In the Senate of the United States, 
September 18, 2018. 
Resolved, That the bill from the House of Representa-
tives (H.R. 1551) entitled ‘‘An Act to amend the Internal 
Revenue Code of 1986 to modify the credit for production 
from advanced nuclear power facilities.’’, do pass with the fol-
lowing 
AMENDMENT: 
Strike all after the enacting clause and insert the 
following: 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Orrin G. Hatch Music Modernization Act’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Customs user fees. 
TITLE I—MUSIC LICENSING MODERNIZATION 
Sec. 101. Short title. 
Sec. 102. Blanket license for digital uses and mechanical licensing collective. 
Sec. 103. Amendments to section 114. 
Sec. 104. Random assignment of rate court proceedings. 
Sec. 105. Performing rights society consent decrees.
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Sec. 106. Effective date. 
TITLE II—CLASSICS PROTECTION AND ACCESS 
Sec. 201. Short title. 
Sec. 202. Unauthorized use of pre-1972 sound recordings. 
TITLE III—ALLOCATION FOR MUSIC PRODUCERS 
Sec. 301. Short title. 
Sec. 302. Payment of statutory performance royalties. 
Sec. 303. Effective date. 
TITLE IV—SEVERABILITY 
Sec. 401. Severability. 
SEC. 2. CUSTOMS USER FEES. 
Section 13031(j)(3)(A) of the Consolidated Omnibus 
Budget Reconciliation Act of 1985 (19 U.S.C. 58c(j)(3)(A)) 
is amended by striking ‘‘October 13, 2027’’ and inserting 
‘‘October 20, 2027’’. 
TITLE I—MUSIC LICENSING 
MODERNIZATION 
SEC. 101. SHORT TITLE. 
This title may be cited as the ‘‘Musical Works Mod-
ernization Act’’. 
SEC. 102. BLANKET LICENSE FOR DIGITAL USES AND ME-
CHANICAL LICENSING COLLECTIVE. 
(a) AMENDMENT.—Section 115 of title 17, United 
States Code, is amended— 
(1) in subsection (a)— 
(A) in the subsection heading, by inserting 
‘‘IN GENERAL’’ after ‘‘AVAILABILITY AND SCOPE 
OF COMPULSORY LICENSE’’;
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(B) by striking paragraph (1) and inserting 
the following: 
‘‘(1) ELIGIBILITY FOR COMPULSORY LICENSE.— 
‘‘(A) CONDITIONS
FOR
COMPULSORY
LI-
CENSE.—A person may by complying with the 
provisions of this section obtain a compulsory li-
cense to make and distribute phonorecords of a 
nondramatic musical work, including by means 
of digital phonorecord delivery. A person may 
obtain a compulsory license only if the primary 
purpose in making phonorecords of the musical 
work is to distribute them to the public for pri-
vate use, including by means of digital phono-
record delivery, and— 
‘‘(i) phonorecords of such musical work 
have previously been distributed to the pub-
lic in the United States under the authority 
of the copyright owner of the work, includ-
ing by means of digital phonorecord deliv-
ery; or 
‘‘(ii) in the case of a digital music pro-
vider seeking to make and distribute digital 
phonorecord deliveries of a sound recording 
embodying a musical work under a compul-
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sory license for which clause (i) does not 
apply— 
‘‘(I) the first fixation of such 
sound recording was made under the 
authority of the musical work copy-
right owner, and the sound recording 
copyright owner has the authority of 
the musical work copyright owner to 
make and distribute digital phono-
record deliveries embodying such work 
to the public in the United States; and 
‘‘(II) the sound recording copy-
right owner, or the authorized dis-
tributor of the sound recording copy-
right owner, has authorized the digital 
music provider to make and distribute 
digital phonorecord deliveries of the 
sound recording to the public in the 
United States. 
‘‘(B) DUPLICATION
OF
SOUND
RECORD-
ING.—A person may not obtain a compulsory li-
cense for the use of the work in the making of 
phonorecords duplicating a sound recording fixed 
by another, including by means of digital phono-
record delivery, unless—
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‘‘(i) such sound recording was fixed 
lawfully; and 
‘‘(ii) the making of the phonorecords 
was authorized by the owner of the copy-
right in the sound recording or, if the sound 
recording was fixed before February 15, 
1972, by any person who fixed the sound re-
cording pursuant to an express license from 
the owner of the copyright in the musical 
work or pursuant to a valid compulsory li-
cense for use of such work in a sound re-
cording.’’; and 
(C) in paragraph (2), by striking ‘‘A com-
pulsory license’’ and inserting ‘‘MUSICAL
AR-
RANGEMENT.—A compulsory license’’; 
(2) by striking subsection (b) and inserting the 
following: 
‘‘(b) PROCEDURES TO OBTAIN A COMPULSORY LI-
CENSE.— 
‘‘(1) PHONORECORDS
OTHER
THAN
DIGITAL 
PHONORECORD DELIVERIES.—A person who seeks to 
obtain a compulsory license under subsection (a) to 
make and distribute phonorecords of a musical work 
other than by means of digital phonorecord delivery 
shall, before, or not later than 30 calendar days after,
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making, and before distributing, any phonorecord of 
the work, serve notice of intention to do so on the 
copyright owner. If the registration or other public 
records of the Copyright Office do not identify the 
copyright owner and include an address at which no-
tice can be served, it shall be sufficient to file the no-
tice of intention with the Copyright Office. The notice 
shall comply, in form, content, and manner of service, 
with requirements that the Register of Copyrights 
shall prescribe by regulation. 
‘‘(2) DIGITAL
PHONORECORD
DELIVERIES.—A 
person who seeks to obtain a compulsory license under 
subsection (a) to make and distribute phonorecords of 
a musical work by means of digital phonorecord de-
livery— 
‘‘(A) prior to the license availability date, 
shall, before, or not later than 30 calendar days 
after, first making any such digital phonorecord 
delivery, serve a notice of intention to do so on 
the copyright owner (but may not file the notice 
with the Copyright Office, even if the public 
records of the Office do not identify the owner or 
the owner’s address), and such notice shall com-
ply, in form, content, and manner of service,
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with requirements that the Register of Copy-
rights shall prescribe by regulation; or 
‘‘(B) on or after the license availability 
date, shall, before making any such digital pho-
norecord delivery, follow the procedure described 
in subsection (d)(2), except as provided in para-
graph (3). 
‘‘(3) RECORD COMPANY INDIVIDUAL DOWNLOAD 
LICENSES.—Notwithstanding paragraph (2)(B), a 
record company may, on or after the license avail-
ability date, obtain an individual download license in 
accordance with the notice requirements described in 
paragraph (2)(A) (except for the requirement that no-
tice occur prior to the license availability date). A 
record company that obtains an individual download 
license as permitted under this paragraph shall pro-
vide statements of account and pay royalties as pro-
vided in subsection (c)(2)(I). 
‘‘(4) FAILURE TO OBTAIN LICENSE.— 
‘‘(A) PHONORECORDS OTHER THAN DIGITAL 
PHONORECORD
DELIVERIES.—In the case of 
phonorecords made and distributed other than by 
means of digital phonorecord delivery, the failure 
to serve or file the notice of intention required by 
paragraph (1) forecloses the possibility of a com-
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pulsory license under paragraph (1). In the ab-
sence of a voluntary license, the failure to obtain 
a compulsory license renders the making and 
distribution of phonorecords actionable as acts of 
infringement under section 501 and subject to 
the remedies provided by sections 502 through 
506. 
‘‘(B) 
DIGITAL
PHONORECORD
DELIV-
ERIES.— 
‘‘(i) IN
GENERAL.—In the case of 
phonorecords made and distributed by 
means of digital phonorecord delivery: 
‘‘(I) The failure to serve the notice 
of intention required by paragraph 
(2)(A) or paragraph (3), as applicable, 
forecloses the possibility of a compul-
sory license under such paragraph. 
‘‘(II) The failure to comply with 
paragraph (2)(B) forecloses the possi-
bility of a blanket license for a period 
of 3 years after the last calendar day 
on which the notice of license was re-
quired to be submitted to the mechan-
ical licensing collective under such 
paragraph.
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‘‘(ii) EFFECT OF FAILURE.—In either 
case described in subclause (I) or (II) of 
clause (i), in the absence of a voluntary li-
cense, the failure to obtain a compulsory li-
cense renders the making and distribution 
of phonorecords by means of digital phono-
record delivery actionable as acts of in-
fringement under section 501 and subject to 
the remedies provided by sections 502 
through 506.’’; 
(3) by amending subsection (c) to read as fol-
lows: 
‘‘(c) GENERAL CONDITIONS APPLICABLE TO COMPUL-
SORY LICENSE.— 
‘‘(1) ROYALTY PAYABLE UNDER COMPULSORY LI-
CENSE.— 
‘‘(A) IDENTIFICATION
REQUIREMENT.—To 
be entitled to receive royalties under a compul-
sory license obtained under subsection (b)(1) the 
copyright owner must be identified in the reg-
istration or other public records of the Copyright 
Office. The owner is entitled to royalties for 
phonorecords made and distributed after being so 
identified, but is not entitled to recover for any 
phonorecords previously made and distributed.
† HR 1551 EAS 
‘‘(B) ROYALTY FOR PHONORECORDS OTHER 
THAN DIGITAL PHONORECORD DELIVERIES.—Ex-
cept as provided by subparagraph (A), for every 
phonorecord made and distributed under a com-
pulsory license under subsection (a) other than 
by means of digital phonorecord delivery, with 
respect to each work embodied in the phono-
record, the royalty shall be the royalty prescribed 
under subparagraphs (D) through (F), para-
graph (2)(A), and chapter 8. For purposes of 
this subparagraph, a phonorecord is considered 
‘distributed’ if the person exercising the compul-
sory license has voluntarily and permanently 
parted with its possession. 
‘‘(C) ROYALTY FOR DIGITAL PHONORECORD 
DELIVERIES.—For every digital phonorecord de-
livery of a musical work made under a compul-
sory license under this section, the royalty pay-
able shall be the royalty prescribed under sub-
paragraphs (D) through (F), paragraph (2)(A), 
and chapter 8. 
‘‘(D) AUTHORITY TO NEGOTIATE.—Notwith-
standing any provision of the antitrust laws, 
any copyright owners of nondramatic musical 
works and any persons entitled to obtain a com-
† HR 1551 EAS 
pulsory license under subsection (a) may nego-
tiate and agree upon the terms and rates of roy-
alty payments under this section and the propor-
tionate division of fees paid among copyright 
owners, and may designate common agents on a 
nonexclusive basis to negotiate, agree to, pay or 
receive such royalty payments. Such authority to 
negotiate the terms and rates of royalty pay-
ments includes, but is not limited to, the author-
ity to negotiate the year during which the roy-
alty rates prescribed under this subparagraph, 
subparagraphs (E) and (F), paragraph (2)(A), 
and chapter 8 shall next be determined. 
‘‘(E) 
DETERMINATION
OF
REASONABLE 
RATES AND TERMS.—Proceedings under chapter 
8 shall determine reasonable rates and terms of 
royalty payments for the activities specified by 
this section during the period beginning with the 
effective date of such rates and terms, but not 
earlier than January 1 of the second year fol-
lowing the year in which the petition requesting 
the proceeding is filed, and ending on the effec-
tive date of successor rates and terms, or such 
other period as the parties may agree. Any copy-
right owners of nondramatic musical works and
† HR 1551 EAS 
any persons entitled to obtain a compulsory li-
cense under subsection (a) may submit to the 
Copyright Royalty Judges licenses covering such 
activities. The parties to each proceeding shall 
bear their own costs. 
‘‘(F) SCHEDULE OF REASONABLE RATES.— 
The schedule of reasonable rates and terms deter-
mined by the Copyright Royalty Judges shall, 
subject to paragraph (2)(A), be binding on all 
copyright owners of nondramatic musical works 
and persons entitled to obtain a compulsory li-
cense under subsection (a) during the period 
specified in subparagraph (E), such other period 
as may be determined pursuant to subpara-
graphs (D) and (E), or such other period as the 
parties may agree. The Copyright Royalty 
Judges shall establish rates and terms that most 
clearly represent the rates and terms that would 
have been negotiated in the marketplace between 
a willing buyer and a willing seller. In deter-
mining such rates and terms for digital phono-
record deliveries, the Copyright Royalty Judges 
shall base their decision on economic, competi-
tive, and programming information presented by 
the parties, including—
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‘‘(i) whether use of the compulsory li-
censee’s service may substitute for or may 
promote the sales of phonorecords or other-
wise may interfere with or may enhance the 
musical 
work 
copyright 
owner’s 
other 
streams of revenue from its musical works; 
and 
‘‘(ii) the relative roles of the copyright 
owner and the compulsory licensee in the 
copyrighted work and the service made 
available to the public with respect to the 
relative creative contribution, technological 
contribution, capital investment, cost, and 
risk. 
‘‘(2) ADDITIONAL TERMS AND CONDITIONS.— 
‘‘(A) VOLUNTARY LICENSES AND CONTRAC-
TUAL ROYALTY RATES.— 
‘‘(i) IN GENERAL.—License agreements 
voluntarily negotiated at any time between 
one or more copyright owners of nondra-
matic musical works and one or more per-
sons entitled to obtain a compulsory license 
under subsection (a) shall be given effect in 
lieu of any determination by the Copyright 
Royalty Judges. Subject to clause (ii), the
† HR 1551 EAS 
royalty rates determined pursuant to sub-
paragraphs (E) and (F) of paragraph (1) 
shall be given effect as to digital phono-
record deliveries in lieu of any contrary 
royalty rates specified in a contract pursu-
ant to which a recording artist who is the 
author of a nondramatic musical work 
grants a license under that person’s exclu-
sive rights in the musical work under para-
graphs (1) and (3) of section 106 or com-
mits another person to grant a license in 
that musical work under paragraphs (1) 
and (3) of section 106, to a person desiring 
to fix in a tangible medium of expression a 
sound recording embodying the musical 
work. 
‘‘(ii) APPLICABILITY.—The second sen-
tence of clause (i) shall not apply to— 
‘‘(I) a contract entered into on or 
before June 22, 1995, and not modified 
thereafter for the purpose of reducing 
the royalty rates determined pursuant 
to subparagraphs (E) and (F) of para-
graph (1) or of increasing the number 
of musical works within the scope of
† HR 1551 EAS 
the contract covered by the reduced 
rates, except if a contract entered into 
on or before June 22, 1995, is modified 
thereafter for the purpose of increasing 
the number of musical works within 
the scope of the contract, any contrary 
royalty rates specified in the contract 
shall be given effect in lieu of royalty 
rates determined pursuant to subpara-
graphs (E) and (F) of paragraph (1) 
for the number of musical works with-
in the scope of the contract as of June 
22, 1995; and 
‘‘(II) a contract entered into after 
the date that the sound recording is 
fixed in a tangible medium of expres-
sion substantially in a form intended 
for commercial release, if at the time 
the contract is entered into, the record-
ing artist retains the right to grant li-
censes as to the musical work under 
paragraphs (1) and (3) of section 106. 
‘‘(B) SOUND
RECORDING
INFORMATION.— 
Except as provided in section 1002(e), a digital 
phonorecord delivery licensed under this para-
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graph shall be accompanied by the information 
encoded in the sound recording, if any, by or 
under the authority of the copyright owner of 
that sound recording, that identifies the title of 
the sound recording, the featured recording artist 
who performs on the sound recording, and re-
lated information, including information con-
cerning the underlying musical work and its 
writer. 
‘‘(C) INFRINGEMENT REMEDIES.— 
‘‘(i) IN
GENERAL.—A digital phono-
record delivery of a sound recording is ac-
tionable as an act of infringement under 
section 501, and is fully subject to the rem-
edies provided by sections 502 through 506, 
unless— 
‘‘(I) the digital phonorecord deliv-
ery has been authorized by the sound 
recording copyright owner; and 
‘‘(II) the entity making the digital 
phonorecord delivery has obtained a 
compulsory license under subsection 
(a) or has otherwise been authorized by 
the musical work copyright owner, or 
by a record company pursuant to an
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individual download license, to make 
and distribute phonorecords of each 
musical work embodied in the sound 
recording by means of digital phono-
record delivery. 
‘‘(ii) OTHER REMEDIES.—Any cause of 
action under this subparagraph shall be in 
addition to those available to the owner of 
the copyright in the nondramatic musical 
work under subparagraph (J) and section 
106(4) and the owner of the copyright in 
the sound recording under section 106(6). 
‘‘(D) LIABILITY OF SOUND RECORDING OWN-
ERS.—The liability of the copyright owner of a 
sound recording for infringement of the copy-
right in a nondramatic musical work embodied 
in the sound recording shall be determined in ac-
cordance with applicable law, except that the 
owner of a copyright in a sound recording shall 
not be liable for a digital phonorecord delivery 
by a third party if the owner of the copyright in 
the sound recording does not license the distribu-
tion of a phonorecord of the nondramatic musi-
cal work.
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‘‘(E) RECORDING
DEVICES
AND
MEDIA.— 
Nothing in section 1008 shall be construed to 
prevent the exercise of the rights and remedies al-
lowed by this paragraph, subparagraph (J), and 
chapter 5 in the event of a digital phonorecord 
delivery, except that no action alleging infringe-
ment of copyright may be brought under this 
title against a manufacturer, importer or dis-
tributor of a digital audio recording device, a 
digital audio recording medium, an analog re-
cording device, or an analog recording medium, 
or against a consumer, based on the actions de-
scribed in such section. 
‘‘(F) PRESERVATION OF RIGHTS.—Nothing 
in this section annuls or limits— 
‘‘(i) the exclusive right to publicly per-
form a sound recording or the musical work 
embodied therein, including by means of a 
digital transmission, under paragraphs (4) 
and (6) of section 106; 
‘‘(ii) except for compulsory licensing 
under the conditions specified by this sec-
tion, the exclusive rights to reproduce and 
distribute the sound recording and the mu-
sical work embodied therein under para-
† HR 1551 EAS 
graphs (1) and (3) of section 106, including 
by means of a digital phonorecord delivery; 
or 
‘‘(iii) any other rights under any other 
provision of section 106, or remedies avail-
able under this title, as such rights or rem-
edies exist before, on, or after the date of en-
actment of the Digital Performance Right 
in Sound Recordings Act of 1995. 
‘‘(G) EXEMPT
TRANSMISSIONS
AND
RE-
TRANSMISSIONS.—The provisions of this section 
concerning digital phonorecord deliveries shall 
not apply to any exempt transmissions or re-
transmissions under section 114(d)(1). The ex-
emptions created in section 114(d)(1) do not ex-
pand or reduce the rights of copyright owners 
under paragraphs (1) through (5) of section 106 
with respect to such transmissions and retrans-
missions. 
‘‘(H) DISTRIBUTION BY RENTAL, LEASE, OR 
LENDING.—A compulsory license obtained under 
subsection 
(b)(1) 
to 
make 
and 
distribute 
phonorecords includes the right of the maker of 
such a phonorecord to distribute or authorize 
distribution of such phonorecord, other than by
† HR 1551 EAS 
means of a digital phonorecord delivery, by rent-
al, lease, or lending (or by acts or practices in 
the nature of rental, lease, or lending). With re-
spect to each nondramatic musical work em-
bodied in the phonorecord, the royalty shall be a 
proportion of the revenue received by the compul-
sory licensee from every such act of distribution 
of the phonorecord under this clause equal to the 
proportion of the revenue received by the compul-
sory licensee from distribution of the phonorecord 
under subsection (a)(1)(A)(ii)(II) that is payable 
by a compulsory licensee under that clause and 
under chapter 8. The Register of Copyrights shall 
issue regulations to carry out the purpose of this 
subparagraph. 
‘‘(I) PAYMENT OF ROYALTIES AND STATE-
MENTS
OF
ACCOUNT.—Except as provided in 
paragraphs (4)(A)(i) and (10)(B) of subsection 
(d), royalty payments shall be made on or before 
the twentieth day of each month and shall in-
clude all royalties for the month next preceding. 
Each monthly payment shall be made under oath 
and shall comply with requirements that the 
Register of Copyrights shall prescribe by regula-
tion. The Register shall also prescribe regulations
† HR 1551 EAS 
under which detailed cumulative annual state-
ments of account, certified by a certified public 
accountant, shall be filed for every compulsory 
license under subsection (a). The regulations cov-
ering both the monthly and the annual state-
ments of account shall prescribe the form, con-
tent, and manner of certification with respect to 
the number of records made and the number of 
records distributed. 
‘‘(J) NOTICE
OF
DEFAULT
AND
TERMI-
NATION OF COMPULSORY LICENSE.—In the case 
of a license obtained under paragraph (1), 
(2)(A), or (3) of subsection (b), if the copyright 
owner does not receive the monthly payment and 
the monthly and annual statements of account 
when due, the owner may give written notice to 
the licensee that, unless the default is remedied 
not later than 30 days after the date on which 
the notice is sent, the compulsory license will be 
automatically terminated. Such termination ren-
ders either the making or the distribution, or 
both, of all phonorecords for which the royalty 
has not been paid, actionable as acts of infringe-
ment under section 501 and fully subject to the 
remedies provided by sections 502 through 506.
† HR 1551 EAS 
In the case of a license obtained under subsection 
(b)(2)(B), license authority under the compulsory 
license may be terminated as provided in sub-
section (d)(4)(E).’’; 
(4) by amending subsection (d) to read as fol-
lows: 
‘‘(d) BLANKET LICENSE FOR DIGITAL USES, MECHAN-
ICAL LICENSING COLLECTIVE, AND DIGITAL LICENSEE CO-
ORDINATOR.— 
‘‘(1) BLANKET LICENSE FOR DIGITAL USES.— 
‘‘(A) IN GENERAL.—A digital music pro-
vider that qualifies for a compulsory license 
under subsection (a) may, by complying with the 
terms and conditions of this subsection, obtain a 
blanket license from copyright owners through 
the mechanical licensing collective to make and 
distribute digital phonorecord deliveries of musi-
cal works through one or more covered activities. 
‘‘(B) INCLUDED ACTIVITIES.—A blanket li-
cense— 
‘‘(i) covers all musical works (or shares 
of such works) available for compulsory li-
censing under this section for purposes of 
engaging in covered activities, except as 
provided in subparagraph (C);
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‘‘(ii) includes the making and distribu-
tion of server, intermediate, archival, and 
incidental reproductions of musical works 
that are reasonable and necessary for the 
digital music provider to engage in covered 
activities licensed under this subsection, 
solely for the purpose of engaging in such 
covered activities; and 
‘‘(iii) does not cover or include any 
rights or uses other than those described in 
clauses (i) and (ii). 
‘‘(C) OTHER
LICENSES.—A voluntary li-
cense for covered activities entered into by or 
under the authority of 1 or more copyright own-
ers and 1 or more digital music providers, or au-
thority to make and distribute permanent 
downloads of a musical work obtained by a dig-
ital music provider from a sound recording 
copyright owner pursuant to an individual 
download license, shall be given effect in lieu of 
a blanket license under this subsection with re-
spect to the musical works (or shares thereof) 
covered by such voluntary license or individual 
download authority and the following conditions 
apply:
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‘‘(i) Where a voluntary license or indi-
vidual download license applies, the license 
authority provided under the blanket license 
shall exclude any musical works (or shares 
thereof) subject to the voluntary license or 
individual download license. 
‘‘(ii) An entity engaged in covered ac-
tivities under a voluntary license or author-
ity obtained pursuant to an individual 
download license that is a significant non-
blanket licensee shall comply with para-
graph (6)(A). 
‘‘(iii) The rates and terms of any vol-
untary license shall be subject to the second 
sentence of clause (i) and clause (ii) of sub-
section (c)(2)(A) and paragraph (9)(C), as 
applicable. 
‘‘(D) PROTECTION AGAINST INFRINGEMENT 
ACTIONS.—A digital music provider that obtains 
and complies with the terms of a valid blanket 
license under this subsection shall not be subject 
to an action for infringement of the exclusive 
rights provided by paragraphs (1) and (3) of sec-
tion 106 under this title arising from use of a 
musical work (or share thereof) to engage in cov-
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ered activities authorized by such license, subject 
to paragraph (4)(E). 
‘‘(E) OTHER
REQUIREMENTS
AND
CONDI-
TIONS APPLY.—Except as expressly provided in 
this subsection, each requirement, limitation, 
condition, privilege, right, and remedy otherwise 
applicable to compulsory licenses under this sec-
tion shall apply to compulsory blanket licenses 
under this subsection. 
‘‘(2) AVAILABILITY OF BLANKET LICENSE.— 
‘‘(A) 
PROCEDURE
FOR
OBTAINING
LI-
CENSE.—A digital music provider may obtain a 
blanket license by submitting a notice of license 
to the mechanical licensing collective that speci-
fies the particular covered activities in which the 
digital music provider seeks to engage, as follows: 
‘‘(i) The notice of license shall comply 
in form and substance with requirements 
that the Register of Copyrights shall estab-
lish by regulation. 
‘‘(ii) Unless rejected in writing by the 
mechanical licensing collective not later 
than 30 calendar days after the date on 
which the mechanical licensing collective re-
ceives the notice, the blanket license shall be
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effective as of the date on which the notice 
of license was sent by the digital music pro-
vider, as shown by a physical or electronic 
record. 
‘‘(iii) A notice of license may only be 
rejected by the mechanical licensing collec-
tive if— 
‘‘(I) the digital music provider or 
notice of license does not meet the re-
quirements of this section or applicable 
regulations, in which case the require-
ments at issue shall be specified with 
reasonable particularity in the notice 
of rejection; or 
‘‘(II) the digital music provider 
has had a blanket license terminated 
by the mechanical licensing collective 
during the 3-year period preceding the 
date on which the mechanical licensing 
collective receives the notice pursuant 
to paragraph (4)(E). 
‘‘(iv) If a notice of license is rejected 
under clause (iii)(I), the digital music pro-
vider shall have 30 calendar days after re-
ceipt of the notice of rejection to cure any
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deficiency and submit an amended notice of 
license to the mechanical licensing collective. 
If the deficiency has been cured, the me-
chanical licensing collective shall so confirm 
in writing, and the license shall be effective 
as of the date that the original notice of li-
cense was provided by the digital music 
provider. 
‘‘(v) A digital music provider that be-
lieves a notice of license was improperly re-
jected by the mechanical licensing collective 
may seek review of such rejection in an ap-
propriate district court of the United 
States. The district court shall determine 
the matter de novo based on the record be-
fore the mechanical licensing collective and 
any additional evidence presented by the 
parties. 
‘‘(B) 
BLANKET
LICENSE
EFFECTIVE 
DATE.—Blanket licenses shall be made available 
by the mechanical licensing collective on and 
after the license availability date. No such license 
shall be effective prior to the license availability 
date. 
‘‘(3) MECHANICAL LICENSING COLLECTIVE.—
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‘‘(A) IN GENERAL.—The mechanical licens-
ing collective shall be a single entity that— 
‘‘(i) is a nonprofit entity, not owned 
by any other entity, that is created by copy-
right owners to carry out responsibilities 
under this subsection; 
‘‘(ii) is endorsed by, and enjoys sub-
stantial support from, musical work copy-
right owners that together represent the 
greatest percentage of the licensor market 
for uses of such works in covered activities, 
as measured over the preceding 3 full cal-
endar years; 
‘‘(iii) is able to demonstrate to the Reg-
ister of Copyrights that the entity has, or 
will have prior to the license availability 
date, the administrative and technological 
capabilities to perform the required func-
tions of the mechanical licensing collective 
under this subsection and that is governed 
by a board of directors in accordance with 
subparagraph (D)(i); and 
‘‘(iv) has been designated by the Reg-
ister of Copyrights, with the approval of the
† HR 1551 EAS 
Librarian of Congress pursuant to section 
702, in accordance with subparagraph (B). 
‘‘(B) DESIGNATION OF MECHANICAL LICENS-
ING COLLECTIVE.— 
‘‘(i) INITIAL DESIGNATION.—Not later 
than 270 days after the enactment date, the 
Register of Copyrights shall initially des-
ignate the mechanical licensing collective as 
follows: 
‘‘(I) Not later than 90 calendar 
days after the enactment date, the Reg-
ister shall publish notice in the Federal 
Register soliciting information to as-
sist in identifying the appropriate en-
tity to serve as the mechanical licens-
ing collective, including the name and 
affiliation of each member of the board 
of directors described under subpara-
graph (D)(i) and each committee estab-
lished pursuant to clauses (iii), (iv), 
and (v) of subparagraph (D). 
‘‘(II) After reviewing the informa-
tion requested under subclause (I) and 
making a designation, the Register
† HR 1551 EAS 
shall publish notice in the Federal Reg-
ister setting forth— 
‘‘(aa) the identity of and 
contact information for the me-
chanical licensing collective; and 
‘‘(bb) the reasons for the des-
ignation. 
‘‘(ii) PERIODIC REVIEW OF DESIGNA-
TION.—Following the initial designation of 
the mechanical licensing collective, the Reg-
ister shall, every 5 years, beginning with the 
fifth full calendar year to commence after 
the initial designation, publish notice in the 
Federal Register in the month of January 
soliciting information concerning whether 
the existing designation should be contin-
ued, or a different entity meeting the cri-
teria described in clauses (i) through (iii) of 
subparagraph (A) shall be designated. Fol-
lowing publication of such notice, the Reg-
ister shall— 
‘‘(I) after reviewing the informa-
tion submitted and conducting addi-
tional proceedings as appropriate, pub-
lish notice in the Federal Register of a
† HR 1551 EAS 
continuing designation or new designa-
tion of the mechanical licensing collec-
tive, as the case may be, and the rea-
sons for such a designation, with any 
new designation to be effective as of the 
first day of a month that is not less 
than 6 months and not longer than 9 
months after the date on which the 
Register publishes the notice, as speci-
fied by the Register; and 
‘‘(II) if a new entity is designated 
as the mechanical licensing collective, 
adopt regulations to govern the trans-
fer of licenses, funds, records, data, and 
administrative responsibilities from the 
existing mechanical licensing collective 
to the new entity. 
‘‘(iii) CLOSEST ALTERNATIVE DESIGNA-
TION.—If the Register is unable to identify 
an entity that fulfills each of the qualifica-
tions set forth in clauses (i) through (iii) of 
subparagraph (A), the Register shall des-
ignate the entity that most nearly fulfills 
such qualifications for purposes of carrying
† HR 1551 EAS 
out the responsibilities of the mechanical li-
censing collective. 
‘‘(C) AUTHORITIES AND FUNCTIONS.— 
‘‘(i) IN GENERAL.—The mechanical li-
censing collective is authorized to perform 
the following functions, subject to more par-
ticular requirements as described in this 
subsection: 
‘‘(I) Offer and administer blanket 
licenses, including receipt of notices of 
license and reports of usage from dig-
ital music providers. 
‘‘(II) Collect and distribute royal-
ties from digital music providers for 
covered activities. 
‘‘(III) Engage in efforts to iden-
tify musical works (and shares of such 
works) embodied in particular sound 
recordings, and to identify and locate 
the copyright owners of such musical 
works (and shares of such works). 
‘‘(IV) Maintain the musical works 
database and other information rel-
evant to the administration of licens-
ing activities under this section.
† HR 1551 EAS 
‘‘(V) Administer a process by 
which copyright owners can claim 
ownership of musical works (and 
shares of such works), and a process by 
which royalties for works for which the 
owner is not identified or located are 
equitably distributed to known copy-
right owners. 
‘‘(VI) Administer collections of the 
administrative assessment from digital 
music providers and significant non-
blanket licensees, including receipt of 
notices of nonblanket activity. 
‘‘(VII) Invest in relevant re-
sources, and arrange for services of 
outside vendors and others, to support 
the activities of the mechanical licens-
ing collective. 
‘‘(VIII) Engage in legal and other 
efforts to enforce rights and obligations 
under this subsection, including by fil-
ing bankruptcy proofs of claims for 
amounts owed under licenses, and act-
ing in coordination with the digital li-
censee coordinator.
† HR 1551 EAS 
‘‘(IX) Initiate and participate in 
proceedings before the Copyright Roy-
alty Judges to establish the adminis-
trative assessment under this sub-
section. 
‘‘(X) Initiate and participate in 
proceedings before the Copyright Office 
with respect to activities under this 
subsection. 
‘‘(XI) Gather and provide docu-
mentation for use in proceedings before 
the Copyright Royalty Judges to set 
rates and terms under this section. 
‘‘(XII) Maintain records of the ac-
tivities of the mechanical licensing col-
lective and engage in and respond to 
audits described in this subsection. 
‘‘(XIII) Engage in such other ac-
tivities as may be necessary or appro-
priate to fulfill the responsibilities of 
the 
mechanical 
licensing 
collective 
under this subsection. 
‘‘(ii) RESTRICTIONS
CONCERNING
LI-
CENSING
AND
ADMINISTRATIVE
ACTIVI-
TIES.—With respect to the administration
† HR 1551 EAS 
of licenses, except as provided in clauses (i) 
and (iii) and subparagraph (E)(v), the me-
chanical licensing collective may only— 
‘‘(I) issue blanket licenses pursu-
ant to subsection (d)(1); and 
‘‘(II) administer blanket licenses 
for reproduction or distribution rights 
in musical works for covered activities, 
including collecting and distributing 
royalties, pursuant to blanket licenses. 
‘‘(iii) 
ADDITIONAL
ADMINISTRATIVE 
ACTIVITIES.—Subject to paragraph (11)(C), 
the mechanical licensing collective may also 
administer, including by collecting and dis-
tributing royalties, voluntary licenses issued 
by, or individual download licenses ob-
tained from, copyright owners only for re-
production or distribution rights in musical 
works for covered activities, for which the 
mechanical licensing collective shall charge 
reasonable fees for such services. 
‘‘(iv) RESTRICTION
ON
LOBBYING.— 
The mechanical licensing collective may not 
engage in government lobbying activities, 
but may engage in the activities described
† HR 1551 EAS 
in subclauses (IX), (X), and (XI) of clause 
(i). 
‘‘(D) GOVERNANCE.— 
‘‘(i) BOARD OF DIRECTORS.—The me-
chanical licensing collective shall have a 
board of directors consisting of 14 voting 
members and 3 nonvoting members, as fol-
lows: 
‘‘(I) Ten voting members shall be 
representatives of music publishers— 
‘‘(aa) to which songwriters 
have assigned exclusive rights of 
reproduction and distribution of 
musical works with respect to cov-
ered activities; and 
‘‘(bb) none of which may be 
owned by, or under common con-
trol with, any other board mem-
ber. 
‘‘(II) Four voting members shall 
be professional songwriters who have 
retained and exercise exclusive rights of 
reproduction and distribution with re-
spect to covered activities with respect 
to musical works they have authored.
† HR 1551 EAS 
‘‘(III) One nonvoting member 
shall be a representative of the non-
profit trade association of music pub-
lishers that represents the greatest per-
centage of the licensor market for uses 
of musical works in covered activities, 
as measured for the 3-year period pre-
ceding the date on which the member is 
appointed. 
‘‘(IV) 
One 
nonvoting 
member 
shall be a representative of the digital 
licensee coordinator, provided that a 
digital licensee coordinator has been 
designated 
pursuant 
to 
paragraph 
(5)(B). Otherwise, the nonvoting mem-
ber shall be the nonprofit trade associa-
tion of digital licensees that represents 
the greatest percentage of the licensee 
market for uses of musical works in 
covered activities, as measured over the 
preceding 3 full calendar years. 
‘‘(V) One nonvoting member shall 
be a representative of a nationally rec-
ognized nonprofit trade association 
whose primary mission is advocacy on
† HR 1551 EAS 
behalf of songwriters in the United 
States. 
‘‘(ii) BYLAWS.— 
‘‘(I) ESTABLISHMENT.—Not later 
than 1 year after the date on which the 
mechanical licensing collective is ini-
tially designated by the Register of 
Copyrights under subparagraph (B)(i), 
the collective shall establish bylaws to 
determine issues relating to the govern-
ance of the collective, including, but 
not limited to— 
‘‘(aa) the length of the term 
for each member of the board of 
directors; 
‘‘(bb) the staggering of the 
terms of the members of the board 
of directors; 
‘‘(cc) a process for filling a 
seat on the board of directors that 
is vacated before the end of the 
term with respect to that seat; 
‘‘(dd) a process for electing a 
member to the board of directors; 
and
† HR 1551 EAS 
‘‘(ee) a management struc-
ture for daily operation of the col-
lective. 
‘‘(II) PUBLIC AVAILABILITY.—The 
mechanical licensing collective shall 
make the bylaws established under sub-
clause (I) available to the public. 
‘‘(iii) BOARD
MEETINGS.—The board 
of directors shall meet not less frequently 
than biannually and discuss matters perti-
nent to the operations of the mechanical li-
censing collective, including the mechanical 
licensing collective budget. 
‘‘(iv) OPERATIONS
ADVISORY
COM-
MITTEE.—The board of directors of the me-
chanical licensing collective shall establish 
an operations advisory committee consisting 
of not fewer than 6 members to make rec-
ommendations to the board of directors con-
cerning the operations of the mechanical li-
censing collective, including the efficient in-
vestment in and deployment of information 
technology and data resources. Such com-
mittee shall have an equal number of mem-
bers of the committee who are—
† HR 1551 EAS 
‘‘(I) musical work copyright own-
ers who are appointed by the board of 
directors of the mechanical licensing 
collective; and 
‘‘(II) representatives of digital 
music providers who are appointed by 
the digital licensee coordinator. 
‘‘(v) UNCLAIMED
ROYALTIES
OVER-
SIGHT COMMITTEE.—The board of directors 
of the mechanical licensing collective shall 
establish and appoint an unclaimed royal-
ties oversight committee consisting of 10 
members, 5 of which shall be musical work 
copyright owners and 5 of which shall be 
professional songwriters whose works are 
used in covered activities. 
‘‘(vi) 
DISPUTE
RESOLUTION
COM-
MITTEE.—The board of directors of the me-
chanical licensing collective shall establish 
and appoint a dispute resolution committee 
that shall— 
‘‘(I) consist of not fewer than 6 
members; and 
‘‘(II) include an equal number of 
representatives of musical work copy-
† HR 1551 EAS 
right owners and professional song-
writers. 
‘‘(vii) MECHANICAL
LICENSING
COL-
LECTIVE ANNUAL REPORT.— 
‘‘(I) IN GENERAL.—Not later than 
June 30 of each year commencing after 
the license availability date, the me-
chanical licensing collective shall post, 
and make available online for a period 
of not less than 3 years, an annual re-
port that sets forth information regard-
ing— 
‘‘(aa) the operational and li-
censing practices of the collective; 
‘‘(bb) how royalties are col-
lected and distributed; 
‘‘(cc) budgeting and expendi-
tures; 
‘‘(dd) the collective total costs 
for the preceding calendar year; 
‘‘(ee) the projected annual 
mechanical 
licensing 
collective 
budget; 
‘‘(ff) aggregated royalty re-
ceipts and payments;
† HR 1551 EAS 
‘‘(gg) expenses that are more 
than 10 percent of the annual me-
chanical licensing collective budg-
et; and 
‘‘(hh) the efforts of the collec-
tive to locate and identify copy-
right owners of unmatched musi-
cal works (and shares of works). 
‘‘(II) SUBMISSION.—On the date 
on which the mechanical licensing col-
lective posts each report required under 
subclause (I), the collective shall pro-
vide a copy of the report to the Reg-
ister of Copyrights. 
‘‘(viii) INDEPENDENT
OFFICERS.—An 
individual serving as an officer of the me-
chanical licensing collective may not, at the 
same time, also be an employee or agent of 
any member of the board of directors of the 
collective or any entity represented by a 
member of the board of directors, as de-
scribed in clause (i). 
‘‘(ix) 
OVERSIGHT
AND
ACCOUNT-
ABILITY.—
† HR 1551 EAS 
‘‘(I) IN GENERAL.—The mechan-
ical licensing collective shall— 
‘‘(aa) ensure that the policies 
and practices of the collective are 
transparent and accountable; 
‘‘(bb) identify a point of con-
tact for publisher inquiries and 
complaints with timely redress; 
and 
‘‘(cc) establish an anti-co-
mingling policy for funds not col-
lected under this section and roy-
alties collected under this section. 
‘‘(II) AUDITS.— 
‘‘(aa) IN
GENERAL.—Begin-
ning in the fourth full calendar 
year that begins after the initial 
designation of the mechanical li-
censing collective by the Register 
of Copyrights under subparagraph 
(B)(i), and in every fifth calendar 
year thereafter, the collective shall 
retain a qualified auditor that 
shall—
† HR 1551 EAS 
‘‘(AA) 
examine 
the 
books, records, and oper-
ations of the collective; 
‘‘(BB) prepare a report 
for the board of directors of 
the collective with respect to 
the matters described in item 
(bb); and 
‘‘(CC) not later than 
December 31 of the year in 
which the qualified auditor is 
retained, deliver the report 
described in subitem (BB) to 
the board of directors of the 
collective. 
‘‘(bb) 
MATTERS
AD-
DRESSED.—Each report prepared 
under item (aa) shall address the 
implementation and efficacy of 
procedures of the mechanical li-
censing collective— 
‘‘(AA) for the receipt, 
handling, and distribution of 
royalty funds, including any
† HR 1551 EAS 
amounts held as unclaimed 
royalties; 
‘‘(BB) to guard against 
fraud, abuse, waste, and the 
unreasonable use of funds; 
and 
‘‘(CC) to protect the 
confidentiality of financial, 
proprietary, and other sen-
sitive information. 
‘‘(cc) 
PUBLIC
AVAIL-
ABILITY.—With respect to each re-
port prepared under item (aa), 
the mechanical licensing collective 
shall— 
‘‘(AA) submit the report 
to the Register of Copyrights; 
and 
‘‘(BB) make the report 
available to the public. 
‘‘(E) MUSICAL WORKS DATABASE.— 
‘‘(i) ESTABLISHMENT
AND
MAINTE-
NANCE OF DATABASE.—The mechanical li-
censing collective shall establish and main-
tain a database containing information re-
† HR 1551 EAS 
lating to musical works (and shares of such 
works) and, to the extent known, the iden-
tity and location of the copyright owners of 
such works (and shares thereof) and the 
sound recordings in which the musical 
works are embodied. In furtherance of 
maintaining such database, the mechanical 
licensing collective shall engage in efforts to 
identify the musical works embodied in par-
ticular sound recordings, as well as to iden-
tify and locate the copyright owners of such 
works (and shares thereof), and update such 
data as appropriate. 
‘‘(ii) MATCHED WORKS.—With respect 
to musical works (and shares thereof) that 
have been matched to copyright owners, the 
musical works database shall include— 
‘‘(I) the title of the musical work; 
‘‘(II) the copyright owner of the 
work (or share thereof), and the owner-
ship percentage of that owner; 
‘‘(III) contact information for 
such copyright owner;
† HR 1551 EAS 
‘‘(IV) to the extent reasonably 
available to the mechanical licensing 
collective— 
‘‘(aa) 
the 
international 
standard musical work code for 
the work; and 
‘‘(bb) identifying information 
for sound recordings in which the 
musical work is embodied, includ-
ing the name of the sound record-
ing, featured artist, sound record-
ing copyright owner, producer, 
international standard recording 
code, and other information com-
monly used to assist in associ-
ating sound recordings with musi-
cal works; and 
‘‘(V) such other information as the 
Register of Copyrights may prescribe 
by regulation. 
‘‘(iii) UNMATCHED WORKS.—With re-
spect to unmatched musical works (and 
shares of works) in the database, the musi-
cal works database shall include—
† HR 1551 EAS 
‘‘(I) to the extent reasonably 
available to the mechanical licensing 
collective— 
‘‘(aa) the title of the musical 
work; 
‘‘(bb) the ownership percent-
age for which an owner has not 
been identified; 
‘‘(cc) if a copyright owner 
has been identified but not lo-
cated, the identity of such owner 
and the ownership percentage of 
that owner; 
‘‘(dd) identifying informa-
tion for sound recordings in which 
the work is embodied, including 
sound recording name, featured 
artist, sound recording copyright 
owner, 
producer, 
international 
standard 
recording 
code, 
and 
other information commonly used 
to assist in associating sound re-
cordings with musical works; and 
‘‘(ee) any additional infor-
mation reported to the mechanical
† HR 1551 EAS 
licensing collective that may assist 
in identifying the work; and 
‘‘(II) such other information relat-
ing to the identity and ownership of 
musical works (and shares of such 
works) as the Register of Copyrights 
may prescribe by regulation. 
‘‘(iv) SOUND
RECORDING
INFORMA-
TION.—Each musical work copyright owner 
with any musical work listed in the musical 
works database shall engage in commer-
cially reasonable efforts to deliver to the me-
chanical licensing collective, including for 
use in the musical works database, to the 
extent such information is not then avail-
able in the database, information regarding 
the names of the sound recordings in which 
that copyright owner’s musical works (or 
shares thereof) are embodied, to the extent 
practicable. 
‘‘(v) ACCESSIBILITY
OF
DATABASE.— 
The musical works database shall be made 
available to members of the public in a 
searchable, online format, free of charge. 
The mechanical licensing collective shall
† HR 1551 EAS 
make such database available in a bulk, 
machine-readable format, through a widely 
available software application, to the fol-
lowing entities: 
‘‘(I) Digital music providers oper-
ating under the authority of valid no-
tices of license, free of charge. 
‘‘(II) Significant nonblanket li-
censees in compliance with their obli-
gations under paragraph (6), free of 
charge. 
‘‘(III) Authorized vendors of the 
entities described in subclauses (I) and 
(II), free of charge. 
‘‘(IV) The Register of Copyrights, 
free of charge (but the Register shall 
not treat such database or any infor-
mation 
therein 
as 
a 
Government 
record). 
‘‘(V) Any other person or entity 
for a fee not to exceed the marginal 
cost to the mechanical licensing collec-
tive of providing the database to such 
person or entity.
† HR 1551 EAS 
‘‘(vi) ADDITIONAL
REQUIREMENTS.— 
The Register of Copyrights shall establish 
requirements by regulations to ensure the 
usability, interoperability, and usage re-
strictions of the musical works database. 
‘‘(F) NOTICES
OF
LICENSE
AND
NON-
BLANKET ACTIVITY.— 
‘‘(i) NOTICES OF LICENSES.—The me-
chanical licensing collective shall receive, re-
view, and confirm or reject notices of license 
from digital music providers, as provided 
in paragraph (2)(A). The collective shall 
maintain a current, publicly accessible list 
of blanket licenses that includes contact in-
formation for the licensees and the effective 
dates of such licenses. 
‘‘(ii) NOTICES OF NONBLANKET ACTIV-
ITY.—The mechanical licensing collective 
shall receive notices of nonblanket activity 
from significant nonblanket licensees, as 
provided in paragraph (6)(A). The collective 
shall maintain a current, publicly accessible 
list of notices of nonblanket activity that in-
cludes contact information for significant
† HR 1551 EAS 
nonblanket licensees and the dates of receipt 
of such notices. 
‘‘(G) COLLECTION
AND
DISTRIBUTION
OF 
ROYALTIES.— 
‘‘(i) IN GENERAL.—Upon receiving re-
ports of usage and payments of royalties 
from digital music providers for covered ac-
tivities, the mechanical licensing collective 
shall— 
‘‘(I) engage in efforts to— 
‘‘(aa) identify the musical 
works embodied in sound record-
ings reflected in such reports, and 
the copyright owners of such mu-
sical works (and shares thereof); 
‘‘(bb) confirm uses of musical 
works subject to voluntary licenses 
and individual download licenses, 
and the corresponding pro rata 
amounts to be deducted from roy-
alties that would otherwise be due 
under the blanket license; and 
‘‘(cc) confirm proper pay-
ment of royalties due;
† HR 1551 EAS 
‘‘(II) distribute royalties to copy-
right owners in accordance with the 
usage and other information contained 
in such reports, as well as the owner-
ship and other information contained 
in the records of the collective; and 
‘‘(III) deposit into an interest- 
bearing account, as provided in sub-
paragraph (H)(ii), royalties that can-
not be distributed due to— 
‘‘(aa) an inability to identify 
or locate a copyright owner of a 
musical work (or share thereof); or 
‘‘(bb) a pending dispute be-
fore the dispute resolution com-
mittee of the mechanical licensing 
collective. 
‘‘(ii) OTHER COLLECTION EFFORTS.— 
Any royalties recovered by the mechanical 
licensing collective as a result of efforts to 
enforce rights or obligations under a blanket 
license, including through a bankruptcy 
proceeding or other legal action, shall be 
distributed to copyright owners based on 
available usage information and in accord-
† HR 1551 EAS 
ance with the procedures described in sub-
clauses (I) and (II) of clause (i), on a pro 
rata basis in proportion to the overall per-
centage recovery of the total royalties owed, 
with any pro rata share of royalties that 
cannot be distributed deposited in an inter-
est-bearing account as provided in subpara-
graph (H)(ii). 
‘‘(H) HOLDING OF ACCRUED ROYALTIES.— 
‘‘(i) HOLDING PERIOD.—The mechan-
ical licensing collective shall hold accrued 
royalties associated with particular musical 
works (and shares of works) that remain 
unmatched for a period of not less than 3 
years after the date on which the funds were 
received by the mechanical licensing collec-
tive, or not less than 3 years after the date 
on which the funds were accrued by a dig-
ital music provider that subsequently trans-
ferred such funds to the mechanical licens-
ing 
collective 
pursuant 
to 
paragraph 
(10)(B), whichever period expires sooner. 
‘‘(ii) INTEREST-BEARING
ACCOUNT.— 
Accrued royalties for unmatched works (and 
shares thereof) shall be maintained by the
† HR 1551 EAS 
mechanical licensing collective in an inter-
est-bearing account that earns monthly in-
terest— 
‘‘(I) at the Federal, short-term 
rate; and 
‘‘(II) that accrues for the benefit 
of copyright owners entitled to pay-
ment of such accrued royalties. 
‘‘(I) MUSICAL WORKS CLAIMING PROCESS.— 
When a copyright owner of an unmatched work 
(or share of a work) has been identified and lo-
cated in accordance with the procedures of the 
mechanical licensing collective, the collective 
shall— 
‘‘(i) update the musical works database 
and the other records of the collective ac-
cordingly; and 
‘‘(ii) provided that accrued royalties 
for the musical work (or share thereof) have 
not yet been included in a distribution pur-
suant to subparagraph (J)(i), pay such ac-
crued royalties and a proportionate amount 
of accrued interest associated with that 
work (or share thereof) to the copyright 
owner, accompanied by a cumulative state-
† HR 1551 EAS 
ment of account reflecting usage of such 
work and accrued royalties based on infor-
mation provided by digital music providers 
to the mechanical licensing collective. 
‘‘(J) DISTRIBUTION
OF
UNCLAIMED
AC-
CRUED ROYALTIES.— 
‘‘(i) 
DISTRIBUTION
PROCEDURES.— 
After the expiration of the prescribed hold-
ing period for accrued royalties provided in 
subparagraph (H)(i), the mechanical licens-
ing collective shall distribute such accrued 
royalties, along with a proportionate share 
of accrued interest, to copyright owners 
identified in the records of the collective, 
subject to the following requirements, and in 
accordance with the policies and procedures 
established under clause (ii): 
‘‘(I) The first such distribution 
shall occur on or after January 1 of 
the second full calendar year to com-
mence after the license availability 
date, with not less than 1 such dis-
tribution to take place during each cal-
endar year thereafter.
† HR 1551 EAS 
‘‘(II) Copyright owners’ payment 
shares for unclaimed accrued royalties 
for particular reporting periods shall 
be determined in a transparent and eq-
uitable manner based on data indi-
cating the relative market shares of 
such copyright owners as reflected in 
reports of usage provided by digital 
music providers for covered activities 
for the periods in question, including, 
in addition to usage data provided to 
the mechanical licensing collective, 
usage data provided to copyright own-
ers under voluntary licenses and indi-
vidual download licenses for covered 
activities, to the extent such informa-
tion is available to the mechanical li-
censing collective. In furtherance of the 
determination 
of 
equitable 
market 
shares under this subparagraph— 
‘‘(aa) the mechanical licens-
ing collective may require copy-
right owners seeking distributions 
of unclaimed accrued royalties to 
provide, or direct the provision of,
† HR 1551 EAS 
information concerning the usage 
of musical works under voluntary 
licenses and individual download 
licenses for covered activities; and 
‘‘(bb) the mechanical licens-
ing collective shall take appro-
priate steps to safeguard the con-
fidentiality and security of usage, 
financial, and other sensitive data 
used to compute market shares in 
accordance with the confiden-
tiality provisions prescribed by 
the Register of Copyrights under 
paragraph (12)(C). 
‘‘(ii) ESTABLISHMENT
OF
DISTRIBU-
TION
POLICIES.—The unclaimed royalties 
oversight committee established under sub-
paragraph (D)(v) shall establish policies 
and procedures for the distribution of un-
claimed accrued royalties and accrued in-
terest in accordance with this subpara-
graph, including the provision of usage data 
to copyright owners to allocate payments 
and credits to songwriters pursuant to 
clause (iv), subject to the approval of the
† HR 1551 EAS 
board of directors of the mechanical licens-
ing collective. 
‘‘(iii) PUBLIC NOTICE OF UNCLAIMED 
ACCRUED ROYALTIES.—The mechanical li-
censing collective shall— 
‘‘(I) maintain a publicly acces-
sible online facility with contact infor-
mation for the collective that lists un-
matched musical works (and shares of 
works), through which a copyright 
owner may assert an ownership claim 
with respect to such a work (and a 
share of such a work); 
‘‘(II) engage in diligent, good- 
faith efforts to publicize, throughout the 
music industry— 
‘‘(aa) the existence of the col-
lective and the ability to claim 
unclaimed accrued royalties for 
unmatched musical works (and 
shares of such works) held by the 
collective; 
‘‘(bb) 
the 
procedures 
by 
which copyright owners may iden-
tify themselves and provide con-
† HR 1551 EAS 
tact, ownership, and other rel-
evant information to the collective 
in order to receive payments of 
accrued royalties; 
‘‘(cc) any transfer of accrued 
royalties for musical works under 
paragraph (10)(B), not later than 
180 days after the date on which 
the transfer is received; and 
‘‘(dd) any pending distribu-
tion of unclaimed accrued royal-
ties and accrued interest, not less 
than 90 days before the date on 
which the distribution is made; 
and 
‘‘(III) as appropriate, participate 
in music industry conferences and 
events for the purpose of publicizing 
the matters described in subclause (II). 
‘‘(iv) SONGWRITER PAYMENTS.—Copy-
right owners that receive a distribution of 
unclaimed accrued royalties and accrued 
interest shall pay or credit a portion to 
songwriters (or the authorized agents of 
songwriters) on whose behalf the copyright
† HR 1551 EAS 
owners license or administer musical works 
for covered activities, in accordance with 
applicable contractual terms, but notwith-
standing any agreement to the contrary— 
‘‘(I) such payments and credits to 
songwriters shall be allocated in pro-
portion to reported usage of individual 
musical works by digital music pro-
viders during the reporting periods 
covered by the distribution from the 
mechanical licensing collective; and 
‘‘(II) in no case shall the payment 
or credit to an individual songwriter 
be less than 50 percent of the payment 
received by the copyright owner attrib-
utable to usage of musical works (or 
shares of works) of that songwriter. 
‘‘(K) DISPUTE RESOLUTION.—The dispute 
resolution committee established under subpara-
graph (D)(vi) shall establish policies and proce-
dures— 
‘‘(i) for copyright owners to address in 
a timely and equitable manner disputes re-
lating to ownership interests in musical 
works licensed under this section and allo-
† HR 1551 EAS 
cation and distribution of royalties by the 
mechanical licensing collective, subject to 
the approval of the board of directors of the 
mechanical licensing collective; 
‘‘(ii) that shall include a mechanism to 
hold disputed funds in accordance with the 
requirements described in subparagraph 
(H)(ii) pending resolution of the dispute; 
and 
‘‘(iii) except as provided in paragraph 
(11)(D), that shall not affect any legal or 
equitable rights or remedies available to any 
copyright owner or songwriter concerning 
ownership of, and entitlement to royalties 
for, a musical work. 
‘‘(L) VERIFICATION OF PAYMENTS BY ME-
CHANICAL LICENSING COLLECTIVE.— 
‘‘(i) VERIFICATION PROCESS.—A copy-
right owner entitled to receive payments of 
royalties for covered activities from the me-
chanical licensing collective may, individ-
ually or with other copyright owners, con-
duct an audit of the mechanical licensing 
collective to verify the accuracy of royalty
† HR 1551 EAS 
payments by the mechanical licensing col-
lective to such copyright owner, as follows: 
‘‘(I) A copyright owner may audit 
the mechanical licensing collective only 
once in a year for any or all of the 3 
calendar years preceding the year in 
which the audit is commenced, and 
may not audit records for any cal-
endar year more than once. 
‘‘(II) The audit shall be conducted 
by a qualified auditor, who shall per-
form the audit during the ordinary 
course of business by examining the 
books, records, and data of the mechan-
ical licensing collective, according to 
generally accepted auditing standards 
and subject to applicable confiden-
tiality requirements prescribed by the 
Register of Copyrights under para-
graph (12)(C). 
‘‘(III) The mechanical licensing 
collective 
shall 
make 
such 
books, 
records, and data available to the 
qualified auditor and respond to rea-
sonable requests for relevant informa-
† HR 1551 EAS 
tion, and shall use commercially rea-
sonable efforts to facilitate access to rel-
evant information maintained by third 
parties. 
‘‘(IV) To commence the audit, any 
copyright owner shall file with the 
Copyright Office a notice of intent to 
conduct an audit of the mechanical li-
censing collective, identifying the pe-
riod of time to be audited, and shall si-
multaneously deliver a copy of such 
notice to the mechanical licensing col-
lective. The Register of Copyrights 
shall cause the notice of audit to be 
published in the Federal Register not 
later than 45 calendar days after the 
date on which the notice is received. 
‘‘(V) The qualified auditor shall 
determine the accuracy of royalty pay-
ments, including whether an under-
payment or overpayment of royalties 
was made by the mechanical licensing 
collective to each auditing copyright 
owner, except that, before providing a 
final audit report to any such copy-
† HR 1551 EAS 
right owner, the qualified auditor shall 
provide a tentative draft of the report 
to the mechanical licensing collective 
and allow the mechanical licensing col-
lective a reasonable opportunity to re-
spond to the findings, including by 
clarifying issues and correcting factual 
errors. 
‘‘(VI) 
The 
auditing 
copyright 
owner or owners shall bear the cost of 
the audit. In case of an underpayment 
to any copyright owner, the mechan-
ical licensing collective shall pay the 
amounts of any such underpayment to 
such auditing copyright owner, as ap-
propriate. In case of an overpayment 
by the mechanical licensing collective, 
the mechanical licensing collective may 
debit the account of the auditing copy-
right owner or owners for such over-
paid amounts, or such owner or owners 
shall refund overpaid amounts to the 
mechanical licensing collective, as ap-
propriate.
† HR 1551 EAS 
‘‘(ii) ALTERNATIVE VERIFICATION PRO-
CEDURES.—Nothing in this subparagraph 
shall preclude a copyright owner and the 
mechanical licensing collective from agree-
ing to audit procedures different from those 
described in this subparagraph, except that 
a notice of the audit shall be provided to 
and published by the Copyright Office as 
described in clause (i)(IV). 
‘‘(M) RECORDS OF MECHANICAL LICENSING 
COLLECTIVE.— 
‘‘(i) 
RECORDS
MAINTENANCE.—The 
mechanical licensing collective shall ensure 
that all material records of the operations of 
the mechanical licensing collective, includ-
ing those relating to notices of license, the 
administration of the claims process of the 
mechanical licensing collective, reports of 
usage, royalty payments, receipt and main-
tenance of accrued royalties, royalty dis-
tribution processes, and legal matters, are 
preserved and maintained in a secure and 
reliable manner, with appropriate commer-
cially reasonable safeguards against unau-
thorized access, copying, and disclosure, and
† HR 1551 EAS 
‘‘(I) The mechanical licensing col-
lective may commence an audit of a 
digital music provider not more fre-
quently than once in any 3-calendar- 
year period to cover a verification pe-
riod of not more than the 3 full cal-
endar years preceding the date of com-
mencement of the audit, and such 
audit may not audit records for any 
such 3-year verification period more 
than once. 
‘‘(II) The audit shall be conducted 
by a qualified auditor, who shall per-
form the audit during the ordinary 
course of business by examining the 
books, records, and data of the digital 
music provider, according to generally 
accepted auditing standards and sub-
ject to applicable confidentiality re-
quirements prescribed by the Register 
of 
Copyrights 
under 
paragraph 
(12)(C). 
‘‘(III) The digital music provider 
shall make such books, records, and 
data available to the qualified auditor