Title: Fair Play Fair Pay Act of 2017
Policy area: Commerce

Summary:
Fair Play Fair Pay Act of 2017
Copyright Royalty Judges (CRJs) must commence a proceeding to determine royalty rates and terms for nonsubscription broadcast transmissions. In determining royalty rates for statutory licensing of such digital or nondigital transmissions, the CRJs must: (1) distinguish among different types of services, and (2) include a minimum fee for each type of service. Differences may be based on the quantity and nature of the use of sound recordings and the degree to which use of the service may substitute for or promote consumer purchases of phonorecords.
The CRJs must establish rates that most clearly represent the rates and terms that would have been negotiated in the marketplace between a willing buyer and a willing seller. The decision must be based on economic, competitive, and programming information presented by the parties, including: (1) the sound recording copyright owner's other streams of revenue from the recordings; and (2) the relative creative contribution, technological contribution, capital investment, cost, and risk of the copyright owner and the transmitting entity.
The bill caps the annual royalty rate at: (1) $500 for small commercial broadcast stations with less than $1 million in revenues for the calendar year, and (2) $100 for public broadcasting stations. Exemptions are provided for religious service broadcasts or incidental uses of music from royalty payment requirements.
Proceeds for direct licenses of transmissions otherwise licensable under the statutory license must be distributed in the same manner as statutory license proceeds. The bill requires payment of 45% to featured artists, 2.5% to nonfeatured musicians, and 2.5% to nonfeatured vocalists. Such payments shall be the sole payments to which featured and nonfeatured artists are entitled under a direct license.
Performance royalties for sound recordings fixed before February 15, 1972, must be paid in the same manner as royalties for sound recordings fixed after such date.
A collective designated by the CRJs must implement a policy to accept instructions (referred to as a "letter of direction") from a sound recording copyright owner, or from a recording artist, to distribute a portion of performance royalty payments to a producer, mixer, or sound engineer who was part of the creative process behind the sound recording.
The collective must adopt special procedures for a producer, mixer, or sound engineer to receive a portion of royalties for recordings fixed before November 1, 1995, by certifying that a reasonable effort has been made to obtain a letter of direction from an artist who owns the right to receipts payable with respect to the sound recording.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1836 Introduced in House (IH)]

<DOC>






115th CONGRESS
  1st Session
                                H. R. 1836

  To amend title 17, United States Code, to provide fair treatment of 
  radio stations and artists for the use of sound recordings, and for 
                            other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 30, 2017

  Mr. Nadler (for himself, Mrs. Blackburn, Mr. Conyers, Mr. Issa, Mr. 
 Deutch, and Mr. Thomas J. Rooney of Florida) introduced the following 
       bill; which was referred to the Committee on the Judiciary

_______________________________________________________________________

                                 A BILL


 
  To amend title 17, United States Code, to provide fair treatment of 
  radio stations and artists for the use of sound recordings, and for 
                            other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Fair Play Fair Pay 
Act of 2017''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Equitable treatment for terrestrial broadcasts and Internet 
                            services.
Sec. 3. Timing of proceedings under sections 112(e) and 114(f).
Sec. 4. Ensuring platform parity.
Sec. 5. Special protection for small broadcasters, public and 
                            educational radio, religious services, and 
                            incidental use of music.
Sec. 6. Distribution of certain royalties.
Sec. 7. Equitable treatment of legacy sound recordings.
Sec. 8. No harmful effects on songwriters.
Sec. 9. Allocation of payments to music producers.
Sec. 10. Effective date.

SEC. 2. EQUITABLE TREATMENT FOR TERRESTRIAL BROADCASTS AND INTERNET 
              SERVICES.

    (a) Performance Right Applicable to Transmissions Generally.--
Paragraph (6) of section 106 of title 17, United States Code, is 
amended to read as follows:
            ``(6) in the case of sound recordings, to perform the 
        copyrighted work publicly by means of an audio transmission.''.
    (b) Inclusion of Terrestrial Broadcasts in Existing Performance 
Right and Statutory License.--Section 114(d)(1) of title 17, United 
States Code, is amended--
            (1) in the matter preceding subparagraph (A), by striking 
        ``a digital'' and inserting ``an''; and
            (2) in subparagraph (B)--
                    (A) by striking clauses (i) and (iii);
                    (B) by redesignating clauses (ii) and (iv) as 
                clauses (i) and (ii), respectively;
                    (C) in clause (i), as so redesignated, by adding 
                ``or'' after ``retransmitter;''; and
                    (D) in clause (ii), as so redesignated, by striking 
                ``retransmission, whether or not simultaneous, is a'' 
                and inserting ``retransmission is a non-
                simultaneous,''.
    (c) Technical and Conforming Amendments.--
            (1) Definition.--Section 101 of title 17, United States 
        Code, is amended by inserting after the definition of 
        ``architectural work'' the following:
            ``An `audio transmission' is a transmission of a sound 
        recording, whether in a digital, analog, or other format. This 
        term does not include the transmission of any audiovisual 
        work.''.
            (2) Conforming removal of digital.--Title 17, United States 
        Code, is amended--
                    (A) in section 112(e)(8), by striking ``a digital 
                audio transmission'' and inserting ``an audio 
                transmission''; and
                    (B) in section 114--
                            (i) in subsection (d)--
                                    (I) in paragraph (2)--
                                            (aa) in the matter 
                                        preceding subparagraph (A), by 
                                        striking ``subscription 
                                        digital'' and inserting 
                                        ``subscription''; and
                                            (bb) in subparagraph 
                                        (C)(viii), by striking 
                                        ``digital signal'' and 
                                        inserting ``signal''; and
                                    (II) in paragraph (4)--
                                            (aa) in subparagraph (A), 
                                        by striking ``a digital audio 
                                        transmission'' and inserting 
                                        ``an audio transmission''; and
                                            (bb) in subparagraph 
                                        (B)(i), by striking ``a digital 
                                        audio transmission'' and 
                                        inserting ``an audio 
                                        transmission'';
                            (ii) in subsection (g)(2)(A), by striking 
                        ``a digital'' and inserting ``an''; and
                            (iii) in subsection (j)--
                                    (I) in paragraph (6)--
                                            (aa) by striking 
                                        ``digital''; and
                                            (bb) by striking 
                                        ``retransmissions of broadcast 
                                        transmissions'' and inserting 
                                        ``broadcast transmissions and 
                                        retransmissions of broadcast 
                                        transmissions''; and
                                    (II) in paragraph (8), by striking 
                                ``subscription digital'' and inserting 
                                ``subscription''.

SEC. 3. TIMING OF PROCEEDINGS UNDER SECTIONS 112(E) AND 114(F).

    Paragraph (3) of section 804(b) of title 17, United States Code, is 
amended by adding at the end the following new subparagraph:
                    ``(D) A proceeding under this chapter shall be 
                commenced as soon as practicable after the date of the 
                enactment of the Fair Play Fair Pay Act of 2017 to 
                determine royalty rates and terms for nonsubscription 
                broadcast transmissions, to be effective for the period 
                beginning on such date of enactment, and ending on 
                December 31, 2022. Any payment due under section 
                114(f)(1)(D) shall not be due until the due date of the 
                first royalty payments for nonsubscription broadcast 
                transmissions that are determined, after the date of 
                the enactment of the Fair Play Fair Pay Act of 2017, by 
                the Copyright Royalty Judges. Thereafter, such 
                proceeding shall be repeated in each subsequent fifth 
                calendar year.''.

SEC. 4. ENSURING PLATFORM PARITY.

    (a) Uniform Rate Standard.--Section 114(f) of title 17, United 
States Code, is amended--
            (1) by striking paragraphs (1) and (2) and inserting the 
        following:
            ``(1)(A) Proceedings under chapter 8 shall determine 
        reasonable rates and terms of royalty payments for 
        transmissions subject to statutory licensing under subsection 
        (d)(2) during the 5-year period beginning on January 1 of the 
        second year following the year in which the proceedings are to 
        be commenced pursuant to subparagraph (A) or (B) of section 
        804(b)(3), as the case may be, or such other period as the 
        parties may agree. The parties to each proceeding shall bear 
        their own costs.
            ``(B) The schedule of reasonable rates and terms determined 
        by the Copyright Royalty Judges shall, subject to paragraph 
        (2), be binding on all copyright owners of sound recordings and 
        entities performing sound recordings affected by this paragraph 
        during the 5-year period specified in subparagraph (A), or such 
        other period as the parties may agree. Such rates and terms 
        shall distinguish among the different types of services then in 
        operation and shall include a minimum fee for each such type of 
        service, such differences to be based on criteria including the 
        quantity and nature of the use of sound recordings and the 
        degree to which use of the service may substitute for or may 
        promote the purchase of phonorecords by consumers. The 
        Copyright Royalty Judges shall establish rates and terms that 
        most clearly represent the rates and terms that would have been 
        negotiated in the marketplace between a willing buyer and a 
        willing seller. In determining such rates and terms, the 
        Copyright Royalty Judges--
                    ``(i) shall base their decision on economic, 
                competitive, and programming information presented by 
                the parties, including--
                            ``(I) whether use of the service may 
                        substitute for or may promote the sales of 
                        phonorecords or otherwise may interfere with or 
                        may enhance the sound recording copyright 
                        owner's other streams of revenue from the 
                        copyright owner's sound recordings; and
                            ``(II) the relative roles of the copyright 
                        owner and the transmitting entity in the 
                        copyrighted work and the service made available 
                        to the public with respect to relative creative 
                        contribution, technological contribution, 
                        capital investment, cost, and risk; and
                    ``(ii) may consider the rates and terms for 
                comparable types of audio transmission services and 
                comparable circumstances under voluntary license 
                agreements.
            ``(C) The procedures under subparagraphs (A) and (B) shall 
        also be initiated pursuant to a petition filed by any copyright 
        owner of sound recordings or any transmitting entity indicating 
        that a new type of service on which sound recordings are 
        performed is or is about to become operational, for the purpose 
        of determining reasonable terms and rates of royalty payments 
        with respect to such new type of service for the period 
        beginning with the inception of such new type of service and 
        ending on the date on which the royalty rates and terms for 
        eligible nonsubscription services and new subscription 
        services, or preexisting services, as the case may be, most 
        recently determined under subparagraph (A) or (B) and chapter 8 
        expire, or such other period as the parties may agree.''; and
            (2) by redesignating paragraphs (3), (4), and (5) as 
        paragraphs (2), (3), and (4), respectively.
    (b) Technical and Conforming Amendments.--
            (1) Section 114.--Section 114(f) of title 17, United States 
        Code, as amended by subsection (a), is further amended in 
        paragraph (4)(C), as so redesignated, by striking ``under 
        paragraph (4)'' and inserting ``under paragraph (3)''.
            (2) Section 801.--Section 801(b)(1) of title 17, United 
        States Code, is amended by striking ``114(f)(1)(B), 115,'' and 
        inserting ``115''.
            (3) Section 804.--Section 804(b)(3)(C) of title 17, United 
        States Code, is amended--
                    (A) in clause (i), by striking ``and 
                114(f)(2)(C)'';
                    (B) in clause (iii)(II), by striking 
                ``114(f)(4)(B)(ii)'' and inserting 
                ``114(f)(3)(B)(ii)''; and
                    (C) in clause (iv), by striking ``or 114(f)(2)(C), 
                as the case may be''.

SEC. 5. SPECIAL PROTECTION FOR SMALL BROADCASTERS, PUBLIC AND 
              EDUCATIONAL RADIO, RELIGIOUS SERVICES, AND INCIDENTAL USE 
              OF MUSIC.

    (a) Special Protection for Small Broadcasters.--Section 114(f)(1) 
of title 17, United States Code, as amended by section 4(a), is further 
amended by inserting at the end the following new subparagraph:
            ``(D)(i) Notwithstanding the provisions of subparagraphs 
        (A) through (C), the royalty rate for nonsubscription broadcast 
        transmissions by each individual terrestrial broadcast station 
        licensed as such by the Federal Communications Commission that 
        is not a public broadcasting entity as defined in section 
        118(f) and that has revenues in any calendar year of less than 
        $1,000,000 shall be $500 per year for any such year. For 
        purposes of such determination, such revenues shall include all 
        revenues from the operation of the station, calculated in 
        accordance with generally accepted accounting principles in the 
        United States. In the case of affiliated broadcast stations, 
        revenues shall be allocated reasonably to individual stations 
        associated with those revenues.''.
    (b) Special Protection for Public Broadcasters, College Radio, and 
Other Noncommercial Stations.--Subparagraph (D) of section 114(f)(1) of 
title 17, United States Code, as added by subsection (a), is amended by 
inserting at the end the following new clauses:
            ``(ii) Notwithstanding the provisions of subparagraphs (A) 
        through (C), the royalty rate for nonsubscription broadcast 
        transmissions by each individual terrestrial broadcast station 
        licensed as such by the Federal Communications Commission that 
        is a public broadcasting entity as defined in section 118(f) 
        shall be $100 per year.
            ``(iii) The royalty rates specified in clauses (i) and (ii) 
        shall not be admissible as evidence or otherwise taken into 
        account in determining royalty rates in a proceeding under 
        chapter 8, or in any other administrative, judicial, or other 
        Federal Government proceeding involving the setting or 
        adjustment of the royalties payable for the public performance 
        or reproduction in ephemeral phonorecords or copies of sound 
        recordings, the determination of terms or conditions related 
        thereto, or the establishment of notice or recordkeeping 
        requirements.''.
    (c) No Royalties for Religious Services or Incidental Uses of 
Music.--Section 114(d)(1) of title 17, United States Code, as amended 
by section 2(b), is further amended by striking subparagraph (A) and 
inserting the following:
                    ``(A) a nonsubscription broadcast transmission of--
                            ``(i) services at a place of worship or 
                        other religious assembly; or
                            ``(ii) an incidental use of a sound 
                        recording of a musical work;''.
    (d) Technical Correction.--Section 118(f) of title 17, United 
States Code, is amended by striking ``section 397 of title 47'' and 
inserting ``section 397 of the Communications Act of 1934 (47 U.S.C. 
397)''.

SEC. 6. DISTRIBUTION OF CERTAIN ROYALTIES.

    Section 114(g) of title 17, United States Code, is amended--
            (1) in paragraph (1), by inserting ``or in the case of a 
        transmission to which paragraph (5) applies'' after ``this 
        section''; and
            (2) by adding at the end the following new paragraph:
            ``(5) Notwithstanding paragraph (1), to the extent that a 
        license granted by the copyright owner of a sound recording to 
        a transmitting entity eligible for a statutory license under 
        subsection (d)(2) extends to such entity's transmissions 
        otherwise licensable under a statutory license in accordance 
        with subsection (f), such entity shall pay to the agent 
        designated to distribute statutory licensing receipts from the 
        licensing of transmissions in accordance with subsection (f), 
        50 percent of the total royalties that such entity is required, 
        pursuant to the applicable license agreement, to pay for such 
        transmissions otherwise licensable under a statutory license in 
        accordance with subsection (f). That agent shall distribute 
        such payments in proportion to the distributions provided in 
        subparagraphs (B) through (D) of paragraph (2), and such 
        payments shall be the sole payments to which featured and 
        nonfeatured artists are entitled by virtue of such 
        transmissions under the direct license with such entity.''.

SEC. 7. EQUITABLE TREATMENT OF LEGACY SOUND RECORDINGS.

    (a) Payment for Use of Certain Sound Recordings.--Section 114(f)(3) 
of title 17, United States Code, as so redesignated, is amended by 
adding at the end the following:
            ``(D)(i) Any person publicly performing sound recordings 
        protected under this title by means of transmissions under a 
        statutory license under this section, or making reproductions 
        of such sound recordings under section 112(e), shall make 
        royalty payments for transmissions that person makes of sound 
        recordings that were fixed before February 15, 1972, and 
        reproductions that person makes of those sound recordings under 
        the circumstances described in section 112(e)(1), in the same 
        manner as such person does for sound recordings that are 
        protected under this title.
            ``(ii) If a person fails to make royalty payments described 
        in clause (i) for sound recordings fixed before February 15, 
        1972, there shall be available, in addition to any remedy that 
        may be available under the laws of any State, a civil action in 
        an appropriate United States district court for recovery 
        limited to the payments described in clause (i), in addition to 
        interest, costs, and attorneys' fees. Any such recovery that is 
        obtained shall be offset against any recovery for such 
        violation that may be available under the laws of any State.
            ``(iii) No action may be brought under the laws of any 
        State against a transmitting entity alleging infringement of a 
        right equivalent to the right granted in section 106(6) based 
        on a public performance of a sound recording fixed before 
        February 15, 1972, or alleging infringement of a right 
        equivalent to the right granted in section 106(1) based on a 
        reproduction of such a sound recording, if--
                    ``(I) the performance would have been subject to 
                statutory licensing under subsection (d)(2) if the 
                sound recording had been first fixed on or after 
                February 15, 1972;
                    ``(II) the reproduction would have been subject to 
                statutory licensing under section 112(e)(1) if the 
                sound recording had been first fixed on or after 
                February 15, 1972;
                    ``(III) the transmitting entity has satisfied the 
                requirements for statutory licensing under subparagraph 
                (B) and section 112(e)(6); and
                    ``(IV) the applicable royalty was paid and 
                accounted for under this subparagraph.
            ``(iv) This subparagraph does not confer copyright 
        protection under this title upon sound recordings that were 
        fixed before February 15, 1972. Such sound recordings are 
        subject to the protection available under the laws of the 
        States, and except as provided in clause (iii), are not subject 
        to any limitation of rights or remedies, or any defense, 
        provided under this title.
            ``(v) This subparagraph shall have no effect with respect 
        to any public performance that is made of a sound recording, or 
        reproduction that is made of a sound recording under the 
        circumstances described in section 112(e)(1), on or after 
        February 15, 2067.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to performances and reproductions of sound recordings occurring 
on or after the date of the enactment of this Act.

SEC. 8. NO HARMFUL EFFECTS ON SONGWRITERS.

    (a) No Adverse Effect on License Fees for Underlying Musical Works; 
Necessity for Other Licenses.--
            (1) In general.--Section 114(i) of title 17, United States 
        Code, is amended to read as follows:
    ``(i) No Adverse Effect on License Fees for Underlying Musical 
Works; Necessity for Other Licenses.--
            ``(1) No adverse effect on license fees for underlying 
        musical works.--License fees payable for the public performance 
        of sound recordings under section 106(6) shall not be cited, 
        taken into account, or otherwise used in any administrative, 
        judicial, or other governmental forum or proceeding, or 
        otherwise, to set or adjust the license fees payable to 
        copyright owners of musical works or their representatives for 
        the public performance of their works, for the purpose of 
        reducing or adversely affecting such license fees. License fees 
        payable to copyright owners for the public performance of their 
        musical works shall not be reduced or adversely affected in any 
        respect as a result of the rights granted by section 106(6).
            ``(2) Necessity for other licenses.--Notwithstanding the 
        grant by an owner of copyright in a sound recording of an 
        exclusive or nonexclusive license of the right under section 
        106(6) to perform the work publicly, a licensee of that sound 
        recording may not publicly perform such sound recording unless 
        a license has been granted for the public performance of any 
        copyrighted musical work contained in the sound recording. Such 
        license to publicly perform the copyrighted musical work may be 
        granted either by a performing rights society representing the 
        copyright owner or by the copyright owner.''.
            (2) Conforming amendment.--Section 114(d)(3)(C) of title 
        17, United States Code, is hereby repealed.
    (b) Public Performance Rights and Royalties.--Nothing in this Act, 
or the amendments made by this Act, shall adversely affect in any 
respect the public performance rights of or royalties payable to 
songwriters or copyright owners of musical works.
    (c) Preservation of Royalties on Underlying Works Publicly 
Performed by Terrestrial Broadcast Stations.--Section 114(f) of title 
17, United States Code, as amended by section 4(a), is further amended 
by adding at the end the following new paragraph:
            ``(5) Notwithstanding any other provision of this section, 
        under no circumstances shall the rates established by the 
        Copyright Royalty Judges for the public performance of sound 
        recordings be cited, taken into account, or otherwise used in 
        any administrative, judicial, or other governmental forum or 
        proceeding, or otherwise, to reduce or adversely affect the 
        license fees payable to copyright owners of musical works or 
        their representatives for the public performance of their works 
        by terrestrial broadcast stations, and such license fees for 
        the public performance of musical works shall be independent of 
        license fees paid for the public performance of sound 
        recordings.''.

SEC. 9. ALLOCATION OF PAYMENTS TO MUSIC PRODUCERS.

    (a) Letter of Direction.--Section 114(g) of title 17, United States 
Code, as amended by section 6, is further amended by adding at the end 
the following new paragraph:
            ``(6) Letter of direction.--A collective designated by the 
        Copyright Royalty Judges to distribute receipts from the 
        licensing of transmissions in accordance with subsection (f) 
        shall adopt and reasonably implement a policy that provides, in 
        circumstances determined by the collective to be appropriate, 
        for acceptance of instructions from a payee identified 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 licensing of transmissions of a particular 
        sound recording 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 `letter 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 
        purposes as the owner of the right to receive such payment. 
        This paragraph shall not be interpreted to 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:
            ``(7) Sound recordings fixed before november 1, 1995.--
                    ``(A) Payment absent letter of direction.--A 
                collective designated by the Copyright Royalty Judges 
                to distribute receipts from the licensing of 
                transmissions in accordance with subsection (f) shall 
                adopt and reasonably implement a policy that provides, 
                in circumstances determined by the collective to be 
                appropriate, for 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 recording artist or artists 
                featured on such sound recording (or the persons 
                conveying rights in the artists' performance in the 
                sound recordings) pursuant to paragraph (2)(D) (which 
                leaves the recording artist or artists featured on 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 person described in 
                        subparagraph (B) certified 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 
                                reasonable efforts described in 
                                subclause (I) and ending on date of 
                                that person's certification to the 
                                collective, the artist payee did not 
                                definitively affirm or deny the request 
                                for a letter of direction.
                            ``(ii) Collective attempt to contact 
                        artist.--After receipt of the certification 
                        described in clause (i) and for a period of at 
                        least 4 months before the collective's first 
                        distribution to the person described 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 reasonably 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 distribution is 
                        made.
                    ``(B) Eligibility for payment.--A person shall be 
                eligible for payment under subparagraph (A) if such 
                person--
                            ``(i) is a producer, mixer, or sound 
                        engineer of the relevant sound recording;
                            ``(ii) has entered into a written contract 
                        with a record company involved in the creation 
                        or lawful exploitation of the relevant sound 
                        recording, or with the recording 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 relevant sound recording that are payable 
                        from royalties otherwise payable to the 
                        recording artist or artists featured on such 
                        sound recording (or the persons conveying 
                        rights in the artists performance in the sound 
                        recordings);
                            ``(iii) made a contribution, of a nature 
                        subject to copyright protection under section 
                        102, to the creation of the relevant sound 
                        recording; and
                            ``(iv) submits a written certification to 
                        the collective stating, under penalty of 
                        perjury, that such person meets the 
                        requirements in clauses (i) through (iii) and 
                        includes a true copy of the contract described 
                        in clause (ii).
                    ``(C) Multiple certifications.--Subject to 
                subparagraph (D), in a case in which more than one 
                person described in subparagraph (B) has met the 
                requirements for a distribution pursuant to 
                subparagraph (A) with respect to a sound recording as 
                of the date that is 10 business days before the date on 
                which a distribution is made, the collective shall 
                divide the 2 percent distribution equally among all 
                such persons.
                    ``(D) Objection to payment.--Not later than 10 days 
                after the collective receives from the artist payee a 
                written objection to a distribution made pursuant to 
                subparagraph (A), the collective shall cease making any 
                further payment 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 objection by the artist payee to such 
                distribution, the objection shall not affect that 
                person's entitlement to any distribution made before 
                the collective ceases such distribution pursuant to 
                this subparagraph.
                    ``(E) Ownership of the right to receive payments.--
                To the extent that the collective 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 person, other than a person 
                described in subparagraph (B), who owns the right to 
                receive all or part of the receipts payable under 
                paragraph (2)(D) with respect to a sound recording. In 
                a case in which there are multiple artist payees with 
                respect to a sound recording, an objection by one such 
                payee shall apply only to that payee's share of the 
                receipts payable under paragraph (2)(D), and does not 
                preclude payment under subparagraph (A) from the share 
                of an artist payee that does not object.''.
    (c) Technical and Conforming Amendments.--Section 114(g) of title 
17, United States Code, as amended by subsections (a) and (b), is 
further amended--
            (1) in paragraph (2), by striking ``An agent designated'' 
        and inserting ``Except as provided for in paragraph (7), a 
        collective designated by the Copyright Royalty Judges'';
            (2) in paragraph (3)--
                    (A) by striking ``agent designated'' and inserting 
                ``collective designated by the Copyright Royalty 
                Judges''; and
                    (B) by striking ``agent'' and inserting 
                ``collective'', each place it appears; and
            (3) in paragraph (4), by striking ``agent'' and inserting 
        ``collective'', each place it appears.

SEC. 10. EFFECTIVE DATE.

    This Act, and the amendments made by this Act, shall take effect on 
the date of enactment of this Act, and except as provided in the 
amendment made by section 3, shall apply to any proceeding that is 
pending on, or commenced on or after, such effective date.
                                 <all>