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[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 2823 Reported in Senate (RS)]

<DOC>

                                                       Calendar No. 569
115th CONGRESS
  2d Session
                                S. 2823

          To modernize copyright law, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                              May 10, 2018

 Mr. Hatch (for himself, Mr. Grassley, Mr. Whitehouse, Mr. Alexander, 
    Mr. Coons, Mr. Kennedy, Ms. Harris, Mr. Corker, Mr. Durbin, Mr. 
Isakson, Mr. Leahy, Mr. Crapo, Mr. Jones, Mr. Tillis, Mr. Perdue, Mrs. 
 Capito, Mr. Nelson, Mr. Blunt, Mr. Wicker, Mr. Brown, Mr. Bennet, Mr. 
 Blumenthal, Mr. Cassidy, Mr. Kaine, Mrs. Hyde-Smith, Ms. Hirono, Ms. 
Cortez Masto, Mr. Roberts, Mrs. McCaskill, Mrs. Murray, Ms. Klobuchar, 
 Mr. Booker, Mr. Schatz, Mr. Manchin, Mrs. Feinstein, Mr. Daines, Ms. 
   Heitkamp, Mr. Van Hollen, Mrs. Ernst, Mr. Young, Ms. Hassan, Mr. 
   Inhofe, Mr. Thune, Mr. Burr, Mr. Rounds, Mr. Risch, Mr. Enzi, Mr. 
     Moran, Mr. Scott, Ms. Baldwin, Mrs. Fischer, Ms. Smith, Mrs. 
 Gillibrand, Ms. Collins, Mrs. Shaheen, Mr. Boozman, Mr. Barrasso, Ms. 
 Murkowski, Mr. Markey, Mr. Peters, Mr. Hoeven, Mr. King, Mr. Portman, 
 Mr. Cardin, Ms. Duckworth, Mr. Gardner, Mr. Rubio, Ms. Stabenow, Mr. 
  Sullivan, Mr. Lankford, Mr. Johnson, Mr. Heinrich, Mr. Tester, Mr. 
Warner, Mr. Donnelly, and Ms. Cantwell) introduced the following bill; 
  which was read twice and referred to the Committee on the Judiciary

                           September 12, 2018

              Reported by Mr. Grassley, with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

_______________________________________________________________________

                                 A BILL

 
          To modernize copyright law, and for other purposes.

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

<DELETED>SECTION 1. SHORT TITLE; TABLE OF CONTENTS.</DELETED>

<DELETED>    (a) Short Title.--This Act may be cited as the ``Music 
Modernization Act''.</DELETED>
<DELETED>    (b) Table of Contents.--The table of contents for this Act 
is as follows:</DELETED>

<DELETED>Sec. 1. Short title; table of contents.
<DELETED>Sec. 2. Rescission of unobligated balances in the Department 
                            of Justice Assets Forfeiture Fund.
            <DELETED>TITLE I--MUSIC LICENSING MODERNIZATION

<DELETED>Sec. 101. Short title.
<DELETED>Sec. 102. Blanket license for digital uses and mechanical 
                            licensing collective.
<DELETED>Sec. 103. Amendments to section 114.
<DELETED>Sec. 104. Random assignment of rate court proceedings.
    <DELETED>TITLE II--COMPENSATING LEGACY ARTISTS FOR THEIR SONGS, 
            SERVICE, AND IMPORTANT CONTRIBUTIONS TO SOCIETY

<DELETED>Sec. 201. Short title.
<DELETED>Sec. 202. Unauthorized digital performance of pre-1972 sound 
                            recordings.
<DELETED>Sec. 203. Effective date.
           <DELETED>TITLE III--ALLOCATION FOR MUSIC PRODUCERS

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

<DELETED>SEC. 2. RESCISSION OF UNOBLIGATED BALANCES IN THE DEPARTMENT 
              OF JUSTICE ASSETS FORFEITURE FUND.</DELETED>

<DELETED>    Of the unobligated balances available under the Department 
of Justice Assets Forfeiture Fund, $47,000,000 is hereby permanently 
rescinded.</DELETED>

       <DELETED>TITLE I--MUSIC LICENSING MODERNIZATION</DELETED>

<DELETED>SEC. 101. SHORT TITLE.</DELETED>

<DELETED>    This title may be cited as the ``Musical Works 
Modernization Act''.</DELETED>

<DELETED>SEC. 102. BLANKET LICENSE FOR DIGITAL USES AND MECHANICAL 
              LICENSING COLLECTIVE.</DELETED>

<DELETED>    (a) Amendment.--Section 115 of title 17, United States 
Code, is amended--</DELETED>
        <DELETED>    (1) in subsection (a)--</DELETED>
                <DELETED>    (A) by inserting ``in General'' after 
                ``Availability and Scope of Compulsory 
                License'';</DELETED>
                <DELETED>    (B) by striking paragraph (1) and 
                inserting the following new paragraph:</DELETED>
        <DELETED>    ``(1) Eligibility for compulsory license.--
        </DELETED>
                <DELETED>    ``(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--</DELETED>
                        <DELETED>    ``(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</DELETED>
                        <DELETED>    ``(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--</DELETED>
                                <DELETED>    ``(I) the first fixation 
                                of such sound recording was made under 
                                the authority of the musical work 
                                copyright owner, and 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</DELETED>
                                <DELETED>    ``(II) the sound recording 
                                copyright owner or its authorized 
                                distributor has authorized the digital 
                                music provider to make and distribute 
                                digital phonorecord deliveries of the 
                                sound recording to the public in the 
                                United States.</DELETED>
                <DELETED>    ``(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--</DELETED>
                        <DELETED>    ``(i) such sound recording was 
                        fixed lawfully; and</DELETED>
                        <DELETED>    ``(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</DELETED>
                <DELETED>    (C) in paragraph (2), by striking ``A 
                compulsory license'' and inserting ``Musical 
                arrangement.--A compulsory license'';</DELETED>
        <DELETED>    (2) by striking subsection (b) and inserting the 
        following:</DELETED>
<DELETED>    ``(b) Procedures To Obtain a Compulsory License.--
</DELETED>
        <DELETED>    ``(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 within 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.</DELETED>
        <DELETED>    ``(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--</DELETED>
                <DELETED>    ``(A) prior to the license availability 
                date, shall, before or within 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</DELETED>
                <DELETED>    ``(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).</DELETED>
        <DELETED>    ``(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).</DELETED>
        <DELETED>    ``(4) Failure to obtain license.--</DELETED>
                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(B) Digital phonorecord deliveries.--
                </DELETED>
                        <DELETED>    ``(i) In the case of phonorecords 
                        made and distributed by means of digital 
                        phonorecord delivery:</DELETED>
                                <DELETED>    ``(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.</DELETED>
                                <DELETED>    ``(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.</DELETED>
                        <DELETED>    ``(ii) In either case described in 
                        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.'';</DELETED>
        <DELETED>    (3) by amending subsection (c) to read as 
        follows:</DELETED>
<DELETED>    ``(c) General Conditions Applicable to Compulsory 
License.--</DELETED>
        <DELETED>    ``(1) Royalty payable under compulsory license.--
        </DELETED>
                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(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) and 
                paragraph (2)(A) and chapter 8 of this title. 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.</DELETED>
                <DELETED>    ``(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) and 
                paragraph (2)(A) and chapter 8 of this title.</DELETED>
                <DELETED>    ``(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 and subparagraphs 
                (E) and (F) and paragraph (2)(A) and chapter 8 of this 
                title shall next be determined.</DELETED>
                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(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--</DELETED>
                        <DELETED>    ``(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</DELETED>
                        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(2) Additional terms and conditions.--</DELETED>
                <DELETED>    ``(A) Voluntary licenses and contractual 
                royalty rates.--</DELETED>
                        <DELETED>    ``(i) 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.</DELETED>
                        <DELETED>    ``(ii) The second sentence of 
                        clause (i) shall not apply to--</DELETED>
                                <DELETED>    ``(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</DELETED>
                                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(B) Sound recording information.--Except 
                as provided in section 1002(e) of this title, 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.</DELETED>
                <DELETED>    ``(C) Infringement remedies.--</DELETED>
                        <DELETED>    ``(i) 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--</DELETED>
                                <DELETED>    ``(I) the digital 
                                phonorecord delivery has been 
                                authorized by the sound recording 
                                copyright owner; and</DELETED>
                                <DELETED>    ``(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.</DELETED>
                        <DELETED>    ``(ii) 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).</DELETED>
                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(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 sections 106(4) and 106(6), (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 sections 106(1) and 
                106(3), 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 either 
                before or after the date of enactment of the Digital 
                Performance Right in Sound Recordings Act of 
                1995.</DELETED>
                <DELETED>    ``(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 section 106(1) through (5) with 
                respect to such transmissions and 
                retransmissions.</DELETED>
                <DELETED>    ``(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 clause.</DELETED>
                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(J) Notice of default and termination of 
                compulsory license.--In the case of a license obtained 
                under subsection (b)(1), (b)(2)(A), or (b)(3), 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 within 30 days 
                from the date of the notice, 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).'';</DELETED>
        <DELETED>    (4) by amending subsection (d) to read as 
        follows:</DELETED>
<DELETED>    ``(d) Blanket License for Digital Uses, Mechanical 
Licensing Collective, and Digital Licensee Coordinator.--</DELETED>
        <DELETED>    ``(1) Blanket license for digital uses.--
        </DELETED>
                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(B) Included activities.--A blanket 
                license--</DELETED>
                        <DELETED>    ``(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);</DELETED>
                        <DELETED>    ``(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</DELETED>
                        <DELETED>    ``(iii) does not cover or include 
                        any rights or uses other than those described 
                        in clauses (i) and (ii).</DELETED>
                <DELETED>    ``(C) Other licenses.--A voluntary license 
                for covered activities entered into by or under the 
                authority of one or more copyright owners and one 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:</DELETED>
                        <DELETED>    ``(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.</DELETED>
                        <DELETED>    ``(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).</DELETED>
                        <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(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).</DELETED>
                <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(2) Availability of blanket license.--</DELETED>
                <DELETED>    ``(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:</DELETED>
                        <DELETED>    ``(i) The notice of license shall 
                        comply in form and substance with requirements 
                        that the Register of Copyrights shall establish 
                        by regulation.</DELETED>
                        <DELETED>    ``(ii) Unless rejected in writing 
                        by the mechanical licensing collective within 
                        30 calendar days after receipt, the blanket 
                        license shall be effective as of the date the 
                        notice of license was sent by the digital music 
                        provider as shown by a physical or electronic 
                        record.</DELETED>
                        <DELETED>    ``(iii) A notice of license may 
                        only be rejected by the mechanical licensing 
                        collective if--</DELETED>
                                <DELETED>    ``(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</DELETED>
                                <DELETED>    ``(II) the digital music 
                                provider has had a blanket license 
                                terminated by the mechanical licensing 
                                collective within the past 3 years 
                                pursuant to paragraph (4)(E).</DELETED>
                        <DELETED>    ``(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.</DELETED>
                        <DELETED>    ``(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 
                        Federal district court. 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.</DELETED>
                <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(3) Mechanical licensing collective.--</DELETED>
                <DELETED>    ``(A) In general.--The mechanical 
                licensing collective shall be a single entity that--
                </DELETED>
                        <DELETED>    ``(i) is a nonprofit, not owned by 
                        any other entity, that is created by copyright 
                        owners to carry out responsibilities under this 
                        subsection;</DELETED>
                        <DELETED>    ``(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;</DELETED>
                        <DELETED>    ``(iii) is able to demonstrate to 
                        the Register of Copyrights that it 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</DELETED>
                        <DELETED>    ``(iv) has been designated by the 
                        Register of Copyrights in accordance with 
                        subparagraph (B).</DELETED>
                <DELETED>    ``(B) Designation of mechanical licensing 
                collective.--</DELETED>
                        <DELETED>    ``(i) Initial designation.--The 
                        Register of Copyrights shall initially 
                        designate the mechanical licensing collective 
                        within 9 months after the enactment date as 
                        follows:</DELETED>
                                <DELETED>    ``(I) Within 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).</DELETED>
                                <DELETED>    ``(II) After reviewing the 
                                information requested under subclause 
                                (I) and making a designation, the 
                                Register shall publish notice in the 
                                Federal Register setting forth the 
                                identity of and contact information for 
                                the mechanical licensing 
                                collective.</DELETED>
                        <DELETED>    ``(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:</DELETED>
                                <DELETED>    ``(I) The Register shall, 
                                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, with 
                                any new designation to be effective as 
                                of the first day of a month that is no 
                                less than 6 months and no longer than 9 
                                months after the date of publication of 
                                such notice, as specified by the 
                                Register.</DELETED>
                                <DELETED>    ``(II) If a new entity is 
                                designated as a mechanical licensing 
                                collective, the Register shall adopt 
                                regulations to govern the transfer of 
                                licenses, funds, records, data, and 
                                administrative responsibilities from 
                                the existing mechanical licensing 
                                collective to the new entity.</DELETED>
                        <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(C) Authorities and functions.--
                </DELETED>
                        <DELETED>    ``(i) In general.--The mechanical 
                        licensing collective is authorized to perform 
                        the following functions, subject to more 
                        particular requirements as described in this 
                        subsection:</DELETED>
                                <DELETED>    ``(I) Offer and administer 
                                blanket licenses, including receipt of 
                                notices of license and reports of usage 
                                from digital music providers.</DELETED>
                                <DELETED>    ``(II) Collect and 
                                distribute royalties from digital music 
                                providers for covered 
                                activities.</DELETED>
                                <DELETED>    ``(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).</DELETED>
                                <DELETED>    ``(IV) Maintain the 
                                musical works database and other 
                                information relevant to the 
                                administration of licensing activities 
                                under this section.</DELETED>
                                <DELETED>    ``(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.</DELETED>
                                <DELETED>    ``(VI) Administer 
                                collections of the administrative 
                                assessment from digital music providers 
                                and significant nonblanket licensees, 
                                including receipt of notices of 
                                nonblanket activity.</DELETED>
                                <DELETED>    ``(VII) Invest in relevant 
                                resources, and arrange for services of 
                                outside vendors and others, to support 
                                its activities.</DELETED>
                                <DELETED>    ``(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.</DELETED>
                                <DELETED>    ``(IX) Initiate and 
                                participate in proceedings before the 
                                Copyright Royalty Judges to establish 
                                the administrative assessment under 
                                this subsection.</DELETED>
                                <DELETED>    ``(X) Initiate and 
                                participate in proceedings before the 
                                Copyright Office with respect to 
                                activities under this 
                                subsection.</DELETED>
                                <DELETED>    ``(XI) Gather and provide 
                                documentation for use in proceedings 
                                before the Copyright Royalty Judges to 
                                set rates and terms under this 
                                section.</DELETED>
                                <DELETED>    ``(XII) Maintain records 
                                of its activities and engage in and 
                                respond to audits described under this 
                                subsection.</DELETED>
                                <DELETED>    ``(XIII) Engage in such 
                                other activities as may be necessary or 
                                appropriate to fulfill its 
                                responsibilities under this 
                                subsection.</DELETED>
                        <DELETED>    ``(ii) Additional administrative 
                        activities.--Subject to paragraph (11)(C) and 
                        clause (iii), the mechanical licensing 
                        collective may also administer, or assist in 
                        administering, voluntary licenses issued by or 
                        individual download licenses obtained from 
                        copyright owners for uses of musical works, for 
                        which the mechanical licensing collective shall 
                        charge reasonable fees for such 
                        services.</DELETED>
                        <DELETED>    ``(iii) Restriction concerning 
                        public performance rights.--The mechanical 
                        licensing collective may, pursuant to clause 
                        (ii), provide administration services with 
                        respect to voluntary licenses that include the 
                        right of public performance in musical works, 
                        but may not itself negotiate or grant licenses 
                        for the right of public performance in musical 
                        works, and may not be the exclusive or 
                        nonexclusive assignee or grantee of the right 
                        of public performance in musical 
                        works.</DELETED>
                        <DELETED>    ``(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).</DELETED>
                <DELETED>    ``(D) Governance.--</DELETED>
                        <DELETED>    ``(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:</DELETED>
                                <DELETED>    ``(I) Ten voting members 
                                shall be representatives of music 
                                publishers to which songwriters have 
                                assigned exclusive rights of 
                                reproduction and distribution of 
                                musical works with respect to covered 
                                activities and no such music publisher 
                                member may be owned by, or under common 
                                control with, any other board 
                                member.</DELETED>
                                <DELETED>    ``(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.</DELETED>
                                <DELETED>    ``(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 over the 
                                preceding 3 full calendar 
                                years.</DELETED>
                                <DELETED>    ``(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.</DELETED>
                                <DELETED>    ``(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.</DELETED>
                        <DELETED>    ``(ii) Board meetings.--The board 
                        of directors shall meet no less than two times 
                        per year and discuss matters pertinent to the 
                        operations, including the mechanical licensing 
                        collective budget.</DELETED>
                        <DELETED>    ``(iii) Operations advisory 
                        committee.--The board of directors of the 
                        mechanical licensing collective shall establish 
                        an operations advisory committee consisting of 
                        no fewer than six 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--</DELETED>
                                <DELETED>    ``(I) musical work 
                                copyright owners who are appointed by 
                                the board of directors of the 
                                mechanical licensing collective; 
                                and</DELETED>
                                <DELETED>    ``(II) representatives of 
                                digital music providers who are 
                                appointed by the digital licensee 
                                coordinator.</DELETED>
                        <DELETED>    ``(iv) 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.</DELETED>
                        <DELETED>    ``(v) Dispute resolution 
                        committee.--The board of directors of the 
                        mechanical licensing collective shall establish 
                        and appoint a dispute resolution committee 
                        consisting of no fewer than six members, which 
                        committee shall include an equal number of 
                        representatives of musical work copyright 
                        owners and professional songwriters.</DELETED>
                        <DELETED>    ``(vi) Mechanical licensing 
                        collective annual report.--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 at least 3 years, an 
                        annual report that sets forth how the 
                        collective operates, how royalties are 
                        collected and distributed, and the collective 
                        total costs for the preceding calendar year. At 
                        the time of posting, a copy of the report shall 
                        be provided to the Register of 
                        Copyrights.</DELETED>
                <DELETED>    ``(E) Musical works database.--</DELETED>
                        <DELETED>    ``(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.</DELETED>
                        <DELETED>    ``(ii) Matched works.--With 
                        respect to musical works (and shares thereof) 
                        that have been matched to copyright owners, the 
                        musical works database shall include--
                        </DELETED>
                                <DELETED>    ``(I) the title of the 
                                musical work;</DELETED>
                                <DELETED>    ``(II) the copyright owner 
                                of the work (or share thereof), and 
                                such owner's ownership 
                                percentage;</DELETED>
                                <DELETED>    ``(III) contact 
                                information for such copyright 
                                owner;</DELETED>
                                <DELETED>    ``(IV) to the extent 
                                reasonably available to the mechanical 
                                licensing collective--</DELETED>
                                        <DELETED>    ``(aa) the 
                                        international standard musical 
                                        work code for the work; 
                                        and</DELETED>
                                        <DELETED>    ``(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</DELETED>
                                <DELETED>    ``(V) such other 
                                information as the Register of 
                                Copyrights may prescribe by 
                                regulation.</DELETED>
                        <DELETED>    ``(iii) Unmatched works.--With 
                        respect to unmatched musical works (and shares 
                        of works) in the database, the musical works 
                        database shall include--</DELETED>
                                <DELETED>    ``(I) to the extent 
                                reasonably available to the mechanical 
                                licensing collective--</DELETED>
                                        <DELETED>    ``(aa) the title 
                                        of the musical work;</DELETED>
                                        <DELETED>    ``(bb) the 
                                        ownership percentage for which 
                                        an owner has not been 
                                        identified;</DELETED>
                                        <DELETED>    ``(cc) if a 
                                        copyright owner has been 
                                        identified but not located, the 
                                        identity of such owner and such 
                                        owner's ownership 
                                        percentage;</DELETED>
                                        <DELETED>    ``(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</DELETED>
                                        <DELETED>    ``(ee) any 
                                        additional information reported 
                                        to the mechanical licensing 
                                        collective that may assist in 
                                        identifying the work; 
                                        and</DELETED>
                                <DELETED>    ``(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.</DELETED>
                        <DELETED>    ``(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.</DELETED>
                        <DELETED>    ``(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:</DELETED>
                                <DELETED>    ``(I) Digital music 
                                providers operating under the authority 
                                of valid notices of license, free of 
                                charge.</DELETED>
                                <DELETED>    ``(II) Significant 
                                nonblanket licensees in compliance with 
                                their obligations under paragraph (6), 
                                free of charge.</DELETED>
                                <DELETED>    ``(III) Authorized vendors 
                                of the entities described in subclauses 
                                (I) and (II), free of charge.</DELETED>
                                <DELETED>    ``(IV) The Register of 
                                Copyrights, free of charge (but the 
                                Register shall not treat such database 
                                or any information therein as a 
                                Government record).</DELETED>
                                <DELETED>    ``(V) Any member of the 
                                public, for a fee not to exceed the 
                                marginal cost to the mechanical 
                                licensing collective of providing the 
                                database to such person.</DELETED>
                        <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(F) Notices of license and nonblanket 
                activity.--</DELETED>
                        <DELETED>    ``(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.</DELETED>
                        <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(G) Collection and distribution of 
                royalties.--</DELETED>
                        <DELETED>    ``(i) In general.--Upon receiving 
                        reports of usage and payments of royalties from 
                        digital music providers for covered activities, 
                        the mechanical licensing collective shall--
                        </DELETED>
                                <DELETED>    ``(I) engage in efforts 
                                to--</DELETED>
                                        <DELETED>    ``(aa) identify 
                                        the musical works embodied in 
                                        sound recordings reflected in 
                                        such reports, and the copyright 
                                        owners of such musical works 
                                        (and shares thereof);</DELETED>
                                        <DELETED>    ``(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</DELETED>
                                        <DELETED>    ``(cc) confirm 
                                        proper payment of royalties 
                                        due;</DELETED>
                                <DELETED>    ``(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</DELETED>
                                <DELETED>    ``(III) deposit into an 
                                interest-bearing account, as provided 
                                in subparagraph (H)(ii), royalties that 
                                cannot be distributed due to--
                                </DELETED>
                                        <DELETED>    ``(aa) an 
                                        inability to identify or locate 
                                        a copyright owner of a musical 
                                        work (or share thereof); 
                                        or</DELETED>
                                        <DELETED>    ``(bb) a pending 
                                        dispute before the dispute 
                                        resolution committee of the 
                                        mechanical licensing 
                                        collective.</DELETED>
                        <DELETED>    ``(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).</DELETED>
                <DELETED>    ``(H) Holding of accrued royalties.--
                </DELETED>
                        <DELETED>    ``(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 at least 3 years 
                        after the date on which the funds were received 
                        by the mechanical licensing collective, or at 
                        least 3 years after the date on which they 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.</DELETED>
                        <DELETED>    ``(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 at 
                        the Federal, short-term rate, such interest to 
                        accrue for the benefit of copyright owners 
                        entitled to payment of such accrued 
                        royalties.</DELETED>
                <DELETED>    ``(I) Musical works claiming process.--The 
                mechanical licensing collective shall publicize the 
                existence of accrued royalties for unmatched musical 
                works (and shares of such works) within 6 months of 
                receiving a transfer of accrued royalties for such 
                works by publicly listing the works and the procedures 
                by which copyright owners may identify themselves and 
                provide ownership, contact, and other relevant 
                information to the mechanical licensing collective in 
                order to receive payment of accrued royalties. 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--</DELETED>
                        <DELETED>    ``(i) update the musical works 
                        database and its other records accordingly; 
                        and</DELETED>
                        <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(J) Distribution of unclaimed accrued 
                royalties.--</DELETED>
                        <DELETED>    ``(i) Distribution procedures.--
                        After the expiration of the prescribed holding 
                        period for accrued royalties provided in 
                        paragraph (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):</DELETED>
                                <DELETED>    ``(I) The first such 
                                distribution shall occur on or after 
                                July 1 of the first full calendar year 
                                to commence after the license 
                                availability date, with at least one 
                                such distribution to take place during 
                                each calendar year 
                                thereafter.</DELETED>
                                <DELETED>    ``(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 by royalty payments made by 
                                digital music providers for covered 
                                activities for the periods in question, 
                                including, in addition to royalty 
                                payments made to the mechanical 
                                licensing collective, royalty payments 
                                made 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--</DELETED>
                                        <DELETED>    ``(aa) the 
                                        mechanical licensing collective 
                                        may require copyright owners 
                                        seeking distributions of 
                                        unclaimed accrued royalties to 
                                        provide, or direct the 
                                        provision of, information 
                                        concerning royalties received 
                                        under voluntary licenses and 
                                        individual download licenses 
                                        for covered activities; 
                                        and</DELETED>
                                        <DELETED>    ``(bb) the 
                                        mechanical licensing collective 
                                        shall take appropriate steps to 
                                        safeguard the confidentiality 
                                        and security of 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).</DELETED>
                        <DELETED>    ``(ii) Establishment of 
                        distribution policies.--The unclaimed royalties 
                        oversight committee established under paragraph 
                        (3)(D)(iv) 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.</DELETED>
                        <DELETED>    ``(iii) Advance notice of 
                        distributions.--The mechanical licensing 
                        collective shall publicize a pending 
                        distribution of unclaimed accrued royalties and 
                        accrued interest at least 90 calendar days in 
                        advance of such distribution.</DELETED>
                        <DELETED>    ``(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--
                        </DELETED>
                                <DELETED>    ``(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</DELETED>
                                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(K) Dispute resolution.--The dispute 
                resolution committee established under paragraph 
                (3)(D)(v) shall address and resolve in a timely and 
                equitable manner disputes among copyright owners 
                relating to ownership interests in musical works 
                licensed under this section and allocation and 
                distribution of royalties by the mechanical licensing 
                collective, according to a process approved by the 
                board of directors of the mechanical licensing 
                collective. Such process--</DELETED>
                        <DELETED>    ``(i) shall include a mechanism to 
                        hold disputed funds in accordance with the 
                        requirements described in subparagraph (H)(ii) 
                        pending resolution of the dispute; 
                        and</DELETED>
                        <DELETED>    ``(ii) except as provided in 
                        paragraph (11)(D), 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.</DELETED>
                <DELETED>    ``(L) Verification of payments by 
                mechanical licensing collective.--</DELETED>
                        <DELETED>    ``(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:</DELETED>
                                <DELETED>    ``(I) A copyright owner 
                                may audit the mechanical licensing 
                                collective only once in a year for any 
                                or all of the prior 3 calendar years, 
                                and may not audit records for any 
                                calendar year more than once.</DELETED>
                                <DELETED>    ``(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).</DELETED>
                                <DELETED>    ``(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.</DELETED>
                                <DELETED>    ``(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 within 45 calendar 
                                days after receipt.</DELETED>
                                <DELETED>    ``(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, but 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.</DELETED>
                                <DELETED>    ``(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(s) 
                                shall refund overpaid amounts to the 
                                mechanical licensing collective, as 
                                appropriate.</DELETED>
                        <DELETED>    ``(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 
                        herein, but a notice of the audit shall be 
                        provided to and published by the Copyright 
                        Office as described in clause 
                        (i)(IV).</DELETED>
                <DELETED>    ``(M) Records of mechanical licensing 
                collective.--</DELETED>
                        <DELETED>    ``(i) Records maintenance.--The 
                        mechanical licensing collective shall ensure 
                        that all material records of its operations, 
                        including those relating to notices of license, 
                        the administration of its claims process, 
                        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 no less than 7 years 
                        after the date of creation or receipt, 
                        whichever occurs later.</DELETED>
                        <DELETED>    ``(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 such owner or the owner's authorized 
                        representative.</DELETED>
        <DELETED>    ``(4) Terms and conditions of blanket license.--A 
        blanket license is subject to, and conditioned upon, the 
        following requirements:</DELETED>
                <DELETED>    ``(A) Royalty reporting and payments.--
                </DELETED>
                        <DELETED>    ``(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), but the monthly 
                        reporting shall be due 45 calendar days, rather 
                        than 20 calendar days, after the end of the 
                        monthly reporting period.</DELETED>
                        <DELETED>    ``(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--
                        </DELETED>
                                <DELETED>    ``(I) with respect to each 
                                sound recording embodying a musical 
                                work--</DELETED>
                                        <DELETED>    ``(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), 
                                        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;</DELETED>
                                        <DELETED>    ``(bb) to the 
                                        extent acquired by the digital 
                                        music provider in the metadata 
                                        in connection with its 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</DELETED>
                                        <DELETED>    ``(cc) provide the 
                                        number of digital phonorecord 
                                        deliveries of the sound 
                                        recording, including limited 
                                        downloads and interactive 
                                        streams;</DELETED>
                                <DELETED>    ``(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</DELETED>
                                <DELETED>    ``(III) provide such other 
                                information as the Register of 
                                Copyrights shall require by 
                                regulation.</DELETED>
                        <DELETED>    ``(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.</DELETED>
                        <DELETED>    ``(iv) Adoption of regulations.--
                        The Register shall adopt regulations--
                        </DELETED>
                                <DELETED>    ``(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</DELETED>
                                <DELETED>    ``(II) regarding 
                                adjustments to reports of usage by 
                                digital music providers, including 
                                mechanisms to account for overpayment 
                                and underpayment of royalties in prior 
                                periods.</DELETED>
                <DELETED>    ``(B) Collection of sound recording 
                information.--A digital music provider shall engage in 
                good-faith, commercially reasonable efforts to obtain 
                from copyright owners of sound recordings made 
                available through the service of such digital music 
                provider--</DELETED>
                        <DELETED>    ``(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</DELETED>
                        <DELETED>    ``(ii) information concerning the 
                        authorship and ownership of musical works, 
                        including songwriters, publisher names, 
                        ownership shares, and international standard 
                        musical work codes.</DELETED>
                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(D) Verification of payments by digital 
                music providers.--</DELETED>
                        <DELETED>    ``(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:</DELETED>
                                <DELETED>    ``(I) The mechanical 
                                licensing collective may commence an 
                                audit of a digital music provider no 
                                more than once in any 3-calendar-year 
                                period to cover a verification period 
                                of no 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.</DELETED>
                                <DELETED>    ``(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).</DELETED>
                                <DELETED>    ``(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.</DELETED>
                                <DELETED>    ``(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 within 45 calendar 
                                days after receipt.</DELETED>
                                <DELETED>    ``(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, but 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.</DELETED>
                                <DELETED>    ``(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 10 percent or more, 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.</DELETED>
                                <DELETED>    ``(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 no more 
                                than 6 years after the commencement of 
                                the audit that is the basis for such 
                                action.</DELETED>
                        <DELETED>    ``(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 
                        herein, but a notice of the audit shall be 
                        provided to and published by the Copyright 
                        Office as described in clause 
                        (i)(IV).</DELETED>
                <DELETED>    ``(E) Default under blanket license.--
                </DELETED>
                        <DELETED>    ``(i) Conditions of default.--A 
                        digital music provider shall be in default 
                        under a blanket license if the digital music 
                        provider--</DELETED>
                                <DELETED>    ``(I) fails to provide one 
                                or more monthly reports of usage to the 
                                mechanical licensing collective when 
                                due;</DELETED>
                                <DELETED>    ``(II) fails to make a 
                                monthly royalty or late fee payment to 
                                the mechanical licensing collective 
                                when due, in all or material 
                                part;</DELETED>
                                <DELETED>    ``(III) provides one 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;</DELETED>
                                <DELETED>    ``(IV) fails to pay the 
                                administrative assessment as required 
                                under this subsection and applicable 
                                regulations; or</DELETED>
                                <DELETED>    ``(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 60 
                                calendar days or longer.</DELETED>
                        <DELETED>    ``(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:</DELETED>
                                <DELETED>    ``(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 
                                within 60 calendar days after the date 
                                of the notice, the blanket license will 
                                automatically terminate at the end of 
                                that period.</DELETED>
                                <DELETED>    ``(II) If the digital 
                                music provider fails to remedy the 
                                default within the 60-day period 
                                referenced 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.</DELETED>
                        <DELETED>    ``(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.</DELETED>
                        <DELETED>    ``(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 Federal district 
                        court. 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.</DELETED>
        <DELETED>    ``(5) Digital licensee coordinator.--</DELETED>
                <DELETED>    ``(A) In general.--The digital licensee 
                coordinator shall be a single entity that--</DELETED>
                        <DELETED>    ``(i) is a nonprofit, not owned by 
                        any other entity, that is created to carry out 
                        responsibilities under this 
                        subsection;</DELETED>
                        <DELETED>    ``(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;</DELETED>
                        <DELETED>    ``(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</DELETED>
                        <DELETED>    ``(iv) has been designated by the 
                        Register of Copyrights in accordance with 
                        subparagraph (B).</DELETED>
                <DELETED>    ``(B) Designation of digital licensee 
                coordinator.--</DELETED>
                        <DELETED>    ``(i) Initial designation.--The 
                        Register of Copyrights shall initially 
                        designate the digital licensee coordinator 
                        within 9 months after the enactment date, in 
                        accordance with the same procedure described 
                        for designation of the mechanical licensing 
                        collective in paragraph (3)(B)(i).</DELETED>
                        <DELETED>    ``(ii) Periodic review of 
                        designation.--Following the initial designation 
                        of the digital licensee coordinator, the 
                        Register 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).</DELETED>
                        <DELETED>    ``(iii) Inability to designate.--
                        If the Register 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 Register's determination 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.</DELETED>
                <DELETED>    ``(C) Authorities and functions.--
                </DELETED>
                        <DELETED>    ``(i) In general.--The digital 
                        licensee coordinator is authorized to perform 
                        the following functions, subject to more 
                        particular requirements as described in this 
                        subsection:</DELETED>
                                <DELETED>    ``(I) Establish a 
                                governance structure, criteria for 
                                membership, and any dues to be paid by 
                                its members.</DELETED>
                                <DELETED>    ``(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.</DELETED>
                                <DELETED>    ``(III) Initiate and 
                                participate in proceedings before the 
                                Copyright Royalty Judges to establish 
                                the administrative assessment under 
                                this subsection.</DELETED>
                                <DELETED>    ``(IV) Initiate and 
                                participate in proceedings before the 
                                Copyright Office with respect to 
                                activities under this 
                                subsection.</DELETED>
                                <DELETED>    ``(V) Gather and provide 
                                documentation for use in proceedings 
                                before the Copyright Royalty Judges to 
                                set rates and terms under this 
                                section.</DELETED>
                                <DELETED>    ``(VI) Maintain records of 
                                its activities.</DELETED>
                                <DELETED>    ``(VII) Engage in such 
                                other activities as may be necessary or 
                                appropriate to fulfill its 
                                responsibilities under this 
                                subsection.</DELETED>
                        <DELETED>    ``(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).</DELETED>
        <DELETED>    ``(6) Requirements for significant nonblanket 
        licensees.--</DELETED>
                <DELETED>    ``(A) In general.--</DELETED>
                        <DELETED>    ``(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.</DELETED>
                        <DELETED>    ``(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.</DELETED>
                        <DELETED>    ``(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).</DELETED>
                <DELETED>    ``(B) Reporting by mechanical licensing 
                collective to digital licensee coordinator.--</DELETED>
                        <DELETED>    ``(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).</DELETED>
                        <DELETED>    ``(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).</DELETED>
                <DELETED>    ``(C) Legal enforcement efforts.--
                </DELETED>
                        <DELETED>    ``(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 Federal district court 
                        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 deems 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.</DELETED>
                        <DELETED>    ``(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).</DELETED>
                        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(7) Funding of mechanical licensing 
        collective.--</DELETED>
                <DELETED>    ``(A) In general.--The collective total 
                costs shall be funded by--</DELETED>
                        <DELETED>    ``(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--</DELETED>
                                <DELETED>    ``(I) digital music 
                                providers that are engaged, in all or 
                                in part, in covered activities pursuant 
                                to a blanket license; and</DELETED>
                                <DELETED>    ``(II) significant 
                                nonblanket licensees; and</DELETED>
                        <DELETED>    ``(ii) voluntary contributions 
                        from digital music providers and significant 
                        nonblanket licensees as may be agreed with 
                        copyright owners.</DELETED>
                <DELETED>    ``(B) Voluntary contributions.--</DELETED>
                        <DELETED>    ``(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:</DELETED>
                                <DELETED>    ``(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.</DELETED>
                                <DELETED>    ``(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.</DELETED>
                        <DELETED>    ``(ii) Treatment of 
                        contributions.--Each such voluntary 
                        contribution 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.</DELETED>
                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(D) Determination of administrative 
                assessment.--</DELETED>
                        <DELETED>    ``(i) Administrative assessment to 
                        cover collective total costs.--The 
                        administrative assessment shall be used solely 
                        and exclusively to fund the collective total 
                        costs.</DELETED>
                        <DELETED>    ``(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--</DELETED>
                                <DELETED>    ``(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;</DELETED>
                                <DELETED>    ``(II) be established by 
                                the Copyright Royalty Judges in an 
                                amount that is calculated to defray the 
                                reasonable collective total 
                                costs;</DELETED>
                                <DELETED>    ``(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;</DELETED>
                                <DELETED>    ``(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, but shall include as a 
                                component a minimum fee for all digital 
                                music providers and significant 
                                nonblanket licensees; and</DELETED>
                                <DELETED>    ``(V) take into 
                                consideration anticipated future 
                                collective total costs and collections 
                                of the administrative assessment, but 
                                also, as applicable--</DELETED>
                                        <DELETED>    ``(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;</DELETED>
                                        <DELETED>    ``(bb) any past 
                                        collections of the 
                                        administrative assessment and 
                                        voluntary contributions that 
                                        exceeded past actual collective 
                                        total costs, resulting in a 
                                        surplus; and</DELETED>
                                        <DELETED>    ``(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).</DELETED>
                        <DELETED>    ``(iii) Initial administrative 
                        assessment.--The procedure for establishing the 
                        initial administrative assessment shall be as 
                        follows:</DELETED>
                                <DELETED>    ``(I) The Copyright 
                                Royalty Judges shall commence a 
                                proceeding to establish the initial 
                                administrative assessment within 9 
                                months after the enactment date by 
                                publishing a notice in the Federal 
                                Register seeking petitions to 
                                participate.</DELETED>
                                <DELETED>    ``(II) 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.</DELETED>
                                <DELETED>    ``(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 they 
                                deem appropriate.</DELETED>
                                <DELETED>    ``(IV) The initial 
                                administrative assessment shall be 
                                determined, and such determination 
                                shall be published in the Federal 
                                Register by the Copyright Royalty 
                                Judges, within 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 
                                (iii).</DELETED>
                        <DELETED>    ``(iv) Adjustment of 
                        administrative assessment.--The administrative 
                        assessment may be adjusted by the Copyright 
                        Royalty Judges periodically, in accordance with 
                        the following procedures:</DELETED>
                                <DELETED>    ``(I) No 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 October to 
                                commence a proceeding to adjust the 
                                administrative assessment.</DELETED>
                                <DELETED>    ``(II) Notice of the 
                                commencement of such proceeding shall 
                                be published in the Federal Register in 
                                the month of November 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.</DELETED>
                                <DELETED>    ``(III) The determination 
                                of the adjusted administrative 
                                assessment, which shall be supported by 
                                a written record, shall be published in 
                                the Federal Register during November 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.</DELETED>
                        <DELETED>    ``(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), 
                        but 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 it is in 
                        effect.</DELETED>
                        <DELETED>    ``(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.</DELETED>
                        <DELETED>    ``(vii) Appeal of administrative 
                        assessment.--The determination of an 
                        administrative assessment by the Copyright 
                        Royalty Judges shall be appealable, within 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 within 3 months after any modification 
                        of the assessment to reflect and account for 
                        such outcome.</DELETED>
                        <DELETED>    ``(viii) Regulations.--The 
                        Copyright Royalty Judges may adopt regulations 
                        to govern the conduct of proceedings under this 
                        paragraph.</DELETED>
        <DELETED>    ``(8) Establishment of rates and terms under 
        blanket license.--</DELETED>
                <DELETED>    ``(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), but either 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.</DELETED>
                <DELETED>    ``(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:</DELETED>
                        <DELETED>    ``(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.</DELETED>
                        <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(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--</DELETED>
                        <DELETED>    ``(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</DELETED>
                        <DELETED>    ``(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).</DELETED>
                <DELETED>    ``(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, within 3 months 
                after the rate and terms established by the Copyright 
                Royalty Judges become effective--</DELETED>
                        <DELETED>    ``(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</DELETED>
                        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(9) Transition to blanket licenses.--</DELETED>
                <DELETED>    ``(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 one or more covered activities with respect to a 
                musical work, but the foregoing 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.</DELETED>
                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(D) Further acceptance of notices for 
                covered activities by copyright office.--On and after 
                the enactment date--</DELETED>
                        <DELETED>    ``(i) the Copyright Office shall 
                        no longer accept notices of intention with 
                        respect to covered activities; and</DELETED>
                        <DELETED>    ``(ii) previously filed notices of 
                        intention will no longer be effective or 
                        provide license authority with respect to 
                        covered activities, but 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.</DELETED>
        <DELETED>    ``(10) Prior unlicensed uses.--</DELETED>
                <DELETED>    ``(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 of this title, 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.</DELETED>
                <DELETED>    ``(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):</DELETED>
                        <DELETED>    ``(i) No 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:</DELETED>
                                <DELETED>    ``(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:</DELETED>
                                        <DELETED>    ``(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.</DELETED>
                                        <DELETED>    ``(bb) Any 
                                        available musical work 
                                        ownership information, 
                                        including each songwriter and 
                                        publisher name, percentage 
                                        ownership share, and 
                                        international standard musical 
                                        work code.</DELETED>
                                <DELETED>    ``(II) Employment of one 
                                or more bulk electronic matching 
                                processes that are available to the 
                                digital music provider through a third-
                                party vendor on commercially reasonable 
                                terms, but a digital music provider may 
                                rely on its own bulk electronic 
                                matching process if it has capabilities 
                                comparable to or better than those 
                                available from a third-party vendor on 
                                commercially reasonable 
                                terms.</DELETED>
                        <DELETED>    ``(ii) The required matching 
                        efforts shall be repeated by the digital music 
                        provider no less than once per month for so 
                        long as the copyright owner remains 
                        unidentified or has not been located.</DELETED>
                        <DELETED>    ``(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.</DELETED>
                        <DELETED>    ``(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:</DELETED>
                                <DELETED>    ``(I) Accrued royalties 
                                shall be maintained by the digital 
                                music provider in accordance with 
                                generally accepted accounting 
                                principles.</DELETED>
                                <DELETED>    ``(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--</DELETED>
                                        <DELETED>    ``(aa) within 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);</DELETED>
                                        <DELETED>    ``(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</DELETED>
                                        <DELETED>    ``(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.</DELETED>
                                <DELETED>    ``(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--</DELETED>
                                        <DELETED>    ``(aa) within 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</DELETED>
                                        <DELETED>    ``(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.</DELETED>
                        <DELETED>    ``(v) Suspension of late fees.--A 
                        digital music provider that complies with the 
                        requirements of this paragraph 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.</DELETED>
                <DELETED>    ``(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 to engage 
                in covered activities that accrued no more than 3 years 
                prior to the license availability date, such action may 
                be commenced within 3 years of the date the claim 
                accrued, or up to 2 years after the license 
                availability date, whichever is later.</DELETED>
                <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(11) Legal protections for licensing 
        activities.--</DELETED>
                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(B) Limitation on common agent 
                exemption.--Notwithstanding the antitrust exemption 
                provided in subsection (c)(1)(D) and subparagraph (A) 
                (except for the administrative assessment referenced 
                therein 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.</DELETED>
                <DELETED>    ``(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, but the following conditions 
                apply:</DELETED>
                        <DELETED>    ``(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.</DELETED>
                        <DELETED>    ``(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.</DELETED>
                        <DELETED>    ``(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).</DELETED>
                <DELETED>    ``(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, `good-faith 
                administration' means administration in a manner that 
                is not grossly negligent.</DELETED>
                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(12) Regulations.--</DELETED>
                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(13) Savings clauses.--</DELETED>
                <DELETED>    ``(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 enactment 
                date.</DELETED>
                <DELETED>    ``(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 described in subsection 
                (e) shall not extend to, limit, or otherwise affect any 
                right of public performance in a musical work.''; 
                and</DELETED>
        <DELETED>    (5) by adding at the end the following new 
        subsection:</DELETED>
<DELETED>    ``(e) Definitions.--As used in this section:</DELETED>
        <DELETED>    ``(1) Accrued interest.--The term `accrued 
        interest' means interest accrued on accrued royalties, as 
        described in subsection (d)(3)(H)(ii).</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(3) Administrative assessment.--The term 
        `administrative assessment' means the fee established pursuant 
        to subsection (d)(7)(D).</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(5) Blanket license.--The term `blanket license' 
        means a compulsory license described in subsection (d)(1)(A) to 
        engage in covered activities.</DELETED>
        <DELETED>    ``(6) Collective total costs.--The term 
        `collective total costs'--</DELETED>
                <DELETED>    ``(A) means the total costs of 
                establishing, maintaining, and operating the mechanical 
                licensing collective to fulfill its statutory 
                functions, including--</DELETED>
                        <DELETED>    ``(i) startup costs;</DELETED>
                        <DELETED>    ``(ii) financing, legal, and 
                        insurance costs;</DELETED>
                        <DELETED>    ``(iii) investments in information 
                        technology, infrastructure, and other long-term 
                        resources;</DELETED>
                        <DELETED>    ``(iv) outside vendor 
                        costs;</DELETED>
                        <DELETED>    ``(v) costs of licensing, royalty 
                        administration, and enforcement of 
                        rights;</DELETED>
                        <DELETED>    ``(vi) costs of bad debt; 
                        and</DELETED>
                        <DELETED>    ``(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</DELETED>
                <DELETED>    ``(B) does not include any added costs 
                incurred by the mechanical licensing collective to 
                provide services under voluntary licenses.</DELETED>
        <DELETED>    ``(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 qualified for a compulsory license under 
        this section.</DELETED>
        <DELETED>    ``(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--</DELETED>
                <DELETED>    ``(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;</DELETED>
                <DELETED>    ``(B) is able to fully report on any 
                revenues and consideration generated by the service; 
                and</DELETED>
                <DELETED>    ``(C) is able to fully report on usage of 
                sound recordings of musical works by the service (or 
                procure such reporting).</DELETED>
        <DELETED>    ``(9) Digital licensee coordinator.--The term 
        `digital licensee coordinator' means the entity most recently 
        designated pursuant to subsection (d)(5).</DELETED>
        <DELETED>    ``(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 of this 
        title.</DELETED>
        <DELETED>    ``(11) Enactment date.--The term `enactment date' 
        means the date of the enactment of the Musical Works 
        Modernization Act.</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(15) License availability date.--The term 
        `license availability date' means the next January 1 following 
        the expiration of the 2-year period beginning on the enactment 
        date.</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(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).</DELETED>
        <DELETED>    ``(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 them, including a calculation of the collective total 
        costs.</DELETED>
        <DELETED>    ``(20) Musical works database.--The term `musical 
        works database' means the database described in subsection 
        (d)(3)(E).</DELETED>
        <DELETED>    ``(21) Nonprofit.--The term `nonprofit' means a 
        nonprofit created or organized in a State.</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(25) Qualified auditor.--The term `qualified 
        auditor' means an independent, certified public accountant with 
        experience performing music royalty audits.</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(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).</DELETED>
        <DELETED>    ``(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).</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(30) Share.--The term `share', as applied to a 
        musical work, means a fractional ownership interest in such 
        work.</DELETED>
        <DELETED>    ``(31) Significant nonblanket licensee.--The term 
        `significant nonblanket licensee'--</DELETED>
                <DELETED>    ``(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--</DELETED>
                        <DELETED>    ``(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);</DELETED>
                        <DELETED>    ``(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</DELETED>
                        <DELETED>    ``(iii) either--</DELETED>
                                <DELETED>    ``(I) on any day in a 
                                calendar month, makes more than 5,000 
                                different sound recordings of musical 
                                works available through such service; 
                                or</DELETED>
                                <DELETED>    ``(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</DELETED>
                <DELETED>    ``(B) does not include--</DELETED>
                        <DELETED>    ``(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</DELETED>
                        <DELETED>    ``(ii) a `public broadcasting 
                        entity' as defined in section 118(f).</DELETED>
        <DELETED>    ``(32) Songwriter.--The term `songwriter' means 
        the author of all or part of a musical work, including a 
        composer or lyricist.</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(34) Unclaimed accrued royalties.--The term 
        `unclaimed accrued royalties' means accrued royalties eligible 
        for distribution under subsection (d)(3)(J).</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(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.''.</DELETED>
<DELETED>    (b) Technical and Conforming Amendments to Section 801.--
Section 801(b) of title 17, United States Code, is amended--</DELETED>
        <DELETED>    (1) by redesignating paragraph (8) as paragraph 
        (9); and</DELETED>
        <DELETED>    (2) by inserting after paragraph (7) the following 
        new paragraph:</DELETED>
        <DELETED>    ``(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.''.</DELETED>
<DELETED>    (c) Effective Date of Amended Rate Setting Standard.--The 
amendments made by subsections (a)(3)(D) and (b)(1) shall apply to any 
proceeding before the Copyright Royalty Judges that is pending on, or 
commenced on or after, the date of the enactment of this Act.</DELETED>
<DELETED>    (d) Technical and Conforming Amendments to Title 37, Part 
385 of the Code of Federal Regulations.--Within 9 months after the date 
of the enactment of this Act, the Copyright Royalty Judges shall amend 
the regulations for section 115 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 amended 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.</DELETED>

SEC. 103. AMENDMENTS TO SECTION 114.

<DELETED>    (a) Uniform Rate Standard.--Section 114(f) of title 17, 
United States Code, is amended--</DELETED>
        <DELETED>    (1) by striking paragraphs (1) and (2) and 
        inserting the following:</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(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--</DELETED>
                <DELETED>    ``(i) shall base their decision on 
                economic, competitive, and programming information 
                presented by the parties, including--</DELETED>
                        <DELETED>    ``(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</DELETED>
                        <DELETED>    ``(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</DELETED>
                <DELETED>    ``(ii) may consider the rates and terms 
                for comparable types of audio transmission services and 
                comparable circumstances under voluntary license 
                agreements.</DELETED>
        <DELETED>    ``(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 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</DELETED>
        <DELETED>    (2) by redesignating paragraphs (3), (4), and (5) 
        as paragraphs (2), (3), and (4), respectively.</DELETED>
<DELETED>    (b) Repeal.--Subsection (i) of section 114 of title 17, 
United States Code, is repealed.</DELETED>
<DELETED>    (c) Use in Musical Work Proceedings.--</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (2) Definitions.--In this subsection:</DELETED>
                <DELETED>    (A) Transmission by a broadcaster.--A 
                ``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.</DELETED>
                <DELETED>    (B) Terrestrial broadcast station.--A 
                ``terrestrial broadcast station'' means a terrestrial, 
                over-the-air radio or television broadcast station, 
                licensed as such by the Federal Communications 
                Commission, including an FM Translator as defined in 
                section 74.1231 of title 47, Code of Federal 
                Regulations, and whose primary business activities are 
                comprised of, and 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.</DELETED>
<DELETED>    (d) Rule of Construction.--Subsection (c)(2) shall not be 
given effect in interpreting provisions of title 17, United States 
Code.</DELETED>
<DELETED>    (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 section 114(f) of such title that is pending on, or commenced on or 
after, the date of the enactment of this Act.</DELETED>
<DELETED>    (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 section 
114(f) of such title before the date of the enactment of this 
Act.</DELETED>
<DELETED>    (g) Technical and Conforming Amendments.--</DELETED>
        <DELETED>    (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, by striking 
        ``under paragraph (4)'' and inserting ``under paragraph 
        (3)''.</DELETED>
        <DELETED>    (2) Section 801.--Section 801(b)(1) of title 17, 
        United States Code, is amended by striking ``The rates 
        applicable'' and all that follows though ``prevailing industry 
        practices.''.</DELETED>
        <DELETED>    (3) Section 804.--Section 804(b)(3)(C) of title 
        17, United States Code, is amended--</DELETED>
                <DELETED>    (A) in clause (i), by striking ``and 
                114(f)(2)(C)'';</DELETED>
                <DELETED>    (B) in clause (iii)(II), by striking 
                ``114(f)(4)(B)(ii)'' and inserting 
                ``114(f)(3)(B)(ii)''; and</DELETED>
                <DELETED>    (C) in clause (iv), by striking ``or 
                114(f)(2)(C), as the case may be''.</DELETED>

<DELETED>SEC. 104. RANDOM ASSIGNMENT OF RATE COURT 
              PROCEEDINGS.</DELETED>

<DELETED>    Section 137 of title 28, United States Code, is amended--
</DELETED>
        <DELETED>    (1) by striking ``The business'' and inserting 
        ``(a) In General.--The business''; and</DELETED>
        <DELETED>    (2) by adding at the end the following new 
        subsection:</DELETED>
<DELETED>    ``(b) Random Assignment of Rate Court Proceedings.--
</DELETED>
        <DELETED>    ``(1) In general.--</DELETED>
                <DELETED>    ``(A) Determination of license fee.--
                Except as provided in subparagraph (B), 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 that court's rules for the 
                division of business among district judges currently in 
                effect or as may be amended from time to time, provided 
                that any such application shall not be assigned to--
                </DELETED>
                        <DELETED>    ``(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</DELETED>
                        <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(B) Exception.--Subparagraph (A) does 
                not apply to an application to determine reasonable 
                license fees made by individual proprietors under 
                section 513 of title 17.</DELETED>
        <DELETED>    ``(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.''.</DELETED>

    <DELETED>TITLE II--COMPENSATING LEGACY ARTISTS FOR THEIR SONGS, 
       SERVICE, AND IMPORTANT CONTRIBUTIONS TO SOCIETY</DELETED>

<DELETED>SEC. 201. SHORT TITLE.</DELETED>

<DELETED>    This title may be cited as the ``Compensating Legacy 
Artists for their Songs, Service, and Important Contributions to 
Society Act'' or the ``CLASSICS Act''.</DELETED>

SEC. 202. UNAUTHORIZED DIGITAL PERFORMANCE OF PRE-1972 SOUND 
              RECORDINGS.

<DELETED>    (a) Protection for Unauthorized Digital Performances.--
Title 17, United States Code, is amended by adding at the end the 
following new chapter:</DELETED>

  <DELETED>``CHAPTER 14--UNAUTHORIZED DIGITAL PERFORMANCE OF PRE-1972 
                       SOUND RECORDINGS</DELETED>

<DELETED>``Sec.
<DELETED>``1401. Unauthorized digital performance of pre-1972 sound 
                            recordings.
<DELETED>``Sec. 1401. Unauthorized digital performance of pre-1972 
              sound recordings</DELETED>
<DELETED>    ``(a) Unauthorized Acts.--Anyone who, before February 15, 
2067, and without the consent of the rights owner, performs publicly, 
by means of a digital audio transmission, a sound recording fixed on or 
after January 1, 1923, and before February 15, 1972, shall be subject 
to the remedies provided in sections 502 through 505 to the same extent 
as an infringer of copyright.</DELETED>
<DELETED>    ``(b) Certain Authorized Transmissions.--A digital audio 
transmission of a sound recording fixed on or after January 1, 1923, 
and 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--</DELETED>
        <DELETED>    ``(1) the transmission is made by a transmitting 
        entity that is publicly performing sound recordings fixed on or 
        after February 15, 1972, by means of digital audio 
        transmissions subject to section 114;</DELETED>
        <DELETED>    ``(2) the transmission would satisfy the 
        requirements for statutory licensing under section 114(d)(2), 
        or would be exempt under section 114(d)(1), if the sound 
        recording were fixed on or after February 15, 1972;</DELETED>
        <DELETED>    ``(3) in the case of a transmission that would not 
        be exempt under section 114(d)(1) as described in paragraph 
        (2), the transmitting entity pays statutory royalties and 
        provides notice of its use of the relevant sound recordings in 
        the same manner as is required by regulations adopted by the 
        Copyright Royalty Judges for sound recordings fixed on or after 
        February 15, 1972; and</DELETED>
        <DELETED>    ``(4) in the case of a transmission that would not 
        be exempt under section 114(d)(1) as described in paragraph 
        (2), the transmitting entity otherwise satisfies the 
        requirements for statutory licensing under section 
        114(f)(4)(B).</DELETED>
<DELETED>    ``(c) Transmissions by Direct Licensing of Statutory 
Services.--</DELETED>
        <DELETED>    ``(1) In general.--A transmission of a sound 
        recording fixed on or after January 1, 1923, and 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 such transmission is included in a license 
        agreement voluntarily negotiated at any time between the rights 
        owner and the entity performing the sound recording.</DELETED>
        <DELETED>    ``(2) Payment of royalties to nonprofit 
        collective.--To the extent that such a license agreement 
        entered into on or after the date of the enactment of this 
        section extends to digital audio transmissions of a sound 
        recording fixed on or after January 1, 1923, and before 
        February 15, 1972, that meet the conditions of subsection (b), 
        the licensee shall 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 the transmissions due under the license, with 
        such royalties fully credited as payments due under the 
        license.</DELETED>
        <DELETED>    ``(3) Distribution of royalties 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 received under paragraph (2) under the license 
        described in paragraph (2). Such payments shall be the only 
        payments to which featured and nonfeatured artists are entitled 
        by virtue of the transmissions described in paragraph (2) under 
        the license.</DELETED>
        <DELETED>    ``(4) Rule of construction.--This section does not 
        prohibit any other license from directing the licensee to pay 
        other royalties due to featured and nonfeatured artists for 
        such transmissions to the collective designated to distribute 
        receipts from the licensing of transmissions in accordance with 
        section 114(f).</DELETED>
<DELETED>    ``(d) Relationship to State Law.--</DELETED>
        <DELETED>    ``(1) In general.--Nothing in this section shall 
        be construed to annul or limit any rights or remedies under the 
        common law or statutes of any State for sound recordings fixed 
        before February 15, 1972, except, notwithstanding section 
        301(c), for the following:</DELETED>
                <DELETED>    ``(A) This section preempts any claim of 
                common law copyright or equivalent right under the laws 
                of any State arising from any digital audio 
                transmission that is made, on and after the date of the 
                enactment of this section, of a sound recording fixed 
                on or after January 1, 1923, and before February 15, 
                1972.</DELETED>
                <DELETED>    ``(B) This section preempts any claim of 
                common law copyright or equivalent right under the laws 
                of any State arising from any reproduction that is 
                made, on and after the date of the enactment of this 
                section, of a sound recording fixed on or after January 
                1, 1923, and before February 15, 1972, and that would 
                satisfy the requirements for statutory licensing under 
                paragraphs (1) and (6) of section 112(e), if the sound 
                recording were fixed on or after February 15, 
                1972.</DELETED>
                <DELETED>    ``(C) This section preempts any claim of 
                common law copyright or equivalent right under the laws 
                of any State arising from any digital audio 
                transmission or reproduction that is made, before the 
                date of the enactment of this section, of a sound 
                recording fixed on or after January 1, 1923, and before 
                February 15, 1972, if--</DELETED>
                        <DELETED>    ``(i) 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</DELETED>
                        <DELETED>    ``(ii) except in the case of 
                        transmissions that would have been exempt under 
                        section 114(d)(1), the transmitting entity, 
                        before the end of the 270-day period beginning 
                        on the date of the enactment of this section, 
                        pays statutory royalties and provides notice of 
                        the use of the relevant sound recordings in the 
                        same manner as is required by regulations 
                        adopted by the Copyright Royalty Judges for 
                        sound recordings that are protected under this 
                        title for all the digital audio transmissions 
                        and reproductions satisfying the requirements 
                        for statutory licensing under section 114(d)(2) 
                        and section 112(e)(1) during the 3 years prior 
                        to the date of the enactment of this 
                        section.</DELETED>
        <DELETED>    ``(2) Rule of construction for common law 
        copyright.--For purposes of subparagraphs (A) through (C) 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 such subparagraphs as an 
        unlawful distribution, act of record piracy, or similar 
        violation.</DELETED>
        <DELETED>    ``(3) Rule of construction for public performance 
        rights.--Nothing in this section shall be construed to 
        recognize or negate the existence of public performance rights 
        in sound recordings under the laws of any State.</DELETED>
<DELETED>    ``(e) Limitations on Remedies.--</DELETED>
        <DELETED>    ``(1) Fair use; uses by libraries, archives, and 
        educational institutions.--The limitations on the exclusive 
        rights of a copyright owner described in sections 107, 108, and 
        110(1) and (2) shall apply to a claim under subsection (a) for 
        the unauthorized performance of a sound recording fixed on or 
        after January 1, 1923, and before February 15, 1972.</DELETED>
        <DELETED>    ``(2) Actions.--The limitations on actions 
        described in section 507 shall apply to a claim under 
        subsection (a) for the unauthorized performance of a sound 
        recording fixed on or after January 1, 1923, and before 
        February 15, 1972.</DELETED>
        <DELETED>    ``(3) Material online.--Section 512 shall apply to 
        a claim under subsection (a) for the unauthorized performance 
        of a sound recording fixed on or after January 1, 1923, and 
        before February 15, 1972.</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(5) Filing requirement for statutory damages and 
        attorneys' fees.--</DELETED>
                <DELETED>    ``(A) Filing of information on sound 
                recordings.--</DELETED>
                        <DELETED>    ``(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 transmission of a sound recording 
                        under subsection (a) only if--</DELETED>
                                <DELETED>    ``(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</DELETED>
                                <DELETED>    ``(II) the transmission is 
                                made after the end of the 90-day period 
                                beginning on the date on which the 
                                information filed under subclause (I) 
                                is indexed into the public records of 
                                the Copyright Office.</DELETED>
                        <DELETED>    ``(ii) Regulations.--The Register 
                        of Copyrights shall, before the end of the 180-
                        day period beginning on the date of the 
                        enactment of this section, issue regulations 
                        establishing the form, content, and procedures 
                        for the filing of schedules under clause (i). 
                        Such regulations shall provide that persons may 
                        request that they receive timely notification 
                        of such filings, and shall set forth the manner 
                        in which such requests may be made.</DELETED>
                <DELETED>    ``(B) Filing of contact information for 
                transmitting entities.--</DELETED>
                        <DELETED>    ``(i) Filing requirement.--The 
                        Register of Copyrights shall, before the end of 
                        the 30-day period beginning on the date of the 
                        enactment of this section, issue regulations 
                        establishing the form, content, and procedures 
                        for the filing, by any entity that, as of the 
                        date of the enactment of this section, performs 
                        sound recordings fixed before February 15, 
                        1972, by means of digital audio transmissions, 
                        of contact information for such 
                        entity.</DELETED>
                        <DELETED>    ``(ii) Time limit on filings.--The 
                        Register of Copyrights may accept filings under 
                        clause (i) only until the 180th day after the 
                        date of the enactment of this 
                        section.</DELETED>
                        <DELETED>    ``(iii) Limitation on statutory 
                        damages and attorneys' fees.--</DELETED>
                                <DELETED>    ``(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 transmission 
                                by that entity of a sound recording 
                                under subsection (a) if the 
                                transmission is made before the end of 
                                the 90-day period beginning on the date 
                                on which the entity receives a notice 
                                that--</DELETED>
                                        <DELETED>    ``(aa) is sent by 
                                        or on behalf of the rights 
                                        owner of the sound 
                                        recording;</DELETED>
                                        <DELETED>    ``(bb) states that 
                                        the entity is not legally 
                                        authorized to transmit that 
                                        sound recording under 
                                        subsection (a); and</DELETED>
                                        <DELETED>    ``(cc) identifies 
                                        the sound recording in a 
                                        schedule conforming to the 
                                        requirements prescribed by the 
                                        regulations issued under 
                                        subparagraph (A)(ii).</DELETED>
                                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(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 an unauthorized transmission of a sound 
                recording under subsection (a).</DELETED>
        <DELETED>    ``(6) Applicability of other provisions.--
        </DELETED>
                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(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.</DELETED>
<DELETED>    ``(f) 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.</DELETED>
<DELETED>    ``(g) Rights Owner Defined.--In this section, the term 
`rights owner' means the person who has the exclusive right to 
reproduce a sound recording under the laws of any State.''.</DELETED>
<DELETED>    (b) Conforming Amendment.--The table of chapters for title 
17, United States Code, is amended by adding at the end the following 
new chapter:</DELETED>

<DELETED>``14. Unauthorized digital performance of pre-1972     1401''.
                            sound recordings.

<DELETED>SEC. 203. EFFECTIVE DATE.</DELETED>

<DELETED>    This title and the amendments made by this title shall 
take effect on the date of the enactment of this Act.</DELETED>

      <DELETED>TITLE III--ALLOCATION FOR MUSIC PRODUCERS</DELETED>

<DELETED>SEC. 301. SHORT TITLE.</DELETED>

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

<DELETED>SEC. 302. PAYMENT OF STATUTORY PERFORMANCE 
              ROYALTIES.</DELETED>

<DELETED>    (a) Letter of Direction.--Section 114(g) of title 17, 
United States Code, is amended by adding at the end the following new 
paragraph:</DELETED>
        <DELETED>    ``(5) Letter of direction.--</DELETED>
                <DELETED>    ``(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 an 
                artist 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 artist 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'.</DELETED>
                <DELETED>    ``(B) Acceptance of letter.--To the extent 
                that the collective accepts a letter of direction under 
                subparagraph (A), 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 artist payee providing the letter of 
                direction to the collective shall be treated as having 
                no interest in such payment.</DELETED>
                <DELETED>    ``(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.''.</DELETED>
<DELETED>    (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 new paragraph:</DELETED>
        <DELETED>    ``(6) Sound recordings fixed before november 1, 
        1995.--</DELETED>
                <DELETED>    ``(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 one or more persons 
                described in subparagraph (B), after deduction of costs 
                described in paragraph (3) or (4), as applicable, if 
                each of the following requirements is met:</DELETED>
                        <DELETED>    ``(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--
                        </DELETED>
                                <DELETED>    ``(I) for a period of at 
                                least 4 months, 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</DELETED>
                                <DELETED>    ``(II) during the period 
                                beginning on the date 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.</DELETED>
                        <DELETED>    ``(ii) Collective attempt to 
                        contact artist.--After receipt of the 
                        certification described in clause (i) and for a 
                        period of at least 4 months before the 
                        collective's first distribution to the person 
                        described in subparagraph (B), the collective 
                        attempted, 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).</DELETED>
                        <DELETED>    ``(iii) No objection received.--
                        The artist payee did not, as of the date that 
                        is 10 business days before the date on which 
                        the first distribution is made, submit to the 
                        collective in writing an objection to the 
                        distribution.</DELETED>
                <DELETED>    ``(B) Eligibility for payment.--A person 
                shall be eligible for payment under subparagraph (A) if 
                the person--</DELETED>
                        <DELETED>    ``(i) is a producer, mixer, or 
                        sound engineer of the sound 
                        recording;</DELETED>
                        <DELETED>    ``(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);</DELETED>
                        <DELETED>    ``(iii) made a creative 
                        contribution to the creation of the sound 
                        recording; and</DELETED>
                        <DELETED>    ``(iv) submits a written 
                        certification to the collective stating, under 
                        penalty of perjury, that the person meets the 
                        requirements in clauses (i) through (iii) and 
                        includes a true copy of the contract described 
                        in clause (ii).</DELETED>
                <DELETED>    ``(C) Multiple certifications.--Subject to 
                subparagraph (D), in a case in which more than one 
                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 a 
                distribution is made, the collective shall divide the 2 
                percent distribution equally among all such 
                persons.</DELETED>
                <DELETED>    ``(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 one 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.</DELETED>
                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(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 one such payee shall apply only to that payee's 
                share of the receipts payable under paragraph (2)(D), 
                and does not preclude payment under subparagraph (A) 
                from the share of an artist payee that does not so 
                object.''.</DELETED>
<DELETED>    (c) Technical and Conforming Amendments.--Section 114(g) 
of title 17, United States Code, as amended by subsections (a) and (b), 
is further amended--</DELETED>
        <DELETED>    (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'';</DELETED>
        <DELETED>    (2) in paragraph (3)--</DELETED>
                <DELETED>    (A) by striking ``nonprofit agent 
                designated'' and inserting ``nonprofit collective 
                designated by the Copyright Royalty Judges'';</DELETED>
                <DELETED>    (B) by striking ``another designated 
                agent'' and inserting ``another designated nonprofit 
                collective''; and</DELETED>
                <DELETED>    (C) by striking ``agent'' and inserting 
                ``collective'' each subsequent place it 
                appears;</DELETED>
        <DELETED>    (3) in paragraph (4)--</DELETED>
                <DELETED>    (A) by striking ``designated agent'' and 
                inserting ``nonprofit collective''; and</DELETED>
                <DELETED>    (B) by striking ``agent'' and inserting 
                ``collective'' each subsequent place it appears; 
                and</DELETED>
        <DELETED>    (4) by adding at the end the following new 
        paragraph:</DELETED>
        <DELETED>    ``(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 shall 
        supersede and preempt any State law (including common law) 
        concerning escheatment or abandoned property, or any analogous 
        provision, that might otherwise apply.''.</DELETED>

<DELETED>SEC. 303. EFFECTIVE DATE.</DELETED>

<DELETED>    (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 the enactment of this Act.</DELETED>
<DELETED>    (b) Delayed Effective Date.--The effective date for 
paragraphs (5)(B) and (6)(E) of section 114(g) of title 17, United 
States Code, as added by section 302, shall be January 1, 
2020.</DELETED>

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Music 
Modernization Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.

                 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--COMPENSATING LEGACY ARTISTS FOR THEIR SONGS, SERVICE, AND 
                   IMPORTANT CONTRIBUTIONS TO SOCIETY

Sec. 201. Short title.
Sec. 202. Unauthorized digital performance of pre-1972 sound 
                            recordings.
Sec. 203. Effective date.

               TITLE III--ALLOCATION FOR MUSIC PRODUCERS

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

                 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 new paragraph:
            ``(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) Additional administrative 
                        activities.--Subject to clause (iii) and 
                        paragraph (11)(C), the mechanical licensing 
                        collective may also administer, or assist in 
                        administering, voluntary licenses issued by or 
                        individual download licenses obtained from 
                        copyright owners for uses of musical works, for 
                        which the mechanical licensing collective shall 
                        charge reasonable fees for such services.
                            ``(iii) Restriction concerning public 
                        performance rights.--The mechanical licensing 
                        collective--
                                    ``(I) may, pursuant to clause (ii), 
                                provide administration services with 
                                respect to voluntary licenses that 
                                include the right of public performance 
                                in musical works; and
                                    ``(II) may not--
                                            ``(aa) negotiate or grant 
                                        licenses for the right of 
                                        public performance in musical 
                                        works; or
                                            ``(bb) be the exclusive or 
                                        nonexclusive assignee or 
                                        grantee of the right of public 
                                        performance in musical works.
                            ``(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 member of the public, for 
                                a fee not to exceed the marginal cost 
                                to the mechanical licensing collective 
                                of providing the database to such 
                                person.
                            ``(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 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 amended 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 the 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 the 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, 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.

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 new subsection:
    ``(b) Random Assignment of Rate Court Proceedings.--
            ``(1) In general.--
                    ``(A) Determination of license fee.--Except as 
                provided in subparagraph (B), 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.
                    ``(B) Exception.--Subparagraph (A) 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 90 days 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 shall 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 requested by 
                        Congress under paragraph (1).
    (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--COMPENSATING LEGACY ARTISTS FOR THEIR SONGS, SERVICE, AND 
                   IMPORTANT CONTRIBUTIONS TO SOCIETY

SEC. 201. SHORT TITLE.

    This title may be cited as the ``Compensating Legacy Artists for 
their Songs, Service, and Important Contributions to Society Act'' or 
the ``CLASSICS Act''.

SEC. 202. UNAUTHORIZED DIGITAL PERFORMANCE OF PRE-1972 SOUND 
              RECORDINGS.

    (a) Protection for Unauthorized Digital Performances.--Title 17, 
United States Code, is amended by adding at the end the following new 
chapter:

   ``CHAPTER 14--UNAUTHORIZED DIGITAL PERFORMANCE OF PRE-1972 SOUND 
                               RECORDINGS

``Sec.
``1401. Unauthorized digital performance of pre-1972 sound recordings.
``Sec. 1401. Unauthorized digital performance of pre-1972 sound 
              recordings
    ``(a) Unauthorized Acts.--Anyone who, before February 15, 2067, and 
without the consent of the rights owner, performs publicly, by means of 
a digital audio transmission, a sound recording fixed on or after 
January 1, 1923, and before February 15, 1972, shall be subject to the 
remedies provided in sections 502 through 505 to the same extent as an 
infringer of copyright.
    ``(b) Certain Authorized Transmissions.--A digital audio 
transmission of a sound recording fixed on or after January 1, 1923, 
and 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 is made by a transmitting entity 
        that is publicly performing sound recordings fixed on or after 
        February 15, 1972, by means of digital audio transmissions 
        subject to section 114;
            ``(2) the transmission would satisfy the requirements for 
        statutory licensing under section 114(d)(2), or would be exempt 
        under section 114(d)(1), if the sound recording were fixed on 
        or after February 15, 1972;
            ``(3) in the case of a transmission that would not be 
        exempt under section 114(d)(1) as described in paragraph (2), 
        the transmitting entity pays statutory royalties and provides 
        notice of its use of the relevant sound recording in the same 
        manner as is required by regulations adopted by the Copyright 
        Royalty Judges for sound recordings fixed on or after February 
        15, 1972; and
            ``(4) in the case of a transmission that would not be 
        exempt under section 114(d)(1) as described in paragraph (2), 
        the transmitting entity otherwise satisfies the requirements 
        for statutory licensing under section 114(f)(3)(B).
    ``(c) Transmissions by Direct Licensing of Statutory Services.--
            ``(1) In general.--A transmission of a sound recording 
        fixed on or after January 1, 1923, and 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 
        such transmission is included in 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.--To the 
        extent that a license agreement described in paragraph (1) and 
        entered into on or after the date of the enactment of this 
        section extends to digital audio transmissions of a sound 
        recording fixed on or after January 1, 1923, and before 
        February 15, 1972, that meet the conditions of subsection (b), 
        the licensee shall 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 the transmissions due under the license, with 
        such royalties fully credited as payments due under the 
        license.
            ``(3) Distribution of royalties 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 received under paragraph (2) under the license 
        described in paragraph (2). Such payments shall be the only 
        payments to which featured and nonfeatured artists are entitled 
        by virtue of the transmissions described in paragraph (2) under 
        the license.
            ``(4) Rule of construction.--This subsection does not 
        prohibit any other license from directing the licensee to pay 
        other royalties due to featured and nonfeatured artists for 
        such transmissions to the collective designated to distribute 
        receipts from the licensing of transmissions in accordance with 
        section 114(f).
    ``(d) Relationship to State Law.--
            ``(1) In general.--Nothing in this section shall be 
        construed to annul or limit any rights or remedies under the 
        common law or statutes of any State for sound recordings fixed 
        before February 15, 1972, except, notwithstanding section 
        301(c), for the following:
                    ``(A) This section preempts any claim of common law 
                copyright or equivalent right under the laws of any 
                State arising from any digital audio transmission that 
                is made, on and after the date of the enactment of this 
                section, of a sound recording fixed on or after January 
                1, 1923, and before February 15, 1972.
                    ``(B) This section preempts any claim of common law 
                copyright or equivalent right under the laws of any 
                State arising from any reproduction that is made, on 
                and after the date of the enactment of this section, of 
                a sound recording fixed on or after January 1, 1923, 
                and before February 15, 1972, and that would satisfy 
                the requirements for statutory licensing under 
                paragraphs (1) and (6) of section 112(e), if the sound 
                recording were fixed on or after February 15, 1972.
                    ``(C) This section preempts any claim of common law 
                copyright or equivalent right under the laws of any 
                State arising from any digital audio transmission or 
                reproduction that is made, before the date of the 
                enactment of this section, of a sound recording fixed 
                on or after January 1, 1923, and before February 15, 
                1972, if--
                            ``(i) 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
                            ``(ii) either--
                                    ``(I) except in the case of a 
                                transmission that would have been 
                                exempt under section 114(d)(1), the 
                                transmitting entity, not later than 270 
                                days after the date of enactment of 
                                this section, pays statutory royalties 
                                and provides notice of the use of the 
                                relevant sound recordings in the same 
                                manner as is required by regulations 
                                adopted by the Copyright Royalty Judges 
                                for sound recordings that are protected 
                                under this title 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-
                                year period ending on the date of 
                                enactment of this section; or
                                    ``(II) an agreement voluntarily 
                                negotiated between the rights owner and 
                                the entity performing the sound 
                                recording authorizes or waives 
                                liability for any such transmission or 
                                reproduction and the transmitting 
                                entity has complied with all provisions 
                                of such agreement for any such 
                                transmission or reproduction.
            ``(2) Rule of construction for common law copyright.--For 
        purposes of subparagraphs (A) through (C) 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 such subparagraphs as an unlawful distribution, act 
        of record piracy, or similar violation.
            ``(3) Rule of construction for public performance rights.--
        Nothing in this section shall be construed to recognize or 
        negate the existence of public performance rights in sound 
        recordings under the laws of any State.
    ``(e) 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, and 110 shall apply to a claim under subsection 
                (a) of this section for the unauthorized performance of 
                a sound recording fixed on or after January 1, 1923, 
                and before February 15, 1972.
                    ``(B) Rule of construction for section 108(h).--
                With respect to the application of section 108(h) to a 
                claim for unauthorized performance of a sound recording 
                first fixed on or after January 1, 1923, and before 
                February 15, 1972, under subsection (a) of this 
                section, 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 
                effective date of this section.
            ``(2) Actions.--The limitations on actions described in 
        section 507 shall apply to a claim under subsection (a) of this 
        section for the unauthorized performance of a sound recording 
        fixed on or after January 1, 1923, and before February 15, 
        1972.
            ``(3) Material online.--Section 512 shall apply to a claim 
        under subsection (a) for the unauthorized performance of a 
        sound recording fixed on or after January 1, 1923, and 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 transmission of a sound recording 
                        under subsection (a) of this section 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 transmission is made 
                                after the end of the 90-day period 
                                beginning on the date on which the 
                                information filed under 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 establishing the form, content, and 
                        procedures for the filing of schedules under 
                        clause (i). Such regulations shall provide that 
                        persons may request that they receive timely 
                        notification of such filings, and shall set 
                        forth the manner in which such requests may be 
                        made.
                    ``(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, by any entity that, 
                        as of the date of the enactment of this 
                        section, performs sound recordings fixed before 
                        February 15, 1972, by means of digital audio 
                        transmissions, of contact information for such 
                        entity.
                            ``(ii) Time limit on filings.--The Register 
                        of Copyrights may not accept filings under 
                        clause (i) after the date that is 180 days 
                        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) of this subparagraph, 
                                with respect to an unauthorized 
                                transmission by that entity of a sound 
                                recording under subsection (a) of this 
                                section if the transmission is made not 
                                later than 90 days after 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 transmit 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 an 
                unauthorized transmission of a sound recording under 
                subsection (a) of this section.
            ``(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.
    ``(f) Application of Section 230 Safe Harbor.--For purposes of 
section 230 of the Communications Act of 1934 (47 U.S.C. 230), 
subsection (a) of this section shall be considered to be a `law 
pertaining to intellectual property' under subsection (e)(2) of such 
section 230.
    ``(g) Rights Owner Defined.--In this section, the term `rights 
owner' means the person who has the exclusive right to reproduce a 
sound recording under the laws of any State.''.
    (b) Conforming Amendment.--The table of chapters for title 17, 
United States Code, is amended by adding at the end the following:

``14. Unauthorized Digital Performance of Pre-1972 Sound        1401''.
                            Recordings.

SEC. 203. EFFECTIVE DATE.

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

               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 new paragraph:
            ``(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 
new paragraph:
            ``(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 one 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 one 
                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 one 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 one 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 new paragraph:
            ``(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 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 
the 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.
                                                       Calendar No. 569

115th CONGRESS

  2d Session

                                S. 2823

_______________________________________________________________________

                                 A BILL

          To modernize copyright law, and for other purposes.

_______________________________________________________________________

                           September 12, 2018

                       Reported with an amendment
```