SEC. 2. PAYMENT OF STATUTORY PERFORMANCE ROYAL-
TIES. 
(a) LETTER OF DIRECTION.—Section 114(g) of title 
17, United States Code, is amended by adding at the end 
the following new paragraph: 
‘‘(5) LETTER OF DIRECTION.—A collective des-
ignated by the Copyright Royalty Judges to dis-
tribute receipts from the licensing of transmissions 
in accordance with subsection (f) shall adopt and 
reasonably implement a policy that provides, in cir-
cumstances determined by the collective to be appro-
priate, for acceptance of instructions from a payee 
identified in subparagraph (A) or (D) of paragraph 
(2) to distribute a portion of the payments to which 
the payee otherwise would be entitled from the li-
censing of transmissions of a particular sound re-
cording to a producer, mixer, or sound engineer who 
was part of the creative process that created the 
sound recording (in this section, referred to as a ‘let-
ter of direction’). To the extent that the collective 
accepts a letter of direction, the person entitled to 
payment pursuant to such letter of direction shall, 
during the time such letter of direction is in effect 
and followed by the collective, be treated for all pur-
poses as the owner of the right to receive such pay-
ment. This paragraph shall not be interpreted to 
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imply that a collective cannot accept or act upon 
payment instructions in other circumstances.’’. 
(b) ADDITIONAL
PROVISIONS
FOR
RECORDINGS 
FIXED BEFORE NOVEMBER 1, 1995.—Section 114(g) of 
title 17, United States Code, as amended by subsection 
(a), is further amended by adding at the end the following 
new paragraph: 
‘‘(6) SOUND RECORDINGS FIXED BEFORE NO-
VEMBER 1, 1995.— 
‘‘(A) PAYMENT
ABSENT
LETTER
OF
DI-
RECTION.—A collective designated by the Copy-
right Royalty Judges to distribute receipts from 
the licensing of transmissions in accordance 
with subsection (f) shall adopt and reasonably 
implement a policy that provides, in cir-
cumstances determined by the collective to be 
appropriate, for deduction of 2 percent of the 
receipts from the licensing of transmissions of 
a sound recording fixed before November 1, 
1995, from receipts otherwise payable to the re-
cording artist or artists featured on such sound 
recording (or the persons conveying rights in 
the artists’ performance in the sound record-
ings) pursuant to paragraph (2)(D) (which 
leaves the recording artist or artists featured on 
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such sound recording (or the persons conveying 
rights in the artists’ performance in the sound 
recordings) 43 percent of the total receipts paid 
pursuant to paragraph (2)) and distribution of 
such amount to one or more persons described 
in subparagraph (B), after deduction of costs as 
described in paragraph (3) or (4), as applicable, 
if each of the following requirements is met: 
‘‘(i) CERTIFICATION OF ATTEMPT TO 
OBTAIN A LETTER OF DIRECTION.—A per-
son described in subparagraph (B) cer-
tified to the collective, under penalty of 
perjury, that— 
‘‘(I) for a period of at least 4 
months, that person made reasonable 
efforts to contact the artist payee for 
such sound recording to request and 
obtain a letter of direction instructing 
the collective to pay a portion of the 
royalties from the featured recording 
artist or artists to that person; and 
‘‘(II) during the period beginning 
on the date that person began the rea-
sonable efforts described in subclause 
(I) and ending on date of that per-
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son’s certification to the collective, the 
artist payee did not definitively affirm 
or deny the request for a letter of di-
rection. 
‘‘(ii) COLLECTIVE ATTEMPT TO CON-
TACT ARTIST.—After receipt of the certifi-
cation described in clause (i) and for a pe-
riod of at least 4 months before the collec-
tive’s first distribution to the person de-
scribed in subparagraph (B), the collective 
attempted to notify the artist payee of the 
certification made by the person described 
in subparagraph (B) in a manner reason-
ably determined by the collective. 
‘‘(iii) NO OBJECTION RECEIVED.—An 
objection to the distribution has not been 
submitted to the collective by the artist 
payee as of the date that is 10 business 
days before the date on which the first dis-
tribution is made. 
‘‘(B) ELIGIBILITY FOR PAYMENT.—A per-
son shall be eligible for payment under subpara-
graph (A) if such person— 
‘‘(i) is a producer, mixer, or sound en-
gineer of the relevant sound recording; 
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‘‘(ii) has entered into a written con-
tract with a record company involved in 
the creation or lawful exploitation of the 
relevant sound recording, or with the re-
cording artist or artists featured on such 
sound recording (or the persons conveying 
rights in the artists’ performance in the 
sound recordings), pursuant to which such 
person is entitled to participate in royalty 
payments based on exploitation of the rel-
evant sound recording that are payable 
from royalties otherwise payable to the re-
cording artist or artists featured on such 
sound recording (or the persons conveying 
rights in the artists’ performance in the 
sound recordings); and 
‘‘(iii) made a contribution, of a nature 
subject to copyright protection under sec-
tion 102, to the creation of the relevant 
sound recording; and 
‘‘(iv) submits a written certification to 
the collective stating, under penalty of per-
jury, that such person meets the require-
ments in clauses (i) through (iii) and in-
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cludes a true copy of the contract de-
scribed in clause (ii). 
‘‘(C) MULTIPLE
CERTIFICATIONS.—Sub-
ject to subparagraph (D), in a case in which 
more than one person described in subpara-
graph (B) has met the requirements for a dis-
tribution pursuant to subparagraph (A) with re-
spect to a sound recording as of the date that 
is 10 business days before the date on which a 
distribution is made, the collective shall divide 
the 2 percent distribution equally among all 
such persons. 
‘‘(D) OBJECTION TO PAYMENT.—Not later 
than 10 days after the collective receives from 
the artist payee a written objection to a dis-
tribution made pursuant to subparagraph (A), 
the collective shall cease making any further 
payment related to such distribution. In any 
case in which the collective has made one or 
more distributions pursuant to subparagraph 
(A) to a person described in subparagraph (B) 
before the date that is 10 business days after 
the date on which the collective receives an ob-
jection by the artist payee to such distribution, 
the objection shall not affect that person’s enti-
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tlement to any distribution made before the col-
lective ceases such distribution pursuant to this 
subparagraph. 
‘‘(E) OWNERSHIP OF THE RIGHT TO RE-
CEIVE PAYMENTS.—To the extent that the col-
lective determines that a distribution will be 
made pursuant to subparagraph (A) to a person 
described in subparagraph (B), such person 
shall during the period of such distribution be 
treated for all purposes as the owner of the 
right to receive such payments. 
‘‘(F) ARTIST
PAYEE
DEFINED.—In this 
paragraph, the term ‘artist payee’ means a per-
son, other than a person described in subpara-
graph (B), who owns the right to receive all or 
part of the receipts payable under paragraph 
(2)(D) with respect to a sound recording. In a 
case in which there are multiple artist payees 
with respect to a sound recording, an objection 
by one such payee shall apply only to that pay-
ee’s share of the receipts payable under para-
graph (2)(D), and does not preclude payment 
under subparagraph (A) from the share of an 
artist payee that does not object.’’. 
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(c) TECHNICAL AND CONFORMING AMENDMENTS.— 
Section 114(g) of title 17, United States Code, as amend-
ed by subsections (a) and (b), is further amended— 
(1) in paragraph (2), by striking ‘‘An agent 
designated’’ and inserting ‘‘Except as provided for in 
paragraph (6), a collective designated by the Copy-
right Royalty Judges’’; 
(2) in paragraph (3)— 
(A) by striking ‘‘agent designated’’ and in-
serting ‘‘collective designated by the Copyright 
Royalty Judges’’; and 
(B) by striking ‘‘agent’’ and inserting ‘‘col-
lective’’, each place it appears; and 
(3) in paragraph (4), by striking ‘‘agent’’ and 
inserting ‘‘collective’’, each place it appears. 
Æ 
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