II 

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, and Mr. BLUNT) introduced the following 

bill; which was read twice and referred to the Committee on the Judiciary 

A BILL 

To modernize copyright law, and for other purposes. 

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Music Modernization Act’’. 

6 (b) TABLE OF CONTENTS.—The table of contents for 

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Rescission of unobligated balances in the Department of Justice Assets 

Forfeiture Fund. 

TITLE I—MUSIC LICENSING MODERNIZATION 

Sec. 101. Short title. 


lotter on DSKBCFDHB2PROD with BILLS
2 

•S 2823 IS

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. 

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. 

1 SEC. 2. RESCISSION OF UNOBLIGATED BALANCES IN THE 

2 DEPARTMENT OF JUSTICE ASSETS FOR3 FEITURE FUND. 

4 Of the unobligated balances available under the De5 partment of Justice Assets Forfeiture Fund, $47,000,000 

6 is hereby permanently rescinded. 

7 TITLE I—MUSIC LICENSING 

8 MODERNIZATION 

9 SEC. 101. SHORT TITLE. 

10 This title may be cited as the ‘‘Musical Works Mod11 ernization Act’’. 

12 SEC. 102. BLANKET LICENSE FOR DIGITAL USES AND ME13 CHANICAL LICENSING COLLECTIVE. 

14 (a) AMENDMENT.—Section 115 of title 17, United 

15 States Code, is amended— 

16 (1) in subsection (a)— 


lotter on DSKBCFDHB2PROD with BILLS
3 

•S 2823 IS

1 (A) by inserting ‘‘IN GENERAL’’ after 

2 ‘‘AVAILABILITY AND SCOPE OF COMPULSORY

3 LICENSE’’; 

4 (B) by striking paragraph (1) and insert5 ing the following new paragraph: 

6 ‘‘(1) ELIGIBILITY FOR COMPULSORY LI7 CENSE.— 

8 ‘‘(A) CONDITIONS FOR COMPULSORY LI9 CENSE.—A person may by complying with the 

10 provisions of this section obtain a compulsory li11 cense to make and distribute phonorecords of a 

12 nondramatic musical work, including by means 

13 of digital phonorecord delivery. A person may 

14 obtain a compulsory license only if the primary 

15 purpose in making phonorecords of the musical 

16 work is to distribute them to the public for pri17 vate use, including by means of digital phono18 record delivery, and— 

19 ‘‘(i) phonorecords of such musical 

20 work have previously been distributed to 

21 the public in the United States under the 

22 authority of the copyright owner of the 

23 work, including by means of digital phono24 record delivery; or 


lotter on DSKBCFDHB2PROD with BILLS
4 

•S 2823 IS

1 ‘‘(ii) in the case of a digital music 

2 provider seeking to make and distribute 

3 digital phonorecord deliveries of a sound 

4 recording embodying a musical work under 

5 a compulsory license for which clause (i) 

6 does not apply— 

7 ‘‘(I) the first fixation of such 

8 sound recording was made under the 

9 authority of the musical work copy10 right owner, and sound recording 

11 copyright owner has the authority of 

12 the musical work copyright owner to 

13 make and distribute digital phono14 record deliveries embodying such work 

15 to the public in the United States; 

16 and 

17 ‘‘(II) the sound recording copy18 right owner or its authorized dis19 tributor has authorized the digital 

20 music provider to make and distribute 

21 digital phonorecord deliveries of the 

22 sound recording to the public in the 

23 United States. 

24 ‘‘(B) DUPLICATION OF SOUND RECORD25 ING.—A person may not obtain a compulsory liVerDate Sep 11 2014 00:32 May 17, 2018 Jkt 079200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2823.IS S2823

lotter on DSKBCFDHB2PROD with BILLS
5 

•S 2823 IS

1 cense for the use of the work in the making of 

2 phonorecords duplicating a sound recording 

3 fixed by another, including by means of digital 

4 phonorecord delivery, unless— 

5 ‘‘(i) such sound recording was fixed 

6 lawfully; and 

7 ‘‘(ii) the making of the phonorecords 

8 was authorized by the owner of the copy9 right in the sound recording or, if the 

10 sound recording was fixed before February 

11 15, 1972, by any person who fixed the 

12 sound recording pursuant to an express li13 cense from the owner of the copyright in 

14 the musical work or pursuant to a valid 

15 compulsory license for use of such work in 

16 a sound recording.’’; and 

17 (C) in paragraph (2), by striking ‘‘A com18 pulsory license’’ and inserting ‘‘MUSICAL AR19 RANGEMENT.—A compulsory license’’; 

20 (2) by striking subsection (b) and inserting the 

21 following: 

22 ‘‘(b) PROCEDURES TO OBTAIN A COMPULSORY LI23 CENSE.— 

24 ‘‘(1) PHONORECORDS OTHER THAN DIGITAL

25 PHONORECORD DELIVERIES.—A person who seeks to 


lotter on DSKBCFDHB2PROD with BILLS
6 

•S 2823 IS

1 obtain a compulsory license under subsection (a) to 

2 make and distribute phonorecords of a musical work 

3 other than by means of digital phonorecord delivery 

4 shall, before or within 30 calendar days after mak5 ing, and before distributing, any phonorecord of the 

6 work, serve notice of intention to do so on the copy7 right owner. If the registration or other public 

8 records of the Copyright Office do not identify the 

9 copyright owner and include an address at which no10 tice can be served, it shall be sufficient to file the 

11 notice of intention with the Copyright Office. The 

12 notice shall comply, in form, content, and manner of 

13 service, with requirements that the Register of Copy14 rights shall prescribe by regulation. 

15 ‘‘(2) DIGITAL PHONORECORD DELIVERIES.—A 

16 person who seeks to obtain a compulsory license 

17 under subsection (a) to make and distribute 

18 phonorecords of a musical work by means of digital 

19 phonorecord delivery— 

20 ‘‘(A) prior to the license availability date, 

21 shall, before or within 30 calendar days after 

22 first making any such digital phonorecord deliv23 ery, serve a notice of intention to do so on the 

24 copyright owner (but may not file the notice 

25 with the Copyright Office, even if the public 


lotter on DSKBCFDHB2PROD with BILLS
7 

•S 2823 IS

1 records of the Office do not identify the owner 

2 or the owner’s address), and such notice shall 

3 comply, in form, content, and manner of serv4 ice, with requirements that the Register of 

5 Copyrights shall prescribe by regulation; or 

6 ‘‘(B) on or after the license availability 

7 date, shall, before making any such digital pho8 norecord delivery, follow the procedure de9 scribed in subsection (d)(2), except as provided 

10 in paragraph (3). 

11 ‘‘(3) RECORD COMPANY INDIVIDUAL DOWNLOAD

12 LICENSES.—Notwithstanding paragraph (2)(B), a 

13 record company may, on or after the license avail14 ability date, obtain an individual download license in 

15 accordance with the notice requirements described in 

16 paragraph (2)(A) (except for the requirement that 

17 notice occur prior to the license availability date). A 

18 record company that obtains an individual download 

19 license as permitted under this paragraph shall pro20 vide statements of account and pay royalties as pro21 vided in subsection (c)(2)(I). 

22 ‘‘(4) FAILURE TO OBTAIN LICENSE.— 

23 ‘‘(A) PHONORECORDS OTHER THAN DIG24 ITAL PHONORECORD DELIVERIES.—In the case 

25 of phonorecords made and distributed other 


lotter on DSKBCFDHB2PROD with BILLS
8 

•S 2823 IS

1 than by means of digital phonorecord delivery, 

2 the failure to serve or file the notice of inten3 tion required by paragraph (1) forecloses the 

4 possibility of a compulsory license under para5 graph (1). In the absence of a voluntary license, 

6 the failure to obtain a compulsory license ren7 ders the making and distribution of 

8 phonorecords actionable as acts of infringement 

9 under section 501 and subject to the remedies 

10 provided by sections 502 through 506. 

11 ‘‘(B) DIGITAL PHONORECORD DELIV12 ERIES.— 

13 ‘‘(i) In the case of phonorecords made 

14 and distributed by means of digital phono15 record delivery: 

16 ‘‘(I) The failure to serve the no17 tice of intention required by para18 graph (2)(A) or paragraph (3), as ap19 plicable, forecloses the possibility of a 

20 compulsory license under such para21 graph. 

22 ‘‘(II) The failure to comply with 

23 paragraph (2)(B) forecloses the possi24 bility of a blanket license for a period 

25 of 3 years after the last calendar day 


lotter on DSKBCFDHB2PROD with BILLS
9 

•S 2823 IS

1 on which the notice of license was re2 quired to be submitted to the mechan3 ical licensing collective under such 

4 paragraph. 

5 ‘‘(ii) In either case described in clause 

6 (i), in the absence of a voluntary license, 

7 the failure to obtain a compulsory license 

8 renders the making and distribution of 

9 phonorecords by means of digital phono10 record delivery actionable as acts of in11 fringement under section 501 and subject 

12 to the remedies provided by sections 502 

13 through 506.’’; 

14 (3) by amending subsection (c) to read as fol15 lows: 

16 ‘‘(c) GENERAL CONDITIONS APPLICABLE TO COM17 PULSORY LICENSE.— 

18 ‘‘(1) ROYALTY PAYABLE UNDER COMPULSORY

19 LICENSE.— 

20 ‘‘(A) IDENTIFICATION REQUIREMENT.—To 

21 be entitled to receive royalties under a compul22 sory license obtained under subsection (b)(1) 

23 the copyright owner must be identified in the 

24 registration or other public records of the Copy25 right Office. The owner is entitled to royalties 


lotter on DSKBCFDHB2PROD with BILLS
10 

•S 2823 IS

1 for phonorecords made and distributed after 

2 being so identified, but is not entitled to recover 

3 for any phonorecords previously made and dis4 tributed. 

5 ‘‘(B) ROYALTY FOR PHONORECORDS

6 OTHER THAN DIGITAL PHONORECORD DELIV7 ERIES.—Except as provided by subparagraph 

8 (A), for every phonorecord made and distrib9 uted under a compulsory license under sub10 section (a) other than by means of digital pho11 norecord delivery, with respect to each work 

12 embodied in the phonorecord, the royalty shall 

13 be the royalty prescribed under subparagraphs 

14 (D) through (F) and paragraph (2)(A) and 

15 chapter 8 of this title. For purposes of this sub16 paragraph, a phonorecord is considered ‘distrib17 uted’ if the person exercising the compulsory li18 cense has voluntarily and permanently parted 

19 with its possession. 

20 ‘‘(C) ROYALTY FOR DIGITAL PHONO21 RECORD DELIVERIES.—For every digital phono22 record delivery of a musical work made under 

23 a compulsory license under this section, the roy24 alty payable shall be the royalty prescribed 


lotter on DSKBCFDHB2PROD with BILLS
11 

•S 2823 IS

1 under subparagraphs (D) through (F) and 

2 paragraph (2)(A) and chapter 8 of this title. 

3 ‘‘(D) AUTHORITY TO NEGOTIATE.—Not4 withstanding any provision of the antitrust 

5 laws, any copyright owners of nondramatic mu6 sical works and any persons entitled to obtain 

7 a compulsory license under subsection (a) may 

8 negotiate and agree upon the terms and rates 

9 of royalty payments under this section and the 

10 proportionate division of fees paid among copy11 right owners, and may designate common 

12 agents on a nonexclusive basis to negotiate, 

13 agree to, pay or receive such royalty payments. 

14 Such authority to negotiate the terms and rates 

15 of royalty payments includes, but is not limited 

16 to, the authority to negotiate the year during 

17 which the royalty rates prescribed under this 

18 subparagraph and subparagraphs (E) and (F) 

19 and paragraph (2)(A) and chapter 8 of this 

20 title shall next be determined. 

21 ‘‘(E) DETERMINATION OF REASONABLE

22 RATES AND TERMS.—Proceedings under chap23 ter 8 shall determine reasonable rates and 

24 terms of royalty payments for the activities 

25 specified by this section during the period beVerDate Sep 11 2014 00:32 May 17, 2018 Jkt 079200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S2823.IS S2823

lotter on DSKBCFDHB2PROD with BILLS
12 

•S 2823 IS

1 ginning with the effective date of such rates 

2 and terms, but not earlier than January 1 of 

3 the second year following the year in which the 

4 petition requesting the proceeding is filed, and 

5 ending on the effective date of successor rates 

6 and terms, or such other period as the parties 

7 may agree. Any copyright owners of nondra8 matic musical works and any persons entitled 

9 to obtain a compulsory license under subsection 

10 (a) may submit to the Copyright Royalty 

11 Judges licenses covering such activities. The 

12 parties to each proceeding shall bear their own 

13 costs. 

14 ‘‘(F) SCHEDULE OF REASONABLE

15 RATES.—The schedule of reasonable rates and 

16 terms determined by the Copyright Royalty 

17 Judges shall, subject to paragraph (2)(A), be 

18 binding on all copyright owners of nondramatic 

19 musical works and persons entitled to obtain a 

20 compulsory license under subsection (a) during 

21 the period specified in subparagraph (E), such 

22 other period as may be determined pursuant to 

23 subparagraphs (D) and (E), or such other pe24 riod as the parties may agree. The Copyright 

25 Royalty Judges shall establish rates and terms 


lotter on DSKBCFDHB2PROD with BILLS
13 

•S 2823 IS

1 that most clearly represent the rates and terms 

2 that would have been negotiated in the market3 place between a willing buyer and a willing sell4 er. In determining such rates and terms for dig5 ital phonorecord deliveries, the Copyright Roy6 alty Judges shall base their decision on eco7 nomic, competitive, and programming informa8 tion presented by the parties, including— 

9 ‘‘(i) whether use of the compulsory li10 censee’s service may substitute for or may 

11 promote the sales of phonorecords or oth12 erwise may interfere with or may enhance 

13 the musical work copyright owner’s other 

14 streams of revenue from its musical works; 

15 and 

16 ‘‘(ii) the relative roles of the copyright 

17 owner and the compulsory licensee in the 

18 copyrighted work and the service made 

19 available to the public with respect to the 

20 relative creative contribution, technological 

21 contribution, capital investment, cost, and 

22 risk. 

23 ‘‘(2) ADDITIONAL TERMS AND CONDITIONS.— 

24 ‘‘(A) VOLUNTARY LICENSES AND CON25 TRACTUAL ROYALTY RATES.— 


lotter on DSKBCFDHB2PROD with BILLS
14 

•S 2823 IS

1 ‘‘(i) License agreements voluntarily 

2 negotiated at any time between one or 

3 more copyright owners of nondramatic mu4 sical works and one or more persons enti5 tled to obtain a compulsory license under 

6 subsection (a) shall be given effect in lieu 

7 of any determination by the Copyright 

8 Royalty Judges. Subject to clause (ii), the 

9 royalty rates determined pursuant to sub10 paragraphs (E) and (F) of paragraph (1) 

11 shall be given effect as to digital phono12 record deliveries in lieu of any contrary 

13 royalty rates specified in a contract pursu14 ant to which a recording artist who is the 

15 author of a nondramatic musical work 

16 grants a license under that person’s exclu17 sive rights in the musical work under para18 graphs (1) and (3) of section 106 or com19 mits another person to grant a license in 

20 that musical work under paragraphs (1) 

21 and (3) of section 106, to a person desir22 ing to fix in a tangible medium of expres23 sion a sound recording embodying the mu24 sical work. 


lotter on DSKBCFDHB2PROD with BILLS
15 

•S 2823 IS

1 ‘‘(ii) The second sentence of clause (i) 

2 shall not apply to— 

3 ‘‘(I) a contract entered into on or 

4 before June 22, 1995, and not modi5 fied thereafter for the purpose of re6 ducing the royalty rates determined 

7 pursuant to subparagraphs (E) and 

8 (F) of paragraph (1) or of increasing 

9 the number of musical works within 

10 the scope of the contract covered by 

11 the reduced rates, except if a contract 

12 entered into on or before June 22, 

13 1995, is modified thereafter for the 

14 purpose of increasing the number of 

15 musical works within the scope of the 

16 contract, any contrary royalty rates 

17 specified in the contract shall be given 

18 effect in lieu of royalty rates deter19 mined pursuant to subparagraphs (E) 

20 and (F) of paragraph (1) for the 

21 number of musical works within the 

22 scope of the contract as of June 22, 

23 1995; and 

24 ‘‘(II) a contract entered into 

25 after the date that the sound recordVerDate Sep 11 2014 00:32 May 17, 2018 Jkt 079200 PO 00000 Frm 00015 Fmt 6652 Sfmt 6201 E:\BILLS\S2823.IS S2823

lotter on DSKBCFDHB2PROD with BILLS
16 

•S 2823 IS

1 ing is fixed in a tangible medium of 

2 expression substantially in a form in3 tended for commercial release, if at 

4 the time the contract is entered into, 

5 the recording artist retains the right 

6 to grant licenses as to the musical 

7 work under paragraphs (1) and (3) of 

8 section 106. 

9 ‘‘(B) SOUND RECORDING INFORMATION.— 

10 Except as provided in section 1002(e) of this 

11 title, a digital phonorecord delivery licensed 

12 under this paragraph shall be accompanied by 

13 the information encoded in the sound recording, 

14 if any, by or under the authority of the copy15 right owner of that sound recording, that iden16 tifies the title of the sound recording, the fea17 tured recording artist who performs on the 

18 sound recording, and related information, in19 cluding information concerning the underlying 

20 musical work and its writer. 

21 ‘‘(C) INFRINGEMENT REMEDIES.— 

22 ‘‘(i) A digital phonorecord delivery of 

23 a sound recording is actionable as an act 

24 of infringement under section 501, and is 


lotter on DSKBCFDHB2PROD with BILLS
17 

•S 2823 IS

1 fully subject to the remedies provided by 

2 sections 502 through 506, unless— 

3 ‘‘(I) the digital phonorecord de4 livery has been authorized by the 

5 sound recording copyright owner; and 

6 ‘‘(II) the entity making the dig7 ital phonorecord delivery has obtained 

8 a compulsory license under subsection 

9 (a) or has otherwise been authorized 

10 by the musical work copyright owner, 

11 or by a record company pursuant to 

12 an individual download license, to 

13 make and distribute phonorecords of 

14 each musical work embodied in the 

15 sound recording by means of digital 

16 phonorecord delivery. 

17 ‘‘(ii) Any cause of action under this 

18 subparagraph shall be in addition to those 

19 available to the owner of the copyright in 

20 the nondramatic musical work under sub21 paragraph (J) and section 106(4) and the 

22 owner of the copyright in the sound record23 ing under section 106(6). 

24 ‘‘(D) LIABILITY OF SOUND RECORDING

25 OWNERS.—The liability of the copyright owner 


lotter on DSKBCFDHB2PROD with BILLS
18 

•S 2823 IS

1 of a sound recording for infringement of the 

2 copyright in a nondramatic musical work em3 bodied in the sound recording shall be deter4 mined in accordance with applicable law, except 

5 that the owner of a copyright in a sound re6 cording shall not be liable for a digital phono7 record delivery by a third party if the owner of 

8 the copyright in the sound recording does not 

9 license the distribution of a phonorecord of the 

10 nondramatic musical work. 

11 ‘‘(E) RECORDING DEVICES AND MEDIA.— 

12 Nothing in section 1008 shall be construed to 

13 prevent the exercise of the rights and remedies 

14 allowed by this paragraph, subparagraph (J), 

15 and chapter 5 in the event of a digital phono16 record delivery, except that no action alleging 

17 infringement of copyright may be brought 

18 under this title against a manufacturer, im19 porter or distributor of a digital audio recording 

20 device, a digital audio recording medium, an 

21 analog recording device, or an analog recording 

22 medium, or against a consumer, based on the 

23 actions described in such section. 

24 ‘‘(F) PRESERVATION OF RIGHTS.—Noth25 ing in this section annuls or limits (i) the excluVerDate Sep 11 2014 00:32 May 17, 2018 Jkt 079200 PO 00000 Frm 00018 Fmt 6652 Sfmt 6201 E:\BILLS\S2823.IS S2823

lotter on DSKBCFDHB2PROD with BILLS
19 

•S 2823 IS

1 sive right to publicly perform a sound recording 

2 or the musical work embodied therein, including 

3 by means of a digital transmission, under sec4 tions 106(4) and 106(6), (ii) except for compul5 sory licensing under the conditions specified by 

6 this section, the exclusive rights to reproduce 

7 and distribute the sound recording and the mu8 sical work embodied therein under sections 

9 106(1) and 106(3), including by means of a 

10 digital phonorecord delivery, or (iii) any other 

11 rights under any other provision of section 106, 

12 or remedies available under this title, as such 

13 rights or remedies exist either before or after 

14 the date of enactment of the Digital Perform15 ance Right in Sound Recordings Act of 1995. 

16 ‘‘(G) EXEMPT TRANSMISSIONS AND RE17 TRANSMISSIONS.—The provisions of this section 

18 concerning digital phonorecord deliveries shall 

19 not apply to any exempt transmissions or re20 transmissions under section 114(d)(1). The ex21 emptions created in section 114(d)(1) do not 

22 expand or reduce the rights of copyright owners 

23 under section 106(1) through (5) with respect 

24 to such transmissions and retransmissions. 


lotter on DSKBCFDHB2PROD with BILLS
20 

•S 2823 IS

1 ‘‘(H) DISTRIBUTION BY RENTAL, LEASE, 

2 OR LENDING.—A compulsory license obtained 

3 under subsection (b)(1) to make and distribute 

4 phonorecords includes the right of the maker of 

5 such a phonorecord to distribute or authorize 

6 distribution of such phonorecord, other than by 

7 means of a digital phonorecord delivery, by 

8 rental, lease, or lending (or by acts or practices 

9 in the nature of rental, lease, or lending). With 

10 respect to each nondramatic musical work em11 bodied in the phonorecord, the royalty shall be 

12 a proportion of the revenue received by the 

13 compulsory licensee from every such act of dis14 tribution of the phonorecord under this clause 

15 equal to the proportion of the revenue received 

16 by the compulsory licensee from distribution of 

17 the phonorecord under subsection 

18 (a)(1)(A)(ii)(II) that is payable by a compulsory 

19 licensee under that clause and under chapter 8. 

20 The Register of Copyrights shall issue regula21 tions to carry out the purpose of this clause. 

22 ‘‘(I) PAYMENT OF ROYALTIES AND STATE23 MENTS OF ACCOUNT.—Except as provided in 

24 paragraphs (4)(A)(i) and (10)(B) of subsection 

25 (d), royalty payments shall be made on or beVerDate Sep 11 2014 00:32 May 17, 2018 Jkt 079200 PO 00000 Frm 00020 Fmt 6652 Sfmt 6201 E:\BILLS\S2823.IS S2823

lotter on DSKBCFDHB2PROD with BILLS
21 

•S 2823 IS

1 fore the twentieth day of each month and shall 

2 include all royalties for the month next pre3 ceding. Each monthly payment shall be made 

4 under oath and shall comply with requirements 

5 that the Register of Copyrights shall prescribe 

6 by regulation. The Register shall also prescribe 

7 regulations under which detailed cumulative an8 nual statements of account, certified by a cer9 tified public accountant, shall be filed for every 

10 compulsory license under subsection (a). The 

11 regulations covering both the monthly and the 

12 annual statements of account shall prescribe 

13 the form, content, and manner of certification 

14 with respect to the number of records made and 

15 the number of records distributed. 

16 ‘‘(J) NOTICE OF DEFAULT AND TERMI17 NATION OF COMPULSORY LICENSE.—In the 

18 case of a license obtained under subsection 

19 (b)(1), (b)(2)(A), or (b)(3), if the copyright 

20 owner does not receive the monthly payment 

21 and the monthly and annual statements of ac22 count when due, the owner may give written no23 tice to the licensee that, unless the default is 

24 remedied within 30 days from the date of the 

25 notice, the compulsory license will be automatiVerDate Sep 11 2014 00:32 May 17, 2018 Jkt 079200 PO 00000 Frm 00021 Fmt 6652 Sfmt 6201 E:\BILLS\S2823.IS S2823

lotter on DSKBCFDHB2PROD with BILLS
22 

•S 2823 IS

1 cally terminated. Such termination renders ei2 ther the making or the distribution, or both, of 

3 all phonorecords for which the royalty has not 

4 been paid, actionable as acts of infringement 

5 under section 501 and fully subject to the rem6 edies provided by sections 502 through 506. In 

7 the case of a license obtained under subsection 

8 (b)(2)(B), license authority under the compul9 sory license may be terminated as provided in 

10 subsection (d)(4)(E).’’; 

11 (4) by amending subsection (d) to read as fol12 lows: 

13 ‘‘(d) BLANKET LICENSE FOR DIGITAL USES, ME14 CHANICAL LICENSING COLLECTIVE, AND DIGITAL LI15 CENSEE COORDINATOR.— 

16 ‘‘(1) BLANKET LICENSE FOR DIGITAL USES.— 

17 ‘‘(A) IN GENERAL.—A digital music pro18 vider that qualifies for a compulsory license 

19 under subsection (a) may, by complying with 

20 the terms and conditions of this subsection, ob21 tain a blanket license from copyright owners 

22 through the mechanical licensing collective to 

23 make and distribute digital phonorecord deliv24 eries of musical works through one or more cov25 ered activities. 


lotter on DSKBCFDHB2PROD with BILLS
23 

•S 2823 IS

1 ‘‘(B) INCLUDED ACTIVITIES.—A blanket li2 cense— 

3 ‘‘(i) covers all musical works (or 

4 shares of such works) available for compul5 sory licensing under this section for pur6 poses of engaging in covered activities, ex7 cept as provided in subparagraph (C); 

8 ‘‘(ii) includes the making and dis9 tribution of server, intermediate, archival, 

10 and incidental reproductions of musical 

11 works that are reasonable and necessary 

12 for the digital music provider to engage in 

13 covered activities licensed under this sub14 section, solely for the purpose of engaging 

15 in such covered activities; and 

16 ‘‘(iii) does not cover or include any 

17 rights or uses other than those described 

18 in clauses (i) and (ii). 

19 ‘‘(C) OTHER LICENSES.—A voluntary li20 cense for covered activities entered into by or 

21 under the authority of one or more copyright 

22 owners and one or more digital music providers, 

23 or authority to make and distribute permanent 

24 downloads of a musical work obtained by a dig25 ital music provider from a sound recording 


lotter on DSKBCFDHB2PROD with BILLS
24 

•S 2823 IS

1 copyright owner pursuant to an individual 

2 download license, shall be given effect in lieu of 

3 a blanket license under this subsection with re4 spect to the musical works (or shares thereof) 

5 covered by such voluntary license or individual 

6 download authority and the following conditions 

7 apply: 

8 ‘‘(i) Where a voluntary license or indi9 vidual download license applies, the license 

10 authority provided under the blanket li11 cense shall exclude any musical works (or 

12 shares thereof) subject to the voluntary li13 cense or individual download license. 

14 ‘‘(ii) An entity engaged in covered ac15 tivities under a voluntary license or author16 ity obtained pursuant to an individual 

17 download license that is a significant non18 blanket licensee shall comply with para19 graph (6)(A). 

20 ‘‘(iii) The rates and terms of any vol21 untary license shall be subject to the sec22 ond sentence of clause (i) and clause (ii) of 

23 subsection (c)(2)(A) and paragraph (9)(C), 

24 as applicable. 


lotter on DSKBCFDHB2PROD with BILLS
25 

•S 2823 IS

1 ‘‘(D) PROTECTION AGAINST INFRINGE2 MENT ACTIONS.—A digital music provider that 

3 obtains and complies with the terms of a valid 

4 blanket license under this subsection shall not 

5 be subject to an action for infringement of the 

6 exclusive rights provided by paragraphs (1) and 

7 (3) of section 106 under this title arising from 

8 use of a musical work (or share thereof) to en9 gage in covered activities authorized by such li10 cense, subject to paragraph (4)(E). 

11 ‘‘(E) OTHER REQUIREMENTS AND CONDI12 TIONS APPLY.—Except as expressly provided in 

13 this subsection, each requirement, limitation, 

14 condition, privilege, right, and remedy otherwise 

15 applicable to compulsory licenses under this sec16 tion shall apply to compulsory blanket licenses 

17 under this subsection. 

18 ‘‘(2) AVAILABILITY OF BLANKET LICENSE.— 

19 ‘‘(A) PROCEDURE FOR OBTAINING LI20 CENSE.—A digital music provider may obtain a 

21 blanket license by submitting a notice of license 

22 to the mechanical licensing collective that speci23 fies the particular covered activities in which 

24 the digital music provider seeks to engage, as 

25 follows: 


lotter on DSKBCFDHB2PROD with BILLS
26 

•S 2823 IS

1 ‘‘(i) The notice of license shall comply 

2 in form and substance with requirements 

3 that the Register of Copyrights shall estab4 lish by regulation. 

5 ‘‘(ii) Unless rejected in writing by the 

6 mechanical licensing collective within 30 

7 calendar days after receipt, the blanket li8 cense shall be effective as of the date the 

9 notice of license was sent by the digital 

10 music provider as shown by a physical or 

11 electronic record. 

12 ‘‘(iii) A notice of license may only be 

13 rejected by the mechanical licensing collec14 tive if— 

15 ‘‘(I) the digital music provider or 

16 notice of license does not meet the re17 quirements of this section or applica18 ble regulations, in which case the re19 quirements at issue shall be specified 

20 with reasonable particularity in the 

21 notice of rejection; or 

22 ‘‘(II) the digital music provider 

23 has had a blanket license terminated 

24 by the mechanical licensing collective 


lotter on DSKBCFDHB2PROD with BILLS
27 

•S 2823 IS

1 within the past 3 years pursuant to 

2 paragraph (4)(E). 

3 ‘‘(iv) If a notice of license is rejected 

4 under clause (iii)(I), the digital music pro5 vider shall have 30 calendar days after re6 ceipt of the notice of rejection to cure any 

7 deficiency and submit an amended notice 

8 of license to the mechanical licensing col9 lective. If the deficiency has been cured, 

10 the mechanical licensing collective shall so 

11 confirm in writing, and the license shall be 

12 effective as of the date that the original 

13 notice of license was provided by the dig14 ital music provider. 

15 ‘‘(v) A digital music provider that be16 lieves a notice of license was improperly re17 jected by the mechanical licensing collec18 tive may seek review of such rejection in 

19 Federal district court. The district court 

20 shall determine the matter de novo based 

21 on the record before the mechanical licens22 ing collective and any additional evidence 

23 presented by the parties. 

24 ‘‘(B) BLANKET LICENSE EFFECTIVE

25 DATE.—Blanket licenses shall be made available 


lotter on DSKBCFDHB2PROD with BILLS
28 

•S 2823 IS

1 by the mechanical licensing collective on and 

2 after the license availability date. No such li3 cense shall be effective prior to the license avail4 ability date. 

5 ‘‘(3) MECHANICAL LICENSING COLLECTIVE.— 

6 ‘‘(A) IN GENERAL.—The mechanical li7 censing collective shall be a single entity that— 

8 ‘‘(i) is a nonprofit, not owned by any 

9 other entity, that is created by copyright 

10 owners to carry out responsibilities under 

11 this subsection; 

12 ‘‘(ii) is endorsed by and enjoys sub13 stantial support from musical work copy14 right owners that together represent the 

15 greatest percentage of the licensor market 

16 for uses of such works in covered activities, 

17 as measured over the preceding 3 full cal18 endar years; 

19 ‘‘(iii) is able to demonstrate to the 

20 Register of Copyrights that it has, or will 

21 have prior to the license availability date, 

22 the administrative and technological capa23 bilities to perform the required functions of 

24 the mechanical licensing collective under 

25 this subsection; and 


lotter on DSKBCFDHB2PROD with BILLS
29 

•S 2823 IS

1 ‘‘(iv) has been designated by the Reg2 ister of Copyrights in accordance with sub3 paragraph (B). 

4 ‘‘(B) DESIGNATION OF MECHANICAL LI5 CENSING COLLECTIVE.— 

6 ‘‘(i) INITIAL DESIGNATION.—The 

7 Register of Copyrights shall initially des8 ignate the mechanical licensing collective 

9 within 9 months after the enactment date 

10 as follows: 

11 ‘‘(I) Within 90 calendar days 

12 after the enactment date, the Register 

13 shall publish notice in the Federal 

14 Register soliciting information to as15 sist in identifying the appropriate en16 tity to serve as the mechanical licens17 ing collective, including the name and 

18 affiliation of each member of the 

19 board of directors described under 

20 subparagraph (D)(i) and each com21 mittee established pursuant to clauses 

22 (iii), (iv), and (v) of subparagraph 

23 (D). 

24 ‘‘(II) After reviewing the infor25 mation requested under subclause (I) 


lotter on DSKBCFDHB2PROD with BILLS
30 

•S 2823 IS

1 and making a designation, the Reg2 ister shall publish notice in the Fed3 eral Register setting forth the identity 

4 of and contact information for the me5 chanical licensing collective. 

6 ‘‘(ii) PERIODIC REVIEW OF DESIGNA7 TION.—Following the initial designation of 

8 the mechanical licensing collective, the 

9 Register shall, every 5 years, beginning 

10 with the fifth full calendar year to com11 mence after the initial designation, publish 

12 notice in the Federal Register in the 

13 month of January soliciting information 

14 concerning whether the existing designa15 tion should be continued, or a different en16 tity meeting the criteria described in 

17 clauses (i) through (iii) of subparagraph 

18 (A) shall be designated. Following publica19 tion of such notice: 

20 ‘‘(I) The Register shall, after re21 viewing the information submitted and 

22 conducting additional proceedings as 

23 appropriate, publish notice in the Fed24 eral Register of a continuing designa25 tion or new designation of the meVerDate Sep 11 2014 00:32 May 17, 2018 Jkt 079200 PO 00000 Frm 00030 Fmt 6652 Sfmt 6201 E:\BILLS\S2823.IS S2823

lotter on DSKBCFDHB2PROD with BILLS
31 

•S 2823 IS

1 chanical licensing collective, as the 

2 case may be, with any new designa3 tion to be effective as of the first day 

4 of a month that is no less than 6 

5 months and no longer than 9 months 

6 after the date of publication of such 

7 notice, as specified by the Register. 

8 ‘‘(II) If a new entity is des9 ignated as a mechanical licensing col10 lective, the Register shall adopt regu11 lations to govern the transfer of li12 censes, funds, records, data, and ad13 ministrative responsibilities from the 

14 existing mechanical licensing collective 

15 to the new entity. 

16 ‘‘(iii) CLOSEST ALTERNATIVE DES17 IGNATION.—If the Register is unable to 

18 identify an entity that fulfills each of the 

19 qualifications set forth in clauses (i) 

20 through (iii) of subparagraph (A), the Reg21 ister shall designate the entity that most 

22 nearly fulfills such qualifications for pur23 poses of carrying out the responsibilities of 

24 the mechanical licensing collective. 

25 ‘‘(C) AUTHORITIES AND FUNCTIONS.— 


lotter on DSKBCFDHB2PROD with BILLS
32 

•S 2823 IS

1 ‘‘(i) IN GENERAL.—The mechanical li2 censing collective is authorized to perform 

3 the following functions, subject to more 

4 particular requirements as described in 

5 this subsection: 

6 ‘‘(I) Offer and administer blanket 

7 licenses, including receipt of notices of 

8 license and reports of usage from dig9 ital music providers. 

10 ‘‘(II) Collect and distribute royal11 ties from digital music providers for 

12 covered activities. 

13 ‘‘(III) Engage in efforts to iden14 tify musical works (and shares of such 

15 works) embodied in particular sound 

16 recordings, and to identify and locate 

17 the copyright owners of such musical 

18 works (and shares of such works). 

19 ‘‘(IV) Maintain the musical 

20 works database and other information 

21 relevant to the administration of li22 censing activities under this section. 

23 ‘‘(V) Administer a process by 

24 which copyright owners can claim 

25 ownership of musical works (and 


lotter on DSKBCFDHB2PROD with BILLS
33 

•S 2823 IS

1 shares of such works), and a process 

2 by which royalties for works for which 

3 the owner is not identified or located 

4 are equitably distributed to known 

5 copyright owners. 

6 ‘‘(VI) Administer collections of 

7 the administrative assessment from 

8 digital music providers and significant 

9 nonblanket licensees, including receipt 

10 of notices of nonblanket activity. 

11 ‘‘(VII) Invest in relevant re12 sources, and arrange for services of 

13 outside vendors and others, to support 

14 its activities. 

15 ‘‘(VIII) Engage in legal and 

16 other efforts to enforce rights and ob17 ligations under this subsection, includ18 ing by filing bankruptcy proofs of 

19 claims for amounts owed under li20 censes, and acting in coordination 

21 with the digital licensee coordinator. 

22 ‘‘(IX) Initiate and participate in 

23 proceedings before the Copyright Roy24 alty Judges to establish the adminisVerDate Sep 11 2014 00:32 May 17, 2018 Jkt 079200 PO 00000 Frm 00033 Fmt 6652 Sfmt 6201 E:\BILLS\S2823.IS S2823

lotter on DSKBCFDHB2PROD with BILLS
34 

•S 2823 IS

1 trative assessment under this sub2 section. 

3 ‘‘(X) Initiate and participate in 

4 proceedings before the Copyright Of5 fice with respect to activities under 

6 this subsection. 

7 ‘‘(XI) Gather and provide docu8 mentation for use in proceedings be9 fore the Copyright Royalty Judges to 

10 set rates and terms under this section. 

11 ‘‘(XII) Maintain records of its 

12 activities and engage in and respond 

13 to audits described under this sub14 section. 

15 ‘‘(XIII) Engage in such other ac16 tivities as may be necessary or appro17 priate to fulfill its responsibilities 

18 under this subsection. 

19 ‘‘(ii) ADDITIONAL ADMINISTRATIVE

20 ACTIVITIES.—Subject to paragraph 

21 (11)(C) and clause (iii), the mechanical li22 censing collective may also administer, or 

23 assist in administering, voluntary licenses 

24 issued by or individual download licenses 

25 obtained from copyright owners for uses of 


lotter on DSKBCFDHB2PROD with BILLS
35 

•S 2823 IS

1 musical works, for which the mechanical li2 censing collective shall charge reasonable 

3 fees for such services. 

4 ‘‘(iii) RESTRICTION CONCERNING PUB5 LIC PERFORMANCE RIGHTS.—The mechan6 ical licensing collective may, pursuant to 

7 clause (ii), provide administration services 

8 with respect to voluntary licenses that in9 clude the right of public performance in 

10 musical works, but may not itself negotiate 

11 or grant licenses for the right of public 

12 performance in musical works, and may 

13 not be the exclusive or nonexclusive as14 signee or grantee of the right of public per15 formance in musical works. 

16 ‘‘(iv) RESTRICTION ON LOBBYING.— 

17 The mechanical licensing collective may 

18 not engage in government lobbying activi19 ties, but may engage in the activities de20 scribed in subclauses (IX), (X), and (XI) 

21 of clause (i). 

22 ‘‘(D) GOVERNANCE.— 

23 ‘‘(i) BOARD OF DIRECTORS.—The me24 chanical licensing collective shall have a 

25 board of directors consisting of 14 voting 


lotter on DSKBCFDHB2PROD with BILLS
36 

•S 2823 IS

1 members and 3 nonvoting members, as fol2 lows: 

3 ‘‘(I) Ten voting members shall be 

4 representatives of music publishers to 

5 which songwriters have assigned ex6 clusive rights of reproduction and dis7 tribution of musical works with re8 spect to covered activities and no such 

9 music publisher member may be 

10 owned by, or under common control 

11 with, any other board member. 

12 ‘‘(II) Four voting members shall 

13 be professional songwriters who have 

14 retained and exercise exclusive rights 

15 of reproduction and distribution with 

16 respect to covered activities with re17 spect to musical works they have au18 thored. 

19 ‘‘(III) One nonvoting member 

20 shall be a representative of the non21 profit trade association of music pub22 lishers that represents the greatest 

23 percentage of the licensor market for 

24 uses of musical works in covered acVerDate Sep 11 2014 00:32 May 17, 2018 Jkt 079200 PO 00000 Frm 00036 Fmt 6652 Sfmt 6201 E:\BILLS\S2823.IS S2823

lotter on DSKBCFDHB2PROD with BILLS
37 

•S 2823 IS

1 tivities, as measured over the pre2 ceding 3 full calendar years. 

3 ‘‘(IV) One nonvoting member 

4 shall be a representative of the digital 

5 licensee coordinator, provided that a 

6 digital licensee coordinator has been 

7 designated pursuant to paragraph 

8 (5)(B). Otherwise, the nonvoting 

9 member shall be the nonprofit trade 

10 association of digital licensees that 

11 represents the greatest percentage of 

12 the licensee market for uses of musi13 cal works in covered activities, as 

14 measured over the preceding 3 full 

15 calendar years. 

16 ‘‘(V) One nonvoting member 

17 shall be a representative of a nation18 ally recognized nonprofit trade asso19 ciation whose primary mission is advo20 cacy on behalf of songwriters in the 

21 United States. 

22 ‘‘(ii) BOARD MEETINGS.—The board 

23 of directors shall meet no less than two 

24 times per year and discuss matters pertiVerDate Sep 11 2014 00:32 May 17, 2018 Jkt 079200 PO 00000 Frm 00037 Fmt 6652 Sfmt 6201 E:\BILLS\S2823.IS S2823

lotter on DSKBCFDHB2PROD with BILLS
38 

•S 2823 IS

1 nent to the operations, including the me2 chanical licensing collective budget. 

3 ‘‘(iii) OPERATIONS ADVISORY COM4 MITTEE.—The board of directors of the 

5 mechanical licensing collective shall estab6 lish an operations advisory committee con7 sisting of no fewer than six members to 

8 make recommendations to the board of di9 rectors concerning the operations of the 

10 mechanical licensing collective, including 

11 the efficient investment in and deployment 

12 of information technology and data re13 sources. Such committee shall have an 

14 equal number of members of the committee 

15 who are— 

16 ‘‘(I) musical work copyright own17 ers who are appointed by the board of 

18 directors of the mechanical licensing 

19 collective; and 

20 ‘‘(II) representatives of digital 

21 music providers who are appointed by 

22 the digital licensee coordinator. 

23 ‘‘(iv) UNCLAIMED ROYALTIES OVER24 SIGHT COMMITTEE.—The board of direc25 tors of the mechanical licensing collective 


lotter on DSKBCFDHB2PROD with BILLS
39 

•S 2823 IS

1 shall establish and appoint an unclaimed 

2 royalties oversight committee consisting of 

3 10 members, 5 of which shall be musical 

4 work copyright owners and 5 of which 

5 shall be professional songwriters whose 

6 works are used in covered activities. 

7 ‘‘(v) DISPUTE RESOLUTION COM8 MITTEE.—The board of directors of the 

9 mechanical licensing collective shall estab10 lish and appoint a dispute resolution com11 mittee consisting of no fewer than six 

12 members, which committee shall include an 

13 equal number of representatives of musical 

14 work copyright owners and professional 

15 songwriters. 

16 ‘‘(vi) MECHANICAL LICENSING COL17 LECTIVE ANNUAL REPORT.—Not later 

18 than June 30 of each year commencing 

19 after the license availability date, the me20 chanical licensing collective shall post, and 

21 make available online for a period of at 

22 least 3 years, an annual report that sets 

23 forth how the collective operates, how roy24 alties are collected and distributed, and the 

25 collective total costs for the preceding calVerDate Sep 11 2014 00:32 May 17, 2018 Jkt 079200 PO 00000 Frm 00039 Fmt 6652 Sfmt 6201 E:\BILLS\S2823.IS S2823

lotter on DSKBCFDHB2PROD with BILLS
40 

•S 2823 IS

1 endar year. At the time of posting, a copy 

2 of the report shall be provided to the Reg3 ister of Copyrights. 

4 ‘‘(E) MUSICAL WORKS DATABASE.— 

5 ‘‘(i) ESTABLISHMENT AND MAINTE6 NANCE OF DATABASE.—The mechanical li7 censing collective shall establish and main8 tain a database containing information re9 lating to musical works (and shares of 

10 such works) and, to the extent known, the 

11 identity and location of the copyright own12 ers of such works (and shares thereof) and 

13 the sound recordings in which the musical 

14 works are embodied. In furtherance of 

15 maintaining such database, the mechanical 

16 licensing collective shall engage in efforts 

17 to identify the musical works embodied in 

18 particular sound recordings, as well as to 

19 identify and locate the copyright owners of 

20 such works (and shares thereof), and up21 date such data as appropriate. 

22 ‘‘(ii) MATCHED WORKS.—With respect 

23 to musical works (and shares thereof) that 

24 have been matched to copyright owners, 

25 the musical works database shall include— 


lotter on DSKBCFDHB2PROD with BILLS
41 

•S 2823 IS

1 ‘‘(I) the title of the musical work; 

2 ‘‘(II) the copyright owner of the 

3 work (or share thereof), and such 

4 owner’s ownership percentage; 

5 ‘‘(III) contact information for 

6 such copyright owner; 

7 ‘‘(IV) to the extent reasonably 

8 available to the mechanical licensing 

9 collective— 

10 ‘‘(aa) the international 

11 standard musical work code for 

12 the work; and 

13 ‘‘(bb) identifying informa14 tion for sound recordings in 

15 which the musical work is em16 bodied, including the name of the 

17 sound recording, featured artist, 

18 sound recording copyright owner, 

19 producer, international standard 

20 recording code, and other infor21 mation commonly used to assist 

22 in associating sound recordings 

23 with musical works; and 


lotter on DSKBCFDHB2PROD with BILLS
42 

•S 2823 IS

1 ‘‘(V) such other information as 

2 the Register of Copyrights may pre3 scribe by regulation. 

4 ‘‘(iii) UNMATCHED WORKS.—With re5 spect to unmatched musical works (and 

6 shares of works) in the database, the musi7 cal works database shall include— 

8 ‘‘(I) to the extent reasonably 

9 available to the mechanical licensing 

10 collective— 

11 ‘‘(aa) the title of the musical 

12 work; 

13 ‘‘(bb) the ownership percent14 age for which an owner has not 

15 been identified; 

16 ‘‘(cc) if a copyright owner 

17 has been identified but not lo18 cated, the identity of such owner 

19 and such owner’s ownership per20 centage; 

21 ‘‘(dd) identifying informa22 tion for sound recordings in 

23 which the work is embodied, in24 cluding sound recording name, 

25 featured artist, sound recording 


lotter on DSKBCFDHB2PROD with BILLS
43 

•S 2823 IS

1 copyright owner, producer, inter2 national standard recording code, 

3 and other information commonly 

4 used to assist in associating 

5 sound recordings with musical 

6 works; and 

7 ‘‘(ee) any additional infor8 mation reported to the mechan9 ical licensing collective that may 

10 assist in identifying the work; 

11 and 

12 ‘‘(II) such other information re13 lating to the identity and ownership of 

14 musical works (and shares of such 

15 works) as the Register of Copyrights 

16 may prescribe by regulation. 

17 ‘‘(iv) SOUND RECORDING INFORMA18 TION.—Each musical work copyright 

19 owner with any musical work listed in the 

20 musical works database shall engage in 

21 commercially reasonable efforts to deliver 

22 to the mechanical licensing collective, in23 cluding for use in the musical works data24 base, to the extent such information is not 

25 then available in the database, information 


lotter on DSKBCFDHB2PROD with BILLS
44 

•S 2823 IS

1 regarding the names of the sound record2 ings in which that copyright owner’s musi3 cal works (or shares thereof) are embodied, 

4 to the extent practicable. 

5 ‘‘(v) ACCESSIBILITY OF DATABASE.— 

6 The musical works database shall be made 

7 available to members of the public in a 

8 searchable, online format, free of charge. 

9 The mechanical licensing collective shall 

10 make such database available in a bulk, 

11 machine-readable format, through a widely 

12 available software application, to the fol13 lowing entities: 

14 ‘‘(I) Digital music providers oper15 ating under the authority of valid no16 tices of license, free of charge. 

17 ‘‘(II) Significant nonblanket li18 censees in compliance with their obli19 gations under paragraph (6), free of 

20 charge. 

21 ‘‘(III) Authorized vendors of the 

22 entities described in subclauses (I) 

23 and (II), free of charge. 

24 ‘‘(IV) The Register of Copy25 rights, free of charge (but the RegVerDate Sep 11 2014 00:32 May 17, 2018 Jkt 079200 PO 00000 Frm 00044 Fmt 6652 Sfmt 6201 E:\BILLS\S2823.IS S2823

lotter on DSKBCFDHB2PROD with BILLS
45 

•S 2823 IS

1 ister shall not treat such database or 

2 any information therein as a Govern3 ment record). 

4 ‘‘(V) Any member of the public, 

5 for a fee not to exceed the marginal 

6 cost to the mechanical licensing collec7 tive of providing the database to such 

8 person. 

9 ‘‘(vi) ADDITIONAL REQUIREMENTS.— 

10 The Register of Copyrights shall establish 

11 requirements by regulations to ensure the 

12 usability, interoperability, and usage re13 strictions of the musical works database. 

14 ‘‘(F) NOTICES OF LICENSE AND NON15 BLANKET ACTIVITY.— 

16 ‘‘(i) NOTICES OF LICENSES.—The me17 chanical licensing collective shall receive, 

18 review, and confirm or reject notices of li19 cense from digital music providers, as pro20 vided in paragraph (2)(A). The collective 

21 shall maintain a current, publicly acces22 sible list of blanket licenses that includes 

23 contact information for the licensees and 

24 the effective dates of such licenses. 


lotter on DSKBCFDHB2PROD with BILLS
46 

•S 2823 IS

1 ‘‘(ii) NOTICES OF NONBLANKET AC2 TIVITY.—The mechanical licensing collec3 tive shall receive notices of nonblanket ac4 tivity from significant nonblanket licensees, 

5 as provided in paragraph (6)(A). The col6 lective shall maintain a current, publicly 

7 accessible list of notices of nonblanket ac8 tivity that includes contact information for 

9 significant nonblanket licensees and the 

10 dates of receipt of such notices. 

11 ‘‘(G) COLLECTION AND DISTRIBUTION OF

12 ROYALTIES.— 

13 ‘‘(i) IN GENERAL.—Upon receiving re14 ports of usage and payments of royalties 

15 from digital music providers for covered 

16 activities, the mechanical licensing collec17 tive shall— 

18 ‘‘(I) engage in efforts to— 

19 ‘‘(aa) identify the musical 

20 works embodied in sound record21 ings reflected in such reports, 

22 and the copyright owners of such 

23 musical works (and shares there24 of); 


lotter on DSKBCFDHB2PROD with BILLS
47 

•S 2823 IS

1 ‘‘(bb) confirm uses of musi2 cal works subject to voluntary li3 censes and individual download 

4 licenses, and the corresponding 

5 pro rata amounts to be deducted 

6 from royalties that would other7 wise be due under the blanket li8 cense; and 

9 ‘‘(cc) confirm proper pay10 ment of royalties due; 

11 ‘‘(II) distribute royalties to copy12 right owners in accordance with the 

13 usage and other information contained 

14 in such reports, as well as the owner15 ship and other information contained 

16 in the records of the collective; and 

17 ‘‘(III) deposit into an interest18 bearing account, as provided in sub19 paragraph (H)(ii), royalties that can20 not be distributed due to— 

21 ‘‘(aa) an inability to identify 

22 or locate a copyright owner of a 

23 musical work (or share thereof); 

24 or 


lotter on DSKBCFDHB2PROD with BILLS
48 

•S 2823 IS

1 ‘‘(bb) a pending dispute be2 fore the dispute resolution com3 mittee of the mechanical licens4 ing collective. 

5 ‘‘(ii) OTHER COLLECTION EFFORTS.— 

6 Any royalties recovered by the mechanical 

7 licensing collective as a result of efforts to 

8 enforce rights or obligations under a blan9 ket license, including through a bankruptcy 

10 proceeding or other legal action, shall be 

11 distributed to copyright owners based on 

12 available usage information and in accord13 ance with the procedures described in sub14 clauses (I) and (II) of clause (i), on a pro 

15 rata basis in proportion to the overall per16 centage recovery of the total royalties 

17 owed, with any pro rata share of royalties 

18 that cannot be distributed deposited in an 

19 interest-bearing account as provided in 

20 subparagraph (H)(ii). 

21 ‘‘(H) HOLDING OF ACCRUED ROYAL22 TIES.— 

23 ‘‘(i) HOLDING PERIOD.—The mechan24 ical licensing collective shall hold accrued 

25 royalties associated with particular musical 


lotter on DSKBCFDHB2PROD with BILLS
49 

•S 2823 IS

1 works (and shares of works) that remain 

2 unmatched for a period of at least 3 years 

3 after the date on which the funds were re4 ceived by the mechanical licensing collec5 tive, or at least 3 years after the date on 

6 which they were accrued by a digital music 

7 provider that subsequently transferred 

8 such funds to the mechanical licensing col9 lective pursuant to paragraph (10)(B), 

10 whichever period expires sooner. 

11 ‘‘(ii) INTEREST-BEARING ACCOUNT.— 

12 Accrued royalties for unmatched works 

13 (and shares thereof) shall be maintained 

14 by the mechanical licensing collective in an 

15 interest-bearing account that earns month16 ly interest at the Federal, short-term rate, 

17 such interest to accrue for the benefit of 

18 copyright owners entitled to payment of 

19 such accrued royalties. 

20 ‘‘(I) MUSICAL WORKS CLAIMING PROC21 ESS.—The mechanical licensing collective shall 

22 publicize the existence of accrued royalties for 

23 unmatched musical works (and shares of such 

24 works) within 6 months of receiving a transfer 

25 of accrued royalties for such works by publicly 


lotter on DSKBCFDHB2PROD with BILLS
50 

•S 2823 IS

1 listing the works and the procedures by which 

2 copyright owners may identify themselves and 

3 provide ownership, contact, and other relevant 

4 information to the mechanical licensing collec5 tive in order to receive payment of accrued roy6 alties. When a copyright owner of an un7 matched work (or share of a work) has been 

8 identified and located in accordance with the 

9 procedures of the mechanical licensing collec10 tive, the collective shall— 

11 ‘‘(i) update the musical works data12 base and its other records accordingly; and 

13 ‘‘(ii) provided that accrued royalties 

14 for the musical work (or share thereof) 

15 have not yet been included in a distribution 

16 pursuant to subparagraph (J)(i), pay such 

17 accrued royalties and a proportionate 

18 amount of accrued interest associated with 

19 that work (or share thereof) to the copy20 right owner, accompanied by a cumulative 

21 statement of account reflecting usage of 

22 such work and accrued royalties based on 

23 information provided by digital music pro24 viders to the mechanical licensing collec25 tive. 


lotter on DSKBCFDHB2PROD with BILLS
51 

•S 2823 IS

1 ‘‘(J) DISTRIBUTION OF UNCLAIMED AC2 CRUED ROYALTIES.— 

3 ‘‘(i) DISTRIBUTION PROCEDURES.— 

4 After the expiration of the prescribed hold5 ing period for accrued royalties provided in 

6 paragraph (H)(i), the mechanical licensing 

7 collective shall distribute such accrued roy8 alties, along with a proportionate share of 

9 accrued interest, to copyright owners iden10 tified in the records of the collective, sub11 ject to the following requirements, and in 

12 accordance with the policies and proce13 dures established under clause (ii): 

14 ‘‘(I) The first such distribution 

15 shall occur on or after July 1 of the 

16 first full calendar year to commence 

17 after the license availability date, with 

18 at least one such distribution to take 

19 place during each calendar year there20 after. 

21 ‘‘(II) Copyright owners’ payment 

22 shares for unclaimed accrued royalties 

23 for particular reporting periods shall 

24 be determined in a transparent and 

25 equitable manner based on data indiVerDate Sep 11 2014 00:32 May 17, 2018 Jkt 079200 PO 00000 Frm 00051 Fmt 6652 Sfmt 6201 E:\BILLS\S2823.IS S2823

lotter on DSKBCFDHB2PROD with BILLS
52 

•S 2823 IS

1 cating the relative market shares of 

2 such copyright owners as reflected by 

3 royalty payments made by digital 

4 music providers for covered activities 

5 for the periods in question, including, 

6 in addition to royalty payments made 

7 to the mechanical licensing collective, 

8 royalty payments made to copyright 

9 owners under voluntary licenses and 

10 individual download licenses for cov11 ered activities, to the extent such in12 formation is available to the mechan13 ical licensing collective. In furtherance 

14 of the determination of equitable mar15 ket shares under this subparagraph— 

16 ‘‘(aa) the mechanical licens17 ing collective may require copy18 right owners seeking distribu19 tions of unclaimed accrued royal20 ties to provide, or direct the pro21 vision of, information concerning 

22 royalties received under voluntary 

23 licenses and individual download 

24 licenses for covered activities; and 


lotter on DSKBCFDHB2PROD with BILLS
53 

•S 2823 IS

1 ‘‘(bb) the mechanical licens2 ing collective shall take appro3 priate steps to safeguard the con4 fidentiality and security of finan5 cial and other sensitive data used 

6 to compute market shares in ac7 cordance with the confidentiality 

8 provisions prescribed by the Reg9 ister of Copyrights under para10 graph (12)(C). 

11 ‘‘(ii) ESTABLISHMENT OF DISTRIBU12 TION POLICIES.—The unclaimed royalties 

13 oversight committee established under 

14 paragraph (3)(D)(iv) shall establish poli15 cies and procedures for the distribution of 

16 unclaimed accrued royalties and accrued 

17 interest in accordance with this subpara18 graph, including the provision of usage 

19 data to copyright owners to allocate pay20 ments and credits to songwriters pursuant 

21 to clause (iv), subject to the approval of 

22 the board of directors of the mechanical li23 censing collective. 

24 ‘‘(iii) ADVANCE NOTICE OF DISTRIBU25 TIONS.—The mechanical licensing collecVerDate Sep 11 2014 00:32 May 17, 2018 Jkt 079200 PO 00000 Frm 00053 Fmt 6652 Sfmt 6201 E:\BILLS\S2823.IS S2823

lotter on DSKBCFDHB2PROD with BILLS
54 

•S 2823 IS

1 tive shall publicize a pending distribution 

2 of unclaimed accrued royalties and accrued 

3 interest at least 90 calendar days in ad4 vance of such distribution. 

5 ‘‘(iv) SONGWRITER PAYMENTS.— 

6 Copyright owners that receive a distribu7 tion of unclaimed accrued royalties and ac8 crued interest shall pay or credit a portion 

9 to songwriters (or the authorized agents of 

10 songwriters) on whose behalf the copyright 

11 owners license or administer musical works 

12 for covered activities, in accordance with 

13 applicable contractual terms, but notwith14 standing any agreement to the contrary— 

15 ‘‘(I) such payments and credits 

16 to songwriters shall be allocated in 

17 proportion to reported usage of indi18 vidual musical works by digital music 

19 providers during the reporting periods 

20 covered by the distribution from the 

21 mechanical licensing collective; and 

22 ‘‘(II) in no case shall the pay23 ment or credit to an individual song24 writer be less than 50 percent of the 

25 payment received by the copyright 


lotter on DSKBCFDHB2PROD with BILLS
55 

•S 2823 IS

1 owner attributable to usage of musical 

2 works (or shares of works) of that 

3 songwriter. 

4 ‘‘(K) DISPUTE RESOLUTION.—The dispute 

5 resolution committee established under para6 graph (3)(D)(v) shall address and resolve in a 

7 timely and equitable manner disputes among 

8 copyright owners relating to ownership interests 

9 in musical works licensed under this section and 

10 allocation and distribution of royalties by the 

11 mechanical licensing collective, according to a 

12 process approved by the board of directors of 

13 the mechanical licensing collective. Such proc14 ess— 

15 ‘‘(i) shall include a mechanism to hold 

16 disputed funds in accordance with the re17 quirements described in subparagraph 

18 (H)(ii) pending resolution of the dispute; 

19 and 

20 ‘‘(ii) except as provided in paragraph 

21 (11)(D), shall not affect any legal or equi22 table rights or remedies available to any 

23 copyright owner or songwriter concerning 

24 ownership of, and entitlement to royalties 

25 for, a musical work. 


lotter on DSKBCFDHB2PROD with BILLS
56 

•S 2823 IS

1 ‘‘(L) VERIFICATION OF PAYMENTS BY ME2 CHANICAL LICENSING COLLECTIVE.— 

3 ‘‘(i) VERIFICATION PROCESS.—A 

4 copyright owner entitled to receive pay5 ments of royalties for covered activities 

6 from the mechanical licensing collective 

7 may, individually or with other copyright 

8 owners, conduct an audit of the mechanical 

9 licensing collective to verify the accuracy of 

10 royalty payments by the mechanical licens11 ing collective to such copyright owner, as 

12 follows: 

13 ‘‘(I) A copyright owner may 

14 audit the mechanical licensing collec15 tive only once in a year for any or all 

16 of the prior 3 calendar years, and may 

17 not audit records for any calendar 

18 year more than once. 

19 ‘‘(II) The audit shall be con20 ducted by a qualified auditor, who 

21 shall perform the audit during the or22 dinary course of business by exam23 ining the books, records, and data of 

24 the mechanical licensing collective, ac25 cording to generally accepted auditing 


lotter on DSKBCFDHB2PROD with BILLS
57 

•S 2823 IS

1 standards and subject to applicable 

2 confidentiality requirements pre3 scribed by the Register of Copyrights 

4 under paragraph (12)(C). 

5 ‘‘(III) The mechanical licensing 

6 collective shall make such books, 

7 records, and data available to the 

8 qualified auditor and respond to rea9 sonable requests for relevant informa10 tion, and shall use commercially rea11 sonable efforts to facilitate access to 

12 relevant information maintained by 

13 third parties. 

14 ‘‘(IV) To commence the audit, 

15 any copyright owner shall file with the 

16 Copyright Office a notice of intent to 

17 conduct an audit of the mechanical li18 censing collective, identifying the pe19 riod of time to be audited, and shall 

20 simultaneously deliver a copy of such 

21 notice to the mechanical licensing col22 lective. The Register of Copyrights 

23 shall cause the notice of audit to be 

24 published in the Federal Register 

25 within 45 calendar days after receipt. 


lotter on DSKBCFDHB2PROD with BILLS
58 

•S 2823 IS

1 ‘‘(V) The qualified auditor shall 

2 determine the accuracy of royalty pay3 ments, including whether an under4 payment or overpayment of royalties 

5 was made by the mechanical licensing 

6 collective to each auditing copyright 

7 owner, but before providing a final 

8 audit report to any such copyright 

9 owner, the qualified auditor shall pro10 vide a tentative draft of the report to 

11 the mechanical licensing collective and 

12 allow the mechanical licensing collec13 tive a reasonable opportunity to re14 spond to the findings, including by 

15 clarifying issues and correcting factual 

16 errors. 

17 ‘‘(VI) The auditing copyright 

18 owner or owners shall bear the cost of 

19 the audit. In case of an underpayment 

20 to any copyright owner, the mechan21 ical licensing collective shall pay the 

22 amounts of any such underpayment to 

23 such auditing copyright owner, as ap24 propriate. In case of an overpayment 

25 by the mechanical licensing collective, 


lotter on DSKBCFDHB2PROD with BILLS
59 

•S 2823 IS

1 the mechanical licensing collective 

2 may debit the account of the auditing 

3 copyright owner or owners for such 

4 overpaid amounts, or such owner(s) 

5 shall refund overpaid amounts to the 

6 mechanical licensing collective, as ap7 propriate. 

8 ‘‘(ii) ALTERNATIVE VERIFICATION

9 PROCEDURES.—Nothing in this subpara10 graph shall preclude a copyright owner and 

11 the mechanical licensing collective from 

12 agreeing to audit procedures different from 

13 those described herein, but a notice of the 

14 audit shall be provided to and published by 

15 the Copyright Office as described in clause 

16 (i)(IV). 

17 ‘‘(M) RECORDS OF MECHANICAL LICENS18 ING COLLECTIVE.— 

19 ‘‘(i) RECORDS MAINTENANCE.—The 

20 mechanical licensing collective shall ensure 

21 that all material records of its operations, 

22 including those relating to notices of li23 cense, the administration of its claims 

24 process, reports of usage, royalty pay25 ments, receipt and maintenance of accrued 


lotter on DSKBCFDHB2PROD with BILLS
60 

•S 2823 IS

1 royalties, royalty distribution processes, 

2 and legal matters, are preserved and main3 tained in a secure and reliable manner, 

4 with appropriate commercially reasonable 

5 safeguards against unauthorized access, 

6 copying, and disclosure, and subject to the 

7 confidentiality requirements prescribed by 

8 the Register of Copyrights under para9 graph (12)(C) for a period of no less than 

10 7 years after the date of creation or re11 ceipt, whichever occurs later. 

12 ‘‘(ii) RECORDS ACCESS.—The mechan13 ical licensing collective shall provide 

14 prompt access to electronic and other 

15 records pertaining to the administration of 

16 a copyright owner’s musical works upon 

17 reasonable written request of such owner 

18 or the owner’s authorized representative. 

19 ‘‘(4) TERMS AND CONDITIONS OF BLANKET LI20 CENSE.—A blanket license is subject to, and condi21 tioned upon, the following requirements: 

22 ‘‘(A) ROYALTY REPORTING AND PAY23 MENTS.— 

24 ‘‘(i) MONTHLY REPORTS AND PAY25 MENT.—A digital music provider shall reVerDate Sep 11 2014 00:32 May 17, 2018 Jkt 079200 PO 00000 Frm 00060 Fmt 6652 Sfmt 6201 E:\BILLS\S2823.IS S2823

lotter on DSKBCFDHB2PROD with BILLS
61 

•S 2823 IS

1 port and pay royalties to the mechanical li2 censing collective under the blanket license 

3 on a monthly basis in accordance with 

4 clause (ii) and subsection (c)(2)(I), but the 

5 monthly reporting shall be due 45 calendar 

6 days, rather than 20 calendar days, after 

7 the end of the monthly reporting period. 

8 ‘‘(ii) DATA TO BE REPORTED.—In re9 porting usage of musical works to the me10 chanical licensing collective, a digital music 

11 provider shall provide usage data for musi12 cal works used under the blanket license 

13 and usage data for musical works used in 

14 covered activities under voluntary licenses 

15 and individual download licenses. In the re16 port of usage, the digital music provider 

17 shall— 

18 ‘‘(I) with respect to each sound 

19 recording embodying a musical 

20 work— 

21 ‘‘(aa) provide identifying in22 formation for the sound record23 ing, including sound recording 

24 name, featured artist and, to the 

25 extent acquired by the digital 


lotter on DSKBCFDHB2PROD with BILLS
62 

•S 2823 IS

1 music provider in connection with 

2 its use of sound recordings of 

3 musical works to engage in cov4 ered activities, including pursu5 ant to subparagraph (B), pro6 ducer, international standard re7 cording code, and other informa8 tion commonly used in the indus9 try to identify sound recordings 

10 and match them to the musical 

11 works the sound recordings em12 body; 

13 ‘‘(bb) to the extent acquired 

14 by the digital music provider in 

15 the metadata in connection with 

16 its use of sound recordings of 

17 musical works to engage in cov18 ered activities, including pursu19 ant to subparagraph (B), provide 

20 information concerning author21 ship and ownership of the appli22 cable rights in the musical work 

23 embodied in the sound recording 

24 (including each songwriter, pub25 lisher name, and respective ownVerDate Sep 11 2014 00:32 May 17, 2018 Jkt 079200 PO 00000 Frm 00062 Fmt 6652 Sfmt 6201 E:\BILLS\S2823.IS S2823

lotter on DSKBCFDHB2PROD with BILLS
63 

•S 2823 IS

1 ership share) and the inter2 national standard musical work 

3 code; and 

4 ‘‘(cc) provide the number of 

5 digital phonorecord deliveries of 

6 the sound recording, including 

7 limited downloads and interactive 

8 streams; 

9 ‘‘(II) identify and provide contact 

10 information for all musical work copy11 right owners for works embodied in 

12 sound recordings as to which a vol13 untary license, rather than the blan14 ket license, is in effect with respect to 

15 the uses being reported; and 

16 ‘‘(III) provide such other infor17 mation as the Register of Copyrights 

18 shall require by regulation. 

19 ‘‘(iii) FORMAT AND MAINTENANCE OF

20 REPORTS.—Reports of usage provided by 

21 digital music providers to the mechanical 

22 licensing collective shall be in a machine23 readable format that is compatible with the 

24 information technology systems of the me25 chanical licensing collective and meets the 


lotter on DSKBCFDHB2PROD with BILLS
64 

•S 2823 IS

1 requirements of regulations adopted by the 

2 Register of Copyrights. The Register shall 

3 also adopt regulations setting forth re4 quirements under which records of use 

5 shall be maintained and made available to 

6 the mechanical licensing collective by dig7 ital music providers engaged in covered ac8 tivities under a blanket license. 

9 ‘‘(iv) ADOPTION OF REGULATIONS.— 

10 The Register shall adopt regulations— 

11 ‘‘(I) setting forth requirements 

12 under which records of use shall be 

13 maintained and made available to the 

14 mechanical licensing collective by dig15 ital music providers engaged in cov16 ered activities under a blanket license; 

17 and 

18 ‘‘(II) regarding adjustments to 

19 reports of usage by digital music pro20 viders, including mechanisms to ac21 count for overpayment and under22 payment of royalties in prior periods. 

23 ‘‘(B) COLLECTION OF SOUND RECORDING

24 INFORMATION.—A digital music provider shall 

25 engage in good-faith, commercially reasonable 


lotter on DSKBCFDHB2PROD with BILLS
65 

•S 2823 IS

1 efforts to obtain from copyright owners of 

2 sound recordings made available through the 

3 service of such digital music provider— 

4 ‘‘(i) sound recording copyright owners, 

5 producers, international standard recording 

6 codes, and other information commonly 

7 used in the industry to identify sound re8 cordings and match them to the musical 

9 works the sound recordings embody; and 

10 ‘‘(ii) information concerning the au11 thorship and ownership of musical works, 

12 including songwriters, publisher names, 

13 ownership shares, and international stand14 ard musical work codes. 

15 ‘‘(C) PAYMENT OF ADMINISTRATIVE AS16 SESSMENT.—A digital music provider and any 

17 significant nonblanket licensee shall pay the ad18 ministrative assessment established under para19 graph (7)(D) in accordance with this subsection 

20 and applicable regulations. 

21 ‘‘(D) VERIFICATION OF PAYMENTS BY DIG22 ITAL MUSIC PROVIDERS.— 

23 ‘‘(i) VERIFICATION PROCESS.—The 

24 mechanical licensing collective may conduct 

25 an audit of a digital music provider operVerDate Sep 11 2014 00:32 May 17, 2018 Jkt 079200 PO 00000 Frm 00065 Fmt 6652 Sfmt 6201 E:\BILLS\S2823.IS S2823

lotter on DSKBCFDHB2PROD with BILLS
66 

•S 2823 IS

1 ating under the blanket license to verify 

2 the accuracy of royalty payments by the 

3 digital music provider to the mechanical li4 censing collective as follows: 

5 ‘‘(I) The mechanical licensing 

6 collective may commence an audit of a 

7 digital music provider no more than 

8 once in any 3-calendar-year period to 

9 cover a verification period of no more 

10 than the 3 full calendar years pre11 ceding the date of commencement of 

12 the audit, and such audit may not 

13 audit records for any such 3-year 

14 verification period more than once. 

15 ‘‘(II) The audit shall be con16 ducted by a qualified auditor, who 

17 shall perform the audit during the or18 dinary course of business by exam19 ining the books, records, and data of 

20 the digital music provider, according 

21 to generally accepted auditing stand22 ards and subject to applicable con23 fidentiality requirements prescribed by 

24 the Register of Copyrights under 

25 paragraph (12)(C). 


lotter on DSKBCFDHB2PROD with BILLS
67 

•S 2823 IS

1 ‘‘(III) The digital music provider 

2 shall make such books, records, and 

3 data available to the qualified auditor 

4 and respond to reasonable requests 

5 for relevant information, and shall use 

6 commercially reasonable efforts to 

7 provide access to relevant information 

8 maintained with respect to a digital 

9 music provider by third parties. 

10 ‘‘(IV) To commence the audit, 

11 the mechanical licensing collective 

12 shall file with the Copyright Office a 

13 notice of intent to conduct an audit of 

14 the digital music provider, identifying 

15 the period of time to be audited, and 

16 shall simultaneously deliver a copy of 

17 such notice to the digital music pro18 vider. The Register of Copyrights 

19 shall cause the notice of audit to be 

20 published in the Federal Register 

21 within 45 calendar days after receipt. 

22 ‘‘(V) The qualified auditor shall 

23 determine the accuracy of royalty pay24 ments, including whether an under25 payment or overpayment of royalties 


lotter on DSKBCFDHB2PROD with BILLS
68 

•S 2823 IS

1 was made by the digital music pro2 vider to the mechanical licensing col3 lective, but before providing a final 

4 audit report to the mechanical licens5 ing collective, the qualified auditor 

6 shall provide a tentative draft of the 

7 report to the digital music provider 

8 and allow the digital music provider a 

9 reasonable opportunity to respond to 

10 the findings, including by clarifying 

11 issues and correcting factual errors. 

12 ‘‘(VI) The mechanical licensing 

13 collective shall pay the cost of the 

14 audit, unless the qualified auditor de15 termines that there was an under16 payment by the digital music provider 

17 of 10 percent or more, in which case 

18 the digital music provider shall bear 

19 the reasonable costs of the audit, in 

20 addition to paying the amount of any 

21 underpayment to the mechanical li22 censing collective. In case of an over23 payment by the digital music provider, 

24 the mechanical licensing collective 


lotter on DSKBCFDHB2PROD with BILLS
69 

•S 2823 IS

1 shall provide a credit to the account 

2 of the digital music provider. 

3 ‘‘(VII) A digital music provider 

4 may not assert section 507 or any 

5 other Federal or State statute of limi6 tations, doctrine of laches or estoppel, 

7 or similar provision as a defense to a 

8 legal action arising from an audit 

9 under this subparagraph if such legal 

10 action is commenced no more than 6 

11 years after the commencement of the 

12 audit that is the basis for such action. 

13 ‘‘(ii) ALTERNATIVE VERIFICATION

14 PROCEDURES.—Nothing in this subpara15 graph shall preclude the mechanical licens16 ing collective and a digital music provider 

17 from agreeing to audit procedures different 

18 from those described herein, but a notice 

19 of the audit shall be provided to and pub20 lished by the Copyright Office as described 

21 in clause (i)(IV). 

22 ‘‘(E) DEFAULT UNDER BLANKET LI23 CENSE.— 

24 ‘‘(i) CONDITIONS OF DEFAULT.—A 

25 digital music provider shall be in default 


lotter on DSKBCFDHB2PROD with BILLS
70 

•S 2823 IS

1 under a blanket license if the digital music 

2 provider— 

3 ‘‘(I) fails to provide one or more 

4 monthly reports of usage to the me5 chanical licensing collective when due; 

6 ‘‘(II) fails to make a monthly 

7 royalty or late fee payment to the me8 chanical licensing collective when due, 

9 in all or material part; 

10 ‘‘(III) provides one or more 

11 monthly reports of usage to the me12 chanical licensing collective that, on 

13 the whole, is or are materially defi14 cient as a result of inaccurate, miss15 ing, or unreadable data, where the 

16 correct data was available to the dig17 ital music provider and required to be 

18 reported under this section and appli19 cable regulations; 

20 ‘‘(IV) fails to pay the administra21 tive assessment as required under this 

22 subsection and applicable regulations; 

23 or 

24 ‘‘(V) after being provided written 

25 notice by the mechanical licensing colVerDate Sep 11 2014 00:32 May 17, 2018 Jkt 079200 PO 00000 Frm 00070 Fmt 6652 Sfmt 6201 E:\BILLS\S2823.IS S2823

lotter on DSKBCFDHB2PROD with BILLS
71 

•S 2823 IS

1 lective, refuses to comply with any 

2 other material term or condition of 

3 the blanket license under this section 

4 for a period of 60 calendar days or 

5 longer. 

6 ‘‘(ii) NOTICE OF DEFAULT AND TER7 MINATION.—In case of a default by a dig8 ital music provider, the mechanical licens9 ing collective may proceed to terminate the 

10 blanket license of the digital music pro11 vider as follows: 

12 ‘‘(I) The mechanical licensing 

13 collective shall provide written notice 

14 to the digital music provider describ15 ing with reasonable particularity the 

16 default and advising that unless such 

17 default is cured within 60 calendar 

18 days after the date of the notice, the 

19 blanket license will automatically ter20 minate at the end of that period. 

21 ‘‘(II) If the digital music provider 

22 fails to remedy the default within the 

23 60-day period referenced in subclause 

24 (I), the license shall terminate without 

25 any further action on the part of the 


lotter on DSKBCFDHB2PROD with BILLS
72 

•S 2823 IS

1 mechanical licensing collective. Such 

2 termination renders the making of all 

3 digital phonorecord deliveries of all 

4 musical works (and shares thereof) 

5 covered by the blanket license for 

6 which the royalty or administrative 

7 assessment has not been paid action8 able as acts of infringement under 

9 section 501 and subject to the rem10 edies provided by sections 502 

11 through 506. 

12 ‘‘(iii) NOTICE TO COPYRIGHT OWN13 ERS.—The mechanical licensing collective 

14 shall provide written notice of any termi15 nation under this subparagraph to copy16 right owners of affected works. 

17 ‘‘(iv) REVIEW BY FEDERAL DISTRICT

18 COURT.—A digital music provider that be19 lieves a blanket license was improperly ter20 minated by the mechanical licensing collec21 tive may seek review of such termination in 

22 Federal district court. The district court 

23 shall determine the matter de novo based 

24 on the record before the mechanical licensVerDate Sep 11 2014 00:32 May 17, 2018 Jkt 079200 PO 00000 Frm 00072 Fmt 6652 Sfmt 6201 E:\BILLS\S2823.IS S2823

lotter on DSKBCFDHB2PROD with BILLS
73 

•S 2823 IS

1 ing collective and any additional sup2 porting evidence presented by the parties. 

3 ‘‘(5) DIGITAL LICENSEE COORDINATOR.— 

4 ‘‘(A) IN GENERAL.—The digital licensee 

5 coordinator shall be a single entity that— 

6 ‘‘(i) is a nonprofit, not owned by any 

7 other entity, that is created to carry out 

8 responsibilities under this subsection; 

9 ‘‘(ii) is endorsed by and enjoys sub10 stantial support from digital music pro11 viders and significant nonblanket licensees 

12 that together represent the greatest per13 centage of the licensee market for uses of 

14 musical works in covered activities, as 

15 measured over the preceding 3 calendar 

16 years; 

17 ‘‘(iii) is able to demonstrate that it 

18 has, or will have prior to the license avail19 ability date, the administrative capabilities 

20 to perform the required functions of the 

21 digital licensee coordinator under this sub22 section; and 

23 ‘‘(iv) has been designated by the Reg24 ister of Copyrights in accordance with sub25 paragraph (B). 


lotter on DSKBCFDHB2PROD with BILLS
74 

•S 2823 IS

1 ‘‘(B) DESIGNATION OF DIGITAL LICENSEE

2 COORDINATOR.— 

3 ‘‘(i) INITIAL DESIGNATION.—The 

4 Register of Copyrights shall initially des5 ignate the digital licensee coordinator with6 in 9 months after the enactment date, in 

7 accordance with the same procedure de8 scribed for designation of the mechanical 

9 licensing collective in paragraph (3)(B)(i). 

10 ‘‘(ii) PERIODIC REVIEW OF DESIGNA11 TION.—Following the initial designation of 

12 the digital licensee coordinator, the Reg13 ister shall, every 5 years, beginning with 

14 the fifth full calendar year to commence 

15 after the initial designation, determine 

16 whether the existing designation should be 

17 continued, or a different entity meeting the 

18 criteria described in clauses (i) through 

19 (iii) of subparagraph (A) should be des20 ignated, in accordance with the same pro21 cedure described for the mechanical licens22 ing collective in paragraph (3)(B)(ii). 

23 ‘‘(iii) INABILITY TO DESIGNATE.—If 

24 the Register is unable to identify an entity 

25 that fulfills each of the qualifications deVerDate Sep 11 2014 00:32 May 17, 2018 Jkt 079200 PO 00000 Frm 00074 Fmt 6652 Sfmt 6201 E:\BILLS\S2823.IS S2823

lotter on DSKBCFDHB2PROD with BILLS
75 

•S 2823 IS

1 scribed in clauses (i) through (iii) of sub2 paragraph (A) to serve as the digital li3 censee coordinator, the Register may de4 cline to designate a digital licensee coordi5 nator. The Register’s determination not to 

6 designate a digital licensee coordinator 

7 shall not negate or otherwise affect any 

8 provision of this subsection except to the 

9 limited extent that a provision references 

10 the digital licensee coordinator. In such 

11 case, the reference to the digital licensee 

12 coordinator shall be without effect unless 

13 and until a new digital licensee coordinator 

14 is designated. 

15 ‘‘(C) AUTHORITIES AND FUNCTIONS.— 

16 ‘‘(i) IN GENERAL.—The digital li17 censee coordinator is authorized to perform 

18 the following functions, subject to more 

19 particular requirements as described in 

20 this subsection: 

21 ‘‘(I) Establish a governance 

22 structure, criteria for membership, 

23 and any dues to be paid by its mem24 bers. 


lotter on DSKBCFDHB2PROD with BILLS
76 

•S 2823 IS

1 ‘‘(II) Engage in efforts to enforce 

2 notice and payment obligations with 

3 respect to the administrative assess4 ment, including by receiving informa5 tion from and coordinating with the 

6 mechanical licensing collective. 

7 ‘‘(III) Initiate and participate in 

8 proceedings before the Copyright Roy9 alty Judges to establish the adminis10 trative assessment under this sub11 section. 

12 ‘‘(IV) Initiate and participate in 

13 proceedings before the Copyright Of14 fice with respect to activities under 

15 this subsection. 

16 ‘‘(V) Gather and provide docu17 mentation for use in proceedings be18 fore the Copyright Royalty Judges to 

19 set rates and terms under this section. 

20 ‘‘(VI) Maintain records of its ac21 tivities. 

22 ‘‘(VII) Engage in such other ac23 tivities as may be necessary or appro24 priate to fulfill its responsibilities 

25 under this subsection. 


lotter on DSKBCFDHB2PROD with BILLS
77 

•S 2823 IS

1 ‘‘(ii) RESTRICTION ON LOBBYING.— 

2 The digital licensee coordinator may not 

3 engage in government lobbying activities, 

4 but may engage in the activities described 

5 in subclauses (III), (IV), and (V) of clause 

6 (i). 

7 ‘‘(6) REQUIREMENTS FOR SIGNIFICANT NON8 BLANKET LICENSEES.— 

9 ‘‘(A) IN GENERAL.— 

10 ‘‘(i) NOTICE OF ACTIVITY.—Not later 

11 than 45 calendar days after the license 

12 availability date, or 45 calendar days after 

13 the end of the first full calendar month in 

14 which an entity initially qualifies as a sig15 nificant nonblanket licensee, whichever oc16 curs later, a significant nonblanket licensee 

17 shall submit a notice of nonblanket activity 

18 to the mechanical licensing collective. The 

19 notice of nonblanket activity shall comply 

20 in form and substance with requirements 

21 that the Register of Copyrights shall estab22 lish by regulation, and a copy shall be 

23 made available to the digital licensee coor24 dinator. 


lotter on DSKBCFDHB2PROD with BILLS
78 

•S 2823 IS

1 ‘‘(ii) REPORTING AND PAYMENT OBLI2 GATIONS.—The notice of nonblanket activ3 ity submitted to the mechanical licensing 

4 collective shall be accompanied by a report 

5 of usage that contains the information de6 scribed in paragraph (4)(A)(ii), as well as 

7 any payment of the administrative assess8 ment required under this subsection and 

9 applicable regulations. Thereafter, subject 

10 to clause (iii), a significant nonblanket li11 censee shall continue to provide monthly 

12 reports of usage, accompanied by any re13 quired payment of the administrative as14 sessment, to the mechanical licensing col15 lective. Such reports and payments shall be 

16 submitted not later than 45 calendar days 

17 after the end of the calendar month being 

18 reported. 

19 ‘‘(iii) DISCONTINUATION OF OBLIGA20 TIONS.—An entity that has submitted a 

21 notice of nonblanket activity to the me22 chanical licensing collective that has ceased 

23 to qualify as a significant nonblanket li24 censee may so notify the collective in writ25 ing. In such case, as of the calendar month 


lotter on DSKBCFDHB2PROD with BILLS
79 

•S 2823 IS

1 in which such notice is provided, such enti2 ty shall no longer be required to provide 

3 reports of usage or pay the administrative 

4 assessment, but if such entity later quali5 fies as a significant nonblanket licensee, 

6 such entity shall again be required to com7 ply with clauses (i) and (ii). 

8 ‘‘(B) REPORTING BY MECHANICAL LICENS9 ING COLLECTIVE TO DIGITAL LICENSEE COOR10 DINATOR.— 

11 ‘‘(i) MONTHLY REPORTS OF NON12 COMPLIANT LICENSEES.—The mechanical 

13 licensing collective shall provide monthly 

14 reports to the digital licensee coordinator 

15 setting forth any significant nonblanket li16 censees of which the collective is aware 

17 that have failed to comply with subpara18 graph (A). 

19 ‘‘(ii) TREATMENT OF CONFIDENTIAL

20 INFORMATION.—The mechanical licensing 

21 collective and digital licensee coordinator 

22 shall take appropriate steps to safeguard 

23 the confidentiality and security of financial 

24 and other sensitive data shared under this 

25 subparagraph, in accordance with the conVerDate Sep 11 2014 00:32 May 17, 2018 Jkt 079200 PO 00000 Frm 00079 Fmt 6652 Sfmt 6201 E:\BILLS\S2823.IS S2823

lotter on DSKBCFDHB2PROD with BILLS
80 

•S 2823 IS

1 fidentiality requirements prescribed by the 

2 Register of Copyrights under paragraph 

3 (12)(C). 

4 ‘‘(C) LEGAL ENFORCEMENT EFFORTS.— 

5 ‘‘(i) FEDERAL COURT ACTION.— 

6 Should the mechanical licensing collective 

7 or digital licensee coordinator become 

8 aware that a significant nonblanket li9 censee has failed to comply with subpara10 graph (A), either may commence an action 

11 in Federal district court for damages and 

12 injunctive relief. If the significant non13 blanket licensee is found liable, the court 

14 shall, absent a finding of excusable neglect, 

15 award damages in an amount equal to 

16 three times the total amount of the unpaid 

17 administrative assessment and, notwith18 standing anything to the contrary in sec19 tion 505, reasonable attorney’s fees and 

20 costs, as well as such other relief as the 

21 court deems appropriate. In all other 

22 cases, the court shall award relief as ap23 propriate. Any recovery of damages shall 

24 be payable to the mechanical licensing colVerDate Sep 11 2014 00:32 May 17, 2018 Jkt 079200 PO 00000 Frm 00080 Fmt 6652 Sfmt 6201 E:\BILLS\S2823.IS S2823

lotter on DSKBCFDHB2PROD with BILLS
81 

•S 2823 IS

1 lective as an offset to the collective total 

2 costs. 

3 ‘‘(ii) STATUTE OF LIMITATIONS FOR

4 ENFORCEMENT ACTION.—Any action de5 scribed in this subparagraph shall be com6 menced within the time period described in 

7 section 507(b). 

8 ‘‘(iii) OTHER RIGHTS AND REMEDIES

9 PRESERVED.—The ability of the mechan10 ical licensing collective or digital licensee 

11 coordinator to bring an action under this 

12 subparagraph shall in no way alter, limit 

13 or negate any other right or remedy that 

14 may be available to any party at law or in 

15 equity. 

16 ‘‘(7) FUNDING OF MECHANICAL LICENSING

17 COLLECTIVE.— 

18 ‘‘(A) IN GENERAL.—The collective total 

19 costs shall be funded by— 

20 ‘‘(i) an administrative assessment, as 

21 such assessment is established by the 

22 Copyright Royalty Judges pursuant to sub23 paragraph (D) from time to time, to be 

24 paid by— 


lotter on DSKBCFDHB2PROD with BILLS
82 

•S 2823 IS

1 ‘‘(I) digital music providers that 

2 are engaged, in all or in part, in cov3 ered activities pursuant to a blanket 

4 license; and 

5 ‘‘(II) significant nonblanket li6 censees; and 

7 ‘‘(ii) voluntary contributions from dig8 ital music providers and significant non9 blanket licensees as may be agreed with 

10 copyright owners. 

11 ‘‘(B) VOLUNTARY CONTRIBUTIONS.— 

12 ‘‘(i) AGREEMENTS CONCERNING CON13 TRIBUTIONS.—Except as provided in 

14 clause (ii), voluntary contributions by dig15 ital music providers and significant non16 blanket licensees shall be determined by 

17 private negotiation and agreement, and the 

18 following conditions apply: 

19 ‘‘(I) The date and amount of 

20 each voluntary contribution to the me21 chanical licensing collective shall be 

22 documented in a writing signed by an 

23 authorized agent of the mechanical li24 censing collective and the contributing 

25 party. 


lotter on DSKBCFDHB2PROD with BILLS
83 

•S 2823 IS

1 ‘‘(II) Such agreement shall be 

2 made available as required in pro3 ceedings before the Copyright Royalty 

4 Judges to establish or adjust the ad5 ministrative assessment in accordance 

6 with applicable statutory and regu7 latory provisions and rulings of the 

8 Copyright Royalty Judges. 

9 ‘‘(ii) TREATMENT OF CONTRIBU10 TIONS.—Each such voluntary contribution 

11 shall be treated for purposes of an admin12 istrative assessment proceeding as an off13 set to the collective total costs that would 

14 otherwise be recovered through the admin15 istrative assessment. Any allocation or re16 allocation of voluntary contributions be17 tween or among individual digital music 

18 providers or significant nonblanket licens19 ees shall be a matter of private negotiation 

20 and agreement among such parties and 

21 outside the scope of the administrative as22 sessment proceeding. 

23 ‘‘(C) INTERIM APPLICATION OF ACCRUED

24 ROYALTIES.—In the event that the administra25 tive assessment, together with any funding from 


lotter on DSKBCFDHB2PROD with BILLS
84 

•S 2823 IS

1 voluntary contributions as provided in subpara2 graphs (A) and (B), is inadequate to cover cur3 rent collective total costs, the collective, with 

4 approval of its board of directors, may apply 

5 unclaimed accrued royalties on an interim basis 

6 to defray such costs, subject to future reim7 bursement of such royalties from future collec8 tions of the assessment. 

9 ‘‘(D) DETERMINATION OF ADMINISTRA10 TIVE ASSESSMENT.— 

11 ‘‘(i) ADMINISTRATIVE ASSESSMENT TO

12 COVER COLLECTIVE TOTAL COSTS.—The 

13 administrative assessment shall be used 

14 solely and exclusively to fund the collective 

15 total costs. 

16 ‘‘(ii) SEPARATE PROCEEDING BEFORE

17 COPYRIGHT ROYALTY JUDGES.—The 

18 amount and terms of the administrative 

19 assessment shall be determined and estab20 lished in a separate and independent pro21 ceeding before the Copyright Royalty 

22 Judges, according to the procedures de23 scribed in clauses (iii) and (iv). The admin24 istrative assessment determined in such 

25 proceeding shall— 


lotter on DSKBCFDHB2PROD with BILLS
85 

•S 2823 IS

1 ‘‘(I) be wholly independent of 

2 royalty rates and terms applicable to 

3 digital music providers, which shall 

4 not be taken into consideration in any 

5 manner in establishing the adminis6 trative assessment; 

7 ‘‘(II) be established by the Copy8 right Royalty Judges in an amount 

9 that is calculated to defray the rea10 sonable collective total costs; 

11 ‘‘(III) be assessed based on usage 

12 of musical works by digital music pro13 viders and significant nonblanket li14 censees in covered activities under 

15 both compulsory and nonblanket li16 censes; 

17 ‘‘(IV) may be in the form of a 

18 percentage of royalties payable under 

19 this section for usage of musical 

20 works in covered activities (regardless 

21 of whether a different rate applies 

22 under a voluntary license), or any 

23 other usage-based metric reasonably 

24 calculated to equitably allocate the 

25 collective total costs across digital 


lotter on DSKBCFDHB2PROD with BILLS
86 

•S 2823 IS

1 music providers and significant non2 blanket licensees engaged in covered 

3 activities, but shall include as a com4 ponent a minimum fee for all digital 

5 music providers and significant non6 blanket licensees; and 

7 ‘‘(V) take into consideration an8 ticipated future collective total costs 

9 and collections of the administrative 

10 assessment, but also, as applicable— 

11 ‘‘(aa) any portion of past ac12 tual collective total costs of the 

13 mechanical licensing collective 

14 not funded by previous collections 

15 of the administrative assessment 

16 or voluntary contributions be17 cause such collections or con18 tributions together were insuffi19 cient to fund such costs; 

20 ‘‘(bb) any past collections of 

21 the administrative assessment 

22 and voluntary contributions that 

23 exceeded past actual collective 

24 total costs, resulting in a surplus; 

25 and 


lotter on DSKBCFDHB2PROD with BILLS
87 

•S 2823 IS

1 ‘‘(cc) the amount of any vol2 untary contributions by digital 

3 music providers or significant 

4 nonblanket licensees in relevant 

5 periods, described in subpara6 graphs (A) and (B) of paragraph 

7 (7). 

8 ‘‘(iii) INITIAL ADMINISTRATIVE AS9 SESSMENT.—The procedure for estab10 lishing the initial administrative assess11 ment shall be as follows: 

12 ‘‘(I) The Copyright Royalty 

13 Judges shall commence a proceeding 

14 to establish the initial administrative 

15 assessment within 9 months after the 

16 enactment date by publishing a notice 

17 in the Federal Register seeking peti18 tions to participate. 

19 ‘‘(II) The mechanical licensing 

20 collective and digital licensee coordi21 nator shall participate in such pro22 ceeding, along with any interested 

23 copyright owners, digital music pro24 viders or significant nonblanket licens25 ees that have notified the Copyright 


lotter on DSKBCFDHB2PROD with BILLS
88 

•S 2823 IS

1 Royalty Judges of their desire to par2 ticipate. 

3 ‘‘(III) The Copyright Royalty 

4 Judges shall establish a schedule for 

5 submission by the parties of informa6 tion that may be relevant to estab7 lishing the administrative assessment, 

8 including actual and anticipated col9 lective total costs of the mechanical li10 censing collective, actual and antici11 pated collections from digital music 

12 providers and significant nonblanket 

13 licensees, and documentation of vol14 untary contributions, as well as a 

15 schedule for further proceedings, 

16 which shall include a hearing, as they 

17 deem appropriate. 

18 ‘‘(IV) The initial administrative 

19 assessment shall be determined, and 

20 such determination shall be published 

21 in the Federal Register by the Copy22 right Royalty Judges, within 1 year 

23 after commencement of the proceeding 

24 described in this clause. The deter25 mination shall be supported by a writVerDate Sep 11 2014 00:32 May 17, 2018 Jkt 079200 PO 00000 Frm 00088 Fmt 6652 Sfmt 6201 E:\BILLS\S2823.IS S2823

lotter on DSKBCFDHB2PROD with BILLS
89 

•S 2823 IS

1 ten record. The initial administrative 

2 assessment shall be effective as of the 

3 license availability date, and shall con4 tinue in effect unless and until an ad5 justed administrative assessment is 

6 established pursuant to an adjustment 

7 proceeding under clause (iii). 

8 ‘‘(iv) ADJUSTMENT OF ADMINISTRA9 TIVE ASSESSMENT.—The administrative 

10 assessment may be adjusted by the Copy11 right Royalty Judges periodically, in ac12 cordance with the following procedures: 

13 ‘‘(I) No earlier than 1 year after 

14 the most recent publication of a deter15 mination of the administrative assess16 ment by the Copyright Royalty 

17 Judges, the mechanical licensing col18 lective, the digital licensee coordi19 nator, or one or more interested copy20 right owners, digital music providers, 

21 or significant nonblanket licensees, 

22 may file a petition with the Copyright 

23 Royalty Judges in the month of Octo24 ber to commence a proceeding to ad25 just the administrative assessment. 


lotter on DSKBCFDHB2PROD with BILLS
90 

•S 2823 IS

1 ‘‘(II) Notice of the commence2 ment of such proceeding shall be pub3 lished in the Federal Register in the 

4 month of November following the fil5 ing of any petition, with a schedule of 

6 requested information and additional 

7 proceedings, as described in clause 

8 (iii)(III). The mechanical licensing 

9 collective and digital licensee coordi10 nator shall participate in such pro11 ceeding, along with any interested 

12 copyright owners, digital music pro13 viders, or significant nonblanket li14 censees that have notified the Copy15 right Royalty Judges of their desire to 

16 participate. 

17 ‘‘(III) The determination of the 

18 adjusted administrative assessment, 

19 which shall be supported by a written 

20 record, shall be published in the Fed21 eral Register during November of the 

22 calendar year following the commence23 ment of the proceeding. The adjusted 

24 administrative assessment shall take 


lotter on DSKBCFDHB2PROD with BILLS
91 

•S 2823 IS

1 effect January 1 of the year following 

2 such publication. 

3 ‘‘(v) ADOPTION OF VOLUNTARY

4 AGREEMENTS.—In lieu of reaching their 

5 own determination based on evaluation of 

6 relevant data, the Copyright Royalty 

7 Judges shall approve and adopt a nego8 tiated agreement to establish the amount 

9 and terms of the administrative assessment 

10 that has been agreed to by the mechanical 

11 licensing collective and the digital licensee 

12 coordinator (or if none has been des13 ignated, interested digital music providers 

14 and significant nonblanket licensees rep15 resenting more than half of the market for 

16 uses of musical works in covered activi17 ties), but the Copyright Royalty Judges 

18 shall have the discretion to reject any such 

19 agreement for good cause shown. An ad20 ministrative assessment adopted under this 

21 clause shall apply to all digital music pro22 viders and significant nonblanket licensees 

23 engaged in covered activities during the pe24 riod it is in effect. 


lotter on DSKBCFDHB2PROD with BILLS
92 

•S 2823 IS

1 ‘‘(vi) CONTINUING AUTHORITY TO

2 AMEND.—The Copyright Royalty Judges 

3 shall retain continuing authority to amend 

4 a determination of an administrative as5 sessment to correct technical or clerical er6 rors, or modify the terms of implementa7 tion, for good cause, with any such amend8 ment to be published in the Federal Reg9 ister. 

10 ‘‘(vii) APPEAL OF ADMINISTRATIVE

11 ASSESSMENT.—The determination of an 

12 administrative assessment by the Copy13 right Royalty Judges shall be appealable, 

14 within 30 calendar days after publication 

15 in the Federal Register, to the Court of 

16 Appeals for the District of Columbia Cir17 cuit by any party that fully participated in 

18 the proceeding. The administrative assess19 ment as established by the Copyright Roy20 alty Judges shall remain in effect pending 

21 the final outcome of any such appeal, and 

22 the mechanical licensing collective, digital 

23 licensee coordinator, digital music pro24 viders, and significant nonblanket licensees 

25 shall implement appropriate financial or 


lotter on DSKBCFDHB2PROD with BILLS
93 

•S 2823 IS

1 other measures within 3 months after any 

2 modification of the assessment to reflect 

3 and account for such outcome. 

4 ‘‘(viii) REGULATIONS.—The Copyright 

5 Royalty Judges may adopt regulations to 

6 govern the conduct of proceedings under 

7 this paragraph. 

8 ‘‘(8) ESTABLISHMENT OF RATES AND TERMS

9 UNDER BLANKET LICENSE.— 

10 ‘‘(A) RESTRICTIONS ON RATESETTING

11 PARTICIPATION.—Neither the mechanical li12 censing collective nor the digital licensee coordi13 nator shall be a party to a proceeding described 

14 in subsection (c)(1)(E), but either may gather 

15 and provide financial and other information for 

16 the use of a party to such a proceeding and 

17 comply with requests for information as re18 quired under applicable statutory and regu19 latory provisions and rulings of the Copyright 

20 Royalty Judges. 

21 ‘‘(B) APPLICATION OF LATE FEES.—In 

22 any proceeding described in subparagraph (A) 

23 in which the Copyright Royalty Judges estab24 lish a late fee for late payment of royalties for 

25 uses of musical works under this section, such 


lotter on DSKBCFDHB2PROD with BILLS
94 

•S 2823 IS

1 fee shall apply to covered activities under blan2 ket licenses, as follows: 

3 ‘‘(i) Late fees for past due royalty 

4 payments shall accrue from the due date 

5 for payment until payment is received by 

6 the mechanical licensing collective. 

7 ‘‘(ii) The availability of late fees shall 

8 in no way prevent a copyright owner or the 

9 mechanical licensing collective from assert10 ing any other rights or remedies to which 

11 such copyright owner or the mechanical li12 censing collective may be entitled under 

13 this title. 

14 ‘‘(C) INTERIM RATE AGREEMENTS IN GEN15 ERAL.—For any covered activity for which no 

16 rate or terms have been established by the 

17 Copyright Royalty Judges, the mechanical li18 censing collective and any digital music provider 

19 may agree to an interim rate and terms for 

20 such activity under the blanket license, and any 

21 such rate and terms— 

22 ‘‘(i) shall be treated as nonpreceden23 tial and not cited or relied upon in any 

24 ratesetting proceeding before the Copyright 

25 Royalty Judges or any other tribunal; and 


lotter on DSKBCFDHB2PROD with BILLS
95 

•S 2823 IS

1 ‘‘(ii) shall automatically expire upon 

2 the establishment of a rate and terms for 

3 such covered activity by the Copyright 

4 Royalty Judges, under subsection 

5 (c)(1)(E). 

6 ‘‘(D) ADJUSTMENTS FOR INTERIM

7 RATES.—The rate and terms established by the 

8 Copyright Royalty Judges for a covered activity 

9 to which an interim rate and terms have been 

10 agreed under subparagraph (C) shall supersede 

11 the interim rate and terms and apply retro12 actively to the inception of the activity under 

13 the blanket license. In such case, within 3 

14 months after the rate and terms established by 

15 the Copyright Royalty Judges become effec16 tive— 

17 ‘‘(i) if the rate established by the 

18 Copyright Royalty Judges exceeds the in19 terim rate, the digital music provider shall 

20 pay to the mechanical licensing collective 

21 the amount of any underpayment of royal22 ties due; or 

23 ‘‘(ii) if the interim rate exceeds the 

24 rate established by the Copyright Royalty 

25 Judges, the mechanical licensing collective 


lotter on DSKBCFDHB2PROD with BILLS
96 

•S 2823 IS

1 shall credit the account of the digital music 

2 provider for the amount of any overpay3 ment of royalties due. 

4 ‘‘(9) TRANSITION TO BLANKET LICENSES.— 

5 ‘‘(A) SUBSTITUTION OF BLANKET LI6 CENSE.—On the license availability date, a 

7 blanket license shall, without any interruption 

8 in license authority enjoyed by such digital 

9 music provider, be automatically substituted for 

10 and supersede any existing compulsory license 

11 previously obtained under this section by the 

12 digital music provider from a copyright owner 

13 to engage in one or more covered activities with 

14 respect to a musical work, but the foregoing 

15 shall not apply to any authority obtained from 

16 a record company pursuant to a compulsory li17 cense to make and distribute permanent 

18 downloads unless and until such record com19 pany terminates such authority in writing to 

20 take effect at the end of a monthly reporting 

21 period, with a copy to the mechanical licensing 

22 collective. 

23 ‘‘(B) EXPIRATION OF EXISTING LI24 CENSES.—Except to the extent provided in sub25 paragraph (A), on and after the license availVerDate Sep 11 2014 00:32 May 17, 2018 Jkt 079200 PO 00000 Frm 00096 Fmt 6652 Sfmt 6201 E:\BILLS\S2823.IS S2823

lotter on DSKBCFDHB2PROD with BILLS
97 

•S 2823 IS

1 ability date, licenses other than individual 

2 download licenses obtained under this section 

3 for covered activities prior to the license avail4 ability date shall no longer continue in effect. 

5 ‘‘(C) TREATMENT OF VOLUNTARY LI6 CENSES.—A voluntary license for a covered ac7 tivity in effect on the license availability date 

8 will remain in effect unless and until the vol9 untary license expires according to the terms of 

10 the voluntary license, or the parties agree to 

11 amend or terminate the voluntary license. In a 

12 case where a voluntary license for a covered ac13 tivity entered into before the license availability 

14 date incorporates the terms of this section by 

15 reference, the terms so incorporated (but not 

16 the rates) shall be those in effect immediately 

17 prior to the license availability date, and those 

18 terms shall continue to apply unless and until 

19 such voluntary license is terminated or amend20 ed, or the parties enter into a new voluntary li21 cense. 

22 ‘‘(D) FURTHER ACCEPTANCE OF NOTICES

23 FOR COVERED ACTIVITIES BY COPYRIGHT OF24 FICE.—On and after the enactment date— 


lotter on DSKBCFDHB2PROD with BILLS
98 

•S 2823 IS

1 ‘‘(i) the Copyright Office shall no 

2 longer accept notices of intention with re3 spect to covered activities; and 

4 ‘‘(ii) previously filed notices of inten5 tion will no longer be effective or provide 

6 license authority with respect to covered 

7 activities, but before the license availability 

8 date there shall be no liability under sec9 tion 501 for the reproduction or distribu10 tion of a musical work (or share thereof) 

11 in covered activities if a valid notice of in12 tention was filed for such work (or share) 

13 before the enactment date. 

14 ‘‘(10) PRIOR UNLICENSED USES.— 

15 ‘‘(A) LIMITATION ON LIABILITY IN GEN16 ERAL.—A copyright owner that commences an 

17 action under section 501 on or after January 1, 

18 2018, against a digital music provider for the 

19 infringement of the exclusive rights provided by 

20 paragraph (1) or (3) of section 106 arising 

21 from the unauthorized reproduction or distribu22 tion of a musical work by such digital music 

23 provider in the course of engaging in covered 

24 activities prior to the license availability date, 

25 shall, as the copyright owner’s sole and excluVerDate Sep 11 2014 00:32 May 17, 2018 Jkt 079200 PO 00000 Frm 00098 Fmt 6652 Sfmt 6201 E:\BILLS\S2823.IS S2823

lotter on DSKBCFDHB2PROD with BILLS
99 

•S 2823 IS

1 sive remedy against the digital music provider, 

2 be eligible to recover the royalty prescribed 

3 under subsection (c)(1)(C) and chapter 8 of 

4 this title, from the digital music provider, pro5 vided that such digital music provider can dem6 onstrate compliance with the requirements of 

7 subparagraph (B), as applicable. In all other 

8 cases the limitation on liability under this sub9 paragraph shall not apply. 

10 ‘‘(B) REQUIREMENTS FOR LIMITATION ON

11 LIABILITY.—The following requirements shall 

12 apply on the enactment date and through the 

13 end of the period that expires 90 days after the 

14 license availability date to digital music pro15 viders seeking to avail themselves of the limita16 tion on liability described in subparagraph (A): 

17 ‘‘(i) No later than 30 calendar days 

18 after first making a particular sound re19 cording of a musical work available 

20 through its service via one or more covered 

21 activities, or 30 calendar days after the en22 actment date, whichever occurs later, a 

23 digital music provider shall engage in 

24 good-faith, commercially reasonable efforts 

25 to identify and locate each copyright owner 


lotter on DSKBCFDHB2PROD with BILLS
100 

•S 2823 IS

1 of such musical work (or share thereof). 

2 Such required matching efforts shall in3 clude the following: 

4 ‘‘(I) Good-faith, commercially 

5 reasonable efforts to obtain from the 

6 owner of the corresponding sound re7 cording made available through the 

8 digital music provider’s service the fol9 lowing information: 

10 ‘‘(aa) Sound recording 

11 name, featured artist, sound re12 cording copyright owner, pro13 ducer, international standard re14 cording code, and other informa15 tion commonly used in the indus16 try to identify sound recordings 

17 and match them to the musical 

18 works they embody. 

19 ‘‘(bb) Any available musical 

20 work ownership information, in21 cluding each songwriter and pub22 lisher name, percentage owner23 ship share, and international 

24 standard musical work code. 


lotter on DSKBCFDHB2PROD with BILLS
101 

•S 2823 IS

1 ‘‘(II) Employment of one or more 

2 bulk electronic matching processes 

3 that are available to the digital music 

4 provider through a third-party vendor 

5 on commercially reasonable terms, but 

6 a digital music provider may rely on 

7 its own bulk electronic matching proc8 ess if it has capabilities comparable to 

9 or better than those available from a 

10 third-party vendor on commercially 

11 reasonable terms. 

12 ‘‘(ii) The required matching efforts 

13 shall be repeated by the digital music pro14 vider no less than once per month for so 

15 long as the copyright owner remains un16 identified or has not been located. 

17 ‘‘(iii) If the required matching efforts 

18 are successful in identifying and locating a 

19 copyright owner of a musical work (or 

20 share thereof) by the end of the calendar 

21 month in which the digital music provider 

22 first makes use of the work, the digital 

23 music provider shall provide statements of 

24 account and pay royalties to such copyVerDate Sep 11 2014 00:32 May 17, 2018 Jkt 079200 PO 00000 Frm 00101 Fmt 6652 Sfmt 6201 E:\BILLS\S2823.IS S2823

lotter on DSKBCFDHB2PROD with BILLS
102 

•S 2823 IS

1 right owner in accordance with this section 

2 and applicable regulations. 

3 ‘‘(iv) If the copyright owner is not 

4 identified or located by the end of the cal5 endar month in which the digital music 

6 provider first makes use of the work, the 

7 digital music provider shall accrue and 

8 hold royalties calculated under the applica9 ble statutory rate in accordance with usage 

10 of the work, from initial use of the work 

11 until the accrued royalties can be paid to 

12 the copyright owner or are required to be 

13 transferred to the mechanical licensing col14 lective, as follows: 

15 ‘‘(I) Accrued royalties shall be 

16 maintained by the digital music pro17 vider in accordance with generally ac18 cepted accounting principles. 

19 ‘‘(II) If a copyright owner of an 

20 unmatched musical work (or share 

21 thereof) is identified and located by or 

22 to the digital music provider before 

23 the license availability date, the digital 

24 music provider shall— 


lotter on DSKBCFDHB2PROD with BILLS
103 

•S 2823 IS

1 ‘‘(aa) within 45 calendar 

2 days after the end of the cal3 endar month during which the 

4 copyright owner was identified 

5 and located, pay the copyright 

6 owner all accrued royalties, such 

7 payment to be accompanied by a 

8 cumulative statement of account 

9 that includes all of the informa10 tion that would have been pro11 vided to the copyright owner had 

12 the digital music provider been 

13 providing monthly statements of 

14 account to the copyright owner 

15 from initial use of the work in 

16 accordance with this section and 

17 applicable regulations, including 

18 the requisite certification under 

19 subsection (c)(2)(I); 

20 ‘‘(bb) beginning with the ac21 counting period following the cal22 endar month in which the copy23 right owner was identified and lo24 cated, and for all other account25 ing periods prior to the license 


lotter on DSKBCFDHB2PROD with BILLS
104 

•S 2823 IS

1 availability date, provide monthly 

2 statements of account and pay 

3 royalties to the copyright owner 

4 as required under this section 

5 and applicable regulations; and 

6 ‘‘(cc) beginning with the 

7 monthly royalty reporting period 

8 commencing on the license avail9 ability date, report usage and pay 

10 royalties for such musical work 

11 (or share thereof) for such re12 porting period and reporting pe13 riods thereafter to the mechanical 

14 licensing collective, as required 

15 under this subsection and appli16 cable regulations. 

17 ‘‘(III) If a copyright owner of an 

18 unmatched musical work (or share 

19 thereof) is not identified and located 

20 by the license availability date, the 

21 digital music provider shall— 

22 ‘‘(aa) within 45 calendar 

23 days after the license availability 

24 date, transfer all accrued royal25 ties to the mechanical licensing 


lotter on DSKBCFDHB2PROD with BILLS
105 

•S 2823 IS

1 collective, such payment to be ac2 companied by a cumulative state3 ment of account that includes all 

4 of the information that would 

5 have been provided to the copy6 right owner had the digital music 

7 provider been serving monthly 

8 statements of account on the 

9 copyright owner from initial use 

10 of the work in accordance with 

11 this section and applicable regu12 lations, including the requisite 

13 certification under subsection 

14 (c)(2)(I), and accompanied by an 

15 additional certification by a duly 

16 authorized officer of the digital 

17 music provider that the digital 

18 music provider has fulfilled the 

19 requirements of clauses (i) and 

20 (ii) of subparagraph (B) but has 

21 not been successful in locating or 

22 identifying the copyright owner; 

23 and 

24 ‘‘(bb) beginning with the 

25 monthly royalty reporting period 


lotter on DSKBCFDHB2PROD with BILLS
106 

•S 2823 IS

1 commencing on the license avail2 ability date, report usage and pay 

3 royalties for such musical work 

4 (or share thereof) for such period 

5 and reporting periods thereafter 

6 to the mechanical licensing collec7 tive, as required under this sub8 section and applicable regula9 tions. 

10 ‘‘(v) SUSPENSION OF LATE FEES.—A 

11 digital music provider that complies with 

12 the requirements of this paragraph with 

13 respect to unmatched musical works (or 

14 shares of works) shall not be liable for or 

15 accrue late fees for late payments of royal16 ties for such works until such time as the 

17 digital music provider is required to begin 

18 paying monthly royalties to the copyright 

19 owner or the mechanical licensing collec20 tive, as applicable. 

21 ‘‘(C) ADJUSTED STATUTE OF LIMITA22 TIONS.—Notwithstanding anything to the con23 trary in section 507(b), with respect to any 

24 claim of infringement of the exclusive rights 

25 provided by paragraphs (1) and (3) of section 


lotter on DSKBCFDHB2PROD with BILLS
107 

•S 2823 IS

1 106 against a digital music provider arising 

2 from the unauthorized reproduction or distribu3 tion of a musical work by such digital music 

4 provider to engage in covered activities that ac5 crued no more than 3 years prior to the license 

6 availability date, such action may be com7 menced within 3 years of the date the claim ac8 crued, or up to 2 years after the license avail9 ability date, whichever is later. 

10 ‘‘(D) OTHER RIGHTS AND REMEDIES PRE11 SERVED.—Except as expressly provided in this 

12 paragraph, nothing in this paragraph shall be 

13 construed to alter, limit, or negate any right or 

14 remedy of a copyright owner with respect to un15 authorized use of a musical work. 

16 ‘‘(11) LEGAL PROTECTIONS FOR LICENSING AC17 TIVITIES.— 

18 ‘‘(A) EXEMPTION FOR COMPULSORY LI19 CENSE ACTIVITIES.—The antitrust exemption 

20 described in subsection (c)(1)(D) shall apply to 

21 negotiations and agreements between and 

22 among copyright owners and persons entitled to 

23 obtain a compulsory license for covered activi24 ties, and common agents acting on behalf of 

25 such copyright owners or persons, including 


lotter on DSKBCFDHB2PROD with BILLS
108 

•S 2823 IS

1 with respect to the administrative assessment 

2 established under this subsection. 

3 ‘‘(B) LIMITATION ON COMMON AGENT EX4 EMPTION.—Notwithstanding the antitrust ex5 emption provided in subsection (c)(1)(D) and 

6 subparagraph (A) (except for the administrative 

7 assessment referenced therein and except as 

8 provided in paragraph (8)(C)), neither the me9 chanical licensing collective nor the digital li10 censee coordinator shall serve as a common 

11 agent with respect to the establishment of roy12 alty rates or terms under this section. 

13 ‘‘(C) ANTITRUST EXEMPTION FOR ADMIN14 ISTRATIVE ACTIVITIES.—Notwithstanding any 

15 provision of the antitrust laws, copyright own16 ers and persons entitled to obtain a compulsory 

17 license under this section may designate the 

18 mechanical licensing collective to administer vol19 untary licenses for the reproduction or distribu20 tion of musical works in covered activities on 

21 behalf of such copyright owners and persons, 

22 but the following conditions apply: 

23 ‘‘(i) Each copyright owner shall estab24 lish the royalty rates and material terms of 

25 any such voluntary license individually and 


lotter on DSKBCFDHB2PROD with BILLS
109 

•S 2823 IS

1 not in agreement, combination, or concert 

2 with any other copyright owner. 

3 ‘‘(ii) Each person entitled to obtain a 

4 compulsory license under this section shall 

5 establish the royalty rates and material 

6 terms of any such voluntary license indi7 vidually and not in agreement, combina8 tion, or concert with any other digital 

9 music provider. 

10 ‘‘(iii) The mechanical licensing collec11 tive shall maintain the confidentiality of 

12 the voluntary licenses in accordance with 

13 the confidentiality provisions prescribed by 

14 the Register of Copyrights under para15 graph (12)(C). 

16 ‘‘(D) LIABILITY FOR GOOD-FAITH ACTIVI17 TIES.—The mechanical licensing collective shall 

18 not be liable to any person or entity based on 

19 a claim arising from its good-faith administra20 tion of policies and procedures adopted and im21 plemented to carry out the responsibilities de22 scribed in subparagraphs (J) and (K) of para23 graph (3), except to the extent of correcting an 

24 underpayment or overpayment of royalties as 

25 provided in paragraph (3)(L)(i)(VI), but the 


lotter on DSKBCFDHB2PROD with BILLS
110 

•S 2823 IS

1 collective may participate in a legal proceeding 

2 as a stakeholder party if the collective is hold3 ing funds that are the subject of a dispute be4 tween copyright owners. For purposes of this 

5 subparagraph, ‘good-faith administration’ 

6 means administration in a manner that is not 

7 grossly negligent. 

8 ‘‘(E) PREEMPTION OF STATE PROPERTY

9 LAWS.—The holding and distribution of funds 

10 by the mechanical licensing collective in accord11 ance with this subsection shall supersede and 

12 preempt any State law (including common law) 

13 concerning escheatment or abandoned property, 

14 or any analogous provision, that might other15 wise apply. 

16 ‘‘(F) RULE OF CONSTRUCTION.—Except as 

17 expressly provided in this subsection, nothing in 

18 this subsection shall negate or limit the ability 

19 of any person to pursue an action in Federal 

20 court against the mechanical licensing collective 

21 or any other person based upon a claim arising 

22 under this title or other applicable law. 

23 ‘‘(12) REGULATIONS.— 

24 ‘‘(A) ADOPTION BY REGISTER OF COPY25 RIGHTS AND COPYRIGHT ROYALTY JUDGES.— 


lotter on DSKBCFDHB2PROD with BILLS
111 

•S 2823 IS

1 The Register of Copyrights may conduct such 

2 proceedings and adopt such regulations as may 

3 be necessary or appropriate to effectuate the 

4 provisions of this subsection, except for regula5 tions concerning proceedings before the Copy6 right Royalty Judges to establish the adminis7 trative assessment, which shall be adopted by 

8 the Copyright Royalty Judges. 

9 ‘‘(B) JUDICIAL REVIEW OF REGULA10 TIONS.—Except as provided in paragraph 

11 (7)(D)(vii), regulations adopted under this sub12 section shall be subject to judicial review pursu13 ant to chapter 7 of title 5. 

14 ‘‘(C) PROTECTION OF CONFIDENTIAL IN15 FORMATION.—The Register of Copyrights shall 

16 adopt regulations to provide for the appropriate 

17 procedures to ensure that confidential, private, 

18 proprietary, or privileged information contained 

19 in the records of the mechanical licensing collec20 tive and digital licensee coordinator is not im21 properly disclosed or used, including through 

22 any disclosure or use by the board of directors 

23 or personnel of either entity, and specifically in24 cluding the unclaimed royalties oversight comVerDate Sep 11 2014 00:32 May 17, 2018 Jkt 079200 PO 00000 Frm 00111 Fmt 6652 Sfmt 6201 E:\BILLS\S2823.IS S2823

lotter on DSKBCFDHB2PROD with BILLS
112 

•S 2823 IS

1 mittee and the dispute resolution committee of 

2 the mechanical licensing collective. 

3 ‘‘(13) SAVINGS CLAUSES.— 

4 ‘‘(A) LIMITATION ON ACTIVITIES AND

5 RIGHTS COVERED.—This subsection applies 

6 solely to uses of musical works subject to licens7 ing under this section. The blanket license shall 

8 not be construed to extend or apply to activities 

9 other than covered activities or to rights other 

10 than the exclusive rights of reproduction and 

11 distribution licensed under this section, or serve 

12 or act as the basis to extend or expand the 

13 compulsory license under this section to activi14 ties and rights not covered by this section on 

15 the enactment date. 

16 ‘‘(B) RIGHTS OF PUBLIC PERFORMANCE

17 NOT AFFECTED.—The rights, protections, and 

18 immunities granted under this subsection, the 

19 data concerning musical works collected and 

20 made available under this subsection, and the 

21 definitions described in subsection (e) shall not 

22 extend to, limit, or otherwise affect any right of 

23 public performance in a musical work.’’; and 

24 (5) by adding at the end the following new sub25 section: 


lotter on DSKBCFDHB2PROD with BILLS
113 

•S 2823 IS

1 ‘‘(e) DEFINITIONS.—As used in this section: 

2 ‘‘(1) ACCRUED INTEREST.—The term ‘accrued 

3 interest’ means interest accrued on accrued royal4 ties, as described in subsection (d)(3)(H)(ii). 

5 ‘‘(2) ACCRUED ROYALTIES.—The term ‘accrued 

6 royalties’ means royalties accrued for the reproduc7 tion or distribution of a musical work (or share 

8 thereof) in a covered activity, calculated in accord9 ance with the applicable royalty rate under this sec10 tion. 

11 ‘‘(3) ADMINISTRATIVE ASSESSMENT.—The term 

12 ‘administrative assessment’ means the fee estab13 lished pursuant to subsection (d)(7)(D). 

14 ‘‘(4) AUDIT.—The term ‘audit’ means a royalty 

15 compliance examination to verify the accuracy of 

16 royalty payments, or the conduct of such an exam17 ination, as applicable. 

18 ‘‘(5) BLANKET LICENSE.—The term ‘blanket li19 cense’ means a compulsory license described in sub20 section (d)(1)(A) to engage in covered activities. 

21 ‘‘(6) COLLECTIVE TOTAL COSTS.—The term 

22 ‘collective total costs’— 

23 ‘‘(A) means the total costs of establishing, 

24 maintaining, and operating the mechanical liVerDate Sep 11 2014 00:32 May 17, 2018 Jkt 079200 PO 00000 Frm 00113 Fmt 6652 Sfmt 6201 E:\BILLS\S2823.IS S2823

lotter on DSKBCFDHB2PROD with BILLS
114 

•S 2823 IS

1 censing collective to fulfill its statutory func2 tions, including— 

3 ‘‘(i) startup costs; 

4 ‘‘(ii) financing, legal, and insurance 

5 costs; 

6 ‘‘(iii) investments in information tech7 nology, infrastructure, and other long-term 

8 resources; 

9 ‘‘(iv) outside vendor costs; 

10 ‘‘(v) costs of licensing, royalty admin11 istration, and enforcement of rights; 

12 ‘‘(vi) costs of bad debt; and 

13 ‘‘(vii) costs of automated and manual 

14 efforts to identify and locate copyright 

15 owners of musical works (and shares of 

16 such musical works) and match sound re17 cordings to the musical works the sound 

18 recordings embody; and 

19 ‘‘(B) does not include any added costs in20 curred by the mechanical licensing collective to 

21 provide services under voluntary licenses. 

22 ‘‘(7) COVERED ACTIVITY.—The term ‘covered 

23 activity’ means the activity of making a digital pho24 norecord delivery of a musical work, including in the 

25 form of a permanent download, limited download, or 


lotter on DSKBCFDHB2PROD with BILLS
115 

•S 2823 IS

1 interactive stream, where such activity qualified for 

2 a compulsory license under this section. 

3 ‘‘(8) DIGITAL MUSIC PROVIDER.—The term 

4 ‘digital music provider’ means a person (or persons 

5 operating under the authority of that person) that, 

6 with respect to a service engaged in covered activi7 ties— 

8 ‘‘(A) has a direct contractual, subscription, 

9 or other economic relationship with end users of 

10 the service, or, if no such relationship with end 

11 users exists, exercises direct control over the 

12 provision of the service to end users; 

13 ‘‘(B) is able to fully report on any revenues 

14 and consideration generated by the service; and 

15 ‘‘(C) is able to fully report on usage of 

16 sound recordings of musical works by the serv17 ice (or procure such reporting). 

18 ‘‘(9) DIGITAL LICENSEE COORDINATOR.—The 

19 term ‘digital licensee coordinator’ means the entity 

20 most recently designated pursuant to subsection 

21 (d)(5). 

22 ‘‘(10) DIGITAL PHONORECORD DELIVERY.—The 

23 term ‘digital phonorecord delivery’ means each indi24 vidual delivery of a phonorecord by digital trans25 mission of a sound recording that results in a speVerDate Sep 11 2014 00:32 May 17, 2018 Jkt 079200 PO 00000 Frm 00115 Fmt 6652 Sfmt 6201 E:\BILLS\S2823.IS S2823

lotter on DSKBCFDHB2PROD with BILLS
116 

•S 2823 IS

1 cifically identifiable reproduction by or for any 

2 transmission recipient of a phonorecord of that 

3 sound recording, regardless of whether the digital 

4 transmission is also a public performance of the 

5 sound recording or any musical work embodied 

6 therein, and includes a permanent download, a lim7 ited download, or an interactive stream. A digital 

8 phonorecord delivery does not result from a real9 time, noninteractive subscription transmission of a 

10 sound recording where no reproduction of the sound 

11 recording or the musical work embodied therein is 

12 made from the inception of the transmission through 

13 to its receipt by the transmission recipient in order 

14 to make the sound recording audible. A digital pho15 norecord delivery does not include the digital trans16 mission of sounds accompanying a motion picture or 

17 other audiovisual work as defined in section 101 of 

18 this title. 

19 ‘‘(11) ENACTMENT DATE.—The term ‘enact20 ment date’ means the date of the enactment of the 

21 Musical Works Modernization Act. 

22 ‘‘(12) INDIVIDUAL DOWNLOAD LICENSE.—The 

23 term ‘individual download license’ means a compul24 sory license obtained by a record company to make 

25 and distribute, or authorize the making and distribuVerDate Sep 11 2014 00:32 May 17, 2018 Jkt 079200 PO 00000 Frm 00116 Fmt 6652 Sfmt 6201 E:\BILLS\S2823.IS S2823

lotter on DSKBCFDHB2PROD with BILLS
117 

•S 2823 IS

1 tion of, permanent downloads embodying a specific 

2 individual musical work. 

3 ‘‘(13) INTERACTIVE STREAM.—The term ‘inter4 active stream’ means a digital transmission of a 

5 sound recording of a musical work in the form of a 

6 stream, where the performance of the sound record7 ing by means of such transmission is not exempt 

8 under section 114(d)(1) and does not in itself, or as 

9 a result of a program in which it is included, qualify 

10 for statutory licensing under section 114(d)(2). An 

11 interactive stream is a digital phonorecord delivery. 

12 ‘‘(14) INTERESTED.—The term ‘interested’, as 

13 applied to a party seeking to participate in a pro14 ceeding under subsection (d)(7)(D), is a party as to 

15 which the Copyright Royalty Judges have not deter16 mined that the party lacks a significant interest in 

17 such proceeding. 

18 ‘‘(15) LICENSE AVAILABILITY DATE.—The term 

19 ‘license availability date’ means the next January 1 

20 following the expiration of the 2-year period begin21 ning on the enactment date. 

22 ‘‘(16) LIMITED DOWNLOAD.—The term ‘limited 

23 download’ means a digital transmission of a sound 

24 recording of a musical work in the form of a 

25 download, where such sound recording is accessible 


lotter on DSKBCFDHB2PROD with BILLS
118 

•S 2823 IS

1 for listening only for a limited amount of time or 

2 specified number of times. 

3 ‘‘(17) MATCHED.—The term ‘matched’, as ap4 plied to a musical work (or share thereof), means 

5 that the copyright owner of such work (or share 

6 thereof) has been identified and located. 

7 ‘‘(18) MECHANICAL LICENSING COLLECTIVE.— 

8 The term ‘mechanical licensing collective’ means the 

9 entity most recently designated as such by the Reg10 ister of Copyrights under subsection (d)(3). 

11 ‘‘(19) MECHANICAL LICENSING COLLECTIVE

12 BUDGET.—The term ‘mechanical licensing collective 

13 budget’ means a statement of the financial position 

14 of the mechanical licensing collective for a fiscal year 

15 or quarter thereof based on estimates of expendi16 tures during the period and proposals for financing 

17 them, including a calculation of the collective total 

18 costs. 

19 ‘‘(20) MUSICAL WORKS DATABASE.—The term 

20 ‘musical works database’ means the database de21 scribed in subsection (d)(3)(E). 

22 ‘‘(21) NONPROFIT.—The term ‘nonprofit’ 

23 means a nonprofit created or organized in a State. 

24 ‘‘(22) NOTICE OF LICENSE.—The term ‘notice 

25 of license’ means a notice from a digital music proVerDate Sep 11 2014 00:32 May 17, 2018 Jkt 079200 PO 00000 Frm 00118 Fmt 6652 Sfmt 6201 E:\BILLS\S2823.IS S2823

lotter on DSKBCFDHB2PROD with BILLS
119 

•S 2823 IS

1 vider provided under subsection (d)(2)(A) for pur2 poses of obtaining a blanket license. 

3 ‘‘(23) NOTICE OF NONBLANKET ACTIVITY.— 

4 The term ‘notice of nonblanket activity’ means a no5 tice from a significant nonblanket licensee provided 

6 under subsection (d)(6)(A) for purposes of notifying 

7 the mechanical licensing collective that the licensee 

8 has been engaging in covered activities. 

9 ‘‘(24) PERMANENT DOWNLOAD.—The term 

10 ‘permanent download’ means a digital transmission 

11 of a sound recording of a musical work in the form 

12 of a download, where such sound recording is acces13 sible for listening without restriction as to the 

14 amount of time or number of times it may be 

15 accessed. 

16 ‘‘(25) QUALIFIED AUDITOR.—The term ‘quali17 fied auditor’ means an independent, certified public 

18 accountant with experience performing music royalty 

19 audits. 

20 ‘‘(26) RECORD COMPANY.—The term ‘record 

21 company’ means an entity that invests in, produces, 

22 and markets sound recordings of musical works, and 

23 distributes such sound recordings for remuneration 

24 through multiple sales channels, including a corVerDate Sep 11 2014 00:32 May 17, 2018 Jkt 079200 PO 00000 Frm 00119 Fmt 6652 Sfmt 6201 E:\BILLS\S2823.IS S2823

lotter on DSKBCFDHB2PROD with BILLS
120 

•S 2823 IS

1 porate affiliate of such an entity engaged in distribu2 tion of sound recordings. 

3 ‘‘(27) REPORT OF USAGE.—The term ‘report of 

4 usage’ means a report reflecting an entity’s usage of 

5 musical works in covered activities described in sub6 section (d)(4)(A). 

7 ‘‘(28) REQUIRED MATCHING EFFORTS.—The 

8 term ‘required matching efforts’ means efforts to 

9 identify and locate copyright owners of musical 

10 works as described in subsection (d)(10)(B)(i). 

11 ‘‘(29) SERVICE.—The term ‘service’, as used in 

12 relation to covered activities, means any site, facility, 

13 or offering by or through which sound recordings of 

14 musical works are digitally transmitted to members 

15 of the public. 

16 ‘‘(30) SHARE.—The term ‘share’, as applied to 

17 a musical work, means a fractional ownership inter18 est in such work. 

19 ‘‘(31) SIGNIFICANT NONBLANKET LICENSEE.— 

20 The term ‘significant nonblanket licensee’— 

21 ‘‘(A) means an entity, including a group of 

22 entities under common ownership or control 

23 that, acting under the authority of one or more 

24 voluntary licenses or individual download liVerDate Sep 11 2014 00:32 May 17, 2018 Jkt 079200 PO 00000 Frm 00120 Fmt 6652 Sfmt 6201 E:\BILLS\S2823.IS S2823

lotter on DSKBCFDHB2PROD with BILLS
121 

•S 2823 IS

1 censes, offers a service engaged in covered ac2 tivities, and such entity or group of entities— 

3 ‘‘(i) is not currently operating under a 

4 blanket license and is not obligated to pro5 vide reports of usage reflecting covered ac6 tivities under subsection (d)(4)(A); 

7 ‘‘(ii) has a direct contractual, sub8 scription, or other economic relationship 

9 with end users of the service or, if no such 

10 relationship with end users exists, exercises 

11 direct control over the provision of the 

12 service to end users; and 

13 ‘‘(iii) either— 

14 ‘‘(I) on any day in a calendar 

15 month, makes more than 5,000 dif16 ferent sound recordings of musical 

17 works available through such service; 

18 or 

19 ‘‘(II) derives revenue or other 

20 consideration in connection with such 

21 covered activities greater than 

22 $50,000 in a calendar month, or total 

23 revenue or other consideration greater 

24 than $500,000 during the preceding 

25 12 calendar months; and 


lotter on DSKBCFDHB2PROD with BILLS
122 

•S 2823 IS

1 ‘‘(B) does not include— 

2 ‘‘(i) an entity whose covered activity 

3 consists solely of free-to-the-user streams 

4 of segments of sound recordings of musical 

5 works that do not exceed 90 seconds in 

6 length, are offered only to facilitate a li7 censed use of musical works that is not a 

8 covered activity, and have no revenue di9 rectly attributable to such streams consti10 tuting the covered activity; or 

11 ‘‘(ii) a ‘public broadcasting entity’ as 

12 defined in section 118(f). 

13 ‘‘(32) SONGWRITER.—The term ‘songwriter’ 

14 means the author of all or part of a musical work, 

15 including a composer or lyricist. 

16 ‘‘(33) STATE.—The term ‘State’ means each 

17 State of the United States, the District of Columbia, 

18 and each territory or possession of the United 

19 States. 

20 ‘‘(34) UNCLAIMED ACCRUED ROYALTIES.—The 

21 term ‘unclaimed accrued royalties’ means accrued 

22 royalties eligible for distribution under subsection 

23 (d)(3)(J). 

24 ‘‘(35) UNMATCHED.—The term ‘unmatched’, as 

25 applied to a musical work (or share thereof), means 


lotter on DSKBCFDHB2PROD with BILLS
123 

•S 2823 IS

1 that the copyright owner of such work (or share 

2 thereof) has not been identified or located. 

3 ‘‘(36) VOLUNTARY LICENSE.—The term ‘vol4 untary license’ means a license for use of a musical 

5 work (or share thereof) other than a compulsory li6 cense obtained under this section.’’. 

7 (b) TECHNICAL AND CONFORMING AMENDMENTS TO

8 SECTION 801.—Section 801(b) of title 17, United States 

9 Code, is amended— 

10 (1) by redesignating paragraph (8) as para11 graph (9); and 

12 (2) by inserting after paragraph (7) the fol13 lowing new paragraph: 

14 ‘‘(8) To determine the administrative assess15 ment to be paid by digital music providers under 

16 section 115(d). The provisions of section 115(d) 

17 shall apply to the conduct of proceedings by the 

18 Copyright Royalty Judges under section 115(d) and 

19 not the procedures described in this section, or sec20 tion 803, 804, or 805.’’. 

21 (c) EFFECTIVE DATE OF AMENDED RATE SETTING

22 STANDARD.—The amendments made by subsections 

23 (a)(3)(D) and (b)(1) shall apply to any proceeding before 

24 the Copyright Royalty Judges that is pending on, or com25 menced on or after, the date of the enactment of this Act. 


lotter on DSKBCFDHB2PROD with BILLS
124 

•S 2823 IS

1 (d) TECHNICAL AND CONFORMING AMENDMENTS TO

2 TITLE 37, PART 385 OF THE CODE OF FEDERAL REGU3 LATIONS.—Within 9 months after the date of the enact4 ment of this Act, the Copyright Royalty Judges shall 

5 amend the regulations for section 115 in part 385 of title 

6 37, Code of Federal Regulations to conform the definitions 

7 used in such part to the definitions of the same terms de8 scribed in section 115(e) of title 17, United States Code, 

9 as amended by subsection (a). In so doing, the Copyright 

10 Royalty Judges shall make adjustments to the language 

11 of the regulations as necessary to achieve the same pur12 pose and effect as the original regulations with respect to 

13 the rates and terms previously adopted by the Copyright 

14 Royalty Judges. 

15 SEC. 103. AMENDMENTS TO SECTION 114. 

16 (a) UNIFORM RATE STANDARD.—Section 114(f) of 

17 title 17, United States Code, is amended— 

18 (1) by striking paragraphs (1) and (2) and in19 serting the following: 

20 ‘‘(1)(A) Proceedings under chapter 8 shall de21 termine reasonable rates and terms of royalty pay22 ments for transmissions subject to statutory licens23 ing under subsection (d)(2) during the 5-year period 

24 beginning on January 1 of the second year following 

25 the year in which the proceedings are to be comVerDate Sep 11 2014 00:32 May 17, 2018 Jkt 079200 PO 00000 Frm 00124 Fmt 6652 Sfmt 6201 E:\BILLS\S2823.IS S2823

lotter on DSKBCFDHB2PROD with BILLS
125 

•S 2823 IS

1 menced pursuant to subparagraph (A) or (B) of sec2 tion 804(b)(3), as the case may be, or such other pe3 riod as the parties may agree. The parties to each 

4 proceeding shall bear their own costs. 

5 ‘‘(B) The schedule of reasonable rates and 

6 terms determined by the Copyright Royalty Judges 

7 shall, subject to paragraph (2), be binding on all 

8 copyright owners of sound recordings and entities 

9 performing sound recordings affected by this para10 graph during the 5-year period specified in subpara11 graph (A), or such other period as the parties may 

12 agree. Such rates and terms shall distinguish among 

13 the different types of services then in operation and 

14 shall include a minimum fee for each such type of 

15 service, such differences to be based on criteria in16 cluding the quantity and nature of the use of sound 

17 recordings and the degree to which use of the service 

18 may substitute for or may promote the purchase of 

19 phonorecords by consumers. The Copyright Royalty 

20 Judges shall establish rates and terms that most 

21 clearly represent the rates and terms that would 

22 have been negotiated in the marketplace between a 

23 willing buyer and a willing seller. In determining 

24 such rates and terms, the Copyright Royalty 

25 Judges— 


lotter on DSKBCFDHB2PROD with BILLS
126 

•S 2823 IS

1 ‘‘(i) shall base their decision on economic, 

2 competitive, and programming information pre3 sented by the parties, including— 

4 ‘‘(I) whether use of the service may 

5 substitute for or may promote the sales of 

6 phonorecords or otherwise may interfere 

7 with or may enhance the sound recording 

8 copyright owner’s other streams of revenue 

9 from the copyright owner’s sound record10 ings; and 

11 ‘‘(II) the relative roles of the copy12 right owner and the transmitting entity in 

13 the copyrighted work and the service made 

14 available to the public with respect to rel15 ative creative contribution, technological 

16 contribution, capital investment, cost, and 

17 risk; and 

18 ‘‘(ii) may consider the rates and terms for 

19 comparable types of audio transmission services 

20 and comparable circumstances under voluntary 

21 license agreements. 

22 ‘‘(C) The procedures under subparagraphs (A) 

23 and (B) shall also be initiated pursuant to a petition 

24 filed by any sound recording copyright owner or any 

25 transmitting entity indicating that a new type of 


lotter on DSKBCFDHB2PROD with BILLS
127 

•S 2823 IS

1 service on which sound recordings are performed is 

2 or is about to become operational, for the purpose 

3 of determining reasonable terms and rates of royalty 

4 payments with respect to such new type of service 

5 for the period beginning with the inception of such 

6 new type of service and ending on the date on which 

7 the royalty rates and terms for eligible nonsubscrip8 tion services and new subscription services, or pre9 existing services, as the case may be, most recently 

10 determined under subparagraph (A) or (B) and 

11 chapter 8 expire, or such other period as the parties 

12 may agree.’’; and 

13 (2) by redesignating paragraphs (3), (4), and 

14 (5) as paragraphs (2), (3), and (4), respectively. 

15 (b) REPEAL.—Subsection (i) of section 114 of title 

16 17, United States Code, is repealed. 

17 (c) USE IN MUSICAL WORK PROCEEDINGS.— 

18 (1) IN GENERAL.—License fees payable for the 

19 public performance of sound recordings under sec20 tion 106(6) of title 17, United States Code, shall not 

21 be taken into account in any administrative, judicial, 

22 or other governmental proceeding to set or adjust 

23 the royalties payable to musical work copyright own24 ers for the public performance of their works except 

25 in such a proceeding to set or adjust royalties for 


lotter on DSKBCFDHB2PROD with BILLS
128 

•S 2823 IS

1 the public performance of musical works by means 

2 of a digital audio transmission other than a trans3 mission by a broadcaster, and may be taken into ac4 count only with respect to such digital audio trans5 mission. 

6 (2) DEFINITIONS.—In this subsection: 

7 (A) TRANSMISSION BY A BROADCASTER.— 

8 A ‘‘transmission by a broadcaster’’ means a 

9 nonsubscription digital transmission made by a 

10 terrestrial broadcast station on its own behalf, 

11 or on the behalf of a terrestrial broadcast sta12 tion under common ownership or control, that 

13 is not part of an interactive service or a music14 intensive service comprising the transmission of 

15 sound recordings customized for or 

16 customizable by recipients or service users. 

17 (B) TERRESTRIAL BROADCAST STATION.— 

18 A ‘‘terrestrial broadcast station’’ means a ter19 restrial, over-the-air radio or television broad20 cast station, licensed as such by the Federal 

21 Communications Commission, including an FM 

22 Translator as defined in section 74.1231 of title 

23 47, Code of Federal Regulations, and whose 

24 primary business activities are comprised of, 

25 and revenues are generated through, terrestrial, 


lotter on DSKBCFDHB2PROD with BILLS
129 

•S 2823 IS

1 over-the-air broadcast transmissions, or the si2 multaneous or substantially-simultaneous digital 

3 retransmission by the terrestrial, over-the-air 

4 broadcast station of its over-the-air broadcast 

5 transmissions. 

6 (d) RULE OF CONSTRUCTION.—Subsection (c)(2) 

7 shall not be given effect in interpreting provisions of title 

8 17, United States Code. 

9 (e) USE IN SOUND RECORDING PROCEEDINGS.—The 

10 repeal of section 114(i) of title 17, United States Code, 

11 by subsection (b) shall not be taken into account in any 

12 proceeding to set or adjust the rates and fees payable for 

13 the use of sound recordings under section 112(e) or sec14 tion 114(f) of such title that is pending on, or commenced 

15 on or after, the date of the enactment of this Act. 

16 (f) DECISIONS AND PRECEDENTS NOT AFFECTED.— 

17 The repeal of section 114(i) of title 17, United States 

18 Code, by subsection (b) shall not have any effect upon the 

19 decisions, or the precedents established or relied upon, in 

20 any proceeding to set or adjust the rates and fees payable 

21 for the use of sound recordings under section 112(e) or 

22 section 114(f) of such title before the date of the enact23 ment of this Act. 

24 (g) TECHNICAL AND CONFORMING AMENDMENTS.— 


lotter on DSKBCFDHB2PROD with BILLS
130 

•S 2823 IS

1 (1) SECTION 114.—Section 114(f) of title 17, 

2 United States Code, as amended by subsection (a), 

3 is further amended in paragraph (4)(C), as so redes4 ignated, by striking ‘‘under paragraph (4)’’ and in5 serting ‘‘under paragraph (3)’’. 

6 (2) SECTION 801.—Section 801(b)(1) of title 

7 17, United States Code, is amended by striking 

8 ‘‘The rates applicable’’ and all that follows though 

9 ‘‘prevailing industry practices.’’. 

10 (3) SECTION 804.—Section 804(b)(3)(C) of title 

11 17, United States Code, is amended— 

12 (A) in clause (i), by striking ‘‘and 

13 114(f)(2)(C)’’; 

14 (B) in clause (iii)(II), by striking 

15 ‘‘114(f)(4)(B)(ii)’’ and inserting 

16 ‘‘114(f)(3)(B)(ii)’’; and 

17 (C) in clause (iv), by striking ‘‘or 

18 114(f)(2)(C), as the case may be’’. 

19 SEC. 104. RANDOM ASSIGNMENT OF RATE COURT PRO20 CEEDINGS. 

21 Section 137 of title 28, United States Code, is 

22 amended— 

23 (1) by striking ‘‘The business’’ and inserting 

24 ‘‘(a) IN GENERAL.—The business’’; and 


lotter on DSKBCFDHB2PROD with BILLS
131 

•S 2823 IS

1 (2) by adding at the end the following new sub2 section: 

3 ‘‘(b) RANDOM ASSIGNMENT OF RATE COURT PRO4 CEEDINGS.— 

5 ‘‘(1) IN GENERAL.— 

6 ‘‘(A) DETERMINATION OF LICENSE FEE.— 

7 Except as provided in subparagraph (B), in the 

8 case of any performing rights society subject to 

9 a consent decree, any application for the deter10 mination of a license fee for the public perform11 ance of music in accordance with the applicable 

12 consent decree shall be made in the district 

13 court with jurisdiction over that consent decree 

14 and randomly assigned to a judge of that dis15 trict court according to that court’s rules for 

16 the division of business among district judges 

17 currently in effect or as may be amended from 

18 time to time, provided that any such application 

19 shall not be assigned to— 

20 ‘‘(i) a judge to whom continuing juris21 diction over any performing rights society 

22 for any performing rights society consent 

23 decree is assigned or has previously been 

24 assigned; or 


lotter on DSKBCFDHB2PROD with BILLS
132 

•S 2823 IS

1 ‘‘(ii) a judge to whom another pro2 ceeding concerning an application for the 

3 determination of a reasonable license fee is 

4 assigned at the time of the filing of the ap5 plication. 

6 ‘‘(B) EXCEPTION.—Subparagraph (A) 

7 does not apply to an application to determine 

8 reasonable license fees made by individual pro9 prietors under section 513 of title 17. 

10 ‘‘(2) RULE OF CONSTRUCTION.—Nothing in 

11 paragraph (1) shall modify the rights of any party 

12 to a consent decree or to a proceeding to determine 

13 reasonable license fees, to make an application for 

14 the construction of any provision of the applicable 

15 consent decree. Such application shall be referred to 

16 the judge to whom continuing jurisdiction over the 

17 applicable consent decree is currently assigned. If 

18 any such application is made in connection with a 

19 rate proceeding, such rate proceeding shall be stayed 

20 until the final determination of the construction ap21 plication. Disputes in connection with a rate pro22 ceeding about whether a licensee is similarly situated 

23 to another licensee shall not be subject to referral to 

24 the judge with continuing jurisdiction over the appli25 cable consent decree.’’. 


lotter on DSKBCFDHB2PROD with BILLS
133 

•S 2823 IS

1 TITLE II—COMPENSATING LEG2 ACY ARTISTS FOR THEIR 

3 SONGS, SERVICE, AND IMPOR4 TANT CONTRIBUTIONS TO SO5 CIETY 

6 SEC. 201. SHORT TITLE. 

7 This title may be cited as the ‘‘Compensating Legacy 

8 Artists for their Songs, Service, and Important Contribu9 tions to Society Act’’ or the ‘‘CLASSICS Act’’. 

10 SEC. 202. UNAUTHORIZED DIGITAL PERFORMANCE OF PRE11 1972 SOUND RECORDINGS. 

12 (a) PROTECTION FOR UNAUTHORIZED DIGITAL PER13 FORMANCES.—Title 17, United States Code, is amended 

14 by adding at the end the following new chapter: 

15 ‘‘CHAPTER 14—UNAUTHORIZED DIGITAL 

16 PERFORMANCE OF PRE-1972 SOUND 

17 RECORDINGS 

‘‘Sec. 

‘‘1401. Unauthorized digital performance of pre-1972 sound recordings. 

18 ‘‘§ 1401. Unauthorized digital performance of pre19 1972 sound recordings 

20 ‘‘(a) UNAUTHORIZED ACTS.—Anyone who, before 

21 February 15, 2067, and without the consent of the rights 

22 owner, performs publicly, by means of a digital audio 

23 transmission, a sound recording fixed on or after January 

24 1, 1923, and before February 15, 1972, shall be subject 


lotter on DSKBCFDHB2PROD with BILLS
134 

•S 2823 IS

1 to the remedies provided in sections 502 through 505 to 

2 the same extent as an infringer of copyright. 

3 ‘‘(b) CERTAIN AUTHORIZED TRANSMISSIONS.—A 

4 digital audio transmission of a sound recording fixed on 

5 or after January 1, 1923, and before February 15, 1972, 

6 shall, for purposes of subsection (a), be considered to be 

7 authorized and made with the consent of the rights owner 

8 if— 

9 ‘‘(1) the transmission is made by a transmitting 

10 entity that is publicly performing sound recordings 

11 fixed on or after February 15, 1972, by means of 

12 digital audio transmissions subject to section 114; 

13 ‘‘(2) the transmission would satisfy the require14 ments for statutory licensing under section 

15 114(d)(2), or would be exempt under section 

16 114(d)(1), if the sound recording were fixed on or 

17 after February 15, 1972; 

18 ‘‘(3) in the case of a transmission that would 

19 not be exempt under section 114(d)(1) as described 

20 in paragraph (2), the transmitting entity pays statu21 tory royalties and provides notice of its use of the 

22 relevant sound recordings in the same manner as is 

23 required by regulations adopted by the Copyright 

24 Royalty Judges for sound recordings fixed on or 

25 after February 15, 1972; and 


lotter on DSKBCFDHB2PROD with BILLS
135 

•S 2823 IS

1 ‘‘(4) in the case of a transmission that would 

2 not be exempt under section 114(d)(1) as described 

3 in paragraph (2), the transmitting entity otherwise 

4 satisfies the requirements for statutory licensing 

5 under section 114(f)(4)(B). 

6 ‘‘(c) TRANSMISSIONS BY DIRECT LICENSING OF

7 STATUTORY SERVICES.— 

8 ‘‘(1) IN GENERAL.—A transmission of a sound 

9 recording fixed on or after January 1, 1923, and be10 fore February 15, 1972, shall, for purposes of sub11 section (a), be considered to be authorized and made 

12 with the consent of the rights owner if such trans13 mission is included in a license agreement volun14 tarily negotiated at any time between the rights 

15 owner and the entity performing the sound record16 ing. 

17 ‘‘(2) PAYMENT OF ROYALTIES TO NONPROFIT

18 COLLECTIVE.—To the extent that such a license 

19 agreement entered into on or after the date of the 

20 enactment of this section extends to digital audio 

21 transmissions of a sound recording fixed on or after 

22 January 1, 1923, and before February 15, 1972, 

23 that meet the conditions of subsection (b), the li24 censee shall pay, to the collective designated to dis25 tribute receipts from the licensing of transmissions 


lotter on DSKBCFDHB2PROD with BILLS
136 

•S 2823 IS

1 in accordance with section 114(f), 50 percent of the 

2 performance royalties for the transmissions due 

3 under the license, with such royalties fully credited 

4 as payments due under the license. 

5 ‘‘(3) DISTRIBUTION OF ROYALTIES BY COLLEC6 TIVE.—The collective described in paragraph (2) 

7 shall, in accordance with subparagraphs (B) through 

8 (D) of section 114(g)(2), and paragraphs (5) and 

9 (6) of section 114(g), distribute the royalties re10 ceived under paragraph (2) under the license de11 scribed in paragraph (2). Such payments shall be 

12 the only payments to which featured and nonfea13 tured artists are entitled by virtue of the trans14 missions described in paragraph (2) under the li15 cense. 

16 ‘‘(4) RULE OF CONSTRUCTION.—This section 

17 does not prohibit any other license from directing 

18 the licensee to pay other royalties due to featured 

19 and nonfeatured artists for such transmissions to 

20 the collective designated to distribute receipts from 

21 the licensing of transmissions in accordance with 

22 section 114(f). 

23 ‘‘(d) RELATIONSHIP TO STATE LAW.— 

24 ‘‘(1) IN GENERAL.—Nothing in this section 

25 shall be construed to annul or limit any rights or 


lotter on DSKBCFDHB2PROD with BILLS
137 

•S 2823 IS

1 remedies under the common law or statutes of any 

2 State for sound recordings fixed before February 15, 

3 1972, except, notwithstanding section 301(c), for the 

4 following: 

5 ‘‘(A) This section preempts any claim of 

6 common law copyright or equivalent right under 

7 the laws of any State arising from any digital 

8 audio transmission that is made, on and after 

9 the date of the enactment of this section, of a 

10 sound recording fixed on or after January 1, 

11 1923, and before February 15, 1972. 

12 ‘‘(B) This section preempts any claim of 

13 common law copyright or equivalent right under 

14 the laws of any State arising from any repro15 duction that is made, on and after the date of 

16 the enactment of this section, of a sound re17 cording fixed on or after January 1, 1923, and 

18 before February 15, 1972, and that would sat19 isfy the requirements for statutory licensing 

20 under paragraphs (1) and (6) of section 112(e), 

21 if the sound recording were fixed on or after 

22 February 15, 1972. 

23 ‘‘(C) This section preempts any claim of 

24 common law copyright or equivalent right under 

25 the laws of any State arising from any digital 


lotter on DSKBCFDHB2PROD with BILLS
138 

•S 2823 IS

1 audio transmission or reproduction that is 

2 made, before the date of the enactment of this 

3 section, of a sound recording fixed on or after 

4 January 1, 1923, and before February 15, 

5 1972, if— 

6 ‘‘(i) the digital audio transmission 

7 would have satisfied the requirements for 

8 statutory licensing under section 114(d)(2) 

9 or been exempt under section 114(d)(1), or 

10 the reproduction would have satisfied the 

11 requirements of section 112(e)(1), as the 

12 case may be, if the sound recording were 

13 fixed on or after February 15, 1972; and 

14 ‘‘(ii) except in the case of trans15 missions that would have been exempt 

16 under section 114(d)(1), the transmitting 

17 entity, before the end of the 270-day pe18 riod beginning on the date of the enact19 ment of this section, pays statutory royal20 ties and provides notice of the use of the 

21 relevant sound recordings in the same 

22 manner as is required by regulations 

23 adopted by the Copyright Royalty Judges 

24 for sound recordings that are protected 

25 under this title for all the digital audio 


lotter on DSKBCFDHB2PROD with BILLS
139 

•S 2823 IS

1 transmissions and reproductions satisfying 

2 the requirements for statutory licensing 

3 under section 114(d)(2) and section 

4 112(e)(1) during the 3 years prior to the 

5 date of the enactment of this section. 

6 ‘‘(2) RULE OF CONSTRUCTION FOR COMMON

7 LAW COPYRIGHT.—For purposes of subparagraphs 

8 (A) through (C) of paragraph (1), a claim of com9 mon law copyright or equivalent right under the 

10 laws of any State includes a claim that characterizes 

11 conduct subject to such subparagraphs as an unlaw12 ful distribution, act of record piracy, or similar viola13 tion. 

14 ‘‘(3) RULE OF CONSTRUCTION FOR PUBLIC

15 PERFORMANCE RIGHTS.—Nothing in this section 

16 shall be construed to recognize or negate the exist17 ence of public performance rights in sound record18 ings under the laws of any State. 

19 ‘‘(e) LIMITATIONS ON REMEDIES.— 

20 ‘‘(1) FAIR USE; USES BY LIBRARIES, ARCHIVES, 

21 AND EDUCATIONAL INSTITUTIONS.—The limitations 

22 on the exclusive rights of a copyright owner de23 scribed in sections 107, 108, and 110(1) and (2) 

24 shall apply to a claim under subsection (a) for the 

25 unauthorized performance of a sound recording fixed 


lotter on DSKBCFDHB2PROD with BILLS
140 

•S 2823 IS

1 on or after January 1, 1923, and before February 

2 15, 1972. 

3 ‘‘(2) ACTIONS.—The limitations on actions de4 scribed in section 507 shall apply to a claim under 

5 subsection (a) for the unauthorized performance of 

6 a sound recording fixed on or after January 1, 1923, 

7 and before February 15, 1972. 

8 ‘‘(3) MATERIAL ONLINE.—Section 512 shall 

9 apply to a claim under subsection (a) for the unau10 thorized performance of a sound recording fixed on 

11 or after January 1, 1923, and before February 15, 

12 1972. 

13 ‘‘(4) PRINCIPLES OF EQUITY.—Principles of eq14 uity apply to remedies for a violation of this section 

15 to the same extent as such principles apply to rem16 edies for infringement of copyright. 

17 ‘‘(5) FILING REQUIREMENT FOR STATUTORY

18 DAMAGES AND ATTORNEYS’ FEES.— 

19 ‘‘(A) FILING OF INFORMATION ON SOUND

20 RECORDINGS.— 

21 ‘‘(i) FILING REQUIREMENT.—Except 

22 in the case of a transmitting entity that 

23 has filed contact information for that 

24 transmitting entity under subparagraph 

25 (B), in any action under this section, an 


lotter on DSKBCFDHB2PROD with BILLS
141 

•S 2823 IS

1 award of statutory damages or of attor2 neys’ fees under section 504 or 505 may 

3 be made with respect to an unauthorized 

4 transmission of a sound recording under 

5 subsection (a) only if— 

6 ‘‘(I) the rights owner has filed 

7 with the Copyright Office a schedule 

8 that specifies the title, artist, and 

9 rights owner of the sound recording 

10 and contains such other information, 

11 as practicable, as the Register of 

12 Copyrights prescribes by regulation; 

13 and 

14 ‘‘(II) the transmission is made 

15 after the end of the 90-day period be16 ginning on the date on which the in17 formation filed under subclause (I) is 

18 indexed into the public records of the 

19 Copyright Office. 

20 ‘‘(ii) REGULATIONS.—The Register of 

21 Copyrights shall, before the end of the 

22 180-day period beginning on the date of 

23 the enactment of this section, issue regula24 tions establishing the form, content, and 

25 procedures for the filing of schedules under 


lotter on DSKBCFDHB2PROD with BILLS
142 

•S 2823 IS

1 clause (i). Such regulations shall provide 

2 that persons may request that they receive 

3 timely notification of such filings, and shall 

4 set forth the manner in which such re5 quests may be made. 

6 ‘‘(B) FILING OF CONTACT INFORMATION

7 FOR TRANSMITTING ENTITIES.— 

8 ‘‘(i) FILING REQUIREMENT.—The 

9 Register of Copyrights shall, before the 

10 end of the 30-day period beginning on the 

11 date of the enactment of this section, issue 

12 regulations establishing the form, content, 

13 and procedures for the filing, by any entity 

14 that, as of the date of the enactment of 

15 this section, performs sound recordings 

16 fixed before February 15, 1972, by means 

17 of digital audio transmissions, of contact 

18 information for such entity. 

19 ‘‘(ii) TIME LIMIT ON FILINGS.—The 

20 Register of Copyrights may accept filings 

21 under clause (i) only until the 180th day 

22 after the date of the enactment of this sec23 tion. 

24 ‘‘(iii) LIMITATION ON STATUTORY

25 DAMAGES AND ATTORNEYS’ FEES.— 


lotter on DSKBCFDHB2PROD with BILLS
143 

•S 2823 IS

1 ‘‘(I) LIMITATION.—An award of 

2 statutory damages or of attorneys’ 

3 fees under section 504 or 505 may 

4 not be made, against an entity that 

5 has filed contact information for that 

6 entity under clause (i), with respect to 

7 an unauthorized transmission by that 

8 entity of a sound recording under sub9 section (a) if the transmission is made 

10 before the end of the 90-day period 

11 beginning on the date on which the 

12 entity receives a notice that— 

13 ‘‘(aa) is sent by or on behalf 

14 of the rights owner of the sound 

15 recording; 

16 ‘‘(bb) states that the entity 

17 is not legally authorized to trans18 mit that sound recording under 

19 subsection (a); and 

20 ‘‘(cc) identifies the sound re21 cording in a schedule conforming 

22 to the requirements prescribed by 

23 the regulations issued under sub24 paragraph (A)(ii). 


lotter on DSKBCFDHB2PROD with BILLS
144 

•S 2823 IS

1 ‘‘(II) UNDELIVERABLE NO2 TICES.—In any case in which a notice 

3 under subclause (I) is sent to an enti4 ty by mail or courier service and the 

5 notice is returned to the sender be6 cause the entity either is no longer lo7 cated at the address provided in the 

8 contact information filed under clause 

9 (i) or has refused to accept delivery, 

10 or the notice is sent by electronic mail 

11 and is undeliverable, the 90-day pe12 riod under subclause (I) shall begin 

13 on the date of the attempted delivery. 

14 ‘‘(C) SECTION 412.—Section 412 shall not 

15 limit an award of statutory damages under sec16 tion 504(c) or attorneys’ fees under section 505 

17 with respect to an unauthorized transmission of 

18 a sound recording under subsection (a). 

19 ‘‘(6) APPLICABILITY OF OTHER PROVISIONS.— 

20 ‘‘(A) IN GENERAL.—Subject to subpara21 graph (B), no provision of this title shall apply 

22 to or limit the remedies available under this 

23 section except as otherwise provided in this sec24 tion. 


lotter on DSKBCFDHB2PROD with BILLS
145 

•S 2823 IS

1 ‘‘(B) APPLICABILITY OF DEFINITIONS.— 

2 Any term used in this section that is defined in 

3 section 101 shall have the meaning given that 

4 term in section 101. 

5 ‘‘(f) APPLICATION OF SECTION 230 SAFE HAR6 BOR.—For purposes of section 230 of the Communica7 tions Act of 1934 (47 U.S.C. 230), subsection (a) shall 

8 be considered to be a ‘law pertaining to intellectual prop9 erty’ under subsection (e)(2) of such section. 

10 ‘‘(g) RIGHTS OWNER DEFINED.—In this section, the 

11 term ‘rights owner’ means the person who has the exclu12 sive right to reproduce a sound recording under the laws 

13 of any State.’’. 

14 (b) CONFORMING AMENDMENT.—The table of chap15 ters for title 17, United States Code, is amended by add16 ing at the end the following new chapter: 

‘‘14. Unauthorized digital performance of pre-1972 sound recordings ... 1401’’. 

17 SEC. 203. EFFECTIVE DATE. 

18 This title and the amendments made by this title 

19 shall take effect on the date of the enactment of this Act. 

20 TITLE III—ALLOCATION FOR 

21 MUSIC PRODUCERS 

22 SEC. 301. SHORT TITLE. 

23 This title may be cited as the ‘‘Allocation for Music 

24 Producers Act’’ or the ‘‘AMP Act’’. 


lotter on DSKBCFDHB2PROD with BILLS
146 

•S 2823 IS

1 SEC. 302. PAYMENT OF STATUTORY PERFORMANCE ROYAL2 TIES. 

3 (a) LETTER OF DIRECTION.—Section 114(g) of title 

4 17, United States Code, is amended by adding at the end 

5 the following new paragraph: 

6 ‘‘(5) LETTER OF DIRECTION.— 

7 ‘‘(A) IN GENERAL.—A nonprofit collective 

8 designated by the Copyright Royalty Judges to 

9 distribute receipts from the licensing of trans10 missions in accordance with subsection (f) shall 

11 adopt and reasonably implement a policy that 

12 provides, in circumstances determined by the 

13 collective to be appropriate, for acceptance of 

14 instructions from an artist payee identified 

15 under subparagraph (A) or (D) of paragraph 

16 (2) to distribute, to a producer, mixer, or sound 

17 engineer who was part of the creative process 

18 that created a sound recording, a portion of the 

19 payments to which the artist payee would other20 wise be entitled from the licensing of trans21 missions of the sound recording. In this section, 

22 such instructions shall be referred to as a ‘letter 

23 of direction’. 

24 ‘‘(B) ACCEPTANCE OF LETTER.—To the 

25 extent that the collective accepts a letter of di26 rection under subparagraph (A), the person enVerDate Sep 11 2014 00:32 May 17, 2018 Jkt 079200 PO 00000 Frm 00146 Fmt 6652 Sfmt 6201 E:\BILLS\S2823.IS S2823

lotter on DSKBCFDHB2PROD with BILLS
147 

•S 2823 IS

1 titled to payment pursuant to the letter of di2 rection shall, during the period in which the let3 ter of direction is in effect and carried out by 

4 the collective, be treated for all purposes as the 

5 owner of the right to receive such payment, and 

6 the artist payee providing the letter of direction 

7 to the collective shall be treated as having no 

8 interest in such payment. 

9 ‘‘(C) AUTHORITY OF COLLECTIVE.—This 

10 paragraph shall not be construed in such a 

11 manner so that the collective is not authorized 

12 to accept or act upon payment instructions in 

13 circumstances other than those to which this 

14 paragraph applies.’’. 

15 (b) ADDITIONAL PROVISIONS FOR RECORDINGS

16 FIXED BEFORE NOVEMBER 1, 1995.—Section 114(g) of 

17 title 17, United States Code, as amended by subsection 

18 (a), is further amended by adding at the end the following 

19 new paragraph: 

20 ‘‘(6) SOUND RECORDINGS FIXED BEFORE NO21 VEMBER 1, 1995.— 

22 ‘‘(A) PAYMENT ABSENT LETTER OF DI23 RECTION.—A nonprofit collective designated by 

24 the Copyright Royalty Judges to distribute re25 ceipts from the licensing of transmissions in acVerDate Sep 11 2014 00:32 May 17, 2018 Jkt 079200 PO 00000 Frm 00147 Fmt 6652 Sfmt 6201 E:\BILLS\S2823.IS S2823

lotter on DSKBCFDHB2PROD with BILLS
148 

•S 2823 IS

1 cordance with subsection (f) (in this paragraph 

2 referred to as the ‘collective’) shall adopt and 

3 reasonably implement a policy that provides, in 

4 circumstances determined by the collective to be 

5 appropriate, for the deduction of 2 percent of 

6 all the receipts that are collected from the li7 censing of transmissions of a sound recording 

8 fixed before November 1, 1995, but which is 

9 withdrawn from the amount otherwise payable 

10 under paragraph (2)(D) to the recording artist 

11 or artists featured on the sound recording (or 

12 the persons conveying rights in the artists’ per13 formance in the sound recording), and the dis14 tribution of such amount to one or more per15 sons described in subparagraph (B), after de16 duction of costs described in paragraph (3) or 

17 (4), as applicable, if each of the following re18 quirements is met: 

19 ‘‘(i) CERTIFICATION OF ATTEMPT TO

20 OBTAIN A LETTER OF DIRECTION.—The 

21 person described in subparagraph (B) who 

22 is to receive the distribution has certified 

23 to the collective, under penalty of perjury, 

24 that— 


lotter on DSKBCFDHB2PROD with BILLS
149 

•S 2823 IS

1 ‘‘(I) for a period of at least 4 

2 months, that person made reasonable 

3 efforts to contact the artist payee for 

4 such sound recording to request and 

5 obtain a letter of direction instructing 

6 the collective to pay to that person a 

7 portion of the royalties payable to the 

8 featured recording artist or artists; 

9 and 

10 ‘‘(II) during the period beginning 

11 on the date that person began the rea12 sonable efforts described in subclause 

13 (I) and ending on the date of that 

14 person’s certification to the collective, 

15 the artist payee did not affirm or 

16 deny in writing the request for a let17 ter of direction. 

18 ‘‘(ii) COLLECTIVE ATTEMPT TO CON19 TACT ARTIST.—After receipt of the certifi20 cation described in clause (i) and for a pe21 riod of at least 4 months before the collec22 tive’s first distribution to the person de23 scribed in subparagraph (B), the collective 

24 attempted, in a reasonable manner as de25 termined by the collective, to notify the 


lotter on DSKBCFDHB2PROD with BILLS
150 

•S 2823 IS

1 artist payee of the certification made by 

2 the person described in subparagraph (B). 

3 ‘‘(iii) NO OBJECTION RECEIVED.—The 

4 artist payee did not, as of the date that is 

5 10 business days before the date on which 

6 the first distribution is made, submit to 

7 the collective in writing an objection to the 

8 distribution. 

9 ‘‘(B) ELIGIBILITY FOR PAYMENT.—A per10 son shall be eligible for payment under subpara11 graph (A) if the person— 

12 ‘‘(i) is a producer, mixer, or sound en13 gineer of the sound recording; 

14 ‘‘(ii) has entered into a written con15 tract with a record company involved in 

16 the creation or lawful exploitation of the 

17 sound recording, or with the recording art18 ist or artists featured on the sound record19 ing (or the persons conveying rights in the 

20 artists’ performance in the sound record21 ing), under which the person seeking pay22 ment is entitled to participate in royalty 

23 payments that are based on the exploi24 tation of the sound recording and are pay25 able from royalties otherwise payable to 


lotter on DSKBCFDHB2PROD with BILLS
151 

•S 2823 IS

1 the recording artist or artists featured on 

2 the sound recording (or the persons con3 veying rights in the artists’ performance in 

4 the sound recording); 

5 ‘‘(iii) made a creative contribution to 

6 the creation of the sound recording; and 

7 ‘‘(iv) submits a written certification to 

8 the collective stating, under penalty of per9 jury, that the person meets the require10 ments in clauses (i) through (iii) and in11 cludes a true copy of the contract de12 scribed in clause (ii). 

13 ‘‘(C) MULTIPLE CERTIFICATIONS.—Sub14 ject to subparagraph (D), in a case in which 

15 more than one person described in subpara16 graph (B) has met the requirements for a dis17 tribution under subparagraph (A) with respect 

18 to a sound recording as of the date that is 10 

19 business days before the date on which a dis20 tribution is made, the collective shall divide the 

21 2 percent distribution equally among all such 

22 persons. 

23 ‘‘(D) OBJECTION TO PAYMENT.—Not later 

24 than 10 business days after the date on which 

25 the collective receives from the artist payee a 


lotter on DSKBCFDHB2PROD with BILLS
152 

•S 2823 IS

1 written objection to a distribution made pursu2 ant to subparagraph (A), the collective shall 

3 cease making any further payment relating to 

4 such distribution. In any case in which the col5 lective has made one or more distributions pur6 suant to subparagraph (A) to a person de7 scribed in subparagraph (B) before the date 

8 that is 10 business days after the date on which 

9 the collective receives from the artist payee an 

10 objection to such distribution, the objection 

11 shall not affect that person’s entitlement to any 

12 distribution made before the collective ceases 

13 such distribution under this subparagraph. 

14 ‘‘(E) OWNERSHIP OF THE RIGHT TO RE15 CEIVE PAYMENTS.—To the extent that the col16 lective determines that a distribution will be 

17 made under subparagraph (A) to a person de18 scribed in subparagraph (B), such person shall, 

19 during the period covered by such distribution, 

20 be treated for all purposes as the owner of the 

21 right to receive such payments, and the artist 

22 payee to whom such payments would otherwise 

23 be payable shall be treated as having no inter24 est in such payments. 


lotter on DSKBCFDHB2PROD with BILLS
153 

•S 2823 IS

1 ‘‘(F) ARTIST PAYEE DEFINED.—In this 

2 paragraph, the term ‘artist payee’ means a per3 son, other than a person described in subpara4 graph (B), who owns the right to receive all or 

5 part of the receipts payable under paragraph 

6 (2)(D) with respect to a sound recording. In a 

7 case in which there are multiple artist payees 

8 with respect to a sound recording, an objection 

9 by one such payee shall apply only to that pay10 ee’s share of the receipts payable under para11 graph (2)(D), and does not preclude payment 

12 under subparagraph (A) from the share of an 

13 artist payee that does not so object.’’. 

14 (c) TECHNICAL AND CONFORMING AMENDMENTS.— 

15 Section 114(g) of title 17, United States Code, as amend16 ed by subsections (a) and (b), is further amended— 

17 (1) in paragraph (2), by striking ‘‘An agent 

18 designated’’ and inserting ‘‘Except as provided for in 

19 paragraph (6), a nonprofit collective designated by 

20 the Copyright Royalty Judges’’; 

21 (2) in paragraph (3)— 

22 (A) by striking ‘‘nonprofit agent des23 ignated’’ and inserting ‘‘nonprofit collective des24 ignated by the Copyright Royalty Judges’’; 


lotter on DSKBCFDHB2PROD with BILLS
154 

•S 2823 IS

1 (B) by striking ‘‘another designated agent’’ 

2 and inserting ‘‘another designated nonprofit col3 lective’’; and 

4 (C) by striking ‘‘agent’’ and inserting ‘‘col5 lective’’ each subsequent place it appears; 

6 (3) in paragraph (4)— 

7 (A) by striking ‘‘designated agent’’ and in8 serting ‘‘nonprofit collective’’; and 

9 (B) by striking ‘‘agent’’ and inserting ‘‘col10 lective’’ each subsequent place it appears; and 

11 (4) by adding at the end the following new 

12 paragraph: 

13 ‘‘(7) PREEMPTION OF STATE PROPERTY

14 LAWS.—The holding and distribution of receipts 

15 under section 112 and this section by a nonprofit 

16 collective designated by the Copyright Royalty 

17 Judges in accordance with this subsection and regu18 lations adopted by the Copyright Royalty Judges 

19 shall supersede and preempt any State law (includ20 ing common law) concerning escheatment or aban21 doned property, or any analogous provision, that 

22 might otherwise apply.’’. 


lotter on DSKBCFDHB2PROD with BILLS
155 

•S 2823 IS

1 SEC. 303. EFFECTIVE DATE. 

2 (a) IN GENERAL.—Except as provided in subsection 

3 (b), this title and the amendments made by this title shall 

4 take effect on the date of the enactment of this Act. 

5 (b) DELAYED EFFECTIVE DATE.—The effective date 

6 for paragraphs (5)(B) and (6)(E) of section 114(g) of title 

7 17, United States Code, as added by section 302, shall 

8 be January 1, 2020. 

Æ 


lotter on DSKBCFDHB2PROD with BILLS