S. 379 (111th): Performance Rights Act

111th Congress, 2009–2010. Text as of Oct 15, 2009 (Reported by Senate Committee).

Status & Summary | PDF | Source: GPO

II

Calendar No. 181

111th CONGRESS

1st Session

S. 379

IN THE SENATE OF THE UNITED STATES

February 4, 2009

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

October 15, 2009

Reported by , with amendments

Omit the part struck through and insert the part printed in italic

A BILL

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

1.

Short title

This Act may be cited as the Performance Rights Act.

2.

Equitable treatment for terrestrial broadcastsEstablishing equitable treatment for terrestrial, cable, satellite, and internet services

(a)

Performance right applicable to radio transmissions generally

Section 106(6) of title 17, United States Code, is amended to read as follows:

(6)

in the case of sound recordings, to perform the copyrighted work publicly by means of an audio transmission.

.

(b)

Inclusion of terrestrial broadcasts in existing performance right

Section 114(d)(1) of title 17, United States Code, is amended—

(1)

in the matter preceding subparagraph (A), by striking a digital and inserting an; and

(2)

by striking subparagraph (A).

(c)

Inclusion of terrestrial broadcasts in existing statutory license system

Section 114(j)(6) of title 17, United States Code, is amended by striking digital.

(d)

Eliminating regulatory burdens for terrestrial broadcast stations

Section 114(d)(2) of title 17, United States Code, is amended in the matter preceding subparagraph (A) by striking subsection (f) if and inserting subsection (f) if, other than for a nonsubscription and noninteractive broadcast transmission,.

(e)

Ensuring platform parity

Section 114(f) of title 17, United States Code, is amended—

(1)

by striking paragraph (1);

(2)

by redesignating paragraphs (2), (3), (4), and (5) as paragraphs (1), (2), (3), and (4), respectively; and

(3)

in paragraph (1), as redesignated—

(A)

in subparagraph (A), by striking under chapter 8 and all that follows through the end of the third sentence and inserting under chapter 8 shall determine reasonable rates and terms of royalty payments for transmissions subject to statutory licensing under subsection (d)(2) during 5-year periods beginning on January 1 of the second year following the year in which the proceedings are to be commenced, except in the case of a different transitional period provided under section 6(b)(3) of the Copyright Royalty and Distribution Reform Act of 2004, or such other period as the parties may agree.;

(B)

in subparagraph (B)—

(i)

in the second sentence, by striking eligible nonsubscription transmission; and

(ii)

in the third sentence, by striking eligible nonsubscription services and new subscription and all that follows through subparagraph (A) and inserting services, in addition to the objectives set forth in subparagraphs (A), (B), and (C) of section 801(b)(1), the Copyright Royalty Judges may consider the rates and terms for comparable types of services and comparable circumstances under voluntary license agreements. Notwithstanding section 801(b)(1), the provisions of section 801(b)(1)(D) shall not be taken into account by the Copyright Royalty Judges in any proceeding under this section; and

(C)

by striking subparagraph (C) and inserting the following:

(C)

The procedures under subparagraphs (A) and (B) shall also be initiated pursuant to a petition filed by any copyright owner of sound recordings or any transmitting entity indicating that a new type of service on which sound recordings are performed is or is about to become operational, for the purpose of determining reasonable terms and rates of royalty payments with respect to such new type of service for the period beginning with the inception of such new type of service and ending on the date on which the royalty rates and terms for preexisting services most recently determined under subparagraph (A) or (B) and chapter 8 expire, or such other period as the parties may agree.

.

(f)

Technical and conforming amendments

(1)

Section 114(f)

Section 114(f) of title 17, United States Code (as amended by subsection (e)), is further amended—

(A)

in paragraph (1)(B), in the first sentence, by striking paragraph (3) and inserting paragraph (2); and

(B)

in paragraph (4)(C), by striking under paragraph (4) and inserting under paragraph (3).

(2)

Section 114(j)

Section 114(j)(6) of title 17, United States Code, is amended by striking retransmissions of broadcast transmissions and inserting broadcast transmissions and retransmissions of broadcast transmissions.

(3)

Section 804

Section 804(b)(3)(C) of title 17, United States Code, is amended—

(A)

in clause (i), by striking and 114(f)(2)(C);

(B)

in clause (iii)(II), by striking 114(f)(4)(B)(ii) and inserting 114(f)(3)(B)(ii); and

(C)

in clause (iv), by striking or 114(f)(2)(C), as the case may be.

3.

Special treatment for small, noncommercial, educational, and religious stations and certain uses

(a)

Small, noncommercial, educational, and religious radio stations

(1)

In general

Section 114(f)(2) of title 17, United States Code, is amended by adding at the end the following:

(D)

Notwithstanding the provisions of subparagraphs (A) through (C), each individual terrestrial broadcast station that has gross revenues in any calendar year of less than $1,250,000 may elect to pay for its over-the-air nonsubscription broadcast transmissions a royalty fee of $5,000 per year, in lieu of the amount such station would otherwise be required to pay under this paragraph. Such royalty fee shall not be taken into account in determining royalty rates in a proceeding under chapter 8, or in any other administrative, judicial, or other Federal Government proceeding.

(E)

Notwithstanding the provisions of subparagraphs (A) through (C), each individual terrestrial broadcast station that is a public broadcasting entity as defined in section 118(f) may elect to pay for its over-the-air nonsubscription broadcast transmissions a royalty fee of $1,000 per year, in lieu of the amount such station would otherwise be required to pay under this paragraph. Such royalty fee shall not be taken into account in determining royalty rates in a proceeding under chapter 8, or in any other administrative, judicial, or other Federal Government proceeding.

.

3.

Special treatment for small, noncommercial, educational, and religious stations and certain uses

(a)

Small, noncommercial, educational, and religious radio stations

(1)

In general

Section 114(f)(1) of title 17, United States Code, as redesignated by section 2(e), is amended by adding at the end the following:

(D)
(i)

Notwithstanding the provisions of subparagraphs (A) through (C), each individual terrestrial broadcast station that has gross revenues within a range specified in clause (ii) may elect to pay for its over-the-air nonsubscription broadcast transmissions a royalty fee as provided in clause (ii), in lieu of the amount such station would otherwise be required to pay under this paragraph. Such royalty fee shall not be taken into account in determining royalty rates in a proceeding under chapter 8, or in any other administrative, judicial, or other Federal Government proceeding.

(ii)

As provided in clause (i), each individual terrestrial broadcast station that has gross revenues in any calendar year of—

(I)

less than $50,000 may elect to pay for its over-the-air nonsubscription broadcast transmissions a royalty fee of $100 per year;

(II)

at least $50,000 but less than $100,000 may elect to pay for its over-the-air nonsubscription broadcast transmissions a royalty fee of $500 per year;

(III)

at least $100,000 but less than $500,000 may elect to pay for its over-the-air nonsubscription broadcast transmissions a royalty fee of $2,500 per year; and

(IV)

at least $500,000 but less than $1,250,000 may elect to pay for its over-the-air nonsubscription broadcast transmissions a royalty fee of $5,000 per year.

(E)
(i)

Notwithstanding the provisions of subparagraphs (A) through (C), each individual terrestrial broadcast station that is a public broadcasting entity as defined in section 118(f) and that has gross revenues within a range specified in clause (ii) may elect to pay for its over-the-air nonsubscription broadcast transmissions a royalty fee as provided in clause (ii), in lieu of the amount such station would otherwise be required to pay under this paragraph. Such royalty fee shall not be taken into account in determining royalty rates in a proceeding under chapter 8, or in any other administrative, judicial, or other Federal Government proceeding.

(ii)

As provided in clause (i), each individual terrestrial broadcast station that is a public broadcasting entity as defined in section 118(f) and has gross receipts in any calendar year of—

(I)

less than $50,000 may elect to pay for its over-the-air nonsubscription broadcast transmissions a royalty fee of $100 per year;

(II)

at least $50,000 but less than $100,000 may elect to pay for its over-the-air nonsubscription broadcast transmissions a royalty fee of $500 per year; and

(III)

$100,000 or more may elect to pay for its over-the-air nonsubscription broadcast transmissions a royalty fee of $1,000 per year.

(F)

Notwithstanding the provisions of subparagraphs (A) through (E), each individual terrestrial broadcast station that had total gross revenues during the 4 full calendar quarters immediately preceding the date of enactment of the Performance Rights Act of—

(i)

less than $5,000,000 shall not be required to pay a royalty under this paragraph during the 3 years immediately following the date of enactment of the Performance Rights Act; and

(ii)

$5,000,000 or more shall not be required to pay a royalty under this paragraph during the 1 year immediately following the date of enactment of the Performance Rights Act.

The provisions of this subparagraph shall not be taken into account in determining royalty rates in a proceeding under chapter 8, or in any other administrative, judicial, or other Federal Government proceeding.

.

(2)

Payment date

A payment under subparagraph (D) or (E) of section 114(f)(2)114(f)(1) of title 17, United States Code, as added by paragraph (1), shall not be due until the due date of the first royalty payments for nonsubscription broadcast transmissions that are determined, after the date of the enactment of this Act, under such section 114(f)(2)114(f)(1) by reason of the amendment made by section 2(b)(2) of this Act.

(b)

Transmission of religious services; incidental uses of music

Section 114(d)(1) of title 17, United States Code, as amended by section 2(b), is further amended by inserting the following before subparagraph (B):

(A)

an eligible nonsubscription transmission of—

(i)

services at a place of worship or other religious assembly; andor

(ii)

an incidental use of a musical sound recording;

.

4.

Availability of per program license

Section 114(f)(2)(B) of title 17, United States Code114(f)(1)(B) of title 17, United States Code, as redesignated by section 2(e), is amended by inserting after the second sentence the following new sentence: Such rates and terms shall include a per program license option for terrestrial broadcast stations that make limited feature uses of sound recordings..

5.

No harmful effects on songwriters

(a)

Preservation of royalties on underlying works

Section 114(i) of title 17, United States Code, is amended in the second sentence by striking It is the intent of Congress that royalties and inserting Royalties.

(b)

Public performance rights and royalties

Nothing in this Act shall adversely affect in any respect the public performance rights of or royalties payable to songwriters or copyright owners of musical works.

5.

No harmful effects on songwriters

(a)

No adverse affect on license fees for underlying musical works; Necessity for other licenses

(1)

In general

Section 114(i) of title 17, United States Code, is amended to read as follows:

(i)

No adverse affect on license fees for underlying musical works; Necessity for other licenses

(1)

No adverse affect on license fees for underlying musical works

License fees payable for the public performance of sound recordings under section 106(6) shall not be cited, taken into account, or otherwise used in any administrative, judicial, or other governmental forum or proceeding, or otherwise, to set or adjust the license fees payable to copyright owners of musical works or their representatives for the public performance of their works, for the purpose of reducing or adversely affecting such license fees. License fees payable to copyright owners for the public performance of their musical works shall not be reduced or adversely affected in any respect as a result of the rights granted by section 106(6).

(2)

Necessity for other licenses

Notwithstanding the grant by an owner of copyright in a sound recording of an exclusive or nonexclusive license of the right under section 106(6) to perform the work publicly, a licensee of that sound recording may not publicly perform such sound recording unless a license has been granted for the public performance of any copyrighted musical work contained in the sound recording. Such license to publicly perform the copyrighted musical work may be granted either by a performing rights society representing the copyright owner or by the copyright owner.

.

(2)

Conforming amendment

Section 114(d)(3)(C) of title 17, United States Code, is hereby repealed.

(b)

Public performance rights and royalties

Nothing in this Act or the amendments made by this Act shall adversely affect in any respect the public performance rights of or royalties payable to songwriters or copyright owners of musical works.

(c)

Preservation of royalties on underlying works publicly performed by terrestrial broadcast stations

Section 114(f) of title 17, United States Code, is amended by adding at the end the following new paragraph:

(5)

Notwithstanding any other provision of this section, under no circumstances shall the rates established by the Copyright Royalty Judges for the public performance of sound recordings be cited, taken into account, or otherwise used in any administrative, judicial, or other governmental forum or proceeding, or otherwise, to reduce or adversely affect the license fees payable to copyright owners of musical works or their representatives for the public performance of their works by terrestrial broadcast stations, and such license fees for the public performance of musical works shall be independent of license fees paid for the public performance of sound recordings.

.

6.

Payment of certain royalties

Section 114(g) of title 17, United States Code, is amended—

(1)

by amending paragraph (1) to read as follows:

(1)

Except in the case of a transmission to which paragraph (5) applies or a transmission licensed under a statutory license in accordance with subsection (f) of this section, the following shall apply:

(A)

A featured recording artist who performs on a sound recording that has been licensed for public performance by means of an audio transmission shall be entitled to receive payments from the copyright owner of the sound recording in accordance with the terms of the artist's contract.

(B)
(i)

In a case in which the copyright owner of a sound recording has licensed the sound recording for the public performance of the sound recording by means of an audio transmission, the copyright owner shall deposit 1 percent of the receipts from the license with the American Federation of Musicians and American Federation of Television and Radio Artists Intellectual Property Rights Distribution Fund (or any successor entity) (in this subparagraph referred to as the Fund) to be distributed to nonfeatured performers who have performed on sound recordings. The sound recording copyright owner shall make such deposits for receipts received during the first half of a calendar year by August 15 and for receipts received during the second half of a calendar year by February 15 of the following calendar year.

(ii)

A sound recording copyright owner shall include with deposits under clause (i) information regarding the amount of such deposits attributable to each licensee and, subject to obtaining consent, if necessary, from such licensee, for each sound recording performed by means of an audio transmission by such licensee during the applicable time period, and to the extent included in the accounting reports provided by the licensee to the sound recording copyright owner—

(I)

the identity of the artist;

(II)

the International Standard Recording Code of the sound recording;

(III)

the title of the sound recording;

(IV)

the number of times the sound recording was transmitted; and

(V)

the total amount of receipts collected from that licensee.

(iii)

The Fund shall make the distributions described in clause (i) as follows: 50 percent shall be paid to nonfeatured musicians (whether or not members of the American Federation of Musicians) and 50 percent shall be paid to nonfeatured vocalists (whether or not members of the American Federation of Television and Radio Artists). The Fund may, prior to making such distributions, deduct the reasonable costs related to making such distributions.

(iv)

The sound recording copyright owner shall not be required to provide any additional information to the Fund other than what is required under this subparagraph. Sound recording copyright owners shall use reasonable good faith efforts to include in all relevant licenses a requirement to report the information identified in subclauses (I) through (V) of clause (ii). Amounts required under clause (i) that are not paid by the date specified in such clause shall be subject to interest at the rate of 6 percent per annum for each day of nonpayment after the date the payment was due.

;

(2)

in paragraph (2)(A), by striking digital; and

(3)

by adding at the end the following new paragraph:

(5)

Notwithstanding paragraph (1), to the extent that a license granted by the copyright owner of a sound recording to a transmitting entity eligible for a statutory license as specified by subsection (d)(2) extends to such entity's transmissions otherwise licensable under a statutory license in accordance with subsection (f), such entity shall pay to the agent designated to distribute statutory licensing receipts from the licensing of transmissions in accordance with subsection (f), 50 percent of the total royalties that such entity is required, pursuant to the applicable license agreement, to pay for such transmissions otherwise licensable under a statutory license in accordance with subsection (f). That agent shall distribute such payments in proportion to the distributions provided in subparagraphs (B) through (D) of paragraph (2), and such payments shall be the sole payments to which featured and nonfeatured artists are entitled by virtue of such transmissions under the direct license with such entity.

.

7.

Ephemeral recordings royalty

Section 112(e)(4) of title 17, United States Code, is amended to read as follows:

(4)
(A)

The schedule of reasonable rates and terms determined by the Copyright Royalty Judges shall, subject to paragraph (5), be binding on all copyright owners of sound recordings and transmitting organizations entitled to a statutory license under this subsection during the 5-year period specified in paragraph (3), or such other period as the parties may agree. Such rates shall include a minimum fee for each type of service offered by transmitting organizations.

(B)

With respect to phonorecords made pursuant to this subsection to facilitate transmissions of public performances under the limitation on exclusive rights specified by section 114(d)(1)(C)(iv), the Copyright Royalty Judges shall establish rates that most clearly represent the fees that would have been negotiated in the marketplace between a willing buyer and a willing seller. In determining such rates and terms, the Copyright Royalty Judges shall base their decision on economic, competitive, and programming information presented by the parties, including—

(i)

whether use of the service may substitute for or may promote the sales of phonorecords or otherwise interferes with or enhances the copyright owner's traditional streams of revenue;

(ii)

the relative roles of the copyright owner and the transmitting organization in the copyrighted work and the service made available to the public with respect to relative creative contribution, technological contribution, capital investment, cost, and risk; and

(iii)

rates and terms under voluntary license agreements described in paragraphs (2) and (3).

(C)

With respect to phonorecords made pursuant to this subsection to facilitate transmissions of public performances under a statutory license in accordance with section 114(f)—

(i)

the Copyright Royalty Judges shall establish rates and terms by application of the applicable standard in section 114(f) covering both the applicable public performances, and the making of phonorecords pursuant to this subsection solely to facilitate such public performances, together; and

(ii)

the royalty payable under this subsection for the making of phonorecords used by the transmitting organization solely to facilitate transmissions for which it pays royalties established as provided in clause (i) shall constitute 5 percent of such payments.

(D)

The Copyright Royalty Judges shall also establish requirements by which copyright owners may receive reasonable notice of the use of their sound recordings under this section, and under which records of such use shall be kept and made available by transmitting organizations entitled to obtain a statutory license under this subsection.

.

October 15, 2009

Reported with amendments