SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Music Licensing Reform Act of 
1996''.

SEC. 2. EXEMPTION OF COPYRIGHT INFRINGEMENT FOR PERFORMANCE OF 
              NONDRAMATIC MUSICAL WORKS IN SMALL COMMERCIAL 
              ESTABLISHMENTS.

    (a) In General.--Section 110 of title 17, United States Code, is 
amended--
            (1) in the matter preceding paragraph (1) by inserting 
        ``(a)'' before ``Notwithstanding'';
            (2) by amending paragraph (5) to read as follows:
            ``(5)(A) communication of a transmission embodying a 
        performance or display of a work (except a nondramatic musical 
        work) by the public reception of the transmission on a single 
        receiving apparatus of a kind commonly used in private homes, 
        unless--
                    ``(i) a direct charge is made to see or hear the 
                transmission; or
                    ``(ii) the transmission thus received is further 
                transmitted to the public; or
            ``(B) communication of a transmission embodying a 
        performance or display of a nondramatic musical work by the 
        public reception of the transmission on the premises of a small 
        commercial establishment, unless--
                    ``(i) a direct charge is made to see or hear the 
                transmission; or
                    ``(ii) the transmission thus received is further 
                transmitted to the public;''; and
            (3) by adding at the end thereof the following new 
        subsection:
    ``(b)(1) For purposes of subsection (a)(5)(B), the Register of 
Copyrights shall define the term `small commercial establishment' by 
regulation, which shall include specific, verifiable criteria. Such 
criteria may relate to--
            ``(A) the area of the establishment, including whether the 
        establishment is of sufficient size to justify, as a practical 
        matter, a subscription to a commercial background music 
        service;
            ``(B) the kind, number, and location of equipment used;
            ``(C) the gross revenue of the establishment;
            ``(D) the number of employees; and
            ``(E) other relevant factors.
    ``(2) The definition of small commercial establishment shall not 
result in an exemption to the right of public performance or to the 
right of public display the scope of which exceeds that permitted under 
the international treaty obligations of the United States.''.
    (b) Technical and Conforming Amendments.--Chapter 1 of title 17, 
United States Code, is amended--
            (1) in section 111(a)(2) by striking out ``section 110'' 
        and inserting in lieu thereof ``section 110(a)'';
            (2) in section 112(d) by striking out ``section 110(8)'' 
        each place such term appears and inserting in each such place 
        ``section 110(a)(8)''; and
            (3) in section 118(d)(3) by striking out ``section 110'' 
        and inserting in lieu thereof ``section 110(a)''.

SEC. 3. NEGOTIATIONS AND LICENSING BETWEEN PROPRIETORS AND PERFORMING 
              RIGHTS SOCIETIES.

    (a) In General.--The provisions of title 17, United States Code, 
are amended by adding after chapter 11 the following new chapter:

   ``CHAPTER 12--NEGOTIATIONS AND LICENSING BETWEEN PROPRIETORS AND 
                      PERFORMING RIGHTS SOCIETIES

``Sec.
``1201. Definitions.
``1202. Code of conduct.
``1203. Access to repertoire.
``Sec. 1201. Definitions
    ``For purposes of this chapter, the term--
            ``(1) `performing rights society' means an association, 
        corporation, or other entity that licenses the public 
        performance of nondramatic musical works on behalf of copyright 
        owners of such works, such as the American Society of 
        Composers, Authors and Publishers (ASCAP), Broadcast Music, 
        Inc. (BMI), and SESAC, Inc.; and
            ``(2) `proprietor'--
                    ``(A) means the owner of a retail establishment, 
                restaurant, inn, bar, tavern, or any other similar 
                place of business in which--
                            ``(i) the public may assemble; and
                            ``(ii) nondramatic musical works may be 
                        publicly performed; and
                    ``(B) shall not include any owner or operator of--
                            ``(i) a radio or television station 
                        licensed by the Federal Communications 
                        Commission;
                            ``(ii) a cable system or satellite carrier;
                            ``(iii) a cable or satellite carrier 
                        service or programmer;
                            ``(iv) a commercial subscription music 
                        service; or
                            ``(v) any other transmission service.
``Sec. 1202. Code of conduct
    ``(a) In General.--The Register of Copyrights shall promulgate 
regulations to establish a code of conduct for the licensing 
negotiations and practices between a proprietor and a performing rights 
society. Such regulations shall include reasonable disclosure 
requirements for proprietors and performing rights societies and the 
content and form of licensing agreements.
    ``(b) General Enforcement.--(1) A proprietor or performing rights 
society may file a civil action in any United States district court of 
appropriate jurisdiction to enforce the code of conduct established 
under this section.
    ``(2) For purposes of an action filed under this subsection--
            ``(A) all parties shall be deemed to have exhausted all 
        administrative remedies; and
            ``(B) the court shall conduct a trial de novo without an 
        agency record.
    ``(c) Enforcement in Actions Involving Licensing Agreements.--(1) 
This subsection applies to any civil action filed under this section to 
enforce the code of conduct in which a proprietor and a performing 
rights society have a licensing agreement.
    ``(2) If a proprietor violates a provision of the code of conduct, 
the court shall assess a civil fine against the proprietor, payable to 
the performing rights society, equal to the cost of the applicable 
annual license fee.
    ``(3) If a performing rights society violates a provision of the 
code of conduct, the court shall order the society to grant a license 
to the proprietor for the nondramatic public performance of musical 
works in the repertoire of the society at no fee for a period of 1 year 
beginning on the date on which judgment is entered.
``Sec. 1203. Access to repertoire
    ``(a) In General.--(1) The Register of Copyrights shall promulgate 
regulations to ensure that a performing rights society shall provide 
reasonable access to its repertoire so that a person engaged in the 
public performance of a nondramatic musical work may determine with 
reasonable certainty whether the public performance of a particular 
work may be licensed by a particular licensor.
    ``(2) Reasonable access to repertoire under this section shall not 
include access to works rarely publicly performed.
    ``(b) Enforcement.--(1) A proprietor or performing rights society 
may file a civil action in any United States district court of 
appropriate jurisdiction to enforce the regulations promulgated under 
this section.
    ``(2) For purposes of an action filed under this section--
            ``(A) all parties shall be deemed to have exhausted all 
        administrative remedies; and
            ``(B) the court shall conduct a trial de novo without an 
        agency record.
    ``(c) Restrictions on Performing Rights Society Not in Compliance 
With Regulations.--(1) A performing rights society may not--
            ``(A) file, be a party, or pay the costs of any party in 
        any civil action alleging the infringement of the copyright in 
        a work described under paragraph (2); or
            ``(B) charge a fee under any per programming period license 
        for a work described under paragraph (2).
    ``(2) A work referred to under paragraph (1) is any work in such 
performing rights society's repertoire that is not identified and 
documented as required by the regulations promulgated under this 
section.''.
    (b) Technical and Conforming Amendment.--The table of chapters for 
title 17, United States Code, is amended by adding after the item 
relating to chapter 11 the following:

``12. Negotiations and licensing between proprietors and        1201''.
                            performing rights societies.

SEC. 4. REPORT ON CONSENT DECREE.

    (a) In General.--No later than 1 year after the date of the 
enactment of this Act, the Register of Copyrights shall submit a report 
to the Senate Committee on the Judiciary and the House of 
Representatives Committee on the Judiciary on the administration by the 
United States District Court for the Southern District of New York of 
the consent decree of March 14, 1950, in United States v. American 
Society of Composers, Authors, and Publishers, 1950 Trade Cas. 
para.62,595 (S.D.N.Y. 1950) and the consent decree of December 29, 
1966, in United States v. Broadcast Music, Inc., 1966 Trade Cas. 
para.71,941 (S.D.N.Y. 1966).
    (b) Contents.--The report under this section shall include--
            (1) any recommendation for improvements so that 
        adjudication under the consent decree may be less time-
        consuming and more cost-effective, especially for parties with 
        fewer resources; and
            (2) a determination whether a system of local or regional 
        arbitration should be implemented.

SEC. 5. STATE COPYRIGHT LICENSING LAWS PREEMPTED.

    Section 301 of title 17, United States Code, is amended by adding 
at the end the following:
    ``(g)(1) Any law, statute, or regulation of any State or local 
government which requires a performing rights society to license 
copyrighted musical compositions to a proprietor in a particular manner 
not required by this title, or to conduct such society's business in 
any manner not applicable to all businesses as a general manner, shall 
be deemed to be preempted by subsection (a) and of no force or effect.
    ``(2) For purposes of this subsection, the terms `proprietor' and 
`performing rights society' have the same meanings as such terms are 
defined under section 1201.''.

SEC. 6. RULE OF CONSTRUCTION.

    Nothing in this Act shall be construed to relieve any performing 
rights society of any obligation under any consent decree or other 
court order governing the operation of such society, as such decree or 
order--
            (1) is in effect on the date of the enactment of this Act;
            (2) may be amended after such date; or
            (3) may be issued or agreed to after such date.

SEC. 7. EFFECTIVE DATE.

    This Act shall take effect 90 days after the date of the enactment 
of this Act.
Music Licensing Reform Act of 1996 - Exempts from copyright infringement the communication of a performance of nondramatic musical works on the premises of small commercial establishments, unless a charge is made to see or hear the transmission or the transmission received is further transmitted to the public.  Directs the Register of Copyrights to define the term "small commercial establishment" for purposes of this Act using specific, verifiable criteria. 
Directs the Register to promulgate regulations to establish a code of conduct for the licensing negotiations and practices between a proprietor and a performing rights society (PRS).  Allows either party to enforce such code of conduct through a civil action in district court. 
Directs the Register to ensure that a PRS provides reasonable access to its repertoire so that a person engaged in the public performance of a nondramatic musical work may determine whether the public performance of a particular work may be licensed by a particular licensor.  Provides for civil enforcement of such access.  Provides restrictions for a PRS not in compliance. 
Directs the Register to report to the Senate and House Judiciary Committees on the administration by the U.S. District Court for the Southern District of New York of the consent decree of March 14, 1950, in United States v. American Society of Composers, Authors, and Publishers and the consent decree of December 29, 1966, in United States v. Broadcast Music, Inc. 
Preempts any State copyright licensing law made inconsistent by this Act.
Music Licensing Reform Act of 1996