblanket licensees engaged in covered activities 
                      during the period the administrative assessment is 
                      in effect.
                          ``(vi) Continuing authority to amend.-- 
                      <<NOTE: Federal Register, publication.>> The 
                      Copyright Royalty Judges shall retain continuing 
                      authority to amend a determination of an 
                      administrative assessment to correct technical or 
                      clerical errors, or modify the terms of 
                      implementation, for good cause,

[[Page 132 STAT. 3711]]

                      with any such amendment to be published in the 
                      Federal Register.
                          ``(vii) <<NOTE: Deadlines.>>  Appeal of 
                      administrative assessment.--The 
                      determination <<NOTE: Federal Register, 
                      publication.>>  of an administrative assessment by 
                      the Copyright Royalty Judges shall be appealable, 
                      not later than 30 calendar days after publication 
                      in the Federal Register, to the Court of Appeals 
                      for the District of Columbia Circuit by any party 
                      that fully participated in the proceeding. The 
                      administrative assessment as established by the 
                      Copyright Royalty Judges shall remain in effect 
                      pending the final outcome of any such appeal, and 
                      the mechanical licensing collective, digital 
                      licensee coordinator, digital music providers, and 
                      significant nonblanket licensees shall implement 
                      appropriate financial or other measures not later 
                      than 90 days after any modification of the 
                      assessment to reflect and account for such 
                      outcome.
                          ``(viii) Regulations.--The Copyright Royalty 
                      Judges may adopt regulations to govern the conduct 
                      of proceedings under this paragraph.
            ``(8) Establishment of rates and terms under blanket 
        license.--
                    ``(A) Restrictions on ratesetting participation.--
                Neither the mechanical licensing collective nor the 
                digital licensee coordinator shall be a party to a 
                proceeding described in subsection (c)(1)(E), except 
                that the mechanical licensing collective or the digital 
                licensee coordinator may gather and provide financial 
                and other information for the use of a party to such a 
                proceeding and comply with requests for information as 
                required under applicable statutory and regulatory 
                provisions and rulings of the Copyright Royalty Judges.
                    ``(B) Application of late fees.--In any proceeding 
                described in subparagraph (A) in which the Copyright 
                Royalty Judges establish a late fee for late payment of 
                royalties for uses of musical works under this section, 
                such fee shall apply to covered activities under blanket 
                licenses, as follows:
                          ``(i) Late fees for past due royalty payments 
                      shall accrue from the due date for payment until 
                      payment is received by the mechanical licensing 
                      collective.
                          ``(ii) The availability of late fees shall in 
                      no way prevent a copyright owner or the mechanical 
                      licensing collective from asserting any other 
                      rights or remedies to which such copyright owner 
                      or the mechanical licensing collective may be 
                      entitled under this title.
                    ``(C) Interim rate agreements in general.--For any 
                covered activity for which no rate or terms have been 
                established by the Copyright Royalty Judges, the 
                mechanical licensing collective and any digital music 
                provider may agree to an interim rate and terms for such 
                activity under the blanket license, and any such rate 
                and terms--
                          ``(i) shall be treated as nonprecedential and 
                      not cited or relied upon in any ratesetting 
                      proceeding before the Copyright Royalty Judges or 
                      any other tribunal; and

[[Page 132 STAT. 3712]]

                          ``(ii) shall automatically expire upon the 
                      establishment of a rate and terms for such covered 
                      activity by the Copyright Royalty Judges, under 
                      subsection (c)(1)(E).
                    ``(D) Adjustments for interim rates.--The rate and 
                terms established by the Copyright Royalty Judges for a 
                covered activity to which an interim rate and terms have 
                been agreed under subparagraph (C) shall supersede the 
                interim rate and terms and apply retroactively to the 
                inception of the activity under the blanket 
                license. <<NOTE: Deadline.>>  In such case, not later 
                than 90 days after the effective date of the rate and 
                terms established by the Copyright Royalty Judges--
                          ``(i) if the rate established by the Copyright 
                      Royalty Judges exceeds the interim rate, the 
                      digital music provider shall pay to the mechanical 
                      licensing collective the amount of any 
                      underpayment of royalties due; or
                          ``(ii) if the interim rate exceeds the rate 
                      established by the Copyright Royalty Judges, the 
                      mechanical licensing collective shall credit the 
                      account of the digital music provider for the 
                      amount of any overpayment of royalties due.
            ``(9) Transition to blanket licenses.--
                    ``(A) Substitution of blanket license.--On the 
                license availability date, a blanket license shall, 
                without any interruption in license authority enjoyed by 
                such digital music provider, be automatically 
                substituted for and supersede any existing compulsory 
                license previously obtained under this section by the 
                digital music provider from a copyright owner to engage 
                in 1 or more covered activities with respect to a 
                musical work, except that such substitution shall not 
                apply to any authority obtained from a record company 
                pursuant to a compulsory license to make and distribute 
                permanent downloads unless and until such record company 
                terminates such authority in writing to take effect at 
                the end of a monthly reporting period, with a copy to 
                the mechanical licensing collective.
                    ``(B) Expiration of existing licenses.--Except to 
                the extent provided in subparagraph (A), on and after 
                the license availability date, licenses other than 
                individual download licenses obtained under this section 
                for covered activities prior to the license availability 
                date shall no longer continue in effect.
                    ``(C) Treatment of voluntary licenses.--A voluntary 
                license for a covered activity in effect on the license 
                availability date will remain in effect unless and until 
                the voluntary license expires according to the terms of 
                the voluntary license, or the parties agree to amend or 
                terminate the voluntary license. In a case where a 
                voluntary license for a covered activity entered into 
                before the license availability date incorporates the 
                terms of this section by reference, the terms so 
                incorporated (but not the rates) shall be those in 
                effect immediately prior to the license availability 
                date, and those terms shall continue

[[Page 132 STAT. 3713]]

                to apply unless and until such voluntary license is 
                terminated or amended, or the parties enter into a new 
                voluntary license.
                    ``(D) Further acceptance of notices for covered 
                activities by copyright office.--On and after the 
                enactment date--
                          ``(i) the Copyright Office shall no longer 
                      accept notices of intention with respect to 
                      covered activities; and
                          ``(ii) notices of intention filed before the 
                      enactment date will no longer be effective or 
                      provide license authority with respect to covered 
                      activities, except that, before the license 
                      availability date, there shall be no liability 
                      under section 501 for the reproduction or 
                      distribution of a musical work (or share thereof) 
                      in covered activities if a valid notice of 
                      intention was filed for such work (or share) 
                      before the enactment date.
            ``(10) Prior unlicensed uses.--
                    ``(A) Limitation on liability in general.--A 
                copyright owner that commences an action under section 
                501 on or after January 1, 2018, against a digital music 
                provider for the infringement of the exclusive rights 
                provided by paragraph (1) or (3) of section 106 arising 
                from the unauthorized reproduction or distribution of a 
                musical work by such digital music provider in the 
                course of engaging in covered activities prior to the 
                license availability date, shall, as the copyright 
                owner's sole and exclusive remedy against the digital 
                music provider, be eligible to recover the royalty 
                prescribed under subsection (c)(1)(C) and chapter 8, 
                from the digital music provider, provided that such 
                digital music provider can demonstrate compliance with 
                the requirements of subparagraph (B), as applicable. In 
                all other cases the limitation on liability under this 
                subparagraph shall not apply.
                    ``(B) <<NOTE: Applicability. Time period.>>  
                Requirements for limitation on liability.--The following 
                requirements shall apply on the enactment date and 
                through the end of the period that expires 90 days after 
                the license availability date to digital music providers 
                seeking to avail themselves of the limitation on 
                liability described in subparagraph (A):
                          ``(i) <<NOTE: Deadlines.>>  Not later than 30 
                      calendar days after first making a particular 
                      sound recording of a musical work available 
                      through its service via one or more covered 
                      activities, or 30 calendar days after the 
                      enactment date, whichever occurs later, a digital 
                      music provider shall engage in good-faith, 
                      commercially reasonable efforts to identify and 
                      locate each copyright owner of such musical work 
                      (or share thereof). Such required matching efforts 
                      shall include the following:
                                    ``(I) Good-faith, commercially 
                                reasonable efforts to obtain from the 
                                owner of the corresponding sound 
                                recording made available through the 
                                digital music provider's service the 
                                following information:
                                            ``(aa) Sound recording name, 
                                        featured artist, sound recording 
                                        copyright owner, producer, 
                                        international standard recording 
                                        code,

[[Page 132 STAT. 3714]]

                                        and other information commonly 
                                        used in the industry to identify 
                                        sound recordings and match them 
                                        to the musical works they 
                                        embody.
                                            ``(bb) Any available musical 
                                        work ownership information, 
                                        including each songwriter and 
                                        publisher name, percentage 
                                        ownership share, and 
                                        international standard musical 
                                        work code.
                                    ``(II) Employment of 1 or more bulk 
                                electronic matching processes that are 
                                available to the digital music provider 
                                through a third-party vendor on 
                                commercially reasonable terms, except 
                                that a digital music provider may rely 
                                on its own bulk electronic matching 
                                process if that process has capabilities 
                                comparable to or better than those 
                                available from a third-party vendor on 
                                commercially reasonable terms.
                          ``(ii) The required matching efforts shall be 
                      repeated by the digital music provider not less 
                      than once per month for so long as the copyright 
                      owner remains unidentified or has not been 
                      located.
                          ``(iii) <<NOTE: Account 
                      statements. Royalties.>>  If the required matching 
                      efforts are successful in identifying and locating 
                      a copyright owner of a musical work (or share 
                      thereof) by the end of the calendar month in which 
                      the digital music provider first makes use of the 
                      work, the digital music provider shall provide 
                      statements of account and pay royalties to such 
                      copyright owner in accordance with this section 
                      and applicable regulations.
                          ``(iv) If the copyright owner is not 
                      identified or located by the end of the calendar 
                      month in which the digital music provider first 
                      makes use of the work, the digital music provider 
                      shall accrue and hold royalties calculated under 
                      the applicable statutory rate in accordance with 
                      usage of the work, from initial use of the work 
                      until the accrued royalties can be paid to the 
                      copyright owner or are required to be transferred 
                      to the mechanical licensing collective, as 
                      follows:
                                    ``(I) Accrued royalties shall be 
                                maintained by the digital music provider 
                                in accordance with generally accepted 
                                accounting principles.
                                    ``(II) <<NOTE: Effective dates.>>  
                                If a copyright owner of an unmatched 
                                musical work (or share thereof) is 
                                identified and located by or to the 
                                digital music provider before the 
                                license availability date, the digital 
                                music provider shall--
                                            ``(aa) <<NOTE: Deadline.>>  
                                        not later than 45 calendar days 
                                        after the end of the calendar 
                                        month during which the copyright 
                                        owner was identified and 
                                        located, pay the copyright owner 
                                        all accrued royalties, such 
                                        payment to be accompanied by a 
                                        cumulative statement of account 
                                        that includes all of the 
                                        information that would have been 
                                        provided to the copyright owner 
                                        had the digital music provider 
                                        been providing monthly 
                                        statements of account to the 
                                        copyright owner

[[Page 132 STAT. 3715]]

                                        from initial use of the work in 
                                        accordance with this section and 
                                        applicable regulations, 
                                        including the requisite 
                                        certification under subsection 
                                        (c)(2)(I);
                                            ``(bb) beginning with the 
                                        accounting period following the 
                                        calendar month in which the 
                                        copyright owner was identified 
                                        and located, and for all other 
                                        accounting periods prior to the 
                                        license availability date, 
                                        provide monthly statements of 
                                        account and pay royalties to the 
                                        copyright owner as required 
                                        under this section and 
                                        applicable regulations; and
                                            ``(cc) beginning with the 
                                        monthly royalty reporting period 
                                        commencing on the license 
                                        availability date, report usage 
                                        and pay royalties for such 
                                        musical work (or share thereof) 
                                        for such reporting period and 
                                        reporting periods thereafter to 
                                        the mechanical licensing 
                                        collective, as required under 
                                        this subsection and applicable 
                                        regulations.
                                    ``(III) If a copyright owner of an 
                                unmatched musical work (or share 
                                thereof) is not identified and located 
                                by the license availability date, the 
                                digital music provider shall--
                                            
                                        ``( <<NOTE: Deadline. Certificati
                                        on.>> aa) not later than 45 
                                        calendar days after the license 
                                        availability date, transfer all 
                                        accrued royalties to the 
                                        mechanical licensing collective, 
                                        such payment to be accompanied 
                                        by a cumulative statement of 
                                        account that includes all of the 
                                        information that would have been 
                                        provided to the copyright owner 
                                        had the digital music provider 
                                        been serving monthly statements 
                                        of account on the copyright 
                                        owner from initial use of the 
                                        work in accordance with this 
                                        section and applicable 
                                        regulations, including the 
                                        requisite certification under 
                                        subsection (c)(2)(I), and 
                                        accompanied by an additional 
                                        certification by a duly 
                                        authorized officer of the 
                                        digital music provider that the 
                                        digital music provider has 
                                        fulfilled the requirements of 
                                        clauses (i) and (ii) of 
                                        subparagraph (B) but has not 
                                        been successful in locating or 
                                        identifying the copyright owner; 
                                        and
                                            ``(bb) <<NOTE: Effective 
                                        date.>>  beginning with the 
                                        monthly royalty reporting period 
                                        commencing on the license 
                                        availability date, report usage 
                                        and pay royalties for such 
                                        musical work (or share thereof) 
                                        for such period and reporting 
                                        periods thereafter to the 
                                        mechanical licensing collective, 
                                        as required under this 
                                        subsection and applicable 
                                        regulations.
                          ``(v) A digital music provider that complies 
                      with the requirements of this subparagraph with 
                      respect to unmatched musical works (or shares of 
                      works) shall not be liable for or accrue late fees 
                      for late payments of royalties for such works 
                      until such time as the digital music provider is 
                      required to begin paying

[[Page 132 STAT. 3716]]

                      monthly royalties to the copyright owner or the 
                      mechanical licensing collective, as applicable.
                    ``(C) Adjusted statute of 
                limitations <<NOTE: Deadlines.>> .--Notwithstanding 
                anything to the contrary in section 507(b), with respect 
                to any claim of infringement of the exclusive rights 
                provided by paragraphs (1) and (3) of section 106 
                against a digital music provider arising from the 
                unauthorized reproduction or distribution of a musical 
                work by such digital music provider in the course of 
                engaging in covered activities that accrued not more 
                than 3 years prior to the license availability date, 
                such action may be commenced not later than the later 
                of--
                          ``(i) 3 years after the date on which the 
                      claim accrued; or
                          ``(ii) 2 years after the license availability 
                      date.
                    ``(D) Other rights and remedies preserved.--Except 
                as expressly provided in this paragraph, nothing in this 
                paragraph shall be construed to alter, limit, or negate 
                any right or remedy of a copyright owner with respect to 
                unauthorized use of a musical work.
            ``(11) Legal protections for licensing activities.--
                    ``(A) <<NOTE: Applicability.>>  Exemption for 
                compulsory license activities.--The antitrust exemption 
                described in subsection (c)(1)(D) shall apply to 
                negotiations and agreements between and among copyright 
                owners and persons entitled to obtain a compulsory 
                license for covered activities, and common agents acting 
                on behalf of such copyright owners or persons, including 
                with respect to the administrative assessment 
                established under this subsection.
                    ``(B) Limitation on common agent exemption.--
                Notwithstanding the antitrust exemption provided in 
                subsection (c)(1)(D) and subparagraph (A) of this 
                paragraph (except for the administrative assessment 
                referenced in such subparagraph (A) and except as 
                provided in paragraph (8)(C)), neither the mechanical 
                licensing collective nor the digital licensee 
                coordinator shall serve as a common agent with respect 
                to the establishment of royalty rates or terms under 
                this section.
                    ``(C) Antitrust exemption for administrative 
                activities.--Notwithstanding any provision of the 
                antitrust laws, copyright owners and persons entitled to 
                obtain a compulsory license under this section may 
                designate the mechanical licensing collective to 
                administer voluntary licenses for the reproduction or 
                distribution of musical works in covered activities on 
                behalf of such copyright owners and persons, subject to 
                the following conditions:
                          ``(i) Each copyright owner shall establish the 
                      royalty rates and material terms of any such 
                      voluntary license individually and not in 
                      agreement, combination, or concert with any other 
                      copyright owner.
                          ``(ii) Each person entitled to obtain a 
                      compulsory license under this section shall 
                      establish the royalty rates and material terms of 
                      any such voluntary license individually and not in 
                      agreement, combination, or concert with any other 
                      digital music provider.
                          ``(iii) The mechanical licensing collective 
                      shall maintain the confidentiality of the 
                      voluntary licenses

[[Page 132 STAT. 3717]]

                      in accordance with the confidentiality provisions 
                      prescribed by the Register of Copyrights under 
                      paragraph (12)(C).
                    ``(D) Liability for good-faith activities.--The 
                mechanical licensing collective shall not be liable to 
                any person or entity based on a claim arising from its 
                good-faith administration of policies and procedures 
                adopted and implemented to carry out the 
                responsibilities described in subparagraphs (J) and (K) 
                of paragraph (3), except to the extent of correcting an 
                underpayment or overpayment of royalties as provided in 
                paragraph (3)(L)(i)(VI), but the collective may 
                participate in a legal proceeding as a stakeholder party 
                if the collective is holding funds that are the subject 
                of a dispute between copyright 
                owners. <<NOTE: Definition.>>  For purposes of this 
                subparagraph, the term `good-faith administration' means 
                administration in a manner that is not grossly 
                negligent.
                    ``(E) Preemption of state property laws.--The 
                holding and distribution of funds by the mechanical 
                licensing collective in accordance with this subsection 
                shall supersede and preempt any State law (including 
                common law) concerning escheatment or abandoned 
                property, or any analogous provision, that might 
                otherwise apply.
                    ``(F) Rule of construction.--Except as expressly 
                provided in this subsection, nothing in this subsection 
                shall negate or limit the ability of any person to 
                pursue an action in Federal court against the mechanical 
                licensing collective or any other person based upon a 
                claim arising under this title or other applicable law.
            ``(12) Regulations.--
                    ``(A) Adoption by register of copyrights and 
                copyright royalty judges.--The Register of Copyrights 
                may conduct such proceedings and adopt such regulations 
                as may be necessary or appropriate to effectuate the 
                provisions of this subsection, except for regulations 
                concerning proceedings before the Copyright Royalty 
                Judges to establish the administrative assessment, which 
                shall be adopted by the Copyright Royalty Judges.
                    ``(B) Judicial review of regulations.--Except as 
                provided in paragraph (7)(D)(vii), regulations adopted 
                under this subsection shall be subject to judicial 
                review pursuant to chapter 7 of title 5.
                    ``(C) Protection of confidential information.--The 
                Register of Copyrights shall adopt regulations to 
                provide for the appropriate procedures to ensure that 
                confidential, private, proprietary, or privileged 
                information contained in the records of the mechanical 
                licensing collective and digital licensee coordinator is 
                not improperly disclosed or used, including through any 
                disclosure or use by the board of directors or personnel 
                of either entity, and specifically including the 
                unclaimed royalties oversight committee and the dispute 
                resolution committee of the mechanical licensing 
                collective.
            ``(13) Savings clauses.--
                    ``(A) <<NOTE: Applicability.>>  Limitation on 
                activities and rights covered.--This subsection applies 
                solely to uses of musical works subject to licensing 
                under this section. The blanket license

[[Page 132 STAT. 3718]]

                shall not be construed to extend or apply to activities 
                other than covered activities or to rights other than 
                the exclusive rights of reproduction and distribution 
                licensed under this section, or serve or act as the 
                basis to extend or expand the compulsory license under 
                this section to activities and rights not covered by 
                this section on the day before the enactment date.
                    ``(B) Rights of public performance not affected.--
                The rights, protections, and immunities granted under 
                this subsection, the data concerning musical works 
                collected and made available under this subsection, and 
                the definitions under subsection (e) shall not extend 
                to, limit, or otherwise affect any right of public 
                performance in a musical work.''; and
            (5) by adding at the end the following:

    ``(e) Definitions.--As used in this section:
            ``(1) Accrued interest.--The term `accrued interest' means 
        interest accrued on accrued royalties, as described in 
        subsection (d)(3)(H)(ii).
            ``(2) Accrued royalties.--The term `accrued royalties' means 
        royalties accrued for the reproduction or distribution of a 
        musical work (or share thereof) in a covered activity, 
        calculated in accordance with the applicable royalty rate under 
        this section.
            ``(3) Administrative assessment.--The term `administrative 
        assessment' means the fee established pursuant to subsection 
        (d)(7)(D).
            ``(4) Audit.--The term `audit' means a royalty compliance 
        examination to verify the accuracy of royalty payments, or the 
        conduct of such an examination, as applicable.
            ``(5) Blanket license.--The term `blanket license' means a 
        compulsory license described in subsection (d)(1)(A) to engage 
        in covered activities.
            ``(6) Collective total costs.--The term `collective total 
        costs'--
                    ``(A) means the total costs of establishing, 
                maintaining, and operating the mechanical licensing 
                collective to fulfill its statutory functions, 
                including--
                          ``(i) startup costs;
                          ``(ii) financing, legal, audit, and insurance 
                      costs;
                          ``(iii) investments in information technology, 
                      infrastructure, and other long-term resources;
                          ``(iv) outside vendor costs;
                          ``(v) costs of licensing, royalty 
                      administration, and enforcement of rights;
                          ``(vi) costs of bad debt; and
                          ``(vii) costs of automated and manual efforts 
                      to identify and locate copyright owners of musical 
                      works (and shares of such musical works) and match 
                      sound recordings to the musical works the sound 
                      recordings embody; and
                    ``(B) does not include any added costs incurred by 
                the mechanical licensing collective to provide services 
                under voluntary licenses.
            ``(7) Covered activity.--The term `covered activity' means 
        the activity of making a digital phonorecord delivery of a 
        musical work, including in the form of a permanent download,

[[Page 132 STAT. 3719]]

        limited download, or interactive stream, where such activity 
        qualifies for a compulsory license under this section.
            ``(8) Digital music provider.--The term `digital music 
        provider' means a person (or persons operating under the 
        authority of that person) that, with respect to a service 
        engaged in covered activities--
                    ``(A) has a direct contractual, subscription, or 
                other economic relationship with end users of the 
                service, or, if no such relationship with end users 
                exists, exercises direct control over the provision of 
                the service to end users;
                    ``(B) is able to fully report on any revenues and 
                consideration generated by the service; and
                    ``(C) is able to fully report on usage of sound 
                recordings of musical works by the service (or procure 
                such reporting).
            ``(9) Digital licensee coordinator.--The term `digital 
        licensee coordinator' means the entity most recently designated 
        pursuant to subsection (d)(5).
            ``(10) Digital phonorecord delivery.--The term `digital 
        phonorecord delivery' means each individual delivery of a 
        phonorecord by digital transmission of a sound recording that 
        results in a specifically identifiable reproduction by or for 
        any transmission recipient of a phonorecord of that sound 
        recording, regardless of whether the digital transmission is 
        also a public performance of the sound recording or any musical 
        work embodied therein, and includes a permanent download, a 
        limited download, or an interactive stream. A digital 
        phonorecord delivery does not result from a real-time, 
        noninteractive subscription transmission of a sound recording 
        where no reproduction of the sound recording or the musical work 
        embodied therein is made from the inception of the transmission 
        through to its receipt by the transmission recipient in order to 
        make the sound recording audible. A digital phonorecord delivery 
        does not include the digital transmission of sounds accompanying 
        a motion picture or other audiovisual work as defined in section 
        101.
            ``(11) Enactment date.--The term `enactment date' means the 
        date of the enactment of the Musical Works Modernization Act.
            ``(12) Individual download license.--The term `individual 
        download license' means a compulsory license obtained by a 
        record company to make and distribute, or authorize the making 
        and distribution of, permanent downloads embodying a specific 
        individual musical work.
            ``(13) Interactive stream.--The term `interactive stream' 
        means a digital transmission of a sound recording of a musical 
        work in the form of a stream, where the performance of the sound 
        recording by means of such transmission is not exempt under 
        section 114(d)(1) and does not in itself, or as a result of a 
        program in which it is included, qualify for statutory licensing 
        under section 114(d)(2). An interactive stream is a digital 
        phonorecord delivery.
            ``(14) Interested.--The term `interested', as applied to a 
        party seeking to participate in a proceeding under subsection 
        (d)(7)(D), is a party as to which the Copyright Royalty Judges 
        have not determined that the party lacks a significant interest 
        in such proceeding.

[[Page 132 STAT. 3720]]

            ``(15) License availability date.--The term `license 
        availability date' means January 1 following the expiration of 
        the 2-year period beginning on the enactment date.
            ``(16) Limited download.--The term `limited download' means 
        a digital transmission of a sound recording of a musical work in 
        the form of a download, where such sound recording is accessible 
        for listening only for a limited amount of time or specified 
        number of times.
            ``(17) Matched.--The term `matched', as applied to a musical 
        work (or share thereof), means that the copyright owner of such 
        work (or share thereof) has been identified and located.
            ``(18) Mechanical licensing collective.--The term 
        `mechanical licensing collective' means the entity most recently 
        designated as such by the Register of Copyrights under 
        subsection (d)(3).
            ``(19) Mechanical licensing collective budget.--The term 
        `mechanical licensing collective budget' means a statement of 
        the financial position of the mechanical licensing collective 
        for a fiscal year or quarter thereof based on estimates of 
        expenditures during the period and proposals for financing those 
        expenditures, including a calculation of the collective total 
        costs.
            ``(20) Musical works database.--The term `musical works 
        database' means the database described in subsection (d)(3)(E).
            ``(21) Nonprofit.--The term `nonprofit' means a nonprofit 
        created or organized in a State.
            ``(22) Notice of license.--The term `notice of license' 
        means a notice from a digital music provider provided under 
        subsection (d)(2)(A) for purposes of obtaining a blanket 
        license.
            ``(23) Notice of nonblanket activity.--The term `notice of 
        nonblanket activity' means a notice from a significant 
        nonblanket licensee provided under subsection (d)(6)(A) for 
        purposes of notifying the mechanical licensing collective that 
        the licensee has been engaging in covered activities.
            ``(24) Permanent download.--The term `permanent download' 
        means a digital transmission of a sound recording of a musical 
        work in the form of a download, where such sound recording is 
        accessible for listening without restriction as to the amount of 
        time or number of times it may be accessed.
            ``(25) Qualified auditor.--The term `qualified auditor' 
        means an independent, certified public accountant with 
        experience performing music royalty audits.
            ``(26) Record company.--The term `record company' means an 
        entity that invests in, produces, and markets sound recordings 
        of musical works, and distributes such sound recordings for 
        remuneration through multiple sales channels, including a 
        corporate affiliate of such an entity engaged in distribution of 
        sound recordings.
            ``(27) Report of usage.--The term `report of usage' means a 
        report reflecting an entity's usage of musical works in covered 
        activities described in subsection (d)(4)(A).
            ``(28) Required matching efforts.--The term `required 
        matching efforts' means efforts to identify and locate copyright 
        owners of musical works as described in subsection 
        (d)(10)(B)(i).
            ``(29) Service.--The term `service', as used in relation to 
        covered activities, means any site, facility, or offering by or

[[Page 132 STAT. 3721]]

        through which sound recordings of musical works are digitally 
        transmitted to members of the public.
            ``(30) Share.--The term `share', as applied to a musical 
        work, means a fractional ownership interest in such work.
            ``(31) Significant nonblanket licensee.--The term 
        `significant nonblanket licensee'--
                    ``(A) means an entity, including a group of entities 
                under common ownership or control that, acting under the 
                authority of one or more voluntary licenses or 
                individual download licenses, offers a service engaged 
                in covered activities, and such entity or group of 
                entities--
                          ``(i) is not currently operating under a 
                      blanket license and is not obligated to provide 
                      reports of usage reflecting covered activities 
                      under subsection (d)(4)(A);
                          ``(ii) has a direct contractual, subscription, 
                      or other economic relationship with end users of 
                      the service or, if no such relationship with end 
                      users exists, exercises direct control over the 
                      provision of the service to end users; and
                          ``(iii) either--
                                    ``(I) on any day in a calendar 
                                month, makes more than 5,000 different 
                                sound recordings of musical works 
                                available through such service; or
                                    ``(II) derives revenue or other 
                                consideration in connection with such 
                                covered activities greater than $50,000 
                                in a calendar month, or total revenue or 
                                other consideration greater than 
                                $500,000 during the preceding 12 
                                calendar months; and
                    ``(B) does not include--
                          ``(i) an entity whose covered activity 
                      consists solely of free-to-the-user streams of 
                      segments of sound recordings of musical works that 
                      do not exceed 90 seconds in length, are offered 
                      only to facilitate a licensed use of musical works 
                      that is not a covered activity, and have no 
                      revenue directly attributable to such streams 
                      constituting the covered activity; or
                          ``(ii) a `public broadcasting entity' as 
                      defined in section 118(f).
            ``(32) Songwriter.--The term `songwriter' means the author 
        of all or part of a musical work, including a composer or 
        lyricist.
            ``(33) State.--The term `State' means each State of the 
        United States, the District of Columbia, and each territory or 
        possession of the United States.
            ``(34) Unclaimed accrued royalties.--The term `unclaimed 
        accrued royalties' means accrued royalties eligible for 
        distribution under subsection (d)(3)(J).
            ``(35) Unmatched.--The term `unmatched', as applied to a 
        musical work (or share thereof), means that the copyright owner 
        of such work (or share thereof) has not been identified or 
        located.
            ``(36) Voluntary license.--The term `voluntary license' 
        means a license for use of a musical work (or share thereof) 
        other than a compulsory license obtained under this section.''.

    (b) Technical and Conforming Amendments to Section 801.--Section 
801(b) of title 17, United States Code, is amended--
            (1) by redesignating paragraph (8) as paragraph (9); and

[[Page 132 STAT. 3722]]

            (2) by inserting after paragraph (7) the following:
            ``(8) To determine the administrative assessment to be paid 
        by digital music providers under section 115(d). The provisions 
        of section 115(d) shall apply to the conduct of proceedings by 
        the Copyright Royalty Judges under section 115(d) and not the 
        procedures described in this section, or section 803, 804, or 
        805.''.

    (c) Effective Date of Amended Rate Setting Standard. <<NOTE: 17 USC 
115 note.>> --The amendments made by subsection (a)(3) and section 
103(g)(2) shall apply to any proceeding before the Copyright Royalty 
Judges that is commenced on or after the date of the enactment of this 
Act.

    (d) Technical and Conforming Amendments to Title 37, Part 385 of the 
Code of Federal Regulations.-- <<NOTE: Deadline. 17 USC 115 note.>> Not 
later than 270 days after the date of enactment of this Act, the 
Copyright Royalty Judges shall amend the regulations for section 115 of 
title 17, United States Code, in part 385 of title 37, Code of Federal 
Regulations, to conform the definitions used in such part to the 
definitions of the same terms described in section 115(e) of title 17, 
United States Code, as added by subsection (a). In so doing, the 
Copyright Royalty Judges shall make adjustments to the language of the 
regulations as necessary to achieve the same purpose and effect as the 
original regulations with respect to the rates and terms previously 
adopted by the Copyright Royalty Judges.

    (e) Copyright Office Activities.-- <<NOTE: 17 USC 115 note.>> The 
Register of Copyrights shall engage in public outreach and educational 
activities--
            (1) regarding the amendments made by subsection (a) to 
        section 115 of title 17, United States Code, including the 
        responsibilities of the mechanical licensing collective 
        designated under those amendments;
            (2) which shall include educating songwriters and other 
        interested parties with respect to the process established under 
        section 115(d)(3)(C)(i)(V) of title 17, United States Code, as 
        added by subsection (a), by which--
                    (A) a copyright owner may claim ownership of musical 
                works (and shares of such works); and
                    (B) royalties for works for which the owner is not 
                identified or located shall be equitably distributed to 
                known copyright owners; and
            (3) <<NOTE: Web posting.>>  which the Register shall make 
        available online.

    (f) <<NOTE: 17 USC 115 note.>>  Unclaimed Royalties Study and 
Recommendations.--
            (1) <<NOTE: Consultation. Deadline. Reports.>>  In 
        general.--Not later than 2 years after the date on which the 
        Register of Copyrights initially designates the mechanical 
        licensing collective under section 115(d)(3)(B)(i) of title 17, 
        United States Code, as added by subsection (a)(4), the Register, 
        in consultation with the Comptroller General of the United 
        States, and after soliciting and reviewing comments and relevant 
        information from music industry participants and other 
        interested parties, shall submit to the Committee on the 
        Judiciary of the Senate and the Committee on the Judiciary of 
        the House of Representatives a report that recommends best 
        practices that the collective may implement in order to--
                    (A) identify and locate musical work copyright 
                owners with unclaimed accrued royalties held by the 
                collective;
                    (B) encourage musical work copyright owners to claim 
                the royalties of those owners; and
                    (C) reduce the incidence of unclaimed royalties.

[[Page 132 STAT. 3723]]

            (2) Consideration of recommendations.--The mechanical 
        licensing collective shall carefully consider, and give 
        substantial weight to, the recommendations submitted by the 
        Register of Copyrights under paragraph (1) when establishing the 
        procedures of the collective with respect to the--
                    (A) identification and location of musical work 
                copyright owners; and
                    (B) distribution of unclaimed royalties.
SEC. 103. AMENDMENTS TO SECTION 114.

    (a) Uniform Rate Standard.--Section 114(f) of title 17, United 
States Code, is amended--
            (1) by striking paragraphs (1) and (2) and inserting the 
        following:
            ``(1)(A) <<NOTE: Time period.>>  Proceedings under chapter 8 
        shall determine reasonable rates and terms of royalty payments 
        for transmissions subject to statutory licensing under 
        subsection (d)(2) during the 5-year period beginning on January 
        1 of the second year following the year in which the proceedings 
        are to be commenced pursuant to subparagraph (A) or (B) of 
        section 804(b)(3), as the case may be, or such other period as 
        the parties may agree. The parties to each proceeding shall bear 
        their own costs.
            ``(B) The schedule of reasonable rates and terms determined 
        by the Copyright Royalty Judges shall, subject to paragraph (2), 
        be binding on all copyright owners of sound recordings and 
        entities performing sound recordings affected by this paragraph 
        during the 5-year period specified in subparagraph (A), or such 
        other period as the parties may agree. Such rates and terms 
        shall distinguish among the different types of services then in 
        operation and shall include a minimum fee for each such type of 
        service, such differences to be based on criteria including the 
        quantity and nature of the use of sound recordings and the 
        degree to which use of the service may substitute for or may 
        promote the purchase of phonorecords by consumers. The Copyright 
        Royalty Judges shall establish rates and terms that most clearly 
        represent the rates and terms that would have been negotiated in 
        the marketplace between a willing buyer and a willing seller. In 
        determining such rates and terms, the Copyright Royalty Judges--
                    ``(i) shall base their decision on economic, 
                competitive, and programming information presented by 
                the parties, including--
                          ``(I) whether use of the service may 
                      substitute for or may promote the sales of 
                      phonorecords or otherwise may interfere with or 
                      may enhance the sound recording copyright owner's 
                      other streams of revenue from the copyright 
                      owner's sound recordings; and
                          ``(II) the relative roles of the copyright 
                      owner and the transmitting entity in the 
                      copyrighted work and the service made available to 
                      the public with respect to relative creative 
                      contribution, technological contribution, capital 
                      investment, cost, and risk; and
                    ``(ii) may consider the rates and terms for 
                comparable types of audio transmission services and 
                comparable circumstances under voluntary license 
                agreements.

[[Page 132 STAT. 3724]]

            ``(C) The procedures under subparagraphs (A) and (B) shall 
        also be initiated pursuant to a petition filed by any sound 
        recording copyright owner or any transmitting entity indicating 
        that a new type of service on which sound recordings are 
        performed is or is about to become operational, for the purpose 
        of determining reasonable terms and rates of royalty payments 
        with respect to such new type of service for the period 
        beginning with the inception of such new type of service and 
        ending on the date on which the royalty rates and terms for 
        eligible nonsubscription services and new subscription services, 
        or preexisting subscription services and preexisting satellite 
        digital audio radio services, as the case may be, most recently 
        determined under subparagraph (A) or (B) and chapter 8 expire, 
        or such other period as the parties may agree.''; and
            (2) by redesignating paragraphs (3), (4), and (5) as 
        paragraphs (2), (3), and (4), respectively.

    (b) Repeal.--Subsection (i) of section 114 of title 17, United 
States Code, is repealed.
    (c) <<NOTE: 17 USC 114 note.>>  Use in Musical Work Proceedings.--
            (1) In general.--License fees payable for the public 
        performance of sound recordings under section 106(6) of title 
        17, United States Code, shall not be taken into account in any 
        administrative, judicial, or other governmental proceeding to 
        set or adjust the royalties payable to musical work copyright 
        owners for the public performance of their works except in such 
        a proceeding to set or adjust royalties for the public 
        performance of musical works by means of a digital audio 
        transmission other than a transmission by a broadcaster, and may 
        be taken into account only with respect to such digital audio 
        transmission.
            (2) Definitions.--In this subsection:
                    (A) Transmission by a broadcaster.--The term 
                ``transmission by a broadcaster'' means a 
                nonsubscription digital transmission made by a 
                terrestrial broadcast station on its own behalf, or on 
                the behalf of a terrestrial broadcast station under 
                common ownership or control, that is not part of an 
                interactive service or a music-intensive service 
                comprising the transmission of sound recordings 
                customized for or customizable by recipients or service 
                users.
                    (B) Terrestrial broadcast station.--The term 
                ``terrestrial broadcast station'' means a terrestrial, 
                over-the-air radio or television broadcast station, 
                including an FM translator (as defined in section 
                74.1201 of title 47, Code of Federal Regulations, and 
                licensed as such by the Federal Communications 
                Commission) whose primary business activities are 
                comprised of, and whose revenues are generated through, 
                terrestrial, over-the-air broadcast transmissions, or 
                the simultaneous or substantially-simultaneous digital 
                retransmission by the terrestrial, over-the-air 
                broadcast station of its over-the-air broadcast 
                transmissions.

    (d) Rule of Construction.-- <<NOTE: 17 USC 114 note.>> Subsection 
(c)(2) shall not be given effect in interpreting provisions of title 17, 
United States Code.

    (e) Use in Sound Recording Proceedings.-- <<NOTE: 17 USC 114 
note.>> The repeal of section 114(i) of title 17, United States Code, by 
subsection (b) shall not be taken into account in any proceeding to set 
or adjust

[[Page 132 STAT. 3725]]

the rates and fees payable for the use of sound recordings under section 
112(e) or 114(f) of such title that is pending on, or commenced on or 
after, the date of enactment of this Act.

    (f) Decisions and Precedents Not Affected.-- <<NOTE: 17 USC 114 
note.>> The repeal of section 114(i) of title 17, United States Code, by 
subsection (b) shall not have any effect upon the decisions, or the 
precedents established or relied upon, in any proceeding to set or 
adjust the rates and fees payable for the use of sound recordings under 
section 112(e) or 114(f) of such title before the date of enactment of 
this Act.

    (g) Technical and Conforming Amendments.--
            (1) Section 114.--Section 114(f) of title 17, United States 
        Code, as amended by subsection (a), is further amended in 
        paragraph (4)(C), as so redesignated, in the first sentence, by 
        striking ``under paragraph (4)'' and inserting ``under paragraph 
        (3)''.
            (2) Section 801.--Section 801(b) of title 17, United States 
        Code, is amended--
                    (A) in paragraph (1), by striking ``The rates 
                applicable'' and all that follows though ``prevailing 
                industry practices.''; and
                    (B) in paragraph (7)(B), by striking ``114(f)(3)'' 
                and inserting ``114(f)(2)''.
            (3) Section 803.--Section 803(c)(2)(E)(i)(II) of title 17, 
        United States Code, is amended--
                    (A) by striking ``or 114(f)(2)(C)''; and
                    (B) by striking ``114(f)(4)(B)'' and inserting 
                ``114(f)(3)(B)''.
            (4) Section 804.--Section 804(b)(3)(C) of title 17, United 
        States Code, is amended--
                    (A) in clause (i), by striking ``and 114(f)(2)(C)'';
                    (B) in clause (iii)(II), by striking 
                ``114(f)(4)(B)(ii)'' and inserting ``114(f)(3)(B)(ii)''; 
                and
                    (C) in clause (iv), by striking ``or 114(f)(2)(C), 
                as the case may be''.

    (h) Effective Date of Amended Rate Setting Standard. <<NOTE: 17 USC 
114 note.>> --The amendments made by subsection (a)(1) shall apply to 
any proceeding before the Copyright Royalty Judges that is commenced on 
or after the date of the enactment of this Act.

    (i) Timing of Rate Determinations.--Section 804(b)(3)(B) of title 
17, United States Code, is amended, in the third sentence, by inserting 
the following after ``fifth calendar year'': ``, except that--(i) with 
respect to preexisting subscription services, the terms and rates 
finally determined for the rate period ending on December 31, 2022, 
shall remain in effect through December 31, 2027, and there shall be no 
proceeding to determine terms and rates for preexisting subscription 
services for the period beginning on January 1, 2023, and ending on 
December 31, 2027; and'' ``(ii) with respect to pre-existing satellite 
digital audio radio services, the terms and rates set forth by the 
Copyright Royalty Judges on December 14, 2017, in their initial 
determination for the rate period ending on December 31, 2022, shall be 
in effect through December 31, 2027, without any change based on a 
rehearing under section 803(c)(2) and without the possibility of appeal 
under section 803(d), and there shall be no proceeding to determine 
terms and rates for preexisting satellite digital audio radio services 
for

[[Page 132 STAT. 3726]]

the period beginning on January 1, 2023, and ending on December 31, 
2027''.
SEC. 104. RANDOM ASSIGNMENT OF RATE COURT PROCEEDINGS.

    Section 137 of title 28, United States Code, is amended--
            (1) by striking ``The business'' and inserting ``(a) In 
        General.--The business''; and
            (2) by adding at the end the following:

    ``(b) Random Assignment of Rate Court Proceedings.--
            ``(1) In general.--
                    ``(A) Definition.--In this paragraph, the term 
                `performing rights society' has the meaning given the 
                term in section 101 of title 17.
                    ``(B) Determination of license fee.--Except as 
                provided in subparagraph (C), in the case of any 
                performing rights society subject to a consent decree, 
                any application for the determination of a license fee 
                for the public performance of music in accordance with 
                the applicable consent decree shall be made in the 
                district court with jurisdiction over that consent 
                decree and randomly assigned to a judge of that district 
                court according to the rules of that court for the 
                division of business among district judges, provided 
                that any such application shall not be assigned to--
                          ``(i) a judge to whom continuing jurisdiction 
                      over any performing rights society for any 
                      performing rights society consent decree is 
                      assigned or has previously been assigned; or
                          ``(ii) a judge to whom another proceeding 
                      concerning an application for the determination of 
                      a reasonable license fee is assigned at the time 
                      of the filing of the application.
                    ``(C) Exception.--Subparagraph (B) does not apply to 
                an application to determine reasonable license fees made 
                by individual proprietors under section 513 of title 17.
            ``(2) Rule of construction.--Nothing in paragraph (1) shall 
        modify the rights of any party to a consent decree or to a 
        proceeding to determine reasonable license fees, to make an 
        application for the construction of any provision of the 
        applicable consent decree. Such application shall be referred to 
        the judge to whom continuing jurisdiction over the applicable 
        consent decree is currently assigned. If any such application is 
        made in connection with a rate proceeding, such rate proceeding 
        shall be stayed until the final determination of the 
        construction application. Disputes in connection with a rate 
        proceeding about whether a licensee is similarly situated to 
        another licensee shall not be subject to referral to the judge 
        with continuing jurisdiction over the applicable consent 
        decree.''.
SEC. 105. <<NOTE: 17 USC 106 note.>>  PERFORMING RIGHTS SOCIETY 
                        CONSENT DECREES.

    (a) Definition.--In this section, the term ``performing rights 
society'' has the meaning given the term in section 101 of title 17, 
United States Code.
    (b) Notification of Review.--
            (1) In general.-- <<NOTE: Briefings.>> The Department of 
        Justice shall provide timely briefings upon request of any 
        Member of the Committee on the Judiciary of the Senate and the 
        Committee on the Judiciary of the House of Representatives 
        regarding the status

[[Page 132 STAT. 3727]]

        of a review in progress of a consent decree between the United 
        States and a performing rights society.
            (2) Confidentiality and deliberative process.--In accordance 
        with applicable rules relating to confidentiality and agency 
        deliberative process, the Department of Justice shall share with 
        such Members of Congress detailed and timely information and 
        pertinent documents related to the consent decree review.

    (c) Action Before Motion to Terminate.--
            (1) In general.--Before filing with the appropriate district 
        court of the United States a motion to terminate a consent 
        decree between the United States and a performing rights 
        society, including a motion to terminate a consent decree after 
        the passage of a specified period of time, the Department of 
        Justice shall--
                    (A) <<NOTE: Notification.>>  notify Members of 
                Congress and committees of Congress described in 
                subsection (b); and
                    (B) provide to such Members of Congress and 
                committees information regarding the impact of the 
                proposed termination on the market for licensing the 
                public performance of musical works should the motion be 
                granted.
            (2) Notification.--
                    (A) In general.--During the notification described 
                in paragraph (1), and not later than a reasonable time 
                before the date on which the Department of Justice files 
                with the appropriate district court of the United States 
                a motion to terminate a consent decree between the 
                United States and a performing rights society, the 
                Department of Justice should submit to the chairmen and 
                ranking members of the Committee on the Judiciary of the 
                Senate and the Committee on the Judiciary of the House 
                of Representatives a written notification of the intent 
                of the Department of Justice to file the motion.
                    (B) Contents.-- <<NOTE: Reports.>> The notification 
                provided in subparagraph (A) shall include a written 
                report to the chairmen and ranking members of the 
                Committee on the Judiciary of Senate and the Committee 
                on the Judiciary of the House of Representatives setting 
                forth--
                          (i) an explanation of the process used by the 
                      Department of Justice to review the consent 
                      decree;
                          (ii) <<NOTE: Summary.>>  a summary of the 
                      public comments received by the Department of 
                      Justice during the review by the Department; and
                          (iii) other information provided to Congress 
                      under paragraph (1)(B).

    (d) Scope.--This section applies only to a consent decree between 
the United States and a performing rights society.
SEC. 106. <<NOTE: 17 USC 114 note.>>  EFFECTIVE DATE.

    This title, and the amendments made by this title, shall take effect 
on the date of enactment of this Act.

[[Page 132 STAT. 3728]]

   TITLE II-- <<NOTE: Classics Protection and Access Act.>> CLASSICS 
PROTECTION AND ACCESS
SEC. 201. <<NOTE: 17 USC 101 note.>>  SHORT TITLE.

    This title may be cited as the ``Classics Protection and Access 
Act''.
SEC. 202. UNAUTHORIZED USE OF PRE-1972 SOUND RECORDINGS.

    (a) Preemption of State Law Rights; Protection for Unauthorized 
Use.--Title 17, United States Code, is amended--
            (1) in section 301, by striking subsection (c) and inserting 
        the following:

    ``(c) Notwithstanding the provisions of section 303, and in 
accordance with chapter 14, no sound recording fixed before February 15, 
1972, shall be subject to copyright under this 
title. <<NOTE: Applicability.>>  With respect to sound recordings fixed 
before February 15, 1972, the preemptive provisions of subsection (a) 
shall apply to activities that are commenced on and after the date of 
enactment of the Classics Protection and Access Act. <<NOTE: Time 
period.>>  Nothing in this subsection may be construed to affirm or 
negate the preemption of rights and remedies pertaining to any cause of 
action arising from the nonsubscription broadcast transmission of sound 
recordings under the common law or statutes of any State for activities 
that do not qualify as covered activities under chapter 14 undertaken 
during the period between the date of enactment of the Classics 
Protection and Access Act and the date on which the term of prohibition 
on unauthorized acts under section 1401(a)(2) expires for such sound 
recordings. <<NOTE: Applicability.>>  Any potential preemption of rights 
and remedies related to such activities undertaken during that period 
shall apply in all respects as it did the day before the date of 
enactment of the Classics Protection and Access Act.''; and
            (2) by adding at the end the following:

``CHAPTER 14-- <<NOTE: 17 USC 1401 prec.>> UNAUTHORIZED USE OF PRE-1972 
SOUND RECORDINGS

``Sec.
``1401. Unauthorized use of pre-1972 sound recordings.

``Sec. 1401. <<NOTE: 17 USC 1401.>> Unauthorized use of pre-1972 
                  sound recordings

    ``(a) In General.--
            ``(1) Unauthorized acts.--Anyone who, on or before the last 
        day of the applicable transition period under paragraph (2), and 
        without the consent of the rights owner, engages in covered 
        activity with respect to a sound recording fixed before February 
        15, 1972, shall be subject to the remedies provided in sections 
        502 through 505 and 1203 to the same extent as an infringer of 
        copyright or a person that engages in unauthorized activity 
        under chapter 12.
            ``(2) Term of prohibition.--
                    ``(A) In general.--The prohibition under paragraph 
                (1)--
                          ``(i) subject to clause (ii), shall apply to a 
                      sound recording described in that paragraph--
                                    ``(I) through December 31 of the 
                                year that is 95 years after the year of 
                                first publication; and

[[Page 132 STAT. 3729]]

                                    ``(II) for a further transition 
                                period as prescribed under subparagraph 
                                (B) of this paragraph; and
                          ``(ii) shall not apply to any sound recording 
                      after February 15, 2067.
                    ``(B) Transition periods.--
                          ``(i) Pre-1923 recordings.--In the case of a 
                      sound recording first published before January 1, 
                      1923, the transition period described in 
                      subparagraph (A)(i)(II) shall end on December 31 
                      of the year that is 3 years after the date of 
                      enactment of this section.
                          ``(ii) 1923-1946 recordings.--In the case of a 
                      sound recording first published during the period 
                      beginning on January 1, 1923, and ending on 
                      December 31, 1946, the transition period described 
                      in subparagraph (A)(i)(II) shall end on the date 
                      that is 5 years after the last day of the period 
                      described in subparagraph (A)(i)(I).
                          ``(iii) 1947-1956 recordings.--In the case of 
                      a sound recording first published during the 
                      period beginning on January 1, 1947, and ending on 
                      December 31, 1956, the transition period described 
                      in subparagraph (A)(i)(II) shall end on the date 
                      that is 15 years after the last day of the period 
                      described in subparagraph (A)(i)(I).
                          ``(iv) Post-1956 recordings.--In the case of a 
                      sound recording fixed before February 15, 1972, 
                      that is not described in clause (i), (ii), or 
                      (iii), the transition period described in 
                      subparagraph (A)(i)(II) shall end on February 15, 
                      2067.
            ``(3) Rule of construction.-- <<NOTE: Definition.>> For the 
        purposes of this subsection, the term `anyone' includes any 
        State, any instrumentality of a State, and any officer or 
        employee of a State or instrumentality of a State acting in the 
        official capacity of the officer or employee, as applicable.

    ``(b) Certain Authorized Transmissions and Reproductions.--A public 
performance by means of a digital audio transmission of a sound 
recording fixed before February 15, 1972, or a reproduction in an 
ephemeral phonorecord or copy of a sound recording fixed before February 
15, 1972, shall, for purposes of subsection (a), be considered to be 
authorized and made with the consent of the rights owner if--
            ``(1) the transmission or reproduction would satisfy the 
        requirements for statutory licensing under section 112(e)(1) or 
        section 114(d)(2), or would be exempt under section 114(d)(1), 
        as the case may be, if the sound recording were fixed on or 
        after February 15, 1972; and
            ``(2) the transmitting entity pays the statutory royalty for 
        the transmission or reproduction pursuant to the rates and terms 
        adopted under sections 112(e) and 114(f), and complies with 
        other obligations, in the same manner as required by regulations 
        adopted by the Copyright Royalty Judges under sections 112(e) 
        and 114(f) for sound recordings that are fixed on or after 
        February 15, 1972, except in the case of a transmission that 
        would be exempt under section 114(d)(1).

    ``(c) Certain Noncommercial Uses of Sound Recordings That Are Not 
Being Commercially Exploited.--

[[Page 132 STAT. 3730]]

            ``(1) In general.--Noncommercial use of a sound recording 
        fixed before February 15, 1972, that is not being commercially 
        exploited by or under the authority of the rights owner shall 
        not violate subsection (a) if--
                    ``(A) the person engaging in the noncommercial use, 
                in order to determine whether the sound recording is 
                being commercially exploited by or under the authority 
                of the rights owner, makes a good faith, reasonable 
                search for, but does not find, the sound recording--
                          ``(i) in the records of schedules filed in the 
                      Copyright Office as described in subsection 
                      (f)(5)(A); and
                          ``(ii) on services offering a comprehensive 
                      set of sound recordings for sale or streaming;
                    ``(B) the person engaging in the noncommercial use 
                files a notice identifying the sound recording and the 
                nature of the use in the Copyright Office in accordance 
                with the regulations issued under paragraph (3)(B); and
                    ``(C) <<NOTE: Time period.>>  during the 90-day 
                period beginning on the date on which the notice 
                described in subparagraph (B) is indexed into the public 
                records of the Copyright Office, the rights owner of the 
                sound recording does not, in its discretion, opt out of 
                the noncommercial use by filing notice thereof in the 
                Copyright Office in accordance with the regulations 
                issued under paragraph (5).
            ``(2) Rules of construction.--For purposes of this 
        subsection--
                    ``(A) merely recovering costs of production and 
                distribution of a sound recording resulting from a use 
                otherwise permitted under this subsection does not 
                itself necessarily constitute a commercial use of the 
                sound recording;
                    ``(B) the fact that a person engaging in the use of 
                a sound recording also engages in commercial activities 
                does not itself necessarily render the use commercial; 
                and
                    ``(C) the fact that a person files notice of a 
                noncommercial use of a sound recording in accordance 
                with the regulations issued under paragraph (3)(B) does 
                not itself affect any limitation on the exclusive rights 
                of a copyright owner described in section 107, 108, 109, 
                110, or 112(f) as applied to a claim under subsection 
                (a) of this section pursuant to subsection (f)(1)(A) of 
                this section.
            ``(3) Notice of covered activity.-- 
        <<NOTE: Deadline. Regulations.>> Not later than 180 days after 
        the date of enactment of this section, the Register of 
        Copyrights shall issue regulations that--
                    ``(A) provide specific, reasonable steps that, if 
                taken by a filer, are sufficient to constitute a good 
                faith, reasonable search under paragraph (1)(A) to 
                determine whether a recording is being commercially 
                exploited, including the services that satisfy the good 
                faith, reasonable search requirement under paragraph 
                (1)(A) for purposes of the safe harbor described in 
                paragraph (4)(A); and
                    ``(B) establish the form, content, and procedures 
                for the filing of notices under paragraph (1)(B).
            ``(4) Safe harbor.--
                    ``(A) In general.--A person engaging in a 
                noncommercial use of a sound recording otherwise 
                permitted under this subsection who establishes that the 
                person made a

[[Page 132 STAT. 3731]]

                good faith, reasonable search under paragraph (1)(A) 
                without finding commercial exploitation of the sound 
                recording by or under the authority of the rights owner 
                shall not be found to be in violation of subsection (a).
                    ``(B) Steps sufficient but not necessary.--Taking 
                the specific, reasonable steps identified by the 
                Register of Copyrights in the regulations issued under 
                paragraph (3)(A) shall be sufficient, but not necessary, 
                for a filer to satisfy the requirement to conduct a good 
                faith, reasonable search under paragraph (1)(A) for 
                purposes of subparagraph (A) of this paragraph.
            ``(5) Opting out of covered activity.--
                    ``(A) In general.-- 
                <<NOTE: Deadline. Regulations. Time period.>> Not later 
                than 180 days after the date of enactment of this 
                section, the Register of Copyrights shall issue 
                regulations establishing the form, content, and 
                procedures for the rights owner of a sound recording 
                that is the subject of a notice under paragraph (1)(B) 
                to, in its discretion, file notice opting out of the 
                covered activity described in the notice under paragraph 
                (1)(B) during the 90-day period beginning on the date on 
                which the notice under paragraph (1)(B) is indexed into 
                the public records of the Copyright Office.
                    ``(B) Rule of construction.--The fact that a rights 
                holder opts out of a noncommercial use of a sound 
                recording by filing notice thereof in the Copyright 
                Office in accordance with the regulations issued under 
                subparagraph (A) does not itself enlarge or diminish any 
                limitation on the exclusive rights of a copyright owner 
                described in section 107, 108, 109, 110, or 112(f) as 
                applied to a claim under subsection (a) of this section 
                pursuant to subsection (f)(1)(A) of this section.
            ``(6) Civil penalties for certain acts.--
                    ``(A) Filing of notices of noncommercial use.--Any 
                person who willfully engages in a pattern or practice of 
                filing a notice of noncommercial use of a sound 
                recording as described in paragraph (1)(B) fraudulently 
                describing the use proposed, or knowing that the use 
                proposed is not permitted under this subsection, shall 
                be assessed a civil penalty in an amount that is not 
                less than $250, and not more than $1000, for each such 
                notice, in addition to any other remedies that may be 
                available under this title based on the actual use made.
                    ``(B) Filing of opt-out notices.--
                          ``(i) In general.--Any person who files an 
                      opt-out notice as described in paragraph (1)(C), 
                      knowing that the person is not the rights owner or 
                      authorized to act on behalf of the rights owner of 
                      the sound recording to which the notice pertains, 
                      shall be assessed a civil penalty in an amount not 
                      less than $250, and not more than $1,000, for each 
                      such notice.
                          ``(ii) Pattern or practice.--Any person who 
                      engages in a pattern or practice of making filings 
                      as described in clause (i) shall be assessed a 
                      civil penalty in an amount not less than $10,000 
                      for each such filing.
                    ``(C) Definition.--For purposes of this paragraph, 
                the term `knowing'--

[[Page 132 STAT. 3732]]

                          ``(i) does not require specific intent to 
                      defraud; and
                          ``(ii) with respect to information about 
                      ownership of the sound recording in question, 
                      means that the person--
                                    ``(I) has actual knowledge of the 
                                information;
                                    ``(II) acts in deliberate ignorance 
                                of the truth or falsity of the 
                                information; or
                                    ``(III) acts in grossly negligent 
                                disregard of the truth or falsity of the 
                                information.

    ``(d) Payment of Royalties for Transmissions of Performances by 
Direct Licensing of Statutory Services.--
            ``(1) In general.--A public performance by means of a 
        digital audio transmission of a sound recording fixed before 
        February 15, 1972, shall, for purposes of subsection (a), be 
        considered to be authorized and made with the consent of the 
        rights owner if the transmission is made pursuant to a license 
        agreement voluntarily negotiated at any time between the rights 
        owner and the entity performing the sound recording.
            ``(2) Payment of royalties to nonprofit collective under 
        certain license agreements.--
                    ``(A) Licenses entered into on or after date of 
                enactment.--To the extent that a license agreement 
                described in paragraph (1) entered into on or after the 
                date of enactment of this section extends to a public 
                performance by means of a digital audio transmission of 
                a sound recording fixed before February 15, 1972, that 
                meets the conditions of subsection (b)--
                          ``(i) the licensee shall, with respect to such 
                      transmission, pay to the collective designated to 
                      distribute receipts from the licensing of 
                      transmissions in accordance with section 114(f), 
                      50 percent of the performance royalties for that 
                      transmission due under the license; and
                          ``(ii) the royalties paid under clause (i) 
                      shall be fully credited as payments due under the 
                      license.
                    ``(B) <<NOTE: Time periods.>>  Certain agreements 
                entered into before enactment.--To the extent that a 
                license agreement described in paragraph (1), entered 
                into during the period beginning on January 1 of the 
                year in which this section is enacted and ending on the 
                day before the date of enactment of this section, or a 
                settlement agreement with a preexisting satellite 
                digital audio radio service (as defined in section 
                114(j)) entered into during the period beginning on 
                January 1, 2015, and ending on the day before the date 
                of enactment of this section, extends to a public 
                performance by means of a digital audio transmission of 
                a sound recording fixed before February 15, 1972, that 
                meets the conditions of subsection (b)--
                          ``(i) the rights owner shall, with respect to 
                      such transmission, pay to the collective 
                      designated to distribute receipts from the 
                      licensing of transmissions in accordance with 
                      section 114(f) an amount that is equal to the 
                      difference between--
                                    ``(I) 50 percent of the difference 
                                between--
                                            ``(aa) the rights owner's 
                                        total gross performance royalty 
                                        fee receipts or settlement

[[Page 132 STAT. 3733]]

                                        monies received for all such 
                                        transmissions covered under the 
                                        license or settlement agreement, 
                                        as applicable; and
                                            ``(bb) the rights owner's 
                                        total payments for outside legal 
                                        expenses, including any payments 
                                        of third-party claims, that are 
                                        directly attributable to the 
                                        license or settlement agreement, 
                                        as applicable; and
                                    ``(II) the amount of any royalty 
                                receipts or settlement monies under the 
                                agreement that are distributed by the 
                                rights owner to featured and nonfeatured 
                                artists before the date of enactment of 
                                this section; and
                          ``(ii) the royalties paid under clause (i) 
                      shall be fully credited as payments due under the 
                      license or settlement agreement, as applicable.
            ``(3) Distribution of royalties and settlement monies by 
        collective.--The collective described in paragraph (2) shall, in 
        accordance with subparagraphs (B) through (D) of section 
        114(g)(2), and paragraphs (5) and (6) of section 114(g), 
        distribute the royalties or settlement monies received under 
        paragraph (2) under a license or settlement described in 
        paragraph (2), which shall be the only payments to which 
        featured and nonfeatured artists are entitled by virtue of the 
        transmissions described in paragraph (2), except for settlement 
        monies described in paragraph (2) that are distributed by the 
        rights owner to featured and nonfeatured artists before the date 
        of enactment of this section.
            ``(4) Payment of royalties under license agreements entered 
        before enactment or not otherwise described in paragraph (2).--
                    ``(A) In general.--To the extent that a license 
                agreement described in paragraph (1) entered into before 
                the date of enactment of this section, or any other 
                license agreement not as described in paragraph (2), 
                extends to a public performance by means of a digital 
                audio transmission of a sound recording fixed before 
                February 15, 1972, that meets the conditions of 
                subsection (b), the payments made by the licensee 
                pursuant to the license shall be made in accordance with 
                the agreement.
                    ``(B) Additional payments not required.--To the 
                extent that a licensee has made, or will make in the 
                future, payments pursuant to a license as described in 
                subparagraph (A), the provisions of paragraphs (2) and 
                (3) shall not require any additional payments from, or 
                additional financial obligations on the part of, the 
                licensee.
                    ``(C) Rule of construction.--Nothing in this 
                subsection may be construed to prohibit the collective 
                designated to distribute receipts from the licensing of 
                transmissions in accordance with section 114(f) from 
                administering royalty payments under any license not 
                described in paragraph (2).

    ``(e) Preemption With Respect to Certain Past Acts.--
            ``(1) In general.--This section preempts any claim of common 
        law copyright or equivalent right under the laws of

[[Page 132 STAT. 3734]]

        any State arising from a digital audio transmission or 
        reproduction that is made before the date of enactment of this 
        section of a sound recording fixed before February 15, 1972, 
        if--
                    ``(A) the digital audio transmission would have 
                satisfied the requirements for statutory licensing under 
                section 114(d)(2) or been exempt under section 
                114(d)(1), or the reproduction would have satisfied the 
                requirements of section 112(e)(1), as the case may be, 
                if the sound recording were fixed on or after February 
                15, 1972; and
                    ``(B) either--
                          ``(i) <<NOTE: Deadline. Notice.>>  except in 
                      the case of a transmission that would have been 
                      exempt under section 114(d)(1), not later than 270 
                      days after the date of enactment of this section, 
                      the transmitting entity pays statutory royalties 
                      and provides notice of the use of the relevant 
                      sound recordings in the same manner as required by 
                      regulations adopted by the Copyright Royalty 
                      Judges for sound recordings that are fixed on or 
                      after February 15, 1972, for all the digital audio 
                      transmissions and reproductions satisfying the 
                      requirements for statutory licensing under 
                      sections 112(e)(1) and 114(d)(2) during the 3 
                      years before that date of enactment; or
                          ``(ii) an agreement voluntarily negotiated 
                      between the rights owner and the entity performing 
                      the sound recording (including a litigation 
                      settlement agreement entered into before the date 
                      of enactment of this section) authorizes or waives 
                      liability for any such transmission or 
                      reproduction and the transmitting entity has paid 
                      for and reported such digital audio transmission 
                      under that agreement.
            ``(2) Rule of construction for common law copyright.--For 
        purposes of paragraph (1), a claim of common law copyright or 
        equivalent right under the laws of any State includes a claim 
        that characterizes conduct subject to that paragraph as an 
        unlawful distribution, act of record piracy, or similar 
        violation.
            ``(3) Rule of construction for public performance rights.--
        Nothing in this section may be construed to recognize or negate 
        the existence of public performance rights in sound recordings 
        under the laws of any State.

    ``(f) <<NOTE: Applicability.>>  Limitations on Remedies.--
            ``(1) Fair use; uses by libraries, archives, and educational 
        institutions.--
                    ``(A) In general.--The limitations on the exclusive 
                rights of a copyright owner described in sections 107, 
                108, 109, 110, and 112(f) shall apply to a claim under 
                subsection (a) with respect to a sound recording fixed 
                before February 15, 1972.
                    ``(B) Rule of construction for section 108(h).--With 
                respect to the application of section 108(h) to a claim 
                under subsection (a) with respect to a sound recording 
                fixed before February 15, 1972, the phrase `during the 
                last 20 years of any term of copyright of a published 
                work' in such section 108(h) shall be construed to mean 
                at any time after the date of enactment of this section.

[[Page 132 STAT. 3735]]

            ``(2) Actions.--The limitations on actions described in 
        section 507 shall apply to a claim under subsection (a) with 
        respect to a sound recording fixed before February 15, 1972.
            ``(3) Material online.--Section 512 shall apply to a claim 
        under subsection (a) with respect to a sound recording fixed 
        before February 15, 1972.
            ``(4) Principles of equity.--Principles of equity apply to 
        remedies for a violation of this section to the same extent as 
        such principles apply to remedies for infringement of copyright.
            ``(5) Filing requirement for statutory damages and 
        attorneys' fees.--
                    ``(A) Filing of information on sound recordings.--
                          ``(i) Filing requirement.--Except in the case 
                      of a transmitting entity that has filed contact 
                      information for that transmitting entity under 
                      subparagraph (B), in any action under this 
                      section, an award of statutory damages or of 
                      attorneys' fees under section 504 or 505 may be 
                      made with respect to an unauthorized use of a 
                      sound recording under subsection (a) only if--
                                    ``(I) <<NOTE: Schedule.>>  the 
                                rights owner has filed with the 
                                Copyright Office a schedule that 
                                specifies the title, artist, and rights 
                                owner of the sound recording and 
                                contains such other information, as 
                                practicable, as the Register of 
                                Copyrights prescribes by regulation; and
                                    ``(II) <<NOTE: Time period.>>  the 
                                use occurs after the end of the 90-day 
                                period beginning on the date on which 
                                the information described in subclause 
                                (I) is indexed into the public records 
                                of the Copyright Office.
                          ``(ii) Regulations.-- <<NOTE: Deadline.>> Not 
                      later than 180 days after the date of enactment of 
                      this section, the Register of Copyrights shall 
                      issue regulations that--
                                    ``(I) establish the form, content, 
                                and procedures for the filing of 
                                schedules under clause (i);
                                    ``(II) provide that a person may 
                                request that the person receive timely 
                                notification of a filing described in 
                                subclause (I); and
                                    ``(III) set forth the manner in 
                                which a person may make a request under 
                                subclause (II).
                    ``(B) Filing of contact information for transmitting 
                entities.--
                          ``(i) Filing requirement.-- 
                      <<NOTE: Deadline. Regulations.>> Not later than 30 
                      days after the date of enactment of this section, 
                      the Register of Copyrights shall issue regulations 
                      establishing the form, content, and procedures for 
                      the filing of contact information by any entity 
                      that, as of the date of enactment of this section, 
                      performs a sound recording fixed before February 
                      15, 1972, by means of a digital audio 
                      transmission.
                          ``(ii) Time limit on filings.--The Register of 
                      Copyrights may accept filings under clause (i) 
                      only until the 180th day after the date of 
                      enactment of this section.
                          ``(iii) Limitation on statutory damages and 
                      attorneys' fees.--

[[Page 132 STAT. 3736]]

                                    ``(I) Limitation.-- <<NOTE: Time 
                                period. Notice.>> An award of statutory 
                                damages or of attorneys' fees under 
                                section 504 or 505 may not be made 
                                against an entity that has filed contact 
                                information for that entity under clause 
                                (i) with respect to an unauthorized use 
                                by that entity of a sound recording 
                                under subsection (a) if the use occurs 
                                before the end of the 90-day period 
                                beginning on the date on which the 
                                entity receives a notice that--
                                            ``(aa) is sent by or on 
                                        behalf of the rights owner of 
                                        the sound recording;
                                            ``(bb) states that the 
                                        entity is not legally authorized 
                                        to use that sound recording 
                                        under subsection (a); and
                                            ``(cc) identifies the sound 
                                        recording in a schedule 
                                        conforming to the requirements 
                                        prescribed by the regulations 
                                        issued under subparagraph 
                                        (A)(ii).
                                    ``(II) Undeliverable notices.--In 
                                any case in which a notice under 
                                subclause (I) is sent to an entity by 
                                mail or courier service and the notice 
                                is returned to the sender because the 
                                entity either is no longer located at 
                                the address provided in the contact 
                                information filed under clause (i) or 
                                has refused to accept delivery, or the 
                                notice is sent by electronic mail and is 
                                undeliverable, the 90-day period under 
                                subclause (I) shall begin on the date of 
                                the attempted delivery.
                    ``(C) Section 412.--Section 412 shall not limit an 
                award of statutory damages under section 504(c) or 
                attorneys' fees under section 505 with respect to a 
                covered activity in violation of subsection (a).
            ``(6) Applicability of other provisions.--
                    ``(A) In general.--Subject to subparagraph (B), no 
                provision of this title shall apply to or limit the 
                remedies available under this section except as 
                otherwise provided in this section.
                    ``(B) Applicability of definitions.--Any term used 
                in this section that is defined in section 101 shall 
                have the meaning given that term in section 101.

    ``(g) Application of Section 230 Safe Harbor.--For purposes of 
section 230 of the Communications Act of 1934 (47 U.S.C. 230), 
subsection (a) shall be considered to be a `law pertaining to 
intellectual property' under subsection (e)(2) of such section 230.
    ``(h) Application to Rights Owners.--
            ``(1) Transfers.--With respect to a rights owner described 
        in subsection (l)(2)(B)--
                    ``(A) subsections (d) and (e) of section 201 and 
                section 204 shall apply to a transfer described in 
                subsection (l)(2)(B) to the same extent as with respect 
                to a transfer of copyright ownership; and
                    ``(B) notwithstanding section 411, that rights owner 
                may institute an action with respect to a violation of 
                this section to the same extent as the owner of an 
                exclusive right under a copyright may institute an 
                action under section 501(b).

[[Page 132 STAT. 3737]]

            ``(2) Application of other provisions.--The following 
        provisions shall apply to a rights owner under this section to 
        the same extent as any copyright owner:
                    ``(A) Section 112(e)(2).
                    ``(B) Section 112(e)(7).
                    ``(C) Section 114(e).
                    ``(D) Section 114(h).

    ``(i) Ephemeral Recordings.--An authorized reproduction made under 
this section shall be subject to section 112(g) to the same extent as a 
reproduction of a sound recording fixed on or after February 15, 1972.
    ``(j) Rule of Construction.--A rights owner of, or featured 
recording artist who performs on, a sound recording under this chapter 
shall be deemed to be an interested copyright party, as defined in 
section 1001, to the same extent as a copyright owner or featured 
recording artist under chapter 10.
    ``(k) Treatment of States and State Instrumentalities, Officers, and 
Employees.--Any State, and any instrumentality, officer, or employee 
described in subsection (a)(3), shall be subject to the provisions of 
this section in the same manner and to the same extent as any 
nongovernmental entity.
    ``(l) Definitions.--In this section:
            ``(1) Covered activity.--The term `covered activity' means 
        any activity that the copyright owner of a sound recording would 
        have the exclusive right to do or authorize under section 106 or 
        602, or that would violate section 1201 or 1202, if the sound 
        recording were fixed on or after February 15, 1972.
            ``(2) Rights owner.--The term `rights owner' means--
                    ``(A) the person that has the exclusive right to 
                reproduce a sound recording under the laws of any State, 
                as of the day before the date of enactment of this 
                section; or
                    ``(B) any person to which a right to enforce a 
                violation of this section may be transferred, in whole 
                or in part, after the date of enactment of this section, 
                under--
                          ``(i) subsections (d) and (e) of section 201; 
                      and
                          ``(ii) section 204.''.

    (b) Conforming Amendment.--The table of chapters for title 17, 
United States Code, <<NOTE: 17 USC 101 prec.>> is amended by adding at 
the end the following:

``14.  Unauthorized use of pre-1972 sound recordings.............1401''.

TITLE III-- <<NOTE: Allocation for Music Producers Act.>> ALLOCATION FOR 
MUSIC PRODUCERS
SEC. 301. <<NOTE: 17 USC 101 note.>>  SHORT TITLE.

    This title may be cited as the ``Allocation for Music Producers 
Act'' or the ``AMP Act''.
SEC. 302. PAYMENT OF STATUTORY PERFORMANCE ROYALTIES.

    (a) Letter of Direction.--Section 114(g) of title 17, United States 
Code, is amended by adding at the end the following:
            ``(5) Letter of direction.--
                    ``(A) In general.-- <<NOTE: Policy.>> A nonprofit 
                collective designated by the Copyright Royalty Judges to 
                distribute receipts from the licensing of transmissions 
                in accordance with subsection

[[Page 132 STAT. 3738]]

                (f) shall adopt and reasonably implement a policy that 
                provides, in circumstances determined by the collective 
                to be appropriate, for acceptance of instructions from a 
                payee identified under subparagraph (A) or (D) of 
                paragraph (2) to distribute, to a producer, mixer, or 
                sound engineer who was part of the creative process that 
                created a sound recording, a portion of the payments to 
                which the payee would otherwise be entitled from the 
                licensing of transmissions of the sound recording. In 
                this section, such instructions shall be referred to as 
                a `letter of direction'.
                    ``(B) Acceptance of letter.--To the extent that a 
                collective described in subparagraph (A) accepts a 
                letter of direction under that subparagraph, the person 
                entitled to payment pursuant to the letter of direction 
                shall, during the period in which the letter of 
                direction is in effect and carried out by the 
                collective, be treated for all purposes as the owner of 
                the right to receive such payment, and the payee 
                providing the letter of direction to the collective 
                shall be treated as having no interest in such payment.
                    ``(C) Authority of collective.--This paragraph shall 
                not be construed in such a manner so that the collective 
                is not authorized to accept or act upon payment 
                instructions in circumstances other than those to which 
                this paragraph applies.''.

    (b) Additional Provisions for Recordings Fixed Before November 1, 
1995.--Section 114(g) of title 17, United States Code, as amended by 
subsection (a), is further amended by adding at the end the following:
            ``(6) Sound recordings fixed before november 1, 1995.--
                    ``(A) Payment absent letter of direction.--A 
                nonprofit collective designated by the Copyright Royalty 
                Judges to distribute receipts from the licensing of 
                transmissions in accordance with subsection (f) (in this 
                paragraph referred to as the `collective') shall adopt 
                and reasonably implement a policy that provides, in 
                circumstances determined by the collective to be 
                appropriate, for the deduction of 2 percent of all the 
                receipts that are collected from the licensing of 
                transmissions of a sound recording fixed before November 
                1, 1995, but which is withdrawn from the amount 
                otherwise payable under paragraph (2)(D) to the 
                recording artist or artists featured on the sound 
                recording (or the persons conveying rights in the 
                artists' performance in the sound recording), and the 
                distribution of such amount to 1 or more persons 
                described in subparagraph (B) of this paragraph, after 
                deduction of costs described in paragraph (3) or (4), as 
                applicable, if each of the following requirements is 
                met:
                          ``(i) <<NOTE: Time periods.>>  Certification 
                      of attempt to obtain a letter of direction.--The 
                      person described in subparagraph (B) who is to 
                      receive the distribution has certified to the 
                      collective, under penalty of perjury, that--
                                    ``(I) for a period of not less than 
                                120 days, that person made reasonable 
                                efforts to contact the artist payee for 
                                such sound recording to request and 
                                obtain a letter of direction instructing 
                                the collective to pay to that person a 
                                portion of the

[[Page 132 STAT. 3739]]

                                royalties payable to the featured 
                                recording artist or artists; and
                                    ``(II) during the period beginning 
                                on the date on which that person began 
                                the reasonable efforts described in 
                                subclause (I) and ending on the date of 
                                that person's certification to the 
                                collective, the artist payee did not 
                                affirm or deny in writing the request 
                                for a letter of direction.
                          ``(ii) <<NOTE: Time period.>>  Collective 
                      attempt to contact artist.--After receipt of the 
                      certification described in clause (i) and for a 
                      period of not less than 120 days before the first 
                      distribution by the collective to the person 
                      described in subparagraph (B), the collective 
                      attempts, in a reasonable manner as determined by 
                      the collective, to notify the artist payee of the 
                      certification made by the person described in 
                      subparagraph (B).
                          ``(iii) No objection received.-- <<NOTE: Time 
                      period.>> The artist payee does not, as of the 
                      date that was 10 business days before the date on 
                      which the first distribution is made, submit to 
                      the collective in writing an objection to the 
                      distribution.
                    ``(B) Eligibility for payment.--A person shall be 
                eligible for payment under subparagraph (A) if the 
                person--
                          ``(i) is a producer, mixer, or sound engineer 
                      of the sound recording;
                          ``(ii) <<NOTE: Contracts.>>  has entered into 
                      a written contract with a record company involved 
                      in the creation or lawful exploitation of the 
                      sound recording, or with the recording artist or 
                      artists featured on the sound recording (or the 
                      persons conveying rights in the artists' 
                      performance in the sound recording), under which 
                      the person seeking payment is entitled to 
                      participate in royalty payments that are based on 
                      the exploitation of the sound recording and are 
                      payable from royalties otherwise payable to the 
                      recording artist or artists featured on the sound 
                      recording (or the persons conveying rights in the 
                      artists' performance in the sound recording);
                          ``(iii) made a creative contribution to the 
                      creation of the sound recording; and
                          ``(iv) submits to the collective--
                                    ``(I) <<NOTE: Certification.>>  a 
                                written certification stating, under 
                                penalty of perjury, that the person 
                                meets the requirements in clauses (i) 
                                through (iii); and
                                    ``(II) a true copy of the contract 
                                described in clause (ii).
                    ``(C) Multiple certifications.-- <<NOTE: Time 
                period.>> Subject to subparagraph (D), in a case in 
                which more than 1 person described in subparagraph (B) 
                has met the requirements for a distribution under 
                subparagraph (A) with respect to a sound recording as of 
                the date that is 10 business days before the date on 
                which the distribution is made, the collective shall 
                divide the 2 percent distribution equally among all such 
                persons.
                    ``(D) Objection to payment.-- 
                <<NOTE: Deadline.>> Not later than 10 business days 
                after the date on which the collective receives from the 
                artist payee a written objection to a distribution

[[Page 132 STAT. 3740]]

                made pursuant to subparagraph (A), the collective shall 
                cease making any further payment relating to such 
                distribution. In any case in which the collective has 
                made 1 or more distributions pursuant to subparagraph 
                (A) to a person described in subparagraph (B) before the 
                date that is 10 business days after the date on which 
                the collective receives from the artist payee an 
                objection to such distribution, the objection shall not 
                affect that person's entitlement to any distribution 
                made before the collective ceases such distribution 
                under this subparagraph.
                    ``(E) Ownership of the right to receive payments.--
                To the extent that the collective determines that a 
                distribution will be made under subparagraph (A) to a 
                person described in subparagraph (B), such person shall, 
                during the period covered by such distribution, be 
                treated for all purposes as the owner of the right to 
                receive such payments, and the artist payee to whom such 
                payments would otherwise be payable shall be treated as 
                having no interest in such payments.
                    ``(F) Artist payee defined.--In this paragraph, the 
                term `artist payee' means a person, other than a person 
                described in subparagraph (B), who owns the right to 
                receive all or part of the receipts payable under 
                paragraph (2)(D) with respect to a sound recording. In a 
                case in which there are multiple artist payees with 
                respect to a sound recording, an objection by 1 such 
                payee shall apply only to that payee's share of the 
                receipts payable under paragraph (2)(D), and shall not 
                preclude payment under subparagraph (A) from the share 
                of an artist payee that does not so object.''.

    (c) Technical and Conforming Amendments.--Section 114(g) of title 
17, United States Code, as amended by subsections (a) and (b), is 
further amended--
            (1) in paragraph (2), by striking ``An agent designated'' 
        and inserting ``Except as provided for in paragraph (6), a 
        nonprofit collective designated by the Copyright Royalty 
        Judges'';
            (2) in paragraph (3)--
                    (A) by striking ``nonprofit agent designated'' and 
                inserting ``nonprofit collective designated by the 
                Copyright Royalty Judges'';
                    (B) by striking ``another designated agent'' and 
                inserting ``another designated nonprofit collective''; 
                and
                    (C) by striking ``agent'' and inserting 
                ``collective'' each subsequent place it appears;
            (3) in paragraph (4)--
                    (A) by striking ``designated agent'' and inserting 
                ``nonprofit collective''; and
                    (B) by striking ``agent'' and inserting 
                ``collective'' each subsequent place it appears; and
            (4) by adding at the end the following:
            ``(7) Preemption of state property laws.--The holding and 
        distribution of receipts under section 112 and this section by a 
        nonprofit collective designated by the Copyright Royalty Judges 
        in accordance with this subsection and regulations adopted by 
        the Copyright Royalty Judges, or by an independent administrator 
        pursuant to subparagraphs (B) and (C) of section 114(g)(2), 
        shall supersede and preempt any State law (including

[[Page 132 STAT. 3741]]

        common law) concerning escheatment or abandoned property, or any 
        analogous provision, that might otherwise apply.''.
SEC. 303. <<NOTE: 17 USC 114 note.>>  EFFECTIVE DATE.

    (a) In General.--Except as provided in subsection (b), this title 
and the amendments made by this title shall take effect on the date of 
enactment of this Act.
    (b) Delayed Effective Date.--Paragraphs (5)(B) and (6)(E) of section 
114(g) of title 17, United States Code, as added by section 302, shall 
take effect on January 1, 2020.

                         TITLE IV--SEVERABILITY

SEC. 401. <<NOTE: 17 USC 114 note.>>  SEVERABILITY.

    If any provision of this Act or any amendment made by this Act, or 
any application of such provision or amendment to any person or 
circumstance, is held to be unconstitutional, the remainder of the 
provisions of this Act and the amendments made by this Act, and the 
application of the provision or amendment to any other person or 
circumstance, shall not be affected.

    Approved October 11, 2018.

LEGISLATIVE HISTORY--H.R. 1551:
---------------------------------------------------------------------------

HOUSE REPORTS: No. 115-183 (Comm. on Ways and Means).
CONGRESSIONAL RECORD:
                                                        Vol. 163 (2017):
                                    June 20, considered and passed 
                                        House.
                                                        Vol. 164 (2018):
                                    Sept. 18, considered and passed 
                                        Senate, amended.
                                    Sept. 25, House concurred in Senate 
                                        amendment.
DAILY COMPILATION OF PRESIDENTIAL DOCUMENTS (2018):
            Oct. 11, Presidential remarks and statement.

                                  <all>