II

103D CONGRESS

2D SESSION S. 2423

To amend the provisions of title 17, United States Code, to provide for

the auction of certain copyrights to financially support the National

Endowment for the Arts and the National Endowment for the Humanities, and for other purposes.

IN THE SENATE OF THE UNITED STATES

AUGUST 25 (legislative day, AUGUST 18), 1994

Mr. DODD (for himself, Mr. BINGAMAN, and Mr. METZENBAUM) introduced

the following bill; which was read twice and referred to the Committee

on the Judiciary

A BILL

To amend the provisions of title 17, United States Code,

to provide for the auction of certain copyrights to financially support the National Endowment for the Arts and

the National Endowment for the Humanities, and for

other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Arts Endowing the

5 Arts Act of 1994’’.
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1 SEC. 2. COPYRIGHT AUCTION FOR THE NATIONAL ENDOW2 MENTS FOR THE ARTS AND HUMANITIES.

3 (a) IN GENERAL.—The provisions of title 17, United

4 States Code, are amended by adding after chapter 9 the

5 following new chapter:

6 ‘‘CHAPTER 10—AUCTION OF CERTAIN

7 COPYRIGHTS FOR THE NATIONAL EN8 DOWMENT FOR THE ARTS AND THE

9 NATIONAL ENDOWMENT FOR THE HU10 MANITIES

‘‘Sec.

‘‘1001. Definitions.

‘‘1002. Copyrights affected.

‘‘1003. Arts and Humanities Copyright Board.

‘‘1004. Auction procedures.

‘‘1005. Registration and issuance of certificate for auction copyright.

‘‘1006. Limitation on the liability of the United States.

‘‘1007. Original copyright not affected by auction.

‘‘1008. National Endowments for the Arts and Humanities Copyright Trust

Fund.

11 ‘‘§ 1001. Definitions

12 ‘‘For purposes of this chapter—

13 ‘‘(1) the term ‘auction copyright’ means a copy14 right which is acquired under the provisions of this

15 chapter;

16 ‘‘(2) the term ‘Board’ means the Arts and Hu17 manities Copyright Board established under section

18 1003; and
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1 ‘‘(3) the term ‘Fund’ means the National En2 dowments for the Arts and Humanities Copyright

3 Trust Fund established under section 1008.

4 ‘‘§ 1002. Copyrights affected

5 ‘‘The provisions of this chapter apply to any copy6 right in a—

7 ‘‘(1) literary work;

8 ‘‘(2) sound recording;

9 ‘‘(3) work of visual art;

10 ‘‘(4) pictorial, graphic, and sculptural work; or

11 ‘‘(5) motion picture.

12 ‘‘§ 1003. Arts and Humanities Copyright Board

13 ‘‘(a) ESTABLISHMENT.—There is established the

14 Arts and Humanities Copyright Board within the Library

15 of Congress.

16 ‘‘(b) MEMBERSHIP.—The Board shall be composed of

17 9 members, appointed by the President, of whom—

18 ‘‘(1) 1 shall be selected upon the recommenda19 tion of the Chairman of the National Endowment

20 for the Arts;

21 ‘‘(2) 1 shall be selected upon the recommenda22 tion of the Chairman of the National Endowment

23 for the Humanities;

24 ‘‘(3) 1 shall be selected upon the recommenda25 tion of the Register of Copyrights;
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1 ‘‘(4) 1 shall be selected upon the recommenda2 tion of the Majority Leader of the Senate;

3 ‘‘(5) 1 shall be selected upon the recommenda4 tion of the Minority Leader of the Senate;

5 ‘‘(6) 1 shall be selected upon the recommenda6 tion of the Majority Leader of the House of Rep7 resentatives;

8 ‘‘(7) 1 shall be selected upon the recommenda9 tion of the Minority Leader of the House of Rep10 resentatives; and

11 ‘‘(8) 2 shall represent the arts community and

12 be notable for contributions to excellence in their

13 fields.

14 ‘‘(c) CHAIRMAN.—The Board shall select a chairman

15 from the members of the Board.

16 ‘‘(d) QUORUM.—A majority of the members of the

17 Board shall constitute a quorum.

18 ‘‘(e) FUNCTIONS.—The Board shall select copyrights

19 in works for auction and conduct auctions as provided

20 under this chapter.

21 ‘‘(f) COMPENSATION.—The members of the Board

22 shall receive compensation at the rate payable for a posi23 tion at level V of the Executive Schedule under section

24 5316 of title 5 for each day in the actual performance

25 of duties for the Board.
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1 ‘‘(g) TRAVEL EXPENSES.—The members of the

2 Board shall be allowed travel expenses, including per diem

3 in lieu of subsistence, at rates authorized for employees

4 of agencies under subchapter I of chapter 57 of title 5

5 while away from their homes or regular places of business

6 in the performance of services for the Board.

7 ‘‘(h) SPECIAL GOVERNMENT EMPLOYEES.—A mem8 ber of the Board shall be a special Government employee

9 as for purposes of sections 203, 204, 207, 208, and 209

10 of title 18.

11 ‘‘§ 1004. Auction procedures

12 ‘‘(a) SELECTION OF COPYRIGHTS FOR AUCTION.—

13 During the first week of January and the first week of

14 July of each year, the Board shall conduct an auction of

15 any copyright described under section 1002 selected by the

16 Board. The Board may select a copyright for an auction

17 under this chapter if—

18 ‘‘(1) the term of the copyright—

19 ‘‘(A) shall expire within 6 months after the

20 date of the auction of the copyright; and

21 ‘‘(B) is not subject to renewal and exten22 sion under this title; or

23 ‘‘(2)(A) the term of the copyright—

24 ‘‘(i) shall expire within 6 months after the

25 date of the auction of the copyright; and
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1 ‘‘(ii) is subject to renewal and extension

2 under this title; and

3 ‘‘(B) the owner of the copyright has not—

4 ‘‘(i) registered for a renewal and extension

5 of the term of such copyright; or

6 ‘‘(ii) submitted written notice to the Board

7 or the Copyright Office of an intent to renew

8 and extend the term of such copyright and the

9 Board determines that such term is subject to

10 renewal and extension.

11 ‘‘(b) COPYRIGHTS FOR AUCTION SELECTED UPON

12 BIDDER’S INITIATIVE.—The Board shall select a copy13 right for an auction if the Board—

14 ‘‘(1) receives a bid for a copyright that meets

15 all of the requirements for selection under this sec16 tion within such period as determined by the Board;

17 and

18 ‘‘(2) determines the bid is of a sufficient mini19 mum amount for the copyright.

20 ‘‘(c) COPYRIGHTS EXCLUDED FROM AUCTION.—The

21 Board may not auction a copyright in any work—

22 ‘‘(1) in which a person owned a copyright;

23 ‘‘(2) in which the term of such copyright ex24 pired without renewal and extension; and

25 ‘‘(3) that entered the public domain.
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1 ‘‘(d) NOTIFICATION.—(1) No later than 45 days be2 fore the date of an auction, the Board shall publish in

3 the Federal Register—

4 ‘‘(A) the date of the auction;

5 ‘‘(B) a description of the copyrights and works

6 relating to such copyrights to be auctioned;

7 ‘‘(C) a description of all works—

8 ‘‘(i) in which a copyright shall be auc9 tioned; and

10 ‘‘(ii) for which a bid has been submitted;

11 and

12 ‘‘(D) the minimum bids set by the Board.

13 ‘‘(2) The Board may take such other actions as nec14 essary to give public notice of the information described

15 under paragraph (1).

16 ‘‘(e) AUCTION COPYRIGHT BIDS.—(1) The Board

17 shall set a minimum amount for each bid for a copyright

18 to be auctioned. If no bid is submitted to the Board equal

19 to or greater than the minimum amount set for a copy20 right in any work, no auction copyright may be issued for

21 the work.

22 ‘‘(2) Each bid shall—

23 ‘‘(A) be sealed;

24 ‘‘(B) be submitted during such period as the

25 Board may determine; and
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1 ‘‘(C) include an amount equal to 20 percent of

2 the total amount of the submitted bid which shall be

3 deposited in the Fund.

4 ‘‘(3) A person shall be the successful bidder on a

5 copyright if such person—

6 ‘‘(A) submits the highest bid on such copyright;

7 ‘‘(B) deposits the total amount of the submitted

8 bid in the Fund; and

9 ‘‘(C) complies with such terms and conditions

10 as the Board may require.

11 ‘‘(4)(A) The Board shall pay to each person who sub12 mitted an unsuccessful bid all amounts deposited in the

13 Fund under paragraph (2)(C) with interest at a rate de14 termined under subparagraph (B).

15 ‘‘(B) For any 12-month period beginning on July 1

16 and ending on June 30 the rate determined under this

17 subparagraph is determined on the preceding June 1 and

18 is equal to the bond equivalent rate of 52-week Treasury

19 bills auctioned at the final auction held prior to such

20 June 1.

21 ‘‘§ 1005. Registration and issuance of certificate for

22 auction copyright

23 ‘‘(a) NOTIFICATION TO COPYRIGHT OFFICE.—The

24 Board shall determine the person making the successful
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1 bid for a copyright in a work at an auction and notify

2 the Copyright Office.

3 ‘‘(b) REGISTRATION AND ISSUANCE OF CERTIFI4 CATE.—After receiving notification from the Board and

5 payment of fees for a copyright claim and registration

6 under section 708(a)(1) by the person making the success7 ful bid at auction, the Register of Copyrights shall register

8 a copyright claim and issue a certificate of registration

9 to such person in accordance with section 410.

10 ‘‘(c) DURATION OF TERM.—The term of an auction

11 copyright in a work shall be for 20 years and shall begin

12 on the date following the date of the expiration of the term

13 of the copyright in such work last held under the provi14 sions of this title (other than this chapter).

15 ‘‘(d) NONRENEWAL OF AUCTION COPYRIGHT.—An

16 auction copyright may not be renewed or extended.

17 ‘‘§ 1006. Limitation on the liability of the United

18 States

19 ‘‘If a person acquires an auction copyright in a work

20 and the Copyright Royalty Tribunal or a court of the

21 United States later determines that such person is not the

22 owner of such copyright or that such copyright is invalid

23 or infringes on another copyright in such work, the liabil24 ity of the United States shall be limited to—
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1 ‘‘(1) all amounts that such person deposited in

2 the Fund for the auction copyright; and

3 ‘‘(2) interest on such amounts at the rate deter4 mined under section 1004(e)(4)(B).

5 ‘‘§ 1007. Original copyright not affected by auction

6 ‘‘The auction of a copyright in any work under this

7 chapter shall have no effect on—

8 ‘‘(1) any other copyright in such work; or

9 ‘‘(2) the rights or privileges of any owner, hold10 er, heir, or assignee of any other copyright in such

11 work.

12 ‘‘§ 1008. National Endowments for the Arts and Hu13 manities Copyright Trust Fund

14 ‘‘(a) ESTABLISHMENT.—There is established the Na15 tional Endowments for the Arts and Humanities Copy16 right Trust Fund in the Treasury of the United States.

17 ‘‘(b) DEPOSITS.—The Fund shall consist of all

18 amounts deposited by the Board from auction bids and

19 payments under section 1004 and any interest earned on

20 investment of amounts in the Fund under subsection

21 (d)(2) of this section.

22 ‘‘(c) APPROPRIATIONS FROM FUND.—The amounts

23 in the Fund shall remain in the Fund without fiscal year

24 limitation and shall be available for annual appropriation

25 by the Congress for—
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1 ‘‘(1) the support of the National Endowment

2 for the Arts and the National Endowment for the

3 Humanities; and

4 ‘‘(2) the administrative costs of carrying out

5 this chapter.

6 ‘‘(d) INVESTMENT OF FUNDS.—(1) It shall be the

7 duty of the Secretary of the Treasury to invest such por8 tion of the Fund as is not, in the Secretary’s judgment,

9 required to meet current withdrawals. Such investments

10 may be made only in interest-bearing obligations of the

11 United States or in obligations guaranteed as to both prin12 cipal and interest by the United States. For such purpose,

13 such obligations may be acquired—

14 ‘‘(A) on original issue at the issue price, or

15 ‘‘(B) by purchase of outstanding obligations at

16 the market price.

17 The purposes for which obligations of the United States

18 may be issued under chapter 31 of title 31, of the United

19 States Code, are hereby extended to authorize the issuance

20 at par of special obligations exclusively to the Fund. Such

21 special obligations shall bear interest at a rate equal to

22 the average rate of interest, computed as to the end of

23 the calendar month next preceding the date of such issue,

24 borne by all marketable interest-bearing obligations of the

25 United States then forming a part of the Public Debt; ex-
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1 cept that where such average rate is not a multiple of one2 eighth of 1 percent, the rate of interest of such special

3 obligations shall be the multiple of one-eighth of 1 percent

4 next lower than such average rate. Such special obligations

5 shall be issued only if the Secretary of the Treasury deter6 mines that the purchase of other interest-bearing obliga7 tions of the United States, or of obligations guaranteed

8 as to both principal and interest by the United States on

9 original issue or at the market price, is not in the public

10 interest.

11 ‘‘(2) Any obligation acquired by the Fund (except

12 special obligations issued exclusively to the Fund) may be

13 sold by the Secretary of the Treasury at the market price,

14 and such special obligations may be redeemed at par plus

15 accrued interest.

16 ‘‘(3) The interest on, and the proceeds from the sale

17 or redemption of, any obligations held in the Fund shall

18 be credited to and form a part of the Fund.’’.

19 (b) TECHNICAL AND CONFORMING AMENDMENT.—

20 The table of chapters for title 17, United States Code,

21 is amended by adding after the item relating to item 9

22 the following new item:

‘‘10. Auction of certain copyrights for the National Endowment for the Arts and the National Endowment for the Humanities ............................ 1001.’’.
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1 SEC. 3. EFFECTIVE DATE.

2 (a) IN GENERAL.—Except as provided under sub3 section (b), the provisions of this Act and the amendments

4 made by this Act shall take effect 30 days after the date

5 of the enactment of this Act.

6 (b) FIRST AUCTION.—The Arts and Humanities

7 Copyright Board established under chapter 10 of title 17,

8 United States Code, as added by this Act, shall determine

9 the date of the first copyright auction, except such auction

10 shall occur—

11 (1) during the first week of January or July;

12 and

13 (2) no later than 18 months after the date of

14 the enactment of this Act.

Æ