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[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1551 Engrossed Amendment Senate (EAS)]

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                  In the Senate of the United States,

                                                    September 18, 2018.
    Resolved, That the bill from the House of Representatives (H.R. 
1551) entitled ``An Act to amend the Internal Revenue Code of 1986 to 
modify the credit for production from advanced nuclear power 
facilities.'', do pass with the following

                               AMENDMENT:

            Strike all after the enacting clause and insert the 
      following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Orrin G. Hatch 
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--MUSIC LICENSING MODERNIZATION

SEC. 101. SHORT TITLE.

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

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

    (a) Amendment.--Section 115 of title 17, United States Code, is 
amended--
            (1) in subsection (a)--
                    (A) 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
                    (C) in paragraph (2), by striking ``A compulsory 
                license'' and inserting ``Musical arrangement.--A 
                compulsory license'';
            (2) by striking subsection (b) and inserting the following:
    ``(b) Procedures To Obtain a Compulsory License.--
            ``(1) Phonorecords other than digital phonorecord 
        deliveries.--A person who seeks to obtain a compulsory license 
        under subsection (a) to make and distribute phonorecords of a 
        musical work other than by means of digital phonorecord 
        delivery shall, before, or 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. The notice shall comply, in form, content, and manner 
        of service, with requirements that the Register of Copyrights 
        shall prescribe by regulation.
            ``(2) Digital phonorecord deliveries.--A person who seeks 
        to obtain a compulsory license under subsection (a) to make and 
        distribute phonorecords of a musical work by means of digital 
        phonorecord delivery--
                    ``(A) prior to the license availability date, 
                shall, before, or 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). A record 
        company that obtains an individual download license as 
        permitted under this paragraph shall provide statements of 
        account and pay royalties as provided in subsection (c)(2)(I).
            ``(4) Failure to obtain license.--
                    ``(A) Phonorecords other than digital phonorecord 
                deliveries.--In the case of phonorecords made and 
                distributed other than by means of digital phonorecord 
                delivery, the failure to serve or file the notice of 
                intention required by paragraph (1) forecloses the 
                possibility of a compulsory license under paragraph 
                (1). In the absence of a voluntary license, the failure 
                to obtain a compulsory license renders the making and 
                distribution of phonorecords actionable as acts of 
                infringement under section 501 and subject to the 
                remedies provided by sections 502 through 506.
                    ``(B) Digital phonorecord deliveries.--
                            ``(i) In 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) 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 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.--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 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) 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--
                                    ``(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.
                    ``(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. 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. 
                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.--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 
                license may be terminated as provided in subsection 
                (d)(4)(E).'';
            (4) by amending subsection (d) to read as follows:
    ``(d) Blanket License for Digital Uses, Mechanical Licensing 
Collective, and Digital Licensee Coordinator.--
            ``(1) Blanket license for digital uses.--
                    ``(A) In general.--A digital music provider that 
                qualifies for a compulsory license under subsection (a) 
                may, by complying with the terms and conditions of this 
                subsection, obtain a blanket license from copyright 
                owners through the mechanical licensing collective to 
                make and distribute digital phonorecord deliveries of 
                musical works through one or more covered activities.
                    ``(B) Included activities.--A blanket license--
                            ``(i) covers all musical works (or shares 
                        of such works) available for compulsory 
                        licensing under this section for purposes of 
                        engaging in covered activities, except as 
                        provided in subparagraph (C);
                            ``(ii) includes the making and distribution 
                        of server, intermediate, archival, and 
                        incidental reproductions of musical works that 
                        are reasonable and necessary for the digital 
                        music provider to engage in covered activities 
                        licensed under this subsection, solely for the 
                        purpose of engaging in such covered activities; 
                        and
                            ``(iii) does not cover or include any 
                        rights or uses other than those described in 
                        clauses (i) and (ii).
                    ``(C) Other licenses.--A voluntary license for 
                covered activities entered into by or under the 
                authority of 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 work (or share thereof) 
                to engage in covered activities authorized by such 
                license, subject to paragraph (4)(E).
                    ``(E) Other requirements and conditions apply.--
                Except as expressly provided in this subsection, each 
                requirement, limitation, condition, privilege, right, 
                and remedy otherwise applicable to compulsory licenses 
                under this section shall apply to compulsory blanket 
                licenses under this subsection.
            ``(2) Availability of blanket license.--
                    ``(A) Procedure for obtaining license.--A digital 
                music provider may obtain a blanket license by 
                submitting a notice of license to the mechanical 
                licensing collective that specifies the particular 
                covered activities in which the digital music provider 
                seeks to engage, as follows:
                            ``(i) The notice of license shall comply in 
                        form and substance with requirements that the 
                        Register of Copyrights shall establish by 
                        regulation.
                            ``(ii) Unless rejected in writing by the 
                        mechanical licensing collective 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) 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) If a notice of license is rejected 
                        under clause (iii)(I), the digital music 
                        provider shall have 30 calendar days after 
                        receipt of the notice of rejection to cure any 
                        deficiency and submit an amended notice of 
                        license to the mechanical licensing collective. 
                        If the deficiency has been cured, the 
                        mechanical licensing collective shall so 
                        confirm in writing, and the license shall be 
                        effective as of the date that the original 
                        notice of license was provided by the digital 
                        music provider.
                            ``(v) A digital music provider that 
                        believes a notice of license was improperly 
                        rejected by the mechanical licensing collective 
                        may seek review of such rejection in an 
                        appropriate district court of the United 
                        States. The district court shall determine the 
                        matter de novo based on the record before the 
                        mechanical licensing collective and any 
                        additional evidence presented by the parties.
                    ``(B) Blanket license effective date.--Blanket 
                licenses shall be made available by the mechanical 
                licensing collective on and after the license 
                availability date. No such license shall be effective 
                prior to the license availability date.
            ``(3) Mechanical licensing collective.--
                    ``(A) In general.--The mechanical licensing 
                collective shall be a single entity that--
                            ``(i) is a nonprofit 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) Designation of mechanical licensing 
                collective.--
                            ``(i) Initial designation.--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) 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 
                        (A) shall be designated. Following publication 
                        of such notice, the Register shall--
                                    ``(I) 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) 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) 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) Maintain the musical works 
                                database and other information relevant 
                                to the administration of licensing 
                                activities under this section.
                                    ``(V) Administer a process by which 
                                copyright owners can claim ownership of 
                                musical works (and shares of such 
                                works), and a process by which 
                                royalties for works for which the owner 
                                is not identified or located are 
                                equitably distributed to known 
                                copyright owners.
                                    ``(VI) Administer collections of 
                                the administrative assessment from 
                                digital music providers and significant 
                                nonblanket licensees, including receipt 
                                of notices of nonblanket activity.
                                    ``(VII) Invest in relevant 
                                resources, and arrange for services of 
                                outside vendors and others, to support 
                                the activities of the mechanical 
                                licensing collective.
                                    ``(VIII) Engage in legal and other 
                                efforts to enforce rights and 
                                obligations under this subsection, 
                                including by filing bankruptcy proofs 
                                of claims for amounts owed under 
                                licenses, and acting in coordination 
                                with the digital licensee coordinator.
                                    ``(IX) Initiate and participate in 
                                proceedings before the Copyright 
                                Royalty Judges to establish the 
                                administrative assessment under this 
                                subsection.
                                    ``(X) Initiate and participate in 
                                proceedings before the Copyright Office 
                                with respect to activities under this 
                                subsection.
                                    ``(XI) Gather and provide 
                                documentation for use in proceedings 
                                before the Copyright Royalty Judges to 
                                set rates and terms under this section.
                                    ``(XII) Maintain records of 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) administer blanket licenses 
                                for reproduction or distribution rights 
                                in musical works for covered 
                                activities, including collecting and 
                                distributing royalties, pursuant to 
                                blanket licenses.
                            ``(iii) 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--
                                            ``(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.--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.
                            ``(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.--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) 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.--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.--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;
                                            ``(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) establish an anti-
                                        comingling policy for funds not 
                                        collected under this section 
                                        and royalties collected under 
                                        this section.
                                    ``(II) Audits.--
                                            ``(aa) In general.--
                                        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) 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) 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

                                                    ``(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;
                                            ``(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.--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.--The 
                        Register of Copyrights shall establish 
                        requirements by regulations to ensure the 
                        usability, interoperability, and usage 
                        restrictions of the musical works database.
                    ``(F) Notices of license and nonblanket activity.--
                            ``(i) Notices of licenses.--The mechanical 
                        licensing collective shall receive, review, and 
                        confirm or reject notices of license from 
                        digital music providers, as provided in 
                        paragraph (2)(A). The collective shall maintain 
                        a current, publicly accessible list of blanket 
                        licenses that includes contact information for 
                        the licensees and the effective dates of such 
                        licenses.
                            ``(ii) Notices of nonblanket activity.--The 
                        mechanical licensing collective shall receive 
                        notices of nonblanket activity from significant 
                        nonblanket licensees, as provided in paragraph 
                        (6)(A). The collective shall maintain a 
                        current, publicly accessible list of notices of 
                        nonblanket activity that includes contact 
                        information for significant nonblanket 
                        licensees and the dates of receipt of such 
                        notices.
                    ``(G) Collection and distribution of royalties.--
                            ``(i) In general.--Upon receiving reports 
                        of usage and payments of royalties from digital 
                        music providers for covered activities, the 
                        mechanical licensing collective shall--
                                    ``(I) engage in efforts to--
                                            ``(aa) identify the musical 
                                        works embodied in sound 
                                        recordings reflected in such 
                                        reports, and the copyright 
                                        owners of such musical works 
                                        (and shares thereof);
                                            ``(bb) confirm uses of 
                                        musical works subject to 
                                        voluntary licenses and 
                                        individual download licenses, 
                                        and the corresponding pro rata 
                                        amounts to be deducted from 
                                        royalties that would otherwise 
                                        be due under the blanket 
                                        license; and
                                            ``(cc) confirm proper 
                                        payment of royalties due;
                                    ``(II) distribute royalties to 
                                copyright owners in accordance with the 
                                usage and other information contained 
                                in such reports, as well as the 
                                ownership and other information 
                                contained in the records of the 
                                collective; and
                                    ``(III) deposit into an interest-
                                bearing account, as provided in 
                                subparagraph (H)(ii), royalties that 
                                cannot be distributed due to--
                                            ``(aa) an inability to 
                                        identify or locate a copyright 
                                        owner of a musical work (or 
                                        share thereof); or
                                            ``(bb) a pending dispute 
                                        before the dispute resolution 
                                        committee of the mechanical 
                                        licensing collective.
                            ``(ii) Other collection efforts.--Any 
                        royalties recovered by the mechanical licensing 
                        collective as a result of efforts to enforce 
                        rights or obligations under a blanket license, 
                        including through a bankruptcy proceeding or 
                        other legal action, shall be distributed to 
                        copyright owners based on available usage 
                        information and in accordance with the 
                        procedures described in subclauses (I) and (II) 
                        of clause (i), on a pro rata basis in 
                        proportion to the overall percentage recovery 
                        of the total royalties owed, with any pro rata 
                        share of royalties that cannot be distributed 
                        deposited in an interest-bearing account as 
                        provided in subparagraph (H)(ii).
                    ``(H) Holding of accrued royalties.--
                            ``(i) Holding period.--The mechanical 
                        licensing collective shall hold accrued 
                        royalties associated with particular musical 
                        works (and shares of works) that remain 
                        unmatched for a period of 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) 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) The first such distribution 
                                shall occur on or after January 1 of 
                                the second full calendar year to 
                                commence after the license availability 
                                date, with not less than 1 such 
                                distribution to take place during each 
                                calendar year thereafter.
                                    ``(II) Copyright owners' payment 
                                shares for unclaimed accrued royalties 
                                for particular reporting periods shall 
                                be determined in a transparent and 
                                equitable manner based on data 
                                indicating the relative market shares 
                                of such copyright owners as reflected 
                                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--
                                            ``(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) 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) 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 concerning 
                        ownership of, and entitlement to royalties for, 
                        a musical work.
                    ``(L) Verification of payments by mechanical 
                licensing collective.--
                            ``(i) Verification process.--A copyright 
                        owner entitled to receive payments of royalties 
                        for covered activities from the mechanical 
                        licensing collective may, individually or with 
                        other copyright owners, conduct an audit of the 
                        mechanical licensing collective to verify the 
                        accuracy of royalty payments by the mechanical 
                        licensing collective to such copyright owner, 
                        as follows:
                                    ``(I) A copyright owner may audit 
                                the mechanical licensing collective 
                                only once in a year for any or all of 
                                the 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) To commence the audit, any 
                                copyright owner shall file with the 
                                Copyright Office a notice of intent to 
                                conduct an audit of the mechanical 
                                licensing collective, identifying the 
                                period of time to be audited, and shall 
                                simultaneously deliver a copy of such 
                                notice to the mechanical licensing 
                                collective. The Register of Copyrights 
                                shall cause the notice of audit to be 
                                published in the Federal Register not 
                                later than 45 calendar days after the 
                                date on which the notice is received.
                                    ``(V) The qualified auditor shall 
                                determine the accuracy of royalty 
                                payments, including whether an 
                                underpayment or overpayment of 
                                royalties was made by the mechanical 
                                licensing collective to each auditing 
                                copyright owner, 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 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) 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.--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 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) Format and maintenance of 
                        reports.--Reports of usage provided by digital 
                        music providers to the mechanical licensing 
                        collective shall be in a machine-readable 
                        format that is compatible with the information 
                        technology systems of the mechanical licensing 
                        collective and meets the requirements of 
                        regulations adopted by the Register of 
                        Copyrights. The Register shall also adopt 
                        regulations setting forth requirements under 
                        which records of use shall be maintained and 
                        made available to the mechanical licensing 
                        collective by digital music providers engaged 
                        in covered activities under a blanket license.
                            ``(iv) Adoption of regulations.--The 
                        Register 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.--The mechanical 
                        licensing collective may conduct an audit of a 
                        digital music provider operating under the 
                        blanket license to verify the accuracy of 
                        royalty payments by the digital music provider 
                        to the mechanical licensing collective as 
                        follows:
                                    ``(I) The mechanical licensing 
                                collective may commence an audit of a 
                                digital music provider 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 qualified auditor 
                                and respond to reasonable requests for 
                                relevant information, and shall use 
                                commercially reasonable efforts to 
                                provide access to relevant information 
                                maintained with respect to a digital 
                                music provider by third parties.
                                    ``(IV) To commence the audit, the 
                                mechanical licensing collective shall 
                                file with the Copyright Office a notice 
                                of intent to conduct an audit of the 
                                digital music provider, identifying the 
                                period of time to be audited, and shall 
                                simultaneously deliver a copy of such 
                                notice to the digital music provider. 
                                The Register of Copyrights shall cause 
                                the notice of audit to be published in 
                                the Federal Register not later than 45 
                                calendar days after the date on which 
                                notice is received.
                                    ``(V) The qualified auditor shall 
                                determine the accuracy of royalty 
                                payments, including whether an 
                                underpayment or overpayment of 
                                royalties was made by the digital music 
                                provider to the mechanical licensing 
                                collective, 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) 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.--
                            ``(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) 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) 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.--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. The district court 
                        shall determine the matter de novo based on the 
                        record before the mechanical licensing 
                        collective and any additional supporting 
                        evidence presented by the parties.
            ``(5) Digital licensee coordinator.--
                    ``(A) In general.--The digital licensee coordinator 
                shall be a single entity that--
                            ``(i) is a nonprofit, not owned by any 
                        other entity, that is created to carry out 
                        responsibilities under this subsection;
                            ``(ii) is endorsed by and enjoys 
                        substantial support from digital music 
                        providers and significant nonblanket licensees 
                        that together represent the greatest percentage 
                        of the licensee market for uses of musical 
                        works in covered activities, as measured over 
                        the preceding 3 calendar years;
                            ``(iii) is able to demonstrate that it has, 
                        or will have prior to the license availability 
                        date, the administrative capabilities to 
                        perform the required functions of the digital 
                        licensee coordinator under this subsection; and
                            ``(iv) has been designated by the Register 
                        of Copyrights, 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.--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.--
                        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.
                    ``(C) Authorities and functions.--
                            ``(i) In general.--The digital licensee 
                        coordinator is authorized to perform the 
                        following functions, subject to more particular 
                        requirements as described in this subsection:
                                    ``(I) Establish a governance 
                                structure, criteria for membership, and 
                                any dues to be paid by its members.
                                    ``(II) Engage in efforts to enforce 
                                notice and payment obligations with 
                                respect to the administrative 
                                assessment, including by receiving 
                                information from and coordinating with 
                                the mechanical licensing collective.
                                    ``(III) Initiate and participate in 
                                proceedings before the Copyright 
                                Royalty Judges to establish the 
                                administrative assessment under this 
                                subsection.
                                    ``(IV) Initiate and participate in 
                                proceedings before the Copyright Office 
                                with respect to activities under this 
                                subsection.
                                    ``(V) Gather and provide 
                                documentation for use in proceedings 
                                before the Copyright Royalty Judges to 
                                set rates and terms under this section.
                                    ``(VI) Maintain records of its 
                                activities.
                                    ``(VII) 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) 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.--Not later than 
                        45 calendar days after the license availability 
                        date, or 45 calendar days after the end of the 
                        first full calendar month in which an entity 
                        initially qualifies as a significant nonblanket 
                        licensee, whichever occurs later, a significant 
                        nonblanket licensee shall submit a notice of 
                        nonblanket activity to the mechanical licensing 
                        collective. The notice of nonblanket activity 
                        shall comply in form and substance with 
                        requirements that the Register of Copyrights 
                        shall establish by regulation, and a copy shall 
                        be made available to the digital licensee 
                        coordinator.
                            ``(ii) Reporting and payment obligations.--
                        The notice of nonblanket activity submitted to 
                        the mechanical licensing collective shall be 
                        accompanied by a report of usage that contains 
                        the information described in paragraph 
                        (4)(A)(ii), as well as any payment of the 
                        administrative assessment required under this 
                        subsection and applicable regulations. 
                        Thereafter, subject to clause (iii), a 
                        significant nonblanket licensee shall continue 
                        to provide monthly reports of usage, 
                        accompanied by any required payment of the 
                        administrative assessment, to the mechanical 
                        licensing collective. Such reports and payments 
                        shall be submitted not later than 45 calendar 
                        days after the end of the calendar month being 
                        reported.
                            ``(iii) Discontinuation of obligations.--An 
                        entity that has submitted a notice of 
                        nonblanket activity to the mechanical licensing 
                        collective that has ceased to qualify as a 
                        significant nonblanket licensee may so notify 
                        the collective in writing. In such case, as of 
                        the calendar month in which such notice is 
                        provided, such entity shall no longer be 
                        required to provide reports of usage or pay the 
                        administrative assessment, but if such entity 
                        later qualifies as a significant nonblanket 
                        licensee, such entity shall again be required 
                        to comply with clauses (i) and (ii).
                    ``(B) Reporting by mechanical licensing collective 
                to digital licensee coordinator.--
                            ``(i) Monthly reports of noncompliant 
                        licensees.--The mechanical licensing collective 
                        shall provide monthly reports to the digital 
                        licensee coordinator setting forth any 
                        significant nonblanket licensees of which the 
                        collective is aware that have failed to comply 
                        with subparagraph (A).
                            ``(ii) Treatment of confidential 
                        information.--The mechanical licensing 
                        collective and digital licensee coordinator 
                        shall take appropriate steps to safeguard the 
                        confidentiality and security of financial and 
                        other sensitive data shared under this 
                        subparagraph, in accordance with the 
                        confidentiality requirements prescribed by the 
                        Register of Copyrights under paragraph (12)(C).
                    ``(C) Legal enforcement efforts.--
                            ``(i) Federal court action.--Should the 
                        mechanical licensing collective or digital 
                        licensee coordinator become aware that a 
                        significant nonblanket licensee has failed to 
                        comply with subparagraph (A), either may 
                        commence an action in an appropriate district 
                        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 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--
                                            ``(aa) any portion of past 
                                        actual collective total costs 
                                        of the mechanical licensing 
                                        collective not funded by 
                                        previous collections of the 
                                        administrative assessment or 
                                        voluntary contributions because 
                                        such collections or 
                                        contributions together were 
                                        insufficient to fund such 
                                        costs;
                                            ``(bb) any past collections 
                                        of the administrative 
                                        assessment and voluntary 
                                        contributions that exceeded 
                                        past actual collective total 
                                        costs, resulting in a surplus; 
                                        and
                                            ``(cc) the amount of any 
                                        voluntary contributions by 
                                        digital music providers or 
                                        significant nonblanket 
                                        licensees in relevant periods, 
                                        described in subparagraphs (A) 
                                        and (B) of paragraph (7).
                            ``(iii) Initial administrative 
                        assessment.--The procedure for establishing the 
                        initial administrative assessment shall be as 
                        follows:
                                    ``(I) 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) 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.
                                    ``(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. 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).
                            ``(iv) Adjustment of administrative 
                        assessment.--The administrative assessment may 
                        be adjusted by the Copyright Royalty Judges 
                        periodically, in accordance with the following 
                        procedures:
                                    ``(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.
                                    ``(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) 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. 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 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.--The 
                        Copyright Royalty Judges shall retain 
                        continuing authority to amend a determination 
                        of an administrative assessment to correct 
                        technical or clerical errors, or modify the 
                        terms of implementation, for good cause, with 
                        any such amendment to be published in the 
                        Federal Register.
                            ``(vii) Appeal of administrative 
                        assessment.--The determination 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
                            ``(ii) shall automatically expire upon the 
                        establishment of a rate and terms for such 
                        covered activity by the Copyright Royalty 
                        Judges, under subsection (c)(1)(E).
                    ``(D) Adjustments for interim rates.--The rate and 
                terms established by the Copyright Royalty Judges for a 
                covered activity to which an interim rate and terms 
                have been agreed under subparagraph (C) shall supersede 
                the interim rate and terms and apply retroactively to 
                the inception of the activity under the blanket 
                license. In such case, 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 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) 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) 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, 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) If the required matching efforts 
                        are successful in identifying and locating a 
                        copyright owner of a musical work (or share 
                        thereof) by the end of the calendar month in 
                        which the digital music provider first makes 
                        use of the work, the digital music provider 
                        shall provide statements of account and pay 
                        royalties to such copyright owner in accordance 
                        with this section and applicable regulations.
                            ``(iv) If the copyright owner is not 
                        identified or located by the end of the 
                        calendar month in which the digital music 
                        provider first makes use of the work, the 
                        digital music provider shall accrue and hold 
                        royalties calculated under the applicable 
                        statutory rate in accordance with usage of the 
                        work, from initial use of the work until the 
                        accrued royalties can be paid to the copyright 
                        owner or are required to be transferred to the 
                        mechanical licensing collective, as follows:
                                    ``(I) Accrued royalties shall be 
                                maintained by the digital music 
                                provider in accordance with generally 
                                accepted accounting principles.
                                    ``(II) If a copyright owner of an 
                                unmatched musical work (or share 
                                thereof) is identified and located by 
                                or to the digital music provider before 
                                the license availability date, the 
                                digital music provider shall--
                                            ``(aa) 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 
                                        from initial use of the work in 
                                        accordance with this section 
                                        and applicable regulations, 
                                        including the requisite 
                                        certification under subsection 
                                        (c)(2)(I);
                                            ``(bb) beginning with the 
                                        accounting period following the 
                                        calendar month in which the 
                                        copyright owner was identified 
                                        and located, and for all other 
                                        accounting periods prior to the 
                                        license availability date, 
                                        provide monthly statements of 
                                        account and pay royalties to 
                                        the copyright owner as required 
                                        under this section and 
                                        applicable regulations; and
                                            ``(cc) beginning with the 
                                        monthly royalty reporting 
                                        period commencing on the 
                                        license availability date, 
                                        report usage and pay royalties 
                                        for such musical work (or share 
                                        thereof) for such reporting 
                                        period and reporting periods 
                                        thereafter to the mechanical 
                                        licensing collective, as 
                                        required under this subsection 
                                        and applicable regulations.
                                    ``(III) If a copyright owner of an 
                                unmatched musical work (or share 
                                thereof) is not identified and located 
                                by the license availability date, the 
                                digital music provider shall--
                                            ``(aa) 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) 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 monthly royalties to the copyright owner 
                        or the mechanical licensing collective, as 
                        applicable.
                    ``(C) Adjusted statute of limitations.--
                Notwithstanding anything to the contrary in section 
                507(b), with respect to any claim of infringement of 
                the exclusive rights provided by paragraphs (1) and (3) 
                of section 106 against a digital music provider arising 
                from the unauthorized reproduction or distribution of a 
                musical work by such digital music provider 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) 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 in accordance with the 
                        confidentiality provisions prescribed by the 
                        Register of Copyrights under paragraph (12)(C).
                    ``(D) Liability for good-faith activities.--The 
                mechanical licensing collective shall not be liable to 
                any person or entity based on a claim arising from its 
                good-faith administration of policies and procedures 
                adopted and implemented to carry out the 
                responsibilities described in subparagraphs (J) and (K) 
                of paragraph (3), except to the extent of correcting an 
                underpayment or overpayment of royalties as provided in 
                paragraph (3)(L)(i)(VI), but the collective may 
                participate in a legal proceeding as a stakeholder 
                party if the collective is holding funds that are the 
                subject of a dispute between copyright owners. For 
                purposes of this subparagraph, 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) Limitation on activities and rights 
                covered.--This subsection applies solely to uses of 
                musical works subject to licensing under this section. 
                The blanket license shall not be construed to extend or 
                apply to activities other than covered activities or to 
                rights other than the exclusive rights of reproduction 
                and distribution licensed under this section, or serve 
                or act as the basis to extend or expand the compulsory 
                license under this section to activities and rights not 
                covered by this section on the 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, 
        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.
            ``(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 
        through which sound recordings of musical works are digitally 
        transmitted to members of the public.
            ``(30) Share.--The term `share', as applied to a musical 
        work, means a fractional ownership interest in such work.
            ``(31) Significant nonblanket licensee.--The term 
        `significant nonblanket licensee'--
                    ``(A) means an entity, including a group of 
                entities under common ownership or control that, acting 
                under the authority of one or more voluntary licenses 
                or individual download licenses, offers a service 
                engaged in covered activities, and such entity or group 
                of entities--
                            ``(i) is not currently operating under a 
                        blanket license and is not obligated to provide 
                        reports of usage reflecting covered activities 
                        under subsection (d)(4)(A);
                            ``(ii) has a direct contractual, 
                        subscription, or other economic relationship 
                        with end users of the service or, if no such 
                        relationship with end users exists, exercises 
                        direct control over the provision of the 
                        service to end users; and
                            ``(iii) either--
                                    ``(I) on any day in a calendar 
                                month, makes more than 5,000 different 
                                sound recordings of musical works 
                                available through such service; or
                                    ``(II) derives revenue or other 
                                consideration in connection with such 
                                covered activities greater than $50,000 
                                in a calendar month, or total revenue 
                                or other consideration greater than 
                                $500,000 during the preceding 12 
                                calendar months; and
                    ``(B) does not include--
                            ``(i) an entity whose covered activity 
                        consists solely of free-to-the-user streams of 
                        segments of sound recordings of musical works 
                        that do not exceed 90 seconds in length, are 
                        offered only to facilitate a licensed use of 
                        musical works that is not a covered activity, 
                        and have no revenue directly attributable to 
                        such streams constituting the covered activity; 
                        or
                            ``(ii) a `public broadcasting entity' as 
                        defined in section 118(f).
            ``(32) Songwriter.--The term `songwriter' means the author 
        of all or part of a musical work, including a composer or 
        lyricist.
            ``(33) State.--The term `State' means each State of the 
        United States, the District of Columbia, and each territory or 
        possession of the United States.
            ``(34) Unclaimed accrued royalties.--The term `unclaimed 
        accrued royalties' means accrued royalties eligible for 
        distribution under subsection (d)(3)(J).
            ``(35) Unmatched.--The term `unmatched', as applied to a 
        musical work (or share thereof), means that the copyright owner 
        of such work (or share thereof) has not been identified or 
        located.
            ``(36) Voluntary license.--The term `voluntary license' 
        means a license for use of a musical work (or share thereof) 
        other than a compulsory license obtained under this section.''.
    (b) Technical and Conforming Amendments to Section 801.--Section 
801(b) of title 17, United States Code, is amended--
            (1) by redesignating paragraph (8) as paragraph (9); and
            (2) by inserting after paragraph (7) the following:
            ``(8) To determine the administrative assessment to be paid 
        by digital music providers under section 115(d). The provisions 
        of section 115(d) shall apply to the conduct of proceedings by 
        the Copyright Royalty Judges under section 115(d) and not the 
        procedures described in this section, or section 803, 804, or 
        805.''.
    (c) Effective Date of Amended Rate Setting Standard.--The 
amendments made by 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.--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.--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) which the Register shall make available online.
    (f) Unclaimed Royalties Study and Recommendations.--
            (1) 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.
            (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) Proceedings under chapter 8 shall determine 
        reasonable rates and terms of royalty payments for 
        transmissions subject to statutory licensing under subsection 
        (d)(2) during the 5-year period beginning on January 1 of the 
        second year following the year in which the proceedings are to 
        be commenced pursuant to subparagraph (A) or (B) of section 
        804(b)(3), as the case may be, or such other period as the 
        parties may agree. The parties to each proceeding shall bear 
        their own costs.
            ``(B) The schedule of reasonable rates and terms determined 
        by the Copyright Royalty Judges shall, subject to paragraph 
        (2), be binding on all copyright owners of sound recordings and 
        entities performing sound recordings affected by this paragraph 
        during the 5-year period specified in subparagraph (A), or such 
        other period as the parties may agree. Such rates and terms 
        shall distinguish among the different types of services then in 
        operation and shall include a minimum fee for each such type of 
        service, such differences to be based on criteria including the 
        quantity and nature of the use of sound recordings and the 
        degree to which use of the service may substitute for or may 
        promote the purchase of phonorecords by consumers. The 
        Copyright Royalty Judges shall establish rates and terms that 
        most clearly represent the rates and terms that would have been 
        negotiated in the marketplace between a willing buyer and a 
        willing seller. In determining such rates and terms, the 
        Copyright Royalty Judges--
                    ``(i) shall base their decision on economic, 
                competitive, and programming information presented by 
                the parties, including--
                            ``(I) whether use of the service may 
                        substitute for or may promote the sales of 
                        phonorecords or otherwise may interfere with or 
                        may enhance the sound recording copyright 
                        owner's other streams of revenue from the 
                        copyright owner's sound recordings; and
                            ``(II) the relative roles of the copyright 
                        owner and the transmitting entity in the 
                        copyrighted work and the service made available 
                        to the public with respect to relative creative 
                        contribution, technological contribution, 
                        capital investment, cost, and risk; and
                    ``(ii) may consider the rates and terms for 
                comparable types of audio transmission services and 
                comparable circumstances under voluntary license 
                agreements.
            ``(C) The procedures under subparagraphs (A) and (B) shall 
        also be initiated pursuant to a petition filed by any sound 
        recording copyright owner or any transmitting entity indicating 
        that a new type of service on which sound recordings are 
        performed is or is about to become operational, for the purpose 
        of determining reasonable terms and rates of royalty payments 
        with respect to such new type of service for the period 
        beginning with the inception of such new type of service and 
        ending on the date on which the royalty rates and terms for 
        eligible nonsubscription services and new subscription 
        services, or preexisting 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) 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.--Subsection (c)(2) shall not be given 
effect in interpreting provisions of title 17, United States Code.
    (e) Use in Sound Recording Proceedings.--The repeal of section 
114(i) of title 17, United States Code, by subsection (b) shall not be 
taken into account in any proceeding to set or adjust the rates and 
fees payable for the use of sound recordings under section 112(e) or 
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.--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.--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 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. 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.--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 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) 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.--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) 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. EFFECTIVE DATE.

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

                TITLE II--CLASSICS PROTECTION AND ACCESS

SEC. 201. 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. 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. 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. 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--UNAUTHORIZED USE OF PRE-1972 SOUND RECORDINGS

``Sec.
``1401. Unauthorized use of pre-1972 sound recordings.
``Sec. 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
                                    ``(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.--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.--
            ``(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) 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.--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 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.--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'--
                            ``(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) 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 
                                        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 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) 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) 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.
            ``(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) the rights owner has filed 
                                with the Copyright Office a schedule 
                                that specifies the title, artist, and 
                                rights owner of the sound recording and 
                                contains such other information, as 
                                practicable, as the Register of 
                                Copyrights prescribes by regulation; 
                                and
                                    ``(II) the 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.--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.--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.--
                                    ``(I) Limitation.--An award of 
                                statutory damages or of attorneys' fees 
                                under section 504 or 505 may not be 
                                made against an entity that has filed 
                                contact information for that entity 
                                under clause (i) with respect to an 
                                unauthorized 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).
            ``(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, is amended by adding at the end the following:

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

               TITLE III--ALLOCATION FOR MUSIC PRODUCERS

SEC. 301. SHORT TITLE.

    This title may be cited as the ``Allocation for Music Producers 
Act'' or the ``AMP Act''.

SEC. 302. PAYMENT OF STATUTORY PERFORMANCE ROYALTIES.

    (a) Letter of Direction.--Section 114(g) of title 17, United States 
Code, is amended by adding at the end the following:
            ``(5) Letter of direction.--
                    ``(A) In general.--A nonprofit collective 
                designated by the Copyright Royalty Judges to 
                distribute receipts from the licensing of transmissions 
                in accordance with subsection (f) shall adopt and 
                reasonably implement a policy that provides, in 
                circumstances determined by the collective to be 
                appropriate, for acceptance of instructions from 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) 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 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) 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.--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) 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) 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.--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.--Not later than 10 
                business days after the date on which the collective 
                receives from the artist payee a written objection to a 
                distribution made pursuant to subparagraph (A), the 
                collective shall cease making any further payment 
                relating to such distribution. In any case in which the 
                collective has made 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 
        common law) concerning escheatment or abandoned property, or 
        any analogous provision, that might otherwise apply.''.

SEC. 303. EFFECTIVE DATE.

    (a) In General.--Except as provided in subsection (b), this title 
and the amendments made by this title shall take effect on the date of 
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. 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.

            Attest:

                                                             Secretary.
115th CONGRESS

  2d Session

                               H.R. 1551

_______________________________________________________________________

                               AMENDMENT
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