Text: H.R.1551 — 115th Congress (2017-2018)All Information (Except Text)

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[Congressional Bills 115th Congress]
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[H.R. 1551 Enrolled Bill (ENR)]

        H.R.1551

                     One Hundred Fifteenth Congress

                                 of the

                        United States of America


                          AT THE SECOND SESSION

         Begun and held at the City of Washington on Wednesday,
           the third day of January, two thousand and eighteen


                                 An Act


 
           To modernize copyright law, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
    (a) Short Title.--This Act may be cited as the ``Orrin G. Hatch-Bob 
Goodlatte 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.
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 Modernization Act''.
    SEC. 102. BLANKET LICENSE FOR DIGITAL USES AND MECHANICAL LICENSING 
      COLLECTIVE.
    (a) Amendment.--Section 115 of title 17, United States Code, is 
amended--
        (1) in subsection (a)--
            (A) in the subsection heading, by inserting ``in General'' 
        after ``Availability and Scope of Compulsory License'';
            (B) by striking paragraph (1) and inserting the following:
        ``(1) Eligibility for compulsory license.--
            ``(A) Conditions for compulsory license.--A person may by 
        complying with the provisions of this section obtain a 
        compulsory license to make and distribute phonorecords of a 
        nondramatic musical work, including by means of digital 
        phonorecord delivery. A person may obtain a compulsory license 
        only if the primary purpose in making phonorecords of the 
        musical work is to distribute them to the public for private 
        use, including by means of digital phonorecord delivery, and--
                ``(i) phonorecords of such musical work have previously 
            been distributed to the public in the United States under 
            the authority of the copyright owner of the work, including 
            by means of digital phonorecord delivery; or
                ``(ii) in the case of a digital music provider seeking 
            to make and distribute digital phonorecord deliveries of a 
            sound recording embodying a musical work under a compulsory 
            license for which clause (i) does not apply--

                    ``(I) the first fixation of such sound recording 
                was made under the authority of the musical work 
                copyright owner, and the sound recording copyright 
                owner has the authority of the musical work copyright 
                owner to make and distribute digital phonorecord 
                deliveries embodying such work to the public in the 
                United States; and
                    ``(II) the sound recording copyright owner, or the 
                authorized distributor of the sound recording copyright 
                owner, has authorized the digital music provider to 
                make and distribute digital phonorecord deliveries of 
                the sound recording to the public in the United States.

            ``(B) Duplication of sound recording.--A person may not 
        obtain a compulsory license for the use of the work in the 
        making of phonorecords duplicating a sound recording fixed by 
        another, including by means of digital phonorecord delivery, 
        unless--
                ``(i) such sound recording was fixed lawfully; and
                ``(ii) the making of the phonorecords was authorized by 
            the owner of the copyright in the sound recording or, if 
            the sound recording was fixed before February 15, 1972, by 
            any person who fixed the sound recording pursuant to an 
            express license from the owner of the copyright in the 
            musical work or pursuant to a valid compulsory license for 
            use of such work in a sound recording.''; and
            (C) in paragraph (2), by striking ``A compulsory license'' 
        and inserting ``Musical arrangement.--A compulsory license'';
        (2) by striking subsection (b) and inserting the following:
    ``(b) Procedures To Obtain a Compulsory License.--
        ``(1) Phonorecords other than digital phonorecord deliveries.--
    A person who seeks to obtain a compulsory license under subsection 
    (a) to make and distribute phonorecords of a musical work other 
    than by means of digital phonorecord delivery shall, before, or not 
    later than 30 calendar days after, making, and before distributing, 
    any phonorecord of the work, serve notice of intention to do so on 
    the copyright owner. If the registration or other public records of 
    the Copyright Office do not identify the copyright owner and 
    include an address at which notice can be served, it shall be 
    sufficient to file the notice of intention with the Copyright 
    Office. The notice shall comply, in form, content, and manner of 
    service, with requirements that the Register of Copyrights shall 
    prescribe by regulation.
        ``(2) Digital phonorecord deliveries.--A person who seeks to 
    obtain a compulsory license under subsection (a) to make and 
    distribute phonorecords of a musical work by means of digital 
    phonorecord delivery--
            ``(A) prior to the license availability date, shall, 
        before, or not later than 30 calendar days after, first making 
        any such digital phonorecord delivery, serve a notice of 
        intention to do so on the copyright owner (but may not file the 
        notice with the Copyright Office, even if the public records of 
        the Office do not identify the owner or the owner's address), 
        and such notice shall comply, in form, content, and manner of 
        service, with requirements that the Register of Copyrights 
        shall prescribe by regulation; or
            ``(B) on or after the license availability date, shall, 
        before making any such digital phonorecord delivery, follow the 
        procedure described in subsection (d)(2), except as provided in 
        paragraph (3).
        ``(3) Record company individual download licenses.--
    Notwithstanding paragraph (2)(B), a record company may, on or after 
    the license availability date, obtain an individual download 
    license in accordance with the notice requirements described in 
    paragraph (2)(A) (except for the requirement that notice occur 
    prior to the license availability date). A record company that 
    obtains an individual download license as permitted under this 
    paragraph shall provide statements of account and pay royalties as 
    provided in subsection (c)(2)(I).
        ``(4) Failure to obtain license.--
            ``(A) Phonorecords other than digital phonorecord 
        deliveries.--In the case of phonorecords made and distributed 
        other than by means of digital phonorecord delivery, the 
        failure to serve or file the notice of intention required by 
        paragraph (1) forecloses the possibility of a compulsory 
        license under paragraph (1). In the absence of a voluntary 
        license, the failure to obtain a compulsory license renders the 
        making and distribution of phonorecords actionable as acts of 
        infringement under section 501 and subject to the remedies 
        provided by sections 502 through 506.
            ``(B) Digital phonorecord deliveries.--
                ``(i) In general.--In the case of phonorecords made and 
            distributed by means of digital phonorecord delivery:

                    ``(I) The failure to serve the notice of intention 
                required by paragraph (2)(A) or paragraph (3), as 
                applicable, forecloses the possibility of a compulsory 
                license under such paragraph.
                    ``(II) The failure to comply with paragraph (2)(B) 
                forecloses the possibility of a blanket license for a 
                period of 3 years after the last calendar day on which 
                the notice of license was required to be submitted to 
                the mechanical licensing collective under such 
                paragraph.

                ``(ii) Effect of failure.--In either case described in 
            subclause (I) or (II) of clause (i), in the absence of a 
            voluntary license, the failure to obtain a compulsory 
            license renders the making and distribution of phonorecords 
            by means of digital phonorecord delivery actionable as acts 
            of infringement under section 501 and subject to the 
            remedies provided by sections 502 through 506.'';
        (3) by amending subsection (c) to read as follows:
    ``(c) General Conditions Applicable to Compulsory License.--
        ``(1) Royalty payable under compulsory license.--
            ``(A) Identification requirement.--To be entitled to 
        receive royalties under a compulsory license obtained under 
        subsection (b)(1) the copyright owner must be identified in the 
        registration or other public records of the Copyright Office. 
        The owner is entitled to royalties for phonorecords made and 
        distributed after being so identified, but is not entitled to 
        recover for any phonorecords previously made and distributed.
            ``(B) Royalty for phonorecords other than digital 
        phonorecord deliveries.--Except as provided by subparagraph 
        (A), for every phonorecord made and distributed under a 
        compulsory license under subsection (a) other than by means of 
        digital phonorecord delivery, with respect to each work 
        embodied in the phonorecord, the royalty shall be the royalty 
        prescribed under subparagraphs (D) through (F), paragraph 
        (2)(A), and chapter 8. For purposes of this subparagraph, a 
        phonorecord is considered `distributed' if the person 
        exercising the compulsory license has voluntarily and 
        permanently parted with its possession.
            ``(C) Royalty for digital phonorecord deliveries.--For 
        every digital phonorecord delivery of a musical work made under 
        a compulsory license under this section, the royalty payable 
        shall be the royalty prescribed under subparagraphs (D) through 
        (F), paragraph (2)(A), and chapter 8.
            ``(D) Authority to negotiate.--Notwithstanding any 
        provision of the antitrust laws, any copyright owners of 
        nondramatic musical works and any persons entitled to obtain a 
        compulsory license under subsection (a) may negotiate and agree 
        upon the terms and rates of royalty payments under this section 
        and the proportionate division of fees paid among copyright 
        owners, and may designate common agents on a nonexclusive basis 
        to negotiate, agree to, pay or receive such royalty payments. 
        Such authority to negotiate the terms and rates of royalty 
        payments includes, but is not limited to, the authority to 
        negotiate the year during which the royalty rates prescribed 
        under this subparagraph, subparagraphs (E) and (F), paragraph 
        (2)(A), and chapter 8 shall next be determined.
            ``(E) Determination of reasonable rates and terms.--
        Proceedings under chapter 8 shall determine reasonable rates 
        and terms of royalty payments for the activities specified by 
        this section during the period beginning with the effective 
        date of such rates and terms, but not earlier than January 1 of 
        the second year following the year in which the petition 
        requesting the proceeding is filed, and ending on the effective 
        date of successor rates and terms, or such other period as the 
        parties may agree. Any copyright owners of nondramatic musical 
        works and any persons entitled to obtain a compulsory license 
        under subsection (a) may submit to the Copyright Royalty Judges 
        licenses covering such activities. The parties to each 
        proceeding shall bear their own costs.
            ``(F) Schedule of reasonable rates.--The schedule of 
        reasonable rates and terms determined by the Copyright Royalty 
        Judges shall, subject to paragraph (2)(A), be binding on all 
        copyright owners of nondramatic musical works and persons 
        entitled to obtain a compulsory license under subsection (a) 
        during the period specified in subparagraph (E), such other 
        period as may be determined pursuant to subparagraphs (D) and 
        (E), or such other period as the parties may agree. The 
        Copyright Royalty Judges shall establish rates and terms that 
        most clearly represent the rates and terms that would have been 
        negotiated in the marketplace between a willing buyer and a 
        willing seller. In determining such rates and terms for digital 
        phonorecord deliveries, the Copyright Royalty Judges shall base 
        their decision on economic, competitive, and programming 
        information presented by the parties, including--
                ``(i) whether use of the compulsory licensee's service 
            may substitute for or may promote the sales of phonorecords 
            or otherwise may interfere with or may enhance the musical 
            work copyright owner's other streams of revenue from its 
            musical works; and
                ``(ii) the relative roles of the copyright owner and 
            the compulsory licensee in the copyrighted work and the 
            service made available to the public with respect to the 
            relative creative contribution, technological contribution, 
            capital investment, cost, and risk.
        ``(2) Additional terms and conditions.--
            ``(A) Voluntary licenses and contractual royalty rates.--
                ``(i) In general.--License agreements voluntarily 
            negotiated at any time between one or more copyright owners 
            of nondramatic musical works and one or more persons 
            entitled to obtain a compulsory license under subsection 
            (a) shall be given effect in lieu of any determination by 
            the Copyright Royalty Judges. Subject to clause (ii), the 
            royalty rates determined pursuant to subparagraphs (E) and 
            (F) of paragraph (1) shall be given effect as to digital 
            phonorecord deliveries in lieu of any contrary royalty 
            rates specified in a contract pursuant to which a recording 
            artist who is the author of a nondramatic musical work 
            grants a license under that person's exclusive rights in 
            the musical work under paragraphs (1) and (3) of section 
            106 or commits another person to grant a license in that 
            musical work under paragraphs (1) and (3) of section 106, 
            to a person desiring to fix in a tangible medium of 
            expression a sound recording embodying the musical work.
                ``(ii) Applicability.--The second sentence of clause 
            (i) shall not apply to--

                    ``(I) a contract entered into on or before June 22, 
                1995, and not modified thereafter for the purpose of 
                reducing the royalty rates determined pursuant to 
                subparagraphs (E) and (F) of paragraph (1) or of 
                increasing the number of musical works within the scope 
                of the contract covered by the reduced rates, except if 
                a contract entered into on or before June 22, 1995, is 
                modified thereafter for the purpose of increasing the 
                number of musical works within the scope of the 
                contract, any contrary royalty rates specified in the 
                contract shall be given effect in lieu of royalty rates 
                determined pursuant to subparagraphs (E) and (F) of 
                paragraph (1) for the number of musical works within 
                the scope of the contract as of June 22, 1995; and
                    ``(II) a contract entered into after the date that 
                the sound recording is fixed in a tangible medium of 
                expression substantially in a form intended for 
                commercial release, if at the time the contract is 
                entered into, the recording artist retains the right to 
                grant licenses as to the musical work under paragraphs 
                (1) and (3) of section 106.

            ``(B) Sound recording information.--Except as provided in 
        section 1002(e), a digital phonorecord delivery licensed under 
        this paragraph shall be accompanied by the information encoded 
        in the sound recording, if any, by or under the authority of 
        the copyright owner of that sound recording, that identifies 
        the title of the sound recording, the featured recording artist 
        who performs on the sound recording, and related information, 
        including information concerning the underlying musical work 
        and its writer.
            ``(C) Infringement remedies.--
                ``(i) In general.--A digital phonorecord delivery of a 
            sound recording is actionable as an act of infringement 
            under section 501, and is fully subject to the remedies 
            provided by sections 502 through 506, unless--

                    ``(I) the digital phonorecord delivery has been 
                authorized by the sound recording copyright owner; and
                    ``(II) the entity making the digital phonorecord 
                delivery has obtained a compulsory license under 
                subsection (a) or has otherwise been authorized by the 
                musical work copyright owner, or by a record company 
                pursuant to an individual download license, to make and 
                distribute phonorecords of each musical work embodied 
                in the sound recording by means of digital phonorecord 
                delivery.

                ``(ii) Other remedies.--Any cause of action under this 
            subparagraph shall be in addition to those available to the 
            owner of the copyright in the nondramatic musical work 
            under subparagraph (J) and section 106(4) and the owner of 
            the copyright in the sound recording under section 106(6).
            ``(D) Liability of sound recording owners.--The liability 
        of the copyright owner of a sound recording for infringement of 
        the copyright in a nondramatic musical work embodied in the 
        sound recording shall be determined in accordance with 
        applicable law, except that the owner of a copyright in a sound 
        recording shall not be liable for a digital phonorecord 
        delivery by a third party if the owner of the copyright in the 
        sound recording does not license the distribution of a 
        phonorecord of the nondramatic musical work.
            ``(E) Recording devices and media.--Nothing in section 1008 
        shall be construed to prevent the exercise of the rights and 
        remedies allowed by this paragraph, subparagraph (J), and 
        chapter 5 in the event of a digital phonorecord delivery, 
        except that no action alleging infringement of copyright may be 
        brought under this title against a manufacturer, importer or 
        distributor of a digital audio recording device, a digital 
        audio recording medium, an analog recording device, or an 
        analog recording medium, or against a consumer, based on the 
        actions described in such section.
            ``(F) Preservation of rights.--Nothing in this section 
        annuls or limits--
                ``(i) the exclusive right to publicly perform a sound 
            recording or the musical work embodied therein, including 
            by means of a digital transmission, under paragraphs (4) 
            and (6) of section 106;
                ``(ii) except for compulsory licensing under the 
            conditions specified by this section, the exclusive rights 
            to reproduce and distribute the sound recording and the 
            musical work embodied therein under paragraphs (1) and (3) 
            of section 106, including by means of a digital phonorecord 
            delivery; or
                ``(iii) any other rights under any other provision of 
            section 106, or remedies available under this title, as 
            such rights or remedies exist before, on, or after the date 
            of enactment of the Digital Performance Right in Sound 
            Recordings Act of 1995.
            ``(G) Exempt transmissions and retransmissions.--The 
        provisions of this section concerning digital phonorecord 
        deliveries shall not apply to any exempt transmissions or 
        retransmissions under section 114(d)(1). The exemptions created 
        in section 114(d)(1) do not expand or reduce the rights of 
        copyright owners under paragraphs (1) through (5) of section 
        106 with respect to such transmissions and retransmissions.
            ``(H) Distribution by rental, lease, or lending.--A 
        compulsory license obtained under subsection (b)(1) to make and 
        distribute phonorecords includes the right of the maker of such 
        a phonorecord to distribute or authorize distribution of such 
        phonorecord, other than by means of a digital phonorecord 
        delivery, by rental, lease, or lending (or by acts or practices 
        in the nature of rental, lease, or lending). With respect to 
        each nondramatic musical work embodied in the phonorecord, the 
        royalty shall be a proportion of the revenue received by the 
        compulsory licensee from every such act of distribution of the 
        phonorecord under this clause equal to the proportion of the 
        revenue received by the compulsory licensee from distribution 
        of the phonorecord under subsection (a)(1)(A)(ii)(II) that is 
        payable by a compulsory licensee under that clause and under 
        chapter 8. The Register of Copyrights shall issue regulations 
        to carry out the purpose of this subparagraph.
            ``(I) Payment of royalties and statements of account.--
        Except as provided in paragraphs (4)(A)(i) and (10)(B) of 
        subsection (d), royalty payments shall be made on or before the 
        twentieth day of each month and shall include all royalties for 
        the month next preceding. Each monthly payment shall be made 
        under oath and shall comply with requirements that the Register 
        of Copyrights shall prescribe by regulation. The Register shall 
        also prescribe regulations under which detailed cumulative 
        annual statements of account, certified by a certified public 
        accountant, shall be filed for every compulsory license under 
        subsection (a). The regulations covering both the monthly and 
        the annual statements of account shall prescribe the form, 
        content, and manner of certification with respect to the number 
        of records made and the number of records distributed.
            ``(J) Notice of default and termination of compulsory 
        license.--In the case of a license obtained under paragraph 
        (1), (2)(A), or (3) of subsection (b), if the copyright owner 
        does not receive the monthly payment and the monthly and annual 
        statements of account when due, the owner may give written 
        notice to the licensee that, unless the default is remedied not 
        later than 30 days after the date on which the notice is sent, 
        the compulsory license will be automatically terminated. Such 
        termination renders either the making or the distribution, or 
        both, of all phonorecords for which the royalty has not been 
        paid, actionable as acts of infringement under section 501 and 
        fully subject to the remedies provided by sections 502 through 
        506. In the case of a license obtained under subsection 
        (b)(2)(B), license authority under the compulsory license may 
        be terminated as provided in subsection (d)(4)(E).'';
        (4) by amending subsection (d) to read as follows:
    ``(d) Blanket License for Digital Uses, Mechanical Licensing 
Collective, and Digital Licensee Coordinator.--
        ``(1) Blanket license for digital uses.--
            ``(A) In general.--A digital music provider that qualifies 
        for a compulsory license under subsection (a) may, by complying 
        with the terms and conditions of this subsection, obtain a 
        blanket license from copyright owners through the mechanical 
        licensing collective to make and distribute digital phonorecord 
        deliveries of musical works through one or more covered 
        activities.
            ``(B) Included activities.--A blanket license--
                ``(i) covers all musical works (or shares of such 
            works) available for compulsory licensing under this 
            section for purposes of engaging in covered activities, 
            except as provided in subparagraph (C);
                ``(ii) includes the making and distribution of server, 
            intermediate, archival, and incidental reproductions of 
            musical works that are reasonable and necessary for the 
            digital music provider to engage in covered activities 
            licensed under this subsection, solely for the purpose of 
            engaging in such covered activities; and
                ``(iii) does not cover or include any rights or uses 
            other than those described in clauses (i) and (ii).
            ``(C) Other licenses.--A voluntary license for covered 
        activities entered into by or under the authority of 1 or more 
        copyright owners and 1 or more digital music providers, or 
        authority to make and distribute permanent downloads of a 
        musical work obtained by a digital music provider from a sound 
        recording copyright owner pursuant to an individual download 
        license, shall be given effect in lieu of a blanket license 
        under this subsection with respect to the musical works (or 
        shares thereof) covered by such voluntary license or individual 
        download authority and the following conditions apply:
                ``(i) Where a voluntary license or individual download 
            license applies, the license authority provided under the 
            blanket license shall exclude any musical works (or shares 
            thereof) subject to the voluntary license or individual 
            download license.
                ``(ii) An entity engaged in covered activities under a 
            voluntary license or authority obtained pursuant to an 
            individual download license that is a significant 
            nonblanket licensee shall comply with paragraph (6)(A).
                ``(iii) The rates and terms of any voluntary license 
            shall be subject to the second sentence of clause (i) and 
            clause (ii) of subsection (c)(2)(A) and paragraph (9)(C), 
            as applicable.
            ``(D) Protection against infringement actions.--A digital 
        music provider that obtains and complies with the terms of a 
        valid blanket license under this subsection shall not be 
        subject to an action for infringement of the exclusive rights 
        provided by paragraphs (1) and (3) of section 106 under this 
        title arising from use of a musical work (or share thereof) to 
        engage in covered activities authorized by such license, 
        subject to paragraph (4)(E).
            ``(E) Other requirements and conditions apply.--Except as 
        expressly provided in this subsection, each requirement, 
        limitation, condition, privilege, right, and remedy otherwise 
        applicable to compulsory licenses under this section shall 
        apply to compulsory blanket licenses under this subsection.
        ``(2) Availability of blanket license.--
            ``(A) Procedure for obtaining license.--A digital music 
        provider may obtain a blanket license by submitting a notice of 
        license to the mechanical licensing collective that specifies 
        the particular covered activities in which the digital music 
        provider seeks to engage, as follows:
                ``(i) The notice of license shall comply in form and 
            substance with requirements that the Register of Copyrights 
            shall establish by regulation.
                ``(ii) Unless rejected in writing by the mechanical 
            licensing collective not later than 30 calendar days after 
            the date on which the mechanical licensing collective 
            receives the notice, the blanket license shall be effective 
            as of the date on which the notice of license was sent by 
            the digital music provider, as shown by a physical or 
            electronic record.
                ``(iii) A notice of license may only be rejected by the 
            mechanical licensing collective if--

                    ``(I) the digital music provider or notice of 
                license does not meet the requirements of this section 
                or applicable regulations, in which case the 
                requirements at issue shall be specified with 
                reasonable particularity in the notice of rejection; or
                    ``(II) the digital music provider has had a blanket 
                license terminated by the mechanical licensing 
                collective during the 3-year period preceding the date 
                on which the mechanical licensing collective receives 
                the notice pursuant to paragraph (4)(E).

                ``(iv) If a notice of license is rejected under clause 
            (iii)(I), the digital music provider shall have 30 calendar 
            days after receipt of the notice of rejection to cure any 
            deficiency and submit an amended notice of license to the 
            mechanical licensing collective. If the deficiency has been 
            cured, the mechanical licensing collective shall so confirm 
            in writing, and the license shall be effective as of the 
            date that the original notice of license was provided by 
            the digital music provider.
                ``(v) A digital music provider that believes a notice 
            of license was improperly rejected by the mechanical 
            licensing collective may seek review of such rejection in 
            an appropriate district court of the United States. The 
            district court shall determine the matter de novo based on 
            the record before the mechanical licensing collective and 
            any additional evidence presented by the parties.
            ``(B) Blanket license effective date.--Blanket licenses 
        shall be made available by the mechanical licensing collective 
        on and after the license availability date. No such license 
        shall be effective prior to the license availability date.
        ``(3) Mechanical licensing collective.--
            ``(A) In general.--The mechanical licensing collective 
        shall be a single entity that--
                ``(i) is a nonprofit entity, not owned by any other 
            entity, that is created by copyright owners to carry out 
            responsibilities under this subsection;
                ``(ii) is endorsed by, and enjoys substantial support 
            from, musical work copyright owners that together represent 
            the greatest percentage of the licensor market for uses of 
            such works in covered activities, as measured over the 
            preceding 3 full calendar years;
                ``(iii) is able to demonstrate to the Register of 
            Copyrights that the entity has, or will have prior to the 
            license availability date, the administrative and 
            technological capabilities to perform the required 
            functions of the mechanical licensing collective under this 
            subsection and that is governed by a board of directors in 
            accordance with subparagraph (D)(i); and
                ``(iv) has been designated by the Register of 
            Copyrights, with the approval of the Librarian of Congress 
            pursuant to section 702, in accordance with subparagraph 
            (B).
            ``(B) Designation of mechanical licensing collective.--
                ``(i) Initial designation.--Not later than 270 days 
            after the enactment date, the Register of Copyrights shall 
            initially designate the mechanical licensing collective as 
            follows:

                    ``(I) Not later than 90 calendar days after the 
                enactment date, the Register shall publish notice in 
                the Federal Register soliciting information to assist 
                in identifying the appropriate entity to serve as the 
                mechanical licensing collective, including the name and 
                affiliation of each member of the board of directors 
                described under subparagraph (D)(i) and each committee 
                established pursuant to clauses (iii), (iv), and (v) of 
                subparagraph (D).
                    ``(II) After reviewing the information requested 
                under subclause (I) and making a designation, the 
                Register shall publish notice in the Federal Register 
                setting forth--

                        ``(aa) the identity of and contact information 
                    for the mechanical licensing collective; and
                        ``(bb) the reasons for the designation.
                ``(ii) Periodic review of designation.--Following the 
            initial designation of the mechanical licensing collective, 
            the Register shall, every 5 years, beginning with the fifth 
            full calendar year to commence after the initial 
            designation, publish notice in the Federal Register in the 
            month of January soliciting information concerning whether 
            the existing designation should be continued, or a 
            different entity meeting the criteria described in clauses 
            (i) through (iii) of subparagraph (A) shall be designated. 
            Following publication of such notice, the Register shall--

                    ``(I) after reviewing the information submitted and 
                conducting additional proceedings as appropriate, 
                publish notice in the Federal Register of a continuing 
                designation or new designation of the mechanical 
                licensing collective, as the case may be, and the 
                reasons for such a designation, with any new 
                designation to be effective as of the first day of a 
                month that is not less than 6 months and not longer 
                than 9 months after the date on which the Register 
                publishes the notice, as specified by the Register; and
                    ``(II) if a new entity is designated as the 
                mechanical licensing collective, adopt regulations to 
                govern the transfer of licenses, funds, records, data, 
                and administrative responsibilities from the existing 
                mechanical licensing collective to the new entity.

                ``(iii) Closest alternative designation.--If the 
            Register is unable to identify an entity that fulfills each 
            of the qualifications set forth in clauses (i) through 
            (iii) of subparagraph (A), the Register shall designate the 
            entity that most nearly fulfills such qualifications for 
            purposes of carrying out the responsibilities of the 
            mechanical licensing collective.
            ``(C) Authorities and functions.--
                ``(i) In general.--The mechanical licensing collective 
            is authorized to perform the following functions, subject 
            to more particular requirements as described in this 
            subsection:

                    ``(I) Offer and administer blanket licenses, 
                including receipt of notices of license and reports of 
                usage from digital music providers.
                    ``(II) Collect and distribute royalties from 
                digital music providers for covered activities.
                    ``(III) Engage in efforts to identify musical works 
                (and shares of such works) embodied in particular sound 
                recordings, and to identify and locate the copyright 
                owners of such musical works (and shares of such 
                works).
                    ``(IV) Maintain the musical works database and 
                other information relevant to the administration of 
                licensing activities under this section.
                    ``(V) Administer a process by which copyright 
                owners can claim ownership of musical works (and shares 
                of such works), and a process by which royalties for 
                works for which the owner is not identified or located 
                are equitably distributed to known copyright owners.
                    ``(VI) Administer collections of the administrative 
                assessment from digital music providers and significant 
                nonblanket licensees, including receipt of notices of 
                nonblanket activity.
                    ``(VII) Invest in relevant resources, and arrange 
                for services of outside vendors and others, to support 
                the activities of the mechanical licensing collective.
                    ``(VIII) Engage in legal and other efforts to 
                enforce rights and obligations under this subsection, 
                including by filing bankruptcy proofs of claims for 
                amounts owed under licenses, and acting in coordination 
                with the digital licensee coordinator.
                    ``(IX) Initiate and participate in proceedings 
                before the Copyright Royalty Judges to establish the 
                administrative assessment under this subsection.
                    ``(X) Initiate and participate in proceedings 
                before the Copyright Office with respect to activities 
                under this subsection.
                    ``(XI) Gather and provide documentation for use in 
                proceedings before the Copyright Royalty Judges to set 
                rates and terms under this section.
                    ``(XII) Maintain records of the activities of the 
                mechanical licensing collective and engage in and 
                respond to audits described in this subsection.
                    ``(XIII) Engage in such other activities as may be 
                necessary or appropriate to fulfill the 
                responsibilities of the mechanical licensing collective 
                under this subsection.

                ``(ii) Restrictions concerning licensing and 
            administrative activities.--With respect to the 
            administration of licenses, except as provided in clauses 
            (i) and (iii) and subparagraph (E)(v), the mechanical 
            licensing collective may only--

                    ``(I) issue blanket licenses pursuant 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 
            distributing royalties, voluntary licenses issued by, or 
            individual download licenses obtained from, copyright 
            owners only for reproduction 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 in 
            subclauses (IX), (X), and (XI) of clause (i).
            ``(D) Governance.--
                ``(i) Board of directors.--The mechanical licensing 
            collective shall have a board of directors consisting of 14 
            voting members and 3 nonvoting members, as follows:

                    ``(I) Ten voting members shall be representatives 
                of music publishers--

                        ``(aa) to which songwriters have assigned 
                    exclusive rights of reproduction and distribution 
                    of musical works with respect to covered 
                    activities; and
                        ``(bb) none of which may be owned by, or under 
                    common control with, any other board member.

                    ``(II) Four voting members shall be professional 
                songwriters who have retained and exercise exclusive 
                rights of reproduction and distribution with respect to 
                covered activities with respect to musical works they 
                have authored.
                    ``(III) One nonvoting member shall be a 
                representative of the nonprofit trade association of 
                music publishers that represents the greatest 
                percentage of the licensor market for uses of musical 
                works in covered activities, as measured for the 3-year 
                period preceding the date on which the member is 
                appointed.
                    ``(IV) One nonvoting member shall be a 
                representative of the digital licensee coordinator, 
                provided that a digital licensee coordinator has been 
                designated pursuant to paragraph (5)(B). Otherwise, the 
                nonvoting member shall be the nonprofit trade 
                association of digital licensees that represents the 
                greatest percentage of the licensee market for uses of 
                musical works in covered activities, as measured over 
                the preceding 3 full calendar years.
                    ``(V) One nonvoting member shall be a 
                representative of a nationally recognized nonprofit 
                trade association whose primary mission is advocacy on 
                behalf of songwriters in the United States.

                ``(ii) Bylaws.--

                    ``(I) Establishment.--Not later than 1 year after 
                the date on which the mechanical licensing collective 
                is initially designated by the Register of Copyrights 
                under subparagraph (B)(i), the collective shall 
                establish bylaws to determine issues relating to the 
                governance of the collective, including, but not 
                limited to--

                        ``(aa) the length of the term for each member 
                    of the board of directors;
                        ``(bb) the staggering of the terms of the 
                    members of the board of directors;
                        ``(cc) a process for filling a seat on the 
                    board of directors that is vacated before the end 
                    of the term with respect to that seat;
                        ``(dd) a process for electing a member to the 
                    board of directors; and
                        ``(ee) a management structure for daily 
                    operation of the collective.

                    ``(II) Public availability.--The mechanical 
                licensing collective shall make the bylaws established 
                under subclause (I) available to the public.

                ``(iii) Board meetings.--The board of directors shall 
            meet not less frequently than biannually and discuss 
            matters pertinent to the operations of the mechanical 
            licensing collective, including the mechanical licensing 
            collective budget.
                ``(iv) Operations advisory committee.--The board of 
            directors of the mechanical licensing collective shall 
            establish an operations advisory committee consisting of 
            not fewer than 6 members to make recommendations to the 
            board of directors concerning the operations of the 
            mechanical licensing collective, including the efficient 
            investment in and deployment of information technology and 
            data resources. Such committee shall have an equal number 
            of members of the committee who are--

                    ``(I) musical work copyright owners who are 
                appointed by the board of directors of the mechanical 
                licensing collective; and
                    ``(II) representatives of digital music providers 
                who are appointed by the digital licensee coordinator.

                ``(v) Unclaimed royalties oversight committee.--The 
            board of directors of the mechanical licensing collective 
            shall establish and appoint an unclaimed royalties 
            oversight committee consisting of 10 members, 5 of which 
            shall be musical work copyright owners and 5 of which shall 
            be professional songwriters whose works are used in covered 
            activities.
                ``(vi) Dispute resolution committee.--The board of 
            directors of the mechanical licensing collective shall 
            establish and appoint a dispute resolution committee that 
            shall--

                    ``(I) consist of not fewer than 6 members; and
                    ``(II) include an equal number of representatives 
                of musical work copyright owners and professional 
                songwriters.

                ``(vii) Mechanical licensing collective annual 
            report.--

                    ``(I) In general.--Not later than June 30 of each 
                year commencing after the license availability date, 
                the mechanical licensing collective shall post, and 
                make available online for a period of not less than 3 
                years, an annual report that sets forth information 
                regarding--

                        ``(aa) the operational and licensing practices 
                    of the collective;
                        ``(bb) how royalties are collected and 
                    distributed;
                        ``(cc) budgeting and expenditures;
                        ``(dd) the collective total costs for the 
                    preceding calendar year;
                        ``(ee) the projected annual mechanical 
                    licensing collective budget;
                        ``(ff) aggregated royalty receipts and 
                    payments;
                        ``(gg) expenses that are more than 10 percent 
                    of the annual mechanical licensing collective 
                    budget; and
                        ``(hh) the efforts of the collective to locate 
                    and identify copyright owners of unmatched musical 
                    works (and shares of works).

                    ``(II) Submission.--On the date on which the 
                mechanical licensing collective posts each report 
                required under subclause (I), the collective shall 
                provide a copy of the report to the Register of 
                Copyrights.

                ``(viii) Independent officers.--An individual serving 
            as an officer of the mechanical licensing collective may 
            not, at the same time, also be an employee or agent of any 
            member of the board of directors of the collective or any 
            entity represented by a member of the board of directors, 
            as described in clause (i).
                ``(ix) Oversight and accountability.--

                    ``(I) In general.--The mechanical licensing 
                collective shall--

                        ``(aa) ensure that the policies and practices 
                    of the collective are transparent and accountable;
                        ``(bb) identify a point of contact for 
                    publisher inquiries and complaints with timely 
                    redress; and
                        ``(cc) establish an anti-comingling policy for 
                    funds not collected under this section and 
                    royalties collected under this section.

                    ``(II) Audits.--

                        ``(aa) In general.--Beginning in the fourth 
                    full calendar year that begins after the initial 
                    designation of the mechanical licensing collective 
                    by the Register of Copyrights under subparagraph 
                    (B)(i), and in every fifth calendar year 
                    thereafter, the collective shall retain a qualified 
                    auditor that shall--
                            ``(AA) examine the books, records, and 
                        operations of the collective;
                            ``(BB) prepare a report for the board of 
                        directors of the collective with respect to the 
                        matters described in item (bb); and
                            ``(CC) not later than December 31 of the 
                        year in which the qualified auditor is 
                        retained, deliver the report described in 
                        subitem (BB) to the board of directors of the 
                        collective.
                        ``(bb) Matters addressed.--Each report prepared 
                    under item (aa) shall address the implementation 
                    and efficacy of procedures of the mechanical 
                    licensing collective--
                            ``(AA) for the receipt, handling, and 
                        distribution of royalty funds, including any 
                        amounts held as unclaimed royalties;
                            ``(BB) to guard against fraud, abuse, 
                        waste, and the unreasonable use of funds; and
                            ``(CC) to protect the confidentiality of 
                        financial, proprietary, and other sensitive 
                        information.
                        ``(cc) Public availability.--With respect to 
                    each report prepared under item (aa), the 
                    mechanical licensing collective shall--
                            ``(AA) submit the report to the Register of 
                        Copyrights; and
                            ``(BB) make the report available to the 
                        public.
            ``(E) Musical works database.--
                ``(i) Establishment and maintenance of database.--The 
            mechanical licensing collective shall establish and 
            maintain a database containing information relating to 
            musical works (and shares of such works) and, to the extent 
            known, the identity and location of the copyright owners of 
            such works (and shares thereof) and the sound recordings in 
            which the musical works are embodied. In furtherance of 
            maintaining such database, the mechanical licensing 
            collective shall engage in efforts to identify the musical 
            works embodied in particular sound recordings, as well as 
            to identify and locate the copyright owners of such works 
            (and shares thereof), and update such data as appropriate.
                ``(ii) Matched works.--With respect to musical works 
            (and shares thereof) that have been matched to copyright 
            owners, the musical works database shall include--

                    ``(I) the title of the musical work;
                    ``(II) the copyright owner of the work (or share 
                thereof), and the ownership percentage of that owner;
                    ``(III) contact information for such copyright 
                owner;
                    ``(IV) to the extent reasonably available to the 
                mechanical licensing collective--

                        ``(aa) the international standard musical work 
                    code for the work; and
                        ``(bb) identifying information for sound 
                    recordings in which the musical work is embodied, 
                    including the name of the sound recording, featured 
                    artist, sound recording copyright owner, producer, 
                    international standard recording code, and other 
                    information commonly used to assist in associating 
                    sound recordings with musical works; and

                    ``(V) such other information as the Register of 
                Copyrights may prescribe by regulation.

                ``(iii) Unmatched works.--With respect to unmatched 
            musical works (and shares of works) in the database, the 
            musical works database shall include--

                    ``(I) to the extent reasonably available to the 
                mechanical licensing collective--

                        ``(aa) the title of the musical work;
                        ``(bb) the ownership percentage for which an 
                    owner has not been identified;
                        ``(cc) if a copyright owner has been identified 
                    but not located, the identity of such owner and the 
                    ownership percentage of that owner;
                        ``(dd) identifying information for sound 
                    recordings in which the work is embodied, including 
                    sound recording name, featured artist, sound 
                    recording copyright owner, producer, international 
                    standard recording code, and other information 
                    commonly used to assist in associating sound 
                    recordings with musical works; and
                        ``(ee) any additional information reported to 
                    the mechanical licensing collective that may assist 
                    in identifying the work; and

                    ``(II) such other information relating to the 
                identity and ownership of musical works (and shares of 
                such works) as the Register of Copyrights may prescribe 
                by regulation.

                ``(iv) Sound recording information.--Each musical work 
            copyright owner with any musical work listed in the musical 
            works database shall engage in commercially reasonable 
            efforts to deliver to the mechanical licensing collective, 
            including for use in the musical works database, to the 
            extent such information is not then available in the 
            database, information regarding the names of the sound 
            recordings in which that copyright owner's musical works 
            (or shares thereof) are embodied, to the extent 
            practicable.
                ``(v) Accessibility of database.--The musical works 
            database shall be made available to members of the public 
            in a searchable, online format, free of charge. The 
            mechanical licensing collective shall make such database 
            available in a bulk, machine-readable format, through a 
            widely available software application, to the following 
            entities:

                    ``(I) Digital music providers operating under the 
                authority of valid notices of license, free of charge.
                    ``(II) Significant nonblanket licensees in 
                compliance with their obligations under paragraph (6), 
                free of charge.
                    ``(III) Authorized vendors of the entities 
                described in subclauses (I) and (II), free of charge.
                    ``(IV) The Register of Copyrights, free of charge 
                (but the Register shall not treat such database or any 
                information therein as a Government record).
                    ``(V) Any other person or entity for a fee not to 
                exceed the marginal cost to the mechanical licensing 
                collective of providing the database to such person or 
                entity.

                ``(vi) Additional requirements.--The Register of 
            Copyrights shall establish requirements by regulations to 
            ensure the usability, interoperability, and usage 
            restrictions of the musical works database.
            ``(F) Notices of license and nonblanket activity.--
                ``(i) Notices of licenses.--The mechanical licensing 
            collective shall receive, review, and confirm or reject 
            notices of license from digital music providers, as 
            provided in paragraph (2)(A). The collective shall maintain 
            a current, publicly accessible list of blanket licenses 
            that includes contact information for the licensees and the 
            effective dates of such licenses.
                ``(ii) Notices of nonblanket activity.--The mechanical 
            licensing collective shall receive notices of nonblanket 
            activity from significant nonblanket licensees, as provided 
            in paragraph (6)(A). The collective shall maintain a 
            current, publicly accessible list of notices of nonblanket 
            activity that includes contact information for significant 
            nonblanket licensees and the dates of receipt of such 
            notices.
            ``(G) Collection and distribution of royalties.--
                ``(i) In general.--Upon receiving reports of usage and 
            payments of royalties from digital music providers for 
            covered activities, the mechanical licensing collective 
            shall--

                    ``(I) engage in efforts to--

                        ``(aa) identify the musical works embodied in 
                    sound recordings reflected in such reports, and the 
                    copyright owners of such musical works (and shares 
                    thereof);
                        ``(bb) confirm uses of musical works subject to 
                    voluntary licenses and individual download 
                    licenses, and the corresponding pro rata amounts to 
                    be deducted from royalties that would otherwise be 
                    due under the blanket license; and
                        ``(cc) confirm proper payment of royalties due;

                    ``(II) distribute royalties to copyright owners in 
                accordance with the usage and other information 
                contained in such reports, as well as the ownership and 
                other information contained in the records of the 
                collective; and
                    ``(III) deposit into an interest-bearing account, 
                as provided in subparagraph (H)(ii), royalties that 
                cannot be distributed due to--

                        ``(aa) an inability to identify or locate a 
                    copyright owner of a musical work (or share 
                    thereof); or
                        ``(bb) a pending dispute before the dispute 
                    resolution committee of the mechanical licensing 
                    collective.
                ``(ii) Other collection efforts.--Any royalties 
            recovered by the mechanical licensing collective as a 
            result of efforts to enforce rights or obligations under a 
            blanket license, including through a bankruptcy proceeding 
            or other legal action, shall be distributed to copyright 
            owners based on available usage information and in 
            accordance with the procedures described in subclauses (I) 
            and (II) of clause (i), on a pro rata basis in proportion 
            to the overall percentage recovery of the total royalties 
            owed, with any pro rata share of royalties that cannot be 
            distributed deposited in an interest-bearing account as 
            provided in subparagraph (H)(ii).
            ``(H) Holding of accrued royalties.--
                ``(i) Holding period.--The mechanical licensing 
            collective shall hold accrued royalties associated with 
            particular musical works (and shares of works) that remain 
            unmatched for a period of not less than 3 years after the 
            date on which the funds were received by the mechanical 
            licensing collective, or not less than 3 years after the 
            date on which the funds were accrued by a digital music 
            provider that subsequently transferred such funds to the 
            mechanical licensing collective pursuant to paragraph 
            (10)(B), whichever period expires sooner.
                ``(ii) Interest-bearing account.--Accrued royalties for 
            unmatched works (and shares thereof) shall be maintained by 
            the mechanical licensing collective in an interest-bearing 
            account that earns monthly interest--

                    ``(I) at the Federal, short-term rate; and
                    ``(II) that accrues for the benefit of copyright 
                owners entitled to payment of such accrued royalties.

            ``(I) Musical works claiming process.--When a copyright 
        owner of an unmatched work (or share of a work) has been 
        identified and located in accordance with the procedures of the 
        mechanical licensing collective, the collective shall--
                ``(i) update the musical works database and the other 
            records of the collective accordingly; and
                ``(ii) provided that accrued royalties for the musical 
            work (or share thereof) have not yet been included in a 
            distribution pursuant to subparagraph (J)(i), pay such 
            accrued royalties and a proportionate amount of accrued 
            interest associated with that work (or share thereof) to 
            the copyright owner, accompanied by a cumulative statement 
            of account reflecting usage of such work and accrued 
            royalties based on information provided by digital music 
            providers to the mechanical licensing collective.
            ``(J) Distribution of unclaimed accrued royalties.--
                ``(i) Distribution procedures.--After the expiration of 
            the prescribed holding period for accrued royalties 
            provided in subparagraph (H)(i), the mechanical licensing 
            collective shall distribute such accrued royalties, along 
            with a proportionate share of accrued interest, to 
            copyright owners identified in the records of the 
            collective, subject to the following requirements, and in 
            accordance with the policies and procedures established 
            under clause (ii):

                    ``(I) The first such distribution shall occur on or 
                after January 1 of the second full calendar year to 
                commence after the license availability date, with not 
                less than 1 such distribution to take place during each 
                calendar year thereafter.
                    ``(II) Copyright owners' payment shares for 
                unclaimed accrued royalties for particular reporting 
                periods shall be determined in a transparent and 
                equitable manner based on data indicating the relative 
                market shares of such copyright owners as reflected in 
                reports of usage provided by digital music providers 
                for covered activities for the periods in question, 
                including, in addition to usage data provided to the 
                mechanical licensing collective, usage data provided to 
                copyright owners under voluntary licenses and 
                individual download licenses for covered activities, to 
                the extent such information is available to the 
                mechanical licensing collective. In furtherance of the 
                determination of equitable market shares under this 
                subparagraph--

                        ``(aa) the mechanical licensing collective may 
                    require copyright owners seeking distributions of 
                    unclaimed accrued royalties to provide, or direct 
                    the provision of, information concerning the usage 
                    of musical works under voluntary licenses and 
                    individual download licenses for covered 
                    activities; and
                        ``(bb) the mechanical licensing collective 
                    shall take appropriate steps to safeguard the 
                    confidentiality and security of usage, financial, 
                    and other sensitive data used to compute market 
                    shares in accordance with the confidentiality 
                    provisions prescribed by the Register of Copyrights 
                    under paragraph (12)(C).
                ``(ii) Establishment of distribution policies.--The 
            unclaimed royalties oversight committee established under 
            subparagraph (D)(v) shall establish policies and procedures 
            for the distribution of unclaimed accrued royalties and 
            accrued interest in accordance with this subparagraph, 
            including the provision of usage data to copyright owners 
            to allocate payments and credits to songwriters pursuant to 
            clause (iv), subject to the approval of the board of 
            directors of the mechanical licensing collective.
                ``(iii) Public notice of unclaimed accrued royalties.--
            The mechanical licensing collective shall--

                    ``(I) maintain a publicly accessible online 
                facility with contact information for the collective 
                that lists unmatched musical works (and shares of 
                works), through which a copyright owner may assert an 
                ownership claim with respect to such a work (and a 
                share of such a work);
                    ``(II) engage in diligent, good-faith efforts to 
                publicize, throughout the music industry--

                        ``(aa) the existence of the collective and the 
                    ability to claim unclaimed accrued royalties for 
                    unmatched musical works (and shares of such works) 
                    held by the collective;
                        ``(bb) the procedures by which copyright owners 
                    may identify themselves and provide contact, 
                    ownership, and other relevant information to the 
                    collective in order to receive payments of accrued 
                    royalties;
                        ``(cc) any transfer of accrued royalties for 
                    musical works under paragraph (10)(B), not later 
                    than 180 days after the date on which the transfer 
                    is received; and
                        ``(dd) any pending distribution of unclaimed 
                    accrued royalties and accrued interest, not less 
                    than 90 days before the date on which the 
                    distribution is made; and

                    ``(III) as appropriate, participate in music 
                industry conferences and events for the purpose of 
                publicizing the matters described in subclause (II).

                ``(iv) Songwriter payments.--Copyright owners that 
            receive a distribution of unclaimed accrued royalties and 
            accrued interest shall pay or credit a portion to 
            songwriters (or the authorized agents of songwriters) on 
            whose behalf the copyright owners license or administer 
            musical works for covered activities, in accordance with 
            applicable contractual terms, but notwithstanding any 
            agreement to the contrary--

                    ``(I) such payments and credits to songwriters 
                shall be allocated in proportion to reported usage of 
                individual musical works by digital music providers 
                during the reporting periods covered by the 
                distribution from the mechanical licensing collective; 
                and
                    ``(II) in no case shall the payment or credit to an 
                individual songwriter be less than 50 percent of the 
                payment received by the copyright owner attributable to 
                usage of musical works (or shares of works) of that 
                songwriter.

            ``(K) Dispute resolution.--The dispute resolution committee 
        established under subparagraph (D)(vi) shall establish policies 
        and procedures--
                ``(i) for copyright owners to address in a timely and 
            equitable manner disputes relating to ownership interests 
            in musical works licensed under this section and allocation 
            and distribution of royalties by the mechanical licensing 
            collective, subject to the approval of the board of 
            directors of the mechanical licensing collective;
                ``(ii) that shall include a mechanism to hold disputed 
            funds in accordance with the requirements described in 
            subparagraph (H)(ii) pending resolution of the dispute; and
                ``(iii) except as provided in paragraph (11)(D), that 
            shall not affect any legal or equitable rights or remedies 
            available to any copyright owner or songwriter concerning 
            ownership of, and entitlement to royalties for, a musical 
            work.
            ``(L) Verification of payments by mechanical licensing 
        collective.--
                ``(i) Verification process.--A copyright owner entitled 
            to receive payments of royalties for covered activities 
            from the mechanical licensing collective may, individually 
            or with other copyright owners, conduct an audit of the 
            mechanical licensing collective to verify the accuracy of 
            royalty payments by the mechanical licensing collective to 
            such copyright owner, as follows:

                    ``(I) A copyright owner may audit the mechanical 
                licensing collective only once in a year for any or all 
                of the 3 calendar years preceding the year in which the 
                audit is commenced, and may not audit records for any 
                calendar year more than once.
                    ``(II) The audit shall be conducted by a qualified 
                auditor, who shall perform the audit during the 
                ordinary course of business by examining the books, 
                records, and data of the mechanical licensing 
                collective, according to generally accepted auditing 
                standards and subject to applicable confidentiality 
                requirements prescribed by the Register of Copyrights 
                under paragraph (12)(C).
                    ``(III) The mechanical licensing collective shall 
                make such books, records, and data available to the 
                qualified auditor and respond to reasonable requests 
                for relevant information, and shall use commercially 
                reasonable efforts to facilitate access to relevant 
                information maintained by third parties.
                    ``(IV) To commence the audit, any copyright owner 
                shall file with the Copyright Office a notice of intent 
                to conduct an audit of the mechanical licensing 
                collective, identifying the period of time to be 
                audited, and shall simultaneously deliver a copy of 
                such notice to the mechanical licensing collective. The 
                Register of Copyrights shall cause the notice of audit 
                to be published in the Federal Register not later than 
                45 calendar days after the date on which the notice is 
                received.
                    ``(V) The qualified auditor shall determine the 
                accuracy of royalty payments, including whether an 
                underpayment or overpayment of royalties was made by 
                the mechanical licensing collective to each auditing 
                copyright owner, except that, before providing a final 
                audit report to any such copyright owner, the qualified 
                auditor shall provide a tentative draft of the report 
                to the mechanical licensing collective and allow the 
                mechanical licensing collective a reasonable 
                opportunity to respond to the findings, including by 
                clarifying issues and correcting factual errors.
                    ``(VI) The auditing copyright owner or owners shall 
                bear the cost of the audit. In case of an underpayment 
                to any copyright owner, the mechanical licensing 
                collective shall pay the amounts of any such 
                underpayment to such auditing copyright owner, as 
                appropriate. In case of an overpayment by the 
                mechanical licensing collective, the mechanical 
                licensing collective may debit the account of the 
                auditing copyright owner or owners for such overpaid 
                amounts, or such owner or owners shall refund overpaid 
                amounts to the mechanical licensing collective, as 
                appropriate.

                ``(ii) Alternative verification procedures.--Nothing in 
            this subparagraph shall preclude a copyright owner and the 
            mechanical licensing collective from agreeing to audit 
            procedures different from those described in this 
            subparagraph, except that a notice of the audit shall be 
            provided to and published by the Copyright Office as 
            described in clause (i)(IV).
            ``(M) Records of mechanical licensing collective.--
                ``(i) Records maintenance.--The mechanical licensing 
            collective shall ensure that all material records of the 
            operations of the mechanical licensing collective, 
            including those relating to notices of license, the 
            administration of the claims process of the mechanical 
            licensing collective, reports of usage, royalty payments, 
            receipt and maintenance of accrued royalties, royalty 
            distribution processes, and legal matters, are preserved 
            and maintained in a secure and reliable manner, with 
            appropriate commercially reasonable safeguards against 
            unauthorized access, copying, and disclosure, and subject 
            to the confidentiality requirements prescribed by the 
            Register of Copyrights under paragraph (12)(C) for a period 
            of not less than 7 years after the date of creation or 
            receipt, whichever occurs later.
                ``(ii) Records access.--The mechanical licensing 
            collective shall provide prompt access to electronic and 
            other records pertaining to the administration of a 
            copyright owner's musical works upon reasonable written 
            request of the owner or the authorized representative of 
            the owner.
        ``(4) Terms and conditions of blanket license.--A blanket 
    license is subject to, and conditioned upon, the following 
    requirements:
            ``(A) Royalty reporting and payments.--
                ``(i) Monthly reports and payment.--A digital music 
            provider shall report and pay royalties to the mechanical 
            licensing collective under the blanket license on a monthly 
            basis in accordance with clause (ii) and subsection 
            (c)(2)(I), except that the monthly reporting shall be due 
            on the date that is 45 calendar days, rather than 20 
            calendar days, after the end of the monthly reporting 
            period.
                ``(ii) Data to be reported.--In reporting usage of 
            musical works to the mechanical licensing collective, a 
            digital music provider shall provide usage data for musical 
            works used under the blanket license and usage data for 
            musical works used in covered activities under voluntary 
            licenses and individual download licenses. In the report of 
            usage, the digital music provider shall--

                    ``(I) with respect to each sound recording 
                embodying a musical work--

                        ``(aa) provide identifying information for the 
                    sound recording, including sound recording name, 
                    featured artist, and, to the extent acquired by the 
                    digital music provider in connection with its use 
                    of sound recordings of musical works to engage in 
                    covered activities, including pursuant to 
                    subparagraph (B), sound recording copyright owner, 
                    producer, international standard recording code, 
                    and other information commonly used in the industry 
                    to identify sound recordings and match them to the 
                    musical works the sound recordings embody;
                        ``(bb) to the extent acquired by the digital 
                    music provider in the metadata provided by sound 
                    recording copyright owners or other licensors of 
                    sound recordings in connection with the use of 
                    sound recordings of musical works to engage in 
                    covered activities, including pursuant to 
                    subparagraph (B), provide information concerning 
                    authorship and ownership of the applicable rights 
                    in the musical work embodied in the sound recording 
                    (including each songwriter, publisher name, and 
                    respective ownership share) and the international 
                    standard musical work code; and
                        ``(cc) provide the number of digital 
                    phonorecord deliveries of the sound recording, 
                    including limited downloads and interactive 
                    streams;

                    ``(II) identify and provide contact information for 
                all musical work copyright owners for works embodied in 
                sound recordings as to which a voluntary license, 
                rather than the blanket license, is in effect with 
                respect to the uses being reported; and
                    ``(III) provide such other information as the 
                Register of Copyrights shall require by regulation.

                ``(iii) Format and maintenance of reports.--Reports of 
            usage provided by digital music providers to the mechanical 
            licensing collective shall be in a machine-readable format 
            that is compatible with the information technology systems 
            of the mechanical licensing collective and meets the 
            requirements of regulations adopted by the Register of 
            Copyrights. The Register shall also adopt regulations 
            setting forth requirements under which records of use shall 
            be maintained and made available to the mechanical 
            licensing collective by digital music providers engaged in 
            covered activities under a blanket license.
                ``(iv) Adoption of regulations.--The Register of 
            Copyrights shall adopt regulations--

                    ``(I) setting forth requirements under which 
                records of use shall be maintained and made available 
                to the mechanical licensing collective by digital music 
                providers engaged in covered activities under a blanket 
                license; and
                    ``(II) regarding adjustments to reports of usage by 
                digital music providers, including mechanisms to 
                account for overpayment and underpayment of royalties 
                in prior periods.

            ``(B) Collection of sound recording information.--A digital 
        music provider shall engage in good-faith, commercially 
        reasonable efforts to obtain from sound recording copyright 
        owners and other licensors of sound recordings made available 
        through the service of such digital music provider information 
        concerning--
                ``(i) sound recording copyright owners, producers, 
            international standard recording codes, and other 
            information commonly used in the industry to identify sound 
            recordings and match them to the musical works the sound 
            recordings embody; and
                ``(ii) the authorship and ownership of musical works, 
            including songwriters, publisher names, ownership shares, 
            and international standard musical work codes.
            ``(C) Payment of administrative assessment.--A digital 
        music provider and any significant nonblanket licensee shall 
        pay the administrative assessment established under paragraph 
        (7)(D) in accordance with this subsection and applicable 
        regulations.
            ``(D) Verification of payments by digital music 
        providers.--
                ``(i) Verification process.--The mechanical licensing 
            collective may conduct an audit of a digital music provider 
            operating under the blanket license to verify the accuracy 
            of royalty payments by the digital music provider to the 
            mechanical licensing collective as follows:

                    ``(I) The mechanical licensing collective may 
                commence an audit of a digital music provider not more 
                frequently than once in any 3-calendar-year period to 
                cover a verification period of not more than the 3 full 
                calendar years preceding the date of commencement of 
                the audit, and such audit may not audit records for any 
                such 3-year verification period more than once.
                    ``(II) The audit shall be conducted by a qualified 
                auditor, who shall perform the audit during the 
                ordinary course of business by examining the books, 
                records, and data of the digital music provider, 
                according to generally accepted auditing standards and 
                subject to applicable confidentiality requirements 
                prescribed by the Register of Copyrights under 
                paragraph (12)(C).
                    ``(III) The digital music provider shall make such 
                books, records, and data available to the qualified 
                auditor and respond to reasonable requests for relevant 
                information, and shall use commercially reasonable 
                efforts to provide access to relevant information 
                maintained with respect to a digital music provider by 
                third parties.
                    ``(IV) To commence the audit, the mechanical 
                licensing collective shall file with the Copyright 
                Office a notice of intent to conduct an audit of the 
                digital music provider, identifying the period of time 
                to be audited, and shall simultaneously deliver a copy 
                of such notice to the digital music provider. The 
                Register of Copyrights shall cause the notice of audit 
                to be published in the Federal Register not later than 
                45 calendar days after the date on which notice is 
                received.
                    ``(V) The qualified auditor shall determine the 
                accuracy of royalty payments, including whether an 
                underpayment or overpayment of royalties was made by 
                the digital music provider to the mechanical licensing 
                collective, except that, before providing a final audit 
                report to the mechanical licensing collective, the 
                qualified auditor shall provide a tentative draft of 
                the report to the digital music provider and allow the 
                digital music provider a reasonable opportunity to 
                respond to the findings, including by clarifying issues 
                and correcting factual errors.
                    ``(VI) The mechanical licensing collective shall 
                pay the cost of the audit, unless the qualified auditor 
                determines that there was an underpayment by the 
                digital music provider of not less than 10 percent, in 
                which case the digital music provider shall bear the 
                reasonable costs of the audit, in addition to paying 
                the amount of any underpayment to the mechanical 
                licensing collective. In case of an overpayment by the 
                digital music provider, the mechanical licensing 
                collective shall provide a credit to the account of the 
                digital music provider.
                    ``(VII) A digital music provider may not assert 
                section 507 or any other Federal or State statute of 
                limitations, doctrine of laches or estoppel, or similar 
                provision as a defense to a legal action arising from 
                an audit under this subparagraph if such legal action 
                is commenced not more than 6 years after the 
                commencement of the audit that is the basis for such 
                action.

                ``(ii) Alternative verification procedures.--Nothing in 
            this subparagraph shall preclude the mechanical licensing 
            collective and a digital music provider from agreeing to 
            audit procedures different from those described in this 
            subparagraph, except that a notice of the audit shall be 
            provided to and published by the Copyright Office as 
            described in clause (i)(IV).
            ``(E) Default under blanket license.--
                ``(i) Conditions of default.--A digital music provider 
            shall be in default under a blanket license if the digital 
            music provider--

                    ``(I) fails to provide 1 or more monthly reports of 
                usage to the mechanical licensing collective when due;
                    ``(II) fails to make a monthly royalty or late fee 
                payment to the mechanical licensing collective when 
                due, in all or material part;
                    ``(III) provides 1 or more monthly reports of usage 
                to the mechanical licensing collective that, on the 
                whole, is or are materially deficient as a result of 
                inaccurate, missing, or unreadable data, where the 
                correct data was available to the digital music 
                provider and required to be reported under this section 
                and applicable regulations;
                    ``(IV) fails to pay the administrative assessment 
                as required under this subsection and applicable 
                regulations; or
                    ``(V) after being provided written notice by the 
                mechanical licensing collective, refuses to comply with 
                any other material term or condition of the blanket 
                license under this section for a period of not less 
                than 60 calendar days.

                ``(ii) Notice of default and termination.--In case of a 
            default by a digital music provider, the mechanical 
            licensing collective may proceed to terminate the blanket 
            license of the digital music provider as follows:

                    ``(I) The mechanical licensing collective shall 
                provide written notice to the digital music provider 
                describing with reasonable particularity the default 
                and advising that unless such default is cured not 
                later than 60 calendar days after the date of the 
                notice, the blanket license will automatically 
                terminate at the end of that period.
                    ``(II) If the digital music provider fails to 
                remedy the default before the end of the 60-day period 
                described in subclause (I), the license shall terminate 
                without any further action on the part of the 
                mechanical licensing collective. Such termination 
                renders the making of all digital phonorecord 
                deliveries of all musical works (and shares thereof) 
                covered by the blanket license for which the royalty or 
                administrative assessment has not been paid actionable 
                as acts of infringement under section 501 and subject 
                to the remedies provided by sections 502 through 506.

                ``(iii) Notice to copyright owners.--The mechanical 
            licensing collective shall provide written notice of any 
            termination under this subparagraph to copyright owners of 
            affected works.
                ``(iv) Review by federal district court.--A digital 
            music provider that believes a blanket license was 
            improperly terminated by the mechanical licensing 
            collective may seek review of such termination in an 
            appropriate district court of the United States. The 
            district court shall determine the matter de novo based on 
            the record before the mechanical licensing collective and 
            any additional supporting evidence presented by the 
            parties.
        ``(5) Digital licensee coordinator.--
            ``(A) In general.--The digital licensee coordinator shall 
        be a single entity that--
                ``(i) is a nonprofit, not owned by any other entity, 
            that is created to carry out responsibilities under this 
            subsection;
                ``(ii) is endorsed by and enjoys substantial support 
            from digital music providers and significant nonblanket 
            licensees that together represent the greatest percentage 
            of the licensee market for uses of musical works in covered 
            activities, as measured over the preceding 3 calendar 
            years;
                ``(iii) is able to demonstrate that it has, or will 
            have prior to the license availability date, the 
            administrative capabilities to perform the required 
            functions of the digital licensee coordinator under this 
            subsection; and
                ``(iv) has been designated by the Register of 
            Copyrights, with the approval of the Librarian of Congress 
            pursuant to section 702, in accordance with subparagraph 
            (B).
            ``(B) Designation of digital licensee coordinator.--
                ``(i) Initial designation.--The Register of Copyrights 
            shall initially designate the digital licensee coordinator 
            not later than 270 days after the enactment date, in 
            accordance with the same procedure described for 
            designation of the mechanical licensing collective in 
            paragraph (3)(B)(i).
                ``(ii) Periodic review of designation.--Following the 
            initial designation of the digital licensee coordinator, 
            the Register of Copyrights shall, every 5 years, beginning 
            with the fifth full calendar year to commence after the 
            initial designation, determine whether the existing 
            designation should be continued, or a different entity 
            meeting the criteria described in clauses (i) through (iii) 
            of subparagraph (A) should be designated, in accordance 
            with the same procedure described for the mechanical 
            licensing collective in paragraph (3)(B)(ii).
                ``(iii) Inability to designate.--If the Register of 
            Copyrights is unable to identify an entity that fulfills 
            each of the qualifications described in clauses (i) through 
            (iii) of subparagraph (A) to serve as the digital licensee 
            coordinator, the Register may decline to designate a 
            digital licensee coordinator. The determination of the 
            Register not to designate a digital licensee coordinator 
            shall not negate or otherwise affect any provision of this 
            subsection except to the limited extent that a provision 
            references the digital licensee coordinator. In such case, 
            the reference to the digital licensee coordinator shall be 
            without effect unless and until a new digital licensee 
            coordinator is designated.
            ``(C) Authorities and functions.--
                ``(i) In general.--The digital licensee coordinator is 
            authorized to perform the following functions, subject to 
            more particular requirements as described in this 
            subsection:

                    ``(I) Establish a governance structure, criteria 
                for membership, and any dues to be paid by its members.
                    ``(II) Engage in efforts to enforce notice and 
                payment obligations with respect to the administrative 
                assessment, including by receiving information from and 
                coordinating with the mechanical licensing collective.
                    ``(III) Initiate and participate in proceedings 
                before the Copyright Royalty Judges to establish the 
                administrative assessment under this subsection.
                    ``(IV) Initiate and participate in proceedings 
                before the Copyright Office with respect to activities 
                under this subsection.
                    ``(V) Gather and provide documentation for use in 
                proceedings before the Copyright Royalty Judges to set 
                rates and terms under this section.
                    ``(VI) Maintain records of its activities.
                    ``(VII) Assist in publicizing the existence of the 
                mechanical licensing collective and the ability of 
                copyright owners to claim royalties for unmatched 
                musical works (and shares of works) through the 
                collective.
                    ``(VIII) Engage in such other activities as may be 
                necessary or appropriate to fulfill its 
                responsibilities under this subsection.

                ``(ii) Restriction on lobbying.--The digital licensee 
            coordinator may not engage in government lobbying 
            activities, but may engage in the activities described in 
            subclauses (III), (IV), and (V) of clause (i).
                ``(iii) Assistance with publicity for unclaimed 
            royalties.--The digital licensee coordinator shall make 
            reasonable, good-faith efforts to assist the mechanical 
            licensing collective in the efforts of the collective to 
            locate and identify copyright owners of unmatched musical 
            works (and shares of such works) by encouraging digital 
            music providers to publicize the existence of the 
            collective and the ability of copyright owners to claim 
            unclaimed accrued royalties, including by--

                    ``(I) posting contact information for the 
                collective at reasonably prominent locations on digital 
                music provider websites and applications; and
                    ``(II) conducting in-person outreach activities 
                with songwriters.

        ``(6) Requirements for significant nonblanket licensees.--
            ``(A) In general.--
                ``(i) Notice of activity.--Not later than 45 calendar 
            days after the license availability date, or 45 calendar 
            days after the end of the first full calendar month in 
            which an entity initially qualifies as a significant 
            nonblanket licensee, whichever occurs later, a significant 
            nonblanket licensee shall submit a notice of nonblanket 
            activity to the mechanical licensing collective. The notice 
            of nonblanket activity shall comply in form and substance 
            with requirements that the Register of Copyrights shall 
            establish by regulation, and a copy shall be made available 
            to the digital licensee coordinator.
                ``(ii) Reporting and payment obligations.--The notice 
            of nonblanket activity submitted to the mechanical 
            licensing collective shall be accompanied by a report of 
            usage that contains the information described in paragraph 
            (4)(A)(ii), as well as any payment of the administrative 
            assessment required under this subsection and applicable 
            regulations. Thereafter, subject to clause (iii), a 
            significant nonblanket licensee shall continue to provide 
            monthly reports of usage, accompanied by any required 
            payment of the administrative assessment, to the mechanical 
            licensing collective. Such reports and payments shall be 
            submitted not later than 45 calendar days after the end of 
            the calendar month being reported.
                ``(iii) Discontinuation of obligations.--An entity that 
            has submitted a notice of nonblanket activity to the 
            mechanical licensing collective that has ceased to qualify 
            as a significant nonblanket licensee may so notify the 
            collective in writing. In such case, as of the calendar 
            month in which such notice is provided, such entity shall 
            no longer be required to provide reports of usage or pay 
            the administrative assessment, but if such entity later 
            qualifies as a significant nonblanket licensee, such entity 
            shall again be required to comply with clauses (i) and 
            (ii).
            ``(B) Reporting by mechanical licensing collective to 
        digital licensee coordinator.--
                ``(i) Monthly reports of noncompliant licensees.--The 
            mechanical licensing collective shall provide monthly 
            reports to the digital licensee coordinator setting forth 
            any significant nonblanket licensees of which the 
            collective is aware that have failed to comply with 
            subparagraph (A).
                ``(ii) Treatment of confidential information.--The 
            mechanical licensing collective and digital licensee 
            coordinator shall take appropriate steps to safeguard the 
            confidentiality and security of financial and other 
            sensitive data shared under this subparagraph, in 
            accordance with the confidentiality requirements prescribed 
            by the Register of Copyrights under paragraph (12)(C).
            ``(C) Legal enforcement efforts.--
                ``(i) Federal court action.--Should the mechanical 
            licensing collective or digital licensee coordinator become 
            aware that a significant nonblanket licensee has failed to 
            comply with subparagraph (A), either may commence an action 
            in an appropriate district court of the United States for 
            damages and injunctive relief. If the significant 
            nonblanket licensee is found liable, the court shall, 
            absent a finding of excusable neglect, award damages in an 
            amount equal to three times the total amount of the unpaid 
            administrative assessment and, notwithstanding anything to 
            the contrary in section 505, reasonable attorney's fees and 
            costs, as well as such other relief as the court determines 
            appropriate. In all other cases, the court shall award 
            relief as appropriate. Any recovery of damages shall be 
            payable to the mechanical licensing collective as an offset 
            to the collective total costs.
                ``(ii) Statute of limitations for enforcement action.--
            Any action described in this subparagraph shall be 
            commenced within the time period described in section 
            507(b).
                ``(iii) Other rights and remedies preserved.--The 
            ability of the mechanical licensing collective or digital 
            licensee coordinator to bring an action under this 
            subparagraph shall in no way alter, limit or negate any 
            other right or remedy that may be available to any party at 
            law or in equity.
        ``(7) Funding of mechanical licensing collective.--
            ``(A) In general.--The collective total costs shall be 
        funded by--
                ``(i) an administrative assessment, as such assessment 
            is established by the Copyright Royalty Judges pursuant to 
            subparagraph (D) from time to time, to be paid by--

                    ``(I) digital music providers that are engaged, in 
                all or in part, in covered activities pursuant to a 
                blanket license; and
                    ``(II) significant nonblanket licensees; and

                ``(ii) voluntary contributions from digital music 
            providers and significant nonblanket licensees as may be 
            agreed with copyright owners.
            ``(B) Voluntary contributions.--
                ``(i) Agreements concerning contributions.--Except as 
            provided in clause (ii), voluntary contributions by digital 
            music providers and significant nonblanket licensees shall 
            be determined by private negotiation and agreement, and the 
            following conditions apply:

                    ``(I) The date and amount of each voluntary 
                contribution to the mechanical licensing collective 
                shall be documented in a writing signed by an 
                authorized agent of the mechanical licensing collective 
                and the contributing party.
                    ``(II) Such agreement shall be made available as 
                required in proceedings before the Copyright Royalty 
                Judges to establish or adjust the administrative 
                assessment in accordance with applicable statutory and 
                regulatory provisions and rulings of the Copyright 
                Royalty Judges.

                ``(ii) Treatment of contributions.--Each voluntary 
            contribution described in clause (i) shall be treated for 
            purposes of an administrative assessment proceeding as an 
            offset to the collective total costs that would otherwise 
            be recovered through the administrative assessment. Any 
            allocation or reallocation of voluntary contributions 
            between or among individual digital music providers or 
            significant nonblanket licensees shall be a matter of 
            private negotiation and agreement among such parties and 
            outside the scope of the administrative assessment 
            proceeding.
            ``(C) Interim application of accrued royalties.--In the 
        event that the administrative assessment, together with any 
        funding from voluntary contributions as provided in 
        subparagraphs (A) and (B), is inadequate to cover current 
        collective total costs, the collective, with approval of its 
        board of directors, may apply unclaimed accrued royalties on an 
        interim basis to defray such costs, subject to future 
        reimbursement of such royalties from future collections of the 
        assessment.
            ``(D) Determination of administrative assessment.--
                ``(i) Administrative assessment to cover collective 
            total costs.--The administrative assessment shall be used 
            solely and exclusively to fund the collective total costs.
                ``(ii) Separate proceeding before copyright royalty 
            judges.--The amount and terms of the administrative 
            assessment shall be determined and established in a 
            separate and independent proceeding before the Copyright 
            Royalty Judges, according to the procedures described in 
            clauses (iii) and (iv). The administrative assessment 
            determined in such proceeding shall--

                    ``(I) be wholly independent of royalty rates and 
                terms applicable to digital music providers, which 
                shall not be taken into consideration in any manner in 
                establishing the administrative assessment;
                    ``(II) be established by the Copyright Royalty 
                Judges in an amount that is calculated to defray the 
                reasonable collective total costs;
                    ``(III) be assessed based on usage of musical works 
                by digital music providers and significant nonblanket 
                licensees in covered activities under both compulsory 
                and nonblanket licenses;
                    ``(IV) may be in the form of a percentage of 
                royalties payable under this section for usage of 
                musical works in covered activities (regardless of 
                whether a different rate applies under a voluntary 
                license), or any other usage-based metric reasonably 
                calculated to equitably allocate the collective total 
                costs across digital music providers and significant 
                nonblanket licensees engaged in covered activities, and 
                shall include as a component a minimum fee for all 
                digital music providers and significant nonblanket 
                licensees; and
                    ``(V) take into consideration anticipated future 
                collective total costs and collections of the 
                administrative assessment, including, as applicable--

                        ``(aa) any portion of past actual collective 
                    total costs of the mechanical licensing collective 
                    not funded by previous collections of the 
                    administrative assessment or voluntary 
                    contributions because such collections or 
                    contributions together were insufficient to fund 
                    such costs;
                        ``(bb) any past collections of the 
                    administrative assessment and voluntary 
                    contributions that exceeded past actual collective 
                    total costs, resulting in a surplus; and
                        ``(cc) the amount of any voluntary 
                    contributions by digital music providers or 
                    significant nonblanket licensees in relevant 
                    periods, described in subparagraphs (A) and (B) of 
                    paragraph (7).
                ``(iii) Initial administrative assessment.--The 
            procedure for establishing the initial administrative 
            assessment shall be as follows:

                    ``(I) Not later than 270 days after the enactment 
                date, the Copyright Royalty Judges shall commence a 
                proceeding to establish the initial administrative 
                assessment by publishing a notice in the Federal 
                Register seeking petitions to participate.
                    ``(II) The mechanical licensing collective and 
                digital licensee coordinator shall participate in the 
                proceeding described in subclause (I), along with any 
                interested copyright owners, digital music providers or 
                significant nonblanket licensees that have notified the 
                Copyright Royalty Judges of their desire to 
                participate.
                    ``(III) The Copyright Royalty Judges shall 
                establish a schedule for submission by the parties of 
                information that may be relevant to establishing the 
                administrative assessment, including actual and 
                anticipated collective total costs of the mechanical 
                licensing collective, actual and anticipated 
                collections from digital music providers and 
                significant nonblanket licensees, and documentation of 
                voluntary contributions, as well as a schedule for 
                further proceedings, which shall include a hearing, as 
                the Copyright Royalty Judges determine appropriate.
                    ``(IV) The initial administrative assessment shall 
                be determined, and such determination shall be 
                published in the Federal Register by the Copyright 
                Royalty Judges, not later than 1 year after 
                commencement of the proceeding described in this 
                clause. The determination shall be supported by a 
                written record. The initial administrative assessment 
                shall be effective as of the license availability date, 
                and shall continue in effect unless and until an 
                adjusted administrative assessment is established 
                pursuant to an adjustment proceeding under clause (iv).

                ``(iv) Adjustment of administrative assessment.--The 
            administrative assessment may be adjusted by the Copyright 
            Royalty Judges periodically, in accordance with the 
            following procedures:

                    ``(I) Not earlier than 1 year after the most recent 
                publication of a determination of the administrative 
                assessment by the Copyright Royalty Judges, the 
                mechanical licensing collective, the digital licensee 
                coordinator, or one or more interested copyright 
                owners, digital music providers, or significant 
                nonblanket licensees, may file a petition with the 
                Copyright Royalty Judges in the month of May to 
                commence a proceeding to adjust the administrative 
                assessment.
                    ``(II) Notice of the commencement of such 
                proceeding shall be published in the Federal Register 
                in the month of June following the filing of any 
                petition, with a schedule of requested information and 
                additional proceedings, as described in clause 
                (iii)(III). The mechanical licensing collective and 
                digital licensee coordinator shall participate in such 
                proceeding, along with any interested copyright owners, 
                digital music providers, or significant nonblanket 
                licensees that have notified the Copyright Royalty 
                Judges of their desire to participate.
                    ``(III) The determination of the adjusted 
                administrative assessment, which shall be supported by 
                a written record, shall be published in the Federal 
                Register during June of the calendar year following the 
                commencement of the proceeding. The adjusted 
                administrative assessment shall take effect January 1 
                of the year following such publication.

                ``(v) Adoption of voluntary agreements.--In lieu of 
            reaching their own determination based on evaluation of 
            relevant data, the Copyright Royalty Judges shall approve 
            and adopt a negotiated agreement to establish the amount 
            and terms of the administrative assessment that has been 
            agreed to by the mechanical licensing collective and the 
            digital licensee coordinator (or if none has been 
            designated, interested digital music providers and 
            significant nonblanket licensees representing more than 
            half of the market for uses of musical works in covered 
            activities), except that the Copyright Royalty Judges shall 
            have the discretion to reject any such agreement for good 
            cause shown. An administrative assessment adopted under 
            this clause shall apply to all digital music providers and 
            significant nonblanket licensees engaged in covered 
            activities during the period the administrative assessment 
            is in effect.
                ``(vi) Continuing authority to amend.--The Copyright 
            Royalty Judges shall retain continuing authority to amend a 
            determination of an administrative assessment to correct 
            technical or clerical errors, or modify the terms of 
            implementation, for good cause, with any such amendment to 
            be published in the Federal Register.
                ``(vii) Appeal of administrative assessment.--The 
            determination of an administrative assessment by the 
            Copyright Royalty Judges shall be appealable, not later 
            than 30 calendar days after publication in the Federal 
            Register, to the Court of Appeals for the District of 
            Columbia Circuit by any party that fully participated in 
            the proceeding. The administrative assessment as 
            established by the Copyright Royalty Judges shall remain in 
            effect pending the final outcome of any such appeal, and 
            the mechanical licensing collective, digital licensee 
            coordinator, digital music providers, and significant 
            nonblanket licensees shall implement appropriate financial 
            or other measures not later than 90 days after any 
            modification of the assessment to reflect and account for 
            such outcome.
                ``(viii) Regulations.--The Copyright Royalty Judges may 
            adopt regulations to govern the conduct of proceedings 
            under this paragraph.
        ``(8) Establishment of rates and terms under blanket license.--
            ``(A) Restrictions on ratesetting participation.--Neither 
        the mechanical licensing collective nor the digital licensee 
        coordinator shall be a party to a proceeding described in 
        subsection (c)(1)(E), except that the mechanical licensing 
        collective or the digital licensee coordinator may gather and 
        provide financial and other information for the use of a party 
        to such a proceeding and comply with requests for information 
        as required under applicable statutory and regulatory 
        provisions and rulings of the Copyright Royalty Judges.
            ``(B) Application of late fees.--In any proceeding 
        described in subparagraph (A) in which the Copyright Royalty 
        Judges establish a late fee for late payment of royalties for 
        uses of musical works under this section, such fee shall apply 
        to covered activities under blanket licenses, as follows:
                ``(i) Late fees for past due royalty payments shall 
            accrue from the due date for payment until payment is 
            received by the mechanical licensing collective.
                ``(ii) The availability of late fees shall in no way 
            prevent a copyright owner or the mechanical licensing 
            collective from asserting any other rights or remedies to 
            which such copyright owner or the mechanical licensing 
            collective may be entitled under this title.
            ``(C) Interim rate agreements in general.--For any covered 
        activity for which no rate or terms have been established by 
        the Copyright Royalty Judges, the mechanical licensing 
        collective and any digital music provider may agree to an 
        interim rate and terms for such activity under the blanket 
        license, and any such rate and terms--
                ``(i) shall be treated as nonprecedential and not cited 
            or relied upon in any ratesetting proceeding before the 
            Copyright Royalty Judges or any other tribunal; and
                ``(ii) shall automatically expire upon the 
            establishment of a rate and terms for such covered activity 
            by the Copyright Royalty Judges, under subsection 
            (c)(1)(E).
            ``(D) Adjustments for interim rates.--The rate and terms 
        established by the Copyright Royalty Judges for a covered 
        activity to which an interim rate and terms have been agreed 
        under subparagraph (C) shall supersede the interim rate and 
        terms and apply retroactively to the inception of the activity 
        under the blanket license. In such case, not later than 90 days 
        after the effective date of the rate and terms established by 
        the Copyright Royalty Judges--
                ``(i) if the rate established by the Copyright Royalty 
            Judges exceeds the interim rate, the digital music provider 
            shall pay to the mechanical licensing collective the amount 
            of any underpayment of royalties due; or
                ``(ii) if the interim rate exceeds the rate established 
            by the Copyright Royalty Judges, the mechanical licensing 
            collective shall credit the account of the digital music 
            provider for the amount of any overpayment of royalties 
            due.
        ``(9) Transition to blanket licenses.--
            ``(A) Substitution of blanket license.--On the license 
        availability date, a blanket license shall, without any 
        interruption in license authority enjoyed by such digital music 
        provider, be automatically substituted for and supersede any 
        existing compulsory license previously obtained under this 
        section by the digital music provider from a copyright owner to 
        engage in 1 or more covered activities with respect to a 
        musical work, except that such substitution shall not apply to 
        any authority obtained from a record company pursuant to a 
        compulsory license to make and distribute permanent downloads 
        unless and until such record company terminates such authority 
        in writing to take effect at the end of a monthly reporting 
        period, with a copy to the mechanical licensing collective.
            ``(B) Expiration of existing licenses.--Except to the 
        extent provided in subparagraph (A), on and after the license 
        availability date, licenses other than individual download 
        licenses obtained under this section for covered activities 
        prior to the license availability date shall no longer continue 
        in effect.
            ``(C) Treatment of voluntary licenses.--A voluntary license 
        for a covered activity in effect on the license availability 
        date will remain in effect unless and until the voluntary 
        license expires according to the terms of the voluntary 
        license, or the parties agree to amend or terminate the 
        voluntary license. In a case where a voluntary license for a 
        covered activity entered into before the license availability 
        date incorporates the terms of this section by reference, the 
        terms so incorporated (but not the rates) shall be those in 
        effect immediately prior to the license availability date, and 
        those terms shall continue to apply unless and until such 
        voluntary license is terminated or amended, or the parties 
        enter into a new voluntary license.
            ``(D) Further acceptance of notices for covered activities 
        by copyright office.--On and after the enactment date--
                ``(i) the Copyright Office shall no longer accept 
            notices of intention with respect to covered activities; 
            and
                ``(ii) notices of intention filed before the enactment 
            date will no longer be effective or provide license 
            authority with respect to covered activities, except that, 
            before the license availability date, there shall be no 
            liability under section 501 for the reproduction or 
            distribution of a musical work (or share thereof) in 
            covered activities if a valid notice of intention was filed 
            for such work (or share) before the enactment date.
        ``(10) Prior unlicensed uses.--
            ``(A) Limitation on liability in general.--A copyright 
        owner that commences an action under section 501 on or after 
        January 1, 2018, against a digital music provider for the 
        infringement of the exclusive rights provided by paragraph (1) 
        or (3) of section 106 arising from the unauthorized 
        reproduction or distribution of a musical work by such digital 
        music provider in the course of engaging in covered activities 
        prior to the license availability date, shall, as the copyright 
        owner's sole and exclusive remedy against the digital music 
        provider, be eligible to recover the royalty prescribed under 
        subsection (c)(1)(C) and chapter 8, from the digital music 
        provider, provided that such digital music provider can 
        demonstrate compliance with the requirements of subparagraph 
        (B), as applicable. In all other cases the limitation on 
        liability under this subparagraph shall not apply.
            ``(B) Requirements for limitation on liability.--The 
        following requirements shall apply on the enactment date and 
        through the end of the period that expires 90 days after the 
        license availability date to digital music providers seeking to 
        avail themselves of the limitation on liability described in 
        subparagraph (A):
                ``(i) Not later than 30 calendar days after first 
            making a particular sound recording of a musical work 
            available through its service via one or more covered 
            activities, or 30 calendar days after the enactment date, 
            whichever occurs later, a digital music provider shall 
            engage in good-faith, commercially reasonable efforts to 
            identify and locate each copyright owner of such musical 
            work (or share thereof). Such required matching efforts 
            shall include the following:

                    ``(I) Good-faith, commercially reasonable efforts 
                to obtain from the owner of the corresponding sound 
                recording made available through the digital music 
                provider's service the following information:

                        ``(aa) Sound recording name, featured artist, 
                    sound recording copyright owner, producer, 
                    international standard recording code, and other 
                    information commonly used in the industry to 
                    identify sound recordings and match them to the 
                    musical works they embody.
                        ``(bb) Any available musical work ownership 
                    information, including each songwriter and 
                    publisher name, percentage ownership share, and 
                    international standard musical work code.

                    ``(II) Employment of 1 or more bulk electronic 
                matching processes that are available to the digital 
                music provider through a third-party vendor on 
                commercially reasonable terms, except that a digital 
                music provider may rely on its own bulk electronic 
                matching process if that process has capabilities 
                comparable to or better than those available from a 
                third-party vendor on commercially reasonable terms.

                ``(ii) The required matching efforts shall be repeated 
            by the digital music provider not less than once per month 
            for so long as the copyright owner remains unidentified or 
            has not been located.
                ``(iii) If the required matching efforts are successful 
            in identifying and locating a copyright owner of a musical 
            work (or share thereof) by the end of the calendar month in 
            which the digital music provider first makes use of the 
            work, the digital music provider shall provide statements 
            of account and pay royalties to such copyright owner in 
            accordance with this section and applicable regulations.
                ``(iv) If the copyright owner is not identified or 
            located by the end of the calendar month in which the 
            digital music provider first makes use of the work, the 
            digital music provider shall accrue and hold royalties 
            calculated under the applicable statutory rate in 
            accordance with usage of the work, from initial use of the 
            work until the accrued royalties can be paid to the 
            copyright owner or are required to be transferred to the 
            mechanical licensing collective, as follows:

                    ``(I) Accrued royalties shall be maintained by the 
                digital music provider in accordance with generally 
                accepted accounting principles.
                    ``(II) If a copyright owner of an unmatched musical 
                work (or share thereof) is identified and located by or 
                to the digital music provider before the license 
                availability date, the digital music provider shall--

                        ``(aa) not later than 45 calendar days after 
                    the end of the calendar month during which the 
                    copyright owner was identified and located, pay the 
                    copyright owner all accrued royalties, such payment 
                    to be accompanied by a cumulative statement of 
                    account that includes all of the information that 
                    would have been provided to the copyright owner had 
                    the digital music provider been providing monthly 
                    statements of account to the copyright owner from 
                    initial use of the work in accordance with this 
                    section and applicable regulations, including the 
                    requisite certification under subsection (c)(2)(I);
                        ``(bb) beginning with the accounting period 
                    following the calendar month in which the copyright 
                    owner was identified and located, and for all other 
                    accounting periods prior to the license 
                    availability date, provide monthly statements of 
                    account and pay royalties to the copyright owner as 
                    required under this section and applicable 
                    regulations; and
                        ``(cc) beginning with the monthly royalty 
                    reporting period commencing on the license 
                    availability date, report usage and pay royalties 
                    for such musical work (or share thereof) for such 
                    reporting period and reporting periods thereafter 
                    to the mechanical licensing collective, as required 
                    under this subsection and applicable regulations.

                    ``(III) If a copyright owner of an unmatched 
                musical work (or share thereof) is not identified and 
                located by the license availability date, the digital 
                music provider shall--

                        ``(aa) not later than 45 calendar days after 
                    the license availability date, transfer all accrued 
                    royalties to the mechanical licensing collective, 
                    such payment to be accompanied by a cumulative 
                    statement of account that includes all of the 
                    information that would have been provided to the 
                    copyright owner had the digital music provider been 
                    serving monthly statements of account on the 
                    copyright owner from initial use of the work in 
                    accordance with this section and applicable 
                    regulations, including the requisite certification 
                    under subsection (c)(2)(I), and accompanied by an 
                    additional certification by a duly authorized 
                    officer of the digital music provider that the 
                    digital music provider has fulfilled the 
                    requirements of clauses (i) and (ii) of 
                    subparagraph (B) but has not been successful in 
                    locating or identifying the copyright owner; and
                        ``(bb) beginning with the monthly royalty 
                    reporting period commencing on the license 
                    availability date, report usage and pay royalties 
                    for such musical work (or share thereof) for such 
                    period and reporting periods thereafter to the 
                    mechanical licensing collective, as required under 
                    this subsection and applicable regulations.
                ``(v) A digital music provider that complies with the 
            requirements of this subparagraph with respect to unmatched 
            musical works (or shares of works) shall not be liable for 
            or accrue late fees for late payments of royalties for such 
            works until such time as the digital music provider is 
            required to begin paying monthly royalties to the copyright 
            owner or the mechanical licensing collective, as 
            applicable.
            ``(C) Adjusted statute of limitations.--Notwithstanding 
        anything to the contrary in section 507(b), with respect to any 
        claim of infringement of the exclusive rights provided by 
        paragraphs (1) and (3) of section 106 against a digital music 
        provider arising from the unauthorized reproduction or 
        distribution of a musical work by such digital music provider 
        in the course of engaging in covered activities that accrued 
        not more than 3 years prior to the license availability date, 
        such action may be commenced not later than the later of--
                ``(i) 3 years after the date on which the claim 
            accrued; or
                ``(ii) 2 years after the license availability date.
            ``(D) Other rights and remedies preserved.--Except as 
        expressly provided in this paragraph, nothing in this paragraph 
        shall be construed to alter, limit, or negate any right or 
        remedy of a copyright owner with respect to unauthorized use of 
        a musical work.
        ``(11) Legal protections for licensing activities.--
            ``(A) Exemption for compulsory license activities.--The 
        antitrust exemption described in subsection (c)(1)(D) shall 
        apply to negotiations and agreements between and among 
        copyright owners and persons entitled to obtain a compulsory 
        license for covered activities, and common agents acting on 
        behalf of such copyright owners or persons, including with 
        respect to the administrative assessment established under this 
        subsection.
            ``(B) Limitation on common agent exemption.--
        Notwithstanding the antitrust exemption provided in subsection 
        (c)(1)(D) and subparagraph (A) of this paragraph (except for 
        the administrative assessment referenced in such subparagraph 
        (A) and except as provided in paragraph (8)(C)), neither the 
        mechanical licensing collective nor the digital licensee 
        coordinator shall serve as a common agent with respect to the 
        establishment of royalty rates or terms under this section.
            ``(C) Antitrust exemption for administrative activities.--
        Notwithstanding any provision of the antitrust laws, copyright 
        owners and persons entitled to obtain a compulsory license 
        under this section may designate the mechanical licensing 
        collective to administer voluntary licenses for the 
        reproduction or distribution of musical works in covered 
        activities on behalf of such copyright owners and persons, 
        subject to the following conditions:
                ``(i) Each copyright owner shall establish the royalty 
            rates and material terms of any such voluntary license 
            individually and not in agreement, combination, or concert 
            with any other copyright owner.
                ``(ii) Each person entitled to obtain a compulsory 
            license under this section shall establish the royalty 
            rates and material terms of any such voluntary license 
            individually and not in agreement, combination, or concert 
            with any other digital music provider.
                ``(iii) The mechanical licensing collective shall 
            maintain the confidentiality of the voluntary licenses in 
            accordance with the confidentiality provisions prescribed 
            by the Register of Copyrights under paragraph (12)(C).
            ``(D) Liability for good-faith activities.--The mechanical 
        licensing collective shall not be liable to any person or 
        entity based on a claim arising from its good-faith 
        administration of policies and procedures adopted and 
        implemented to carry out the responsibilities described in 
        subparagraphs (J) and (K) of paragraph (3), except to the 
        extent of correcting an underpayment or overpayment of 
        royalties as provided in paragraph (3)(L)(i)(VI), but the 
        collective may participate in a legal proceeding as a 
        stakeholder party if the collective is holding funds that are 
        the subject of a dispute between copyright owners. For purposes 
        of this subparagraph, the term `good-faith administration' 
        means administration in a manner that is not grossly negligent.
            ``(E) Preemption of state property laws.--The holding and 
        distribution of funds by the mechanical licensing collective in 
        accordance with this subsection shall supersede and preempt any 
        State law (including common law) concerning escheatment or 
        abandoned property, or any analogous provision, that might 
        otherwise apply.
            ``(F) Rule of construction.--Except as expressly provided 
        in this subsection, nothing in this subsection shall negate or 
        limit the ability of any person to pursue an action in Federal 
        court against the mechanical licensing collective or any other 
        person based upon a claim arising under this title or other 
        applicable law.
        ``(12) Regulations.--
            ``(A) Adoption by register of copyrights and copyright 
        royalty judges.--The Register of Copyrights may conduct such 
        proceedings and adopt such regulations as may be necessary or 
        appropriate to effectuate the provisions of this subsection, 
        except for regulations concerning proceedings before the 
        Copyright Royalty Judges to establish the administrative 
        assessment, which shall be adopted by the Copyright Royalty 
        Judges.
            ``(B) Judicial review of regulations.--Except as provided 
        in paragraph (7)(D)(vii), regulations adopted under this 
        subsection shall be subject to judicial review pursuant to 
        chapter 7 of title 5.
            ``(C) Protection of confidential information.--The Register 
        of Copyrights shall adopt regulations to provide for the 
        appropriate procedures to ensure that confidential, private, 
        proprietary, or privileged information contained in the records 
        of the mechanical licensing collective and digital licensee 
        coordinator is not improperly disclosed or used, including 
        through any disclosure or use by the board of directors or 
        personnel of either entity, and specifically including the 
        unclaimed royalties oversight committee and the dispute 
        resolution committee of the mechanical licensing collective.
        ``(13) Savings clauses.--
            ``(A) Limitation on activities and rights covered.--This 
        subsection applies solely to uses of musical works subject to 
        licensing under this section. The blanket license shall not be 
        construed to extend or apply to activities other than covered 
        activities or to rights other than the exclusive rights of 
        reproduction and distribution licensed under this section, or 
        serve or act as the basis to extend or expand the compulsory 
        license under this section to activities and rights not covered 
        by this section on the day before the enactment date.
            ``(B) Rights of public performance not affected.--The 
        rights, protections, and immunities granted under this 
        subsection, the data concerning musical works collected and 
        made available under this subsection, and the definitions under 
        subsection (e) shall not extend to, limit, or otherwise affect 
        any right of public performance in a musical work.''; and
        (5) by adding at the end the following:
    ``(e) Definitions.--As used in this section:
        ``(1) Accrued interest.--The term `accrued interest' means 
    interest accrued on accrued royalties, as described in subsection 
    (d)(3)(H)(ii).
        ``(2) Accrued royalties.--The term `accrued royalties' means 
    royalties accrued for the reproduction or distribution of a musical 
    work (or share thereof) in a covered activity, calculated in 
    accordance with the applicable royalty rate under this section.
        ``(3) Administrative assessment.--The term `administrative 
    assessment' means the fee established pursuant to subsection 
    (d)(7)(D).
        ``(4) Audit.--The term `audit' means a royalty compliance 
    examination to verify the accuracy of royalty payments, or the 
    conduct of such an examination, as applicable.
        ``(5) Blanket license.--The term `blanket license' means a 
    compulsory license described in subsection (d)(1)(A) to engage in 
    covered activities.
        ``(6) Collective total costs.--The term `collective total 
    costs'--
            ``(A) means the total costs of establishing, maintaining, 
        and operating the mechanical licensing collective to fulfill 
        its statutory functions, including--
                ``(i) startup costs;
                ``(ii) financing, legal, audit, and insurance costs;
                ``(iii) investments in information technology, 
            infrastructure, and other long-term resources;
                ``(iv) outside vendor costs;
                ``(v) costs of licensing, royalty administration, and 
            enforcement of rights;
                ``(vi) costs of bad debt; and
                ``(vii) costs of automated and manual efforts to 
            identify and locate copyright owners of musical works (and 
            shares of such musical works) and match sound recordings to 
            the musical works the sound recordings embody; and
            ``(B) does not include any added costs incurred by the 
        mechanical licensing collective to provide services under 
        voluntary licenses.
        ``(7) Covered activity.--The term `covered activity' means the 
    activity of making a digital phonorecord delivery of a musical 
    work, including in the form of a permanent download, limited 
    download, or interactive stream, where such activity qualifies for 
    a compulsory license under this section.
        ``(8) Digital music provider.--The term `digital music 
    provider' means a person (or persons operating under the authority 
    of that person) that, with respect to a service engaged in covered 
    activities--
            ``(A) has a direct contractual, subscription, or other 
        economic relationship with end users of the service, or, if no 
        such relationship with end users exists, exercises direct 
        control over the provision of the service to end users;
            ``(B) is able to fully report on any revenues and 
        consideration generated by the service; and
            ``(C) is able to fully report on usage of sound recordings 
        of musical works by the service (or procure such reporting).
        ``(9) Digital licensee coordinator.--The term `digital licensee 
    coordinator' means the entity most recently designated pursuant to 
    subsection (d)(5).
        ``(10) Digital phonorecord delivery.--The term `digital 
    phonorecord delivery' means each individual delivery of a 
    phonorecord by digital transmission of a sound recording that 
    results in a specifically identifiable reproduction by or for any 
    transmission recipient of a phonorecord of that sound recording, 
    regardless of whether the digital transmission is also a public 
    performance of the sound recording or any musical work embodied 
    therein, and includes a permanent download, a limited download, or 
    an interactive stream. A digital phonorecord delivery does not 
    result from a real-time, noninteractive subscription transmission 
    of a sound recording where no reproduction of the sound recording 
    or the musical work embodied therein is made from the inception of 
    the transmission through to its receipt by the transmission 
    recipient in order to make the sound recording audible. A digital 
    phonorecord delivery does not include the digital transmission of 
    sounds accompanying a motion picture or other audiovisual work as 
    defined in section 101.
        ``(11) Enactment date.--The term `enactment date' means the 
    date of the enactment of the Musical Works Modernization Act.
        ``(12) Individual download license.--The term `individual 
    download license' means a compulsory license obtained by a record 
    company to make and distribute, or authorize the making and 
    distribution of, permanent downloads embodying a specific 
    individual musical work.
        ``(13) Interactive stream.--The term `interactive stream' means 
    a digital transmission of a sound recording of a musical work in 
    the form of a stream, where the performance of the sound recording 
    by means of such transmission is not exempt under section 114(d)(1) 
    and does not in itself, or as a result of a program in which it is 
    included, qualify for statutory licensing under section 114(d)(2). 
    An interactive stream is a digital phonorecord delivery.
        ``(14) Interested.--The term `interested', as applied to a 
    party seeking to participate in a proceeding under subsection 
    (d)(7)(D), is a party as to which the Copyright Royalty Judges have 
    not determined that the party lacks a significant interest in such 
    proceeding.
        ``(15) License availability date.--The term `license 
    availability date' means January 1 following the expiration of the 
    2-year period beginning on the enactment date.
        ``(16) Limited download.--The term `limited download' means a 
    digital transmission of a sound recording of a musical work in the 
    form of a download, where such sound recording is accessible for 
    listening only for a limited amount of time or specified number of 
    times.
        ``(17) Matched.--The term `matched', as applied to a musical 
    work (or share thereof), means that the copyright owner of such 
    work (or share thereof) has been identified and located.
        ``(18) Mechanical licensing collective.--The term `mechanical 
    licensing collective' means the entity most recently designated as 
    such by the Register of Copyrights under subsection (d)(3).
        ``(19) Mechanical licensing collective budget.--The term 
    `mechanical licensing collective budget' means a statement of the 
    financial position of the mechanical licensing collective for a 
    fiscal year or quarter thereof based on estimates of expenditures 
    during the period and proposals for financing those expenditures, 
    including a calculation of the collective total costs.
        ``(20) Musical works database.--The term `musical works 
    database' means the database described in subsection (d)(3)(E).
        ``(21) Nonprofit.--The term `nonprofit' means a nonprofit 
    created or organized in a State.
        ``(22) Notice of license.--The term `notice of license' means a 
    notice from a digital music provider provided under subsection 
    (d)(2)(A) for purposes of obtaining a blanket license.
        ``(23) Notice of nonblanket activity.--The term `notice of 
    nonblanket activity' means a notice from a significant nonblanket 
    licensee provided under subsection (d)(6)(A) for purposes of 
    notifying the mechanical licensing collective that the licensee has 
    been engaging in covered activities.
        ``(24) Permanent download.--The term `permanent download' means 
    a digital transmission of a sound recording of a musical work in 
    the form of a download, where such sound recording is accessible 
    for listening without restriction as to the amount of time or 
    number of times it may be accessed.
        ``(25) Qualified auditor.--The term `qualified auditor' means 
    an independent, certified public accountant with experience 
    performing music royalty audits.
        ``(26) Record company.--The term `record company' means an 
    entity that invests in, produces, and markets sound recordings of 
    musical works, and distributes such sound recordings for 
    remuneration through multiple sales channels, including a corporate 
    affiliate of such an entity engaged in distribution of sound 
    recordings.
        ``(27) Report of usage.--The term `report of usage' means a 
    report reflecting an entity's usage of musical works in covered 
    activities described in subsection (d)(4)(A).
        ``(28) Required matching efforts.--The term `required matching 
    efforts' means efforts to identify and locate copyright owners of 
    musical works as described in subsection (d)(10)(B)(i).
        ``(29) Service.--The term `service', as used in relation to 
    covered activities, means any site, facility, or offering by or 
    through which sound recordings of musical works are digitally 
    transmitted to members of the public.
        ``(30) Share.--The term `share', as applied to a musical work, 
    means a fractional ownership interest in such work.
        ``(31) Significant nonblanket licensee.--The term `significant 
    nonblanket licensee'--
            ``(A) means an entity, including a group of entities under 
        common ownership or control that, acting under the authority of 
        one or more voluntary licenses or individual download licenses, 
        offers a service engaged in covered activities, and such entity 
        or group of entities--
                ``(i) is not currently operating under a blanket 
            license and is not obligated to provide reports of usage 
            reflecting covered activities under subsection (d)(4)(A);
                ``(ii) has a direct contractual, subscription, or other 
            economic relationship with end users of the service or, if 
            no such relationship with end users exists, exercises 
            direct control over the provision of the service to end 
            users; and
                ``(iii) either--

                    ``(I) on any day in a calendar month, makes more 
                than 5,000 different sound recordings of musical works 
                available through such service; or
                    ``(II) derives revenue or other consideration in 
                connection with such covered activities greater than 
                $50,000 in a calendar month, or total revenue or other 
                consideration greater than $500,000 during the 
                preceding 12 calendar months; and

            ``(B) does not include--
                ``(i) an entity whose covered activity consists solely 
            of free-to-the-user streams of segments of sound recordings 
            of musical works that do not exceed 90 seconds in length, 
            are offered only to facilitate a licensed use of musical 
            works that is not a covered activity, and have no revenue 
            directly attributable to such streams constituting the 
            covered activity; or
                ``(ii) a `public broadcasting entity' as defined in 
            section 118(f).
        ``(32) Songwriter.--The term `songwriter' means the author of 
    all or part of a musical work, including a composer or lyricist.
        ``(33) State.--The term `State' means each State of the United 
    States, the District of Columbia, and each territory or possession 
    of the United States.
        ``(34) Unclaimed accrued royalties.--The term `unclaimed 
    accrued royalties' means accrued royalties eligible for 
    distribution under subsection (d)(3)(J).
        ``(35) Unmatched.--The term `unmatched', as applied to a 
    musical work (or share thereof), means that the copyright owner of 
    such work (or share thereof) has not been identified or located.
        ``(36) Voluntary license.--The term `voluntary license' means a 
    license for use of a musical work (or share thereof) other than a 
    compulsory license obtained under this section.''.
    (b) Technical and Conforming Amendments to Section 801.--Section 
801(b) of title 17, United States Code, is amended--
        (1) by redesignating paragraph (8) as paragraph (9); and
        (2) by inserting after paragraph (7) the following:
        ``(8) To determine the administrative assessment to be paid by 
    digital music providers under section 115(d). The provisions of 
    section 115(d) shall apply to the conduct of proceedings by the 
    Copyright Royalty Judges under section 115(d) and not the 
    procedures described in this section, or section 803, 804, or 
    805.''.
    (c) Effective Date of Amended Rate Setting Standard.--The 
amendments made by subsection (a)(3) and section 103(g)(2) shall apply 
to any proceeding before the Copyright Royalty Judges that is commenced 
on or after the date of the enactment of this Act.
    (d) Technical and Conforming Amendments to Title 37, Part 385 of 
the Code of Federal Regulations.--Not later than 270 days after the 
date of enactment of this Act, the Copyright Royalty Judges shall amend 
the regulations for section 115 of title 17, United States Code, in 
part 385 of title 37, Code of Federal Regulations, to conform the 
definitions used in such part to the definitions of the same terms 
described in section 115(e) of title 17, United States Code, as added 
by subsection (a). In so doing, the Copyright Royalty Judges shall make 
adjustments to the language of the regulations as necessary to achieve 
the same purpose and effect as the original regulations with respect to 
the rates and terms previously adopted by the Copyright Royalty Judges.
    (e) Copyright Office Activities.--The Register of Copyrights shall 
engage in public outreach and educational activities--
        (1) regarding the amendments made by subsection (a) to section 
    115 of title 17, United States Code, including the responsibilities 
    of the mechanical licensing collective designated under those 
    amendments;
        (2) which shall include educating songwriters and other 
    interested parties with respect to the process established under 
    section 115(d)(3)(C)(i)(V) of title 17, United States Code, as 
    added by subsection (a), by which--
            (A) a copyright owner may claim ownership of musical works 
        (and shares of such works); and
            (B) royalties for works for which the owner is not 
        identified or located shall be equitably distributed to known 
        copyright owners; and
        (3) which the Register shall make available online.
    (f) Unclaimed Royalties Study and Recommendations.--
        (1) In general.--Not later than 2 years after the date on which 
    the Register of Copyrights initially designates the mechanical 
    licensing collective under section 115(d)(3)(B)(i) of title 17, 
    United States Code, as added by subsection (a)(4), the Register, in 
    consultation with the Comptroller General of the United States, and 
    after soliciting and reviewing comments and relevant information 
    from music industry participants and other interested parties, 
    shall submit to the Committee on the Judiciary of the Senate and 
    the Committee on the Judiciary of the House of Representatives a 
    report that recommends best practices that the collective may 
    implement in order to--
            (A) identify and locate musical work copyright owners with 
        unclaimed accrued royalties held by the collective;
            (B) encourage musical work copyright owners to claim the 
        royalties of those owners; and
            (C) reduce the incidence of unclaimed royalties.
        (2) Consideration of recommendations.--The mechanical licensing 
    collective shall carefully consider, and give substantial weight 
    to, the recommendations submitted by the Register of Copyrights 
    under paragraph (1) when establishing the procedures of the 
    collective with respect to the--
            (A) identification and location of musical work copyright 
        owners; and
            (B) distribution of unclaimed royalties.
    SEC. 103. AMENDMENTS TO SECTION 114.
    (a) Uniform Rate Standard.--Section 114(f) of title 17, United 
States Code, is amended--
        (1) by striking paragraphs (1) and (2) and inserting the 
    following:
        ``(1)(A) Proceedings under chapter 8 shall determine reasonable 
    rates and terms of royalty payments for transmissions subject to 
    statutory licensing under subsection (d)(2) during the 5-year 
    period beginning on January 1 of the second year following the year 
    in which the proceedings are to be commenced pursuant to 
    subparagraph (A) or (B) of section 804(b)(3), as the case may be, 
    or such other period as the parties may agree. The parties to each 
    proceeding shall bear their own costs.
        ``(B) The schedule of reasonable rates and terms determined by 
    the Copyright Royalty Judges shall, subject to paragraph (2), be 
    binding on all copyright owners of sound recordings and entities 
    performing sound recordings affected by this paragraph during the 
    5-year period specified in subparagraph (A), or such other period 
    as the parties may agree. Such rates and terms shall distinguish 
    among the different types of services then in operation and shall 
    include a minimum fee for each such type of service, such 
    differences to be based on criteria including the quantity and 
    nature of the use of sound recordings and the degree to which use 
    of the service may substitute for or may promote the purchase of 
    phonorecords by consumers. The Copyright Royalty Judges shall 
    establish rates and terms that most clearly represent the rates and 
    terms that would have been negotiated in the marketplace between a 
    willing buyer and a willing seller. In determining such rates and 
    terms, the Copyright Royalty Judges--
            ``(i) shall base their decision on economic, competitive, 
        and programming information presented by the parties, 
        including--
                ``(I) whether use of the service may substitute for or 
            may promote the sales of phonorecords or otherwise may 
            interfere with or may enhance the sound recording copyright 
            owner's other streams of revenue from the copyright owner's 
            sound recordings; and
                ``(II) the relative roles of the copyright owner and 
            the transmitting entity in the copyrighted work and the 
            service made available to the public with respect to 
            relative creative contribution, technological contribution, 
            capital investment, cost, and risk; and
            ``(ii) may consider the rates and terms for comparable 
        types of audio transmission services and comparable 
        circumstances under voluntary license agreements.
        ``(C) The procedures under subparagraphs (A) and (B) shall also 
    be initiated pursuant to a petition filed by any sound recording 
    copyright owner or any transmitting entity indicating that a new 
    type of service on which sound recordings are performed is or is 
    about to become operational, for the purpose of determining 
    reasonable terms and rates of royalty payments with respect to such 
    new type of service for the period beginning with the inception of 
    such new type of service and ending on the date on which the 
    royalty rates and terms for eligible nonsubscription services and 
    new subscription services, or preexisting subscription services and 
    preexisting satellite digital audio radio services, as the case may 
    be, most recently determined under subparagraph (A) or (B) and 
    chapter 8 expire, or such other period as the parties may agree.''; 
    and
        (2) by redesignating paragraphs (3), (4), and (5) as paragraphs 
    (2), (3), and (4), respectively.
    (b) Repeal.--Subsection (i) of section 114 of title 17, United 
States Code, is repealed.
    (c) Use in Musical Work Proceedings.--
        (1) In general.--License fees payable for the public 
    performance of sound recordings under section 106(6) of title 17, 
    United States Code, shall not be taken into account in any 
    administrative, judicial, or other governmental proceeding to set 
    or adjust the royalties payable to musical work copyright owners 
    for the public performance of their works except in such a 
    proceeding to set or adjust royalties for the public performance of 
    musical works by means of a digital audio transmission other than a 
    transmission by a broadcaster, and may be taken into account only 
    with respect to such digital audio transmission.
        (2) Definitions.--In this subsection:
            (A) Transmission by a broadcaster.--The term ``transmission 
        by a broadcaster'' means a nonsubscription digital transmission 
        made by a terrestrial broadcast station on its own behalf, or 
        on the behalf of a terrestrial broadcast station under common 
        ownership or control, that is not part of an interactive 
        service or a music-intensive service comprising the 
        transmission of sound recordings customized for or customizable 
        by recipients or service users.
            (B) Terrestrial broadcast station.--The term ``terrestrial 
        broadcast station'' means a terrestrial, over-the-air radio or 
        television broadcast station, including an FM translator (as 
        defined in section 74.1201 of title 47, Code of Federal 
        Regulations, and licensed as such by the Federal Communications 
        Commission) whose primary business activities are comprised of, 
        and whose revenues are generated through, terrestrial, over-
        the-air broadcast transmissions, or the simultaneous or 
        substantially-simultaneous digital retransmission by the 
        terrestrial, over-the-air broadcast station of its over-the-air 
        broadcast transmissions.
    (d) Rule of Construction.--Subsection (c)(2) shall not be given 
effect in interpreting provisions of title 17, United States Code.
    (e) Use in Sound Recording Proceedings.--The repeal of section 
114(i) of title 17, United States Code, by subsection (b) shall not be 
taken into account in any proceeding to set or adjust the rates and 
fees payable for the use of sound recordings under section 112(e) or 
114(f) of such title that is pending on, or commenced on or after, the 
date of enactment of this Act.
    (f) Decisions and Precedents Not Affected.--The repeal of section 
114(i) of title 17, United States Code, by subsection (b) shall not 
have any effect upon the decisions, or the precedents established or 
relied upon, in any proceeding to set or adjust the rates and fees 
payable for the use of sound recordings under section 112(e) or 114(f) 
of such title before the date of enactment of this Act.
    (g) Technical and Conforming Amendments.--
        (1) Section 114.--Section 114(f) of title 17, United States 
    Code, as amended by subsection (a), is further amended in paragraph 
    (4)(C), as so redesignated, in the first sentence, by striking 
    ``under paragraph (4)'' and inserting ``under paragraph (3)''.
        (2) Section 801.--Section 801(b) of title 17, United States 
    Code, is amended--
            (A) in paragraph (1), by striking ``The rates applicable'' 
        and all that follows though ``prevailing industry practices.''; 
        and
            (B) in paragraph (7)(B), by striking ``114(f)(3)'' and 
        inserting ``114(f)(2)''.
        (3) Section 803.--Section 803(c)(2)(E)(i)(II) of title 17, 
    United States Code, is amended--
            (A) by striking ``or 114(f)(2)(C)''; and
            (B) by striking ``114(f)(4)(B)'' and inserting 
        ``114(f)(3)(B)''.
        (4) Section 804.--Section 804(b)(3)(C) of title 17, United 
    States Code, is amended--
            (A) in clause (i), by striking ``and 114(f)(2)(C)'';
            (B) in clause (iii)(II), by striking ``114(f)(4)(B)(ii)'' 
        and inserting ``114(f)(3)(B)(ii)''; and
            (C) in clause (iv), by striking ``or 114(f)(2)(C), as the 
        case may be''.
    (h) Effective Date of Amended Rate Setting Standard.--The 
amendments made by subsection (a)(1) shall apply to any proceeding 
before the Copyright Royalty Judges that is commenced on or after the 
date of the enactment of this Act.
    (i) Timing of Rate Determinations.--Section 804(b)(3)(B) of title 
17, United States Code, is amended, in the third sentence, by inserting 
the following after ``fifth calendar year'': ``, except that--(i) with 
respect to preexisting subscription services, the terms and rates 
finally determined for the rate period ending on December 31, 2022, 
shall remain in effect through December 31, 2027, and there shall be no 
proceeding to determine terms and rates for preexisting subscription 
services for the period beginning on January 1, 2023, and ending on 
December 31, 2027; and'' ``(ii) with respect to pre-existing satellite 
digital audio radio services, the terms and rates set forth by the 
Copyright Royalty Judges on December 14, 2017, in their initial 
determination for the rate period ending on December 31, 2022, shall be 
in effect through December 31, 2027, without any change based on a 
rehearing under section 803(c)(2) and without the possibility of appeal 
under section 803(d), and there shall be no proceeding to determine 
terms and rates for preexisting satellite digital audio radio services 
for the period beginning on January 1, 2023, and ending on December 31, 
2027''.
    SEC. 104. RANDOM ASSIGNMENT OF RATE COURT PROCEEDINGS.
    Section 137 of title 28, United States Code, is amended--
        (1) by striking ``The business'' and inserting ``(a) In 
    General.--The business''; and
        (2) by adding at the end the following:
    ``(b) Random Assignment of Rate Court Proceedings.--
        ``(1) In general.--
            ``(A) Definition.--In this paragraph, the term `performing 
        rights society' has the meaning given the term in section 101 
        of title 17.
            ``(B) Determination of license fee.--Except as provided in 
        subparagraph (C), in the case of any performing rights society 
        subject to a consent decree, any application for the 
        determination of a license fee for the public performance of 
        music in accordance with the applicable consent decree shall be 
        made in the district court with jurisdiction over that consent 
        decree and randomly assigned to a judge of that district court 
        according to the rules of that court for the division of 
        business among district judges, provided that any such 
        application shall not be assigned to--
                ``(i) a judge to whom continuing jurisdiction over any 
            performing rights society for any performing rights society 
            consent decree is assigned or has previously been assigned; 
            or
                ``(ii) a judge to whom another proceeding concerning an 
            application for the determination of a reasonable license 
            fee is assigned at the time of the filing of the 
            application.
            ``(C) Exception.--Subparagraph (B) does not apply to an 
        application to determine reasonable license fees made by 
        individual proprietors under section 513 of title 17.
        ``(2) Rule of construction.--Nothing in paragraph (1) shall 
    modify the rights of any party to a consent decree or to a 
    proceeding to determine reasonable license fees, to make an 
    application for the construction of any provision of the applicable 
    consent decree. Such application shall be referred to the judge to 
    whom continuing jurisdiction over the applicable consent decree is 
    currently assigned. If any such application is made in connection 
    with a rate proceeding, such rate proceeding shall be stayed until 
    the final determination of the construction application. Disputes 
    in connection with a rate proceeding about whether a licensee is 
    similarly situated to another licensee shall not be subject to 
    referral to the judge with continuing jurisdiction over the 
    applicable consent decree.''.
    SEC. 105. PERFORMING RIGHTS SOCIETY CONSENT DECREES.
    (a) Definition.--In this section, the term ``performing rights 
society'' has the meaning given the term in section 101 of title 17, 
United States Code.
    (b) Notification of Review.--
        (1) In general.--The Department of Justice shall provide timely 
    briefings upon request of any Member of the Committee on the 
    Judiciary of the Senate and the Committee on the Judiciary of the 
    House of Representatives regarding the status of a review in 
    progress of a consent decree between the United States and a 
    performing rights society.
        (2) Confidentiality and deliberative process.--In accordance 
    with applicable rules relating to confidentiality and agency 
    deliberative process, the Department of Justice shall share with 
    such Members of Congress detailed and timely information and 
    pertinent documents related to the consent decree review.
    (c) Action Before Motion to Terminate.--
        (1) In general.--Before filing with the appropriate district 
    court of the United States a motion to terminate a consent decree 
    between the United States and a performing rights society, 
    including a motion to terminate a consent decree after the passage 
    of a specified period of time, the Department of Justice shall--
            (A) notify Members of Congress and committees of Congress 
        described in subsection (b); and
            (B) provide to such Members of Congress and committees 
        information regarding the impact of the proposed termination on 
        the market for licensing the public performance of musical 
        works should the motion be granted.
        (2) Notification.--
            (A) In general.--During the notification described in 
        paragraph (1), and not later than a reasonable time before the 
        date on which the Department of Justice files with the 
        appropriate district court of the United States a motion to 
        terminate a consent decree between the United States and a 
        performing rights society, the Department of Justice should 
        submit to the chairmen and ranking members of the Committee on 
        the Judiciary of the Senate and the Committee on the Judiciary 
        of the House of Representatives a written notification of the 
        intent of the Department of Justice to file the motion.
            (B) Contents.--The notification provided in subparagraph 
        (A) shall include a written report to the chairmen and ranking 
        members of the Committee on the Judiciary of Senate and the 
        Committee on the Judiciary of the House of Representatives 
        setting forth--
                (i) an explanation of the process used by the 
            Department of Justice to review the consent decree;
                (ii) a summary of the public comments received by the 
            Department of Justice during the review by the Department; 
            and
                (iii) other information provided to Congress under 
            paragraph (1)(B).
    (d) Scope.--This section applies only to a consent decree between 
the United States and a performing rights society.
    SEC. 106. EFFECTIVE DATE.
    This title, and the amendments made by this title, shall take 
effect on the date of enactment of this Act.

                TITLE II--CLASSICS PROTECTION AND ACCESS

    SEC. 201. SHORT TITLE.
    This title may be cited as the ``Classics Protection and Access 
Act''.
    SEC. 202. UNAUTHORIZED USE OF PRE-1972 SOUND RECORDINGS.
    (a) Preemption of State Law Rights; Protection for Unauthorized 
Use.--Title 17, United States Code, is amended--
        (1) in section 301, by striking subsection (c) and inserting 
    the following:
    ``(c) Notwithstanding the provisions of section 303, and in 
accordance with chapter 14, no sound recording fixed before February 
15, 1972, shall be subject to copyright under this title. With respect 
to sound recordings fixed before February 15, 1972, the preemptive 
provisions of subsection (a) shall apply to activities that are 
commenced on and after the date of enactment of the Classics Protection 
and Access Act. Nothing in this subsection may be construed to affirm 
or negate the preemption of rights and remedies pertaining to any cause 
of action arising from the nonsubscription broadcast transmission of 
sound recordings under the common law or statutes of any State for 
activities that do not qualify as covered activities under chapter 14 
undertaken during the period between the date of enactment of the 
Classics Protection and Access Act and the date on which the term of 
prohibition on unauthorized acts under section 1401(a)(2) expires for 
such sound recordings. Any potential preemption of rights and remedies 
related to such activities undertaken during that period shall apply in 
all respects as it did the day before the date of enactment of the 
Classics Protection and Access Act.''; and
        (2) by adding at the end the following:

      ``CHAPTER 14--UNAUTHORIZED USE OF PRE-1972 SOUND RECORDINGS

``Sec.
``1401. Unauthorized use of pre-1972 sound recordings.

``Sec. 1401. Unauthorized use of pre-1972 sound recordings
    ``(a) In General.--
        ``(1) Unauthorized acts.--Anyone who, on or before the last day 
    of the applicable transition period under paragraph (2), and 
    without the consent of the rights owner, engages in covered 
    activity with respect to a sound recording fixed before February 
    15, 1972, shall be subject to the remedies provided in sections 502 
    through 505 and 1203 to the same extent as an infringer of 
    copyright or a person that engages in unauthorized activity under 
    chapter 12.
        ``(2) Term of prohibition.--
            ``(A) In general.--The prohibition under paragraph (1)--
                ``(i) subject to clause (ii), shall apply to a sound 
            recording described in that paragraph--

                    ``(I) through December 31 of the year that is 95 
                years after the year of first publication; and
                    ``(II) for a further transition period as 
                prescribed under subparagraph (B) of this paragraph; 
                and

                ``(ii) shall not apply to any sound recording after 
            February 15, 2067.
            ``(B) Transition periods.--
                ``(i) Pre-1923 recordings.--In the case of a sound 
            recording first published before January 1, 1923, the 
            transition period described in subparagraph (A)(i)(II) 
            shall end on December 31 of the year that is 3 years after 
            the date of enactment of this section.
                ``(ii) 1923-1946 recordings.--In the case of a sound 
            recording first published during the period beginning on 
            January 1, 1923, and ending on December 31, 1946, the 
            transition period described in subparagraph (A)(i)(II) 
            shall end on the date that is 5 years after the last day of 
            the period described in subparagraph (A)(i)(I).
                ``(iii) 1947-1956 recordings.--In the case of a sound 
            recording first published during the period beginning on 
            January 1, 1947, and ending on December 31, 1956, the 
            transition period described in subparagraph (A)(i)(II) 
            shall end on the date that is 15 years after the last day 
            of the period described in subparagraph (A)(i)(I).
                ``(iv) Post-1956 recordings.--In the case of a sound 
            recording fixed before February 15, 1972, that is not 
            described in clause (i), (ii), or (iii), the transition 
            period described in subparagraph (A)(i)(II) shall end on 
            February 15, 2067.
        ``(3) Rule of construction.--For the purposes of this 
    subsection, the term `anyone' includes any State, any 
    instrumentality of a State, and any officer or employee of a State 
    or instrumentality of a State acting in the official capacity of 
    the officer or employee, as applicable.
    ``(b) Certain Authorized Transmissions and Reproductions.--A public 
performance by means of a digital audio transmission of a sound 
recording fixed before February 15, 1972, or a reproduction in an 
ephemeral phonorecord or copy of a sound recording fixed before 
February 15, 1972, shall, for purposes of subsection (a), be considered 
to be authorized and made with the consent of the rights owner if--
        ``(1) the transmission or reproduction would satisfy the 
    requirements for statutory licensing under section 112(e)(1) or 
    section 114(d)(2), or would be exempt under section 114(d)(1), as 
    the case may be, if the sound recording were fixed on or after 
    February 15, 1972; and
        ``(2) the transmitting entity pays the statutory royalty for 
    the transmission or reproduction pursuant to the rates and terms 
    adopted under sections 112(e) and 114(f), and complies with other 
    obligations, in the same manner as required by regulations adopted 
    by the Copyright Royalty Judges under sections 112(e) and 114(f) 
    for sound recordings that are fixed on or after February 15, 1972, 
    except in the case of a transmission that would be exempt under 
    section 114(d)(1).
    ``(c) Certain Noncommercial Uses of Sound Recordings That Are Not 
Being Commercially Exploited.--
        ``(1) In general.--Noncommercial use of a sound recording fixed 
    before February 15, 1972, that is not being commercially exploited 
    by or under the authority of the rights owner shall not violate 
    subsection (a) if--
            ``(A) the person engaging in the noncommercial use, in 
        order to determine whether the sound recording is being 
        commercially exploited by or under the authority of the rights 
        owner, makes a good faith, reasonable search for, but does not 
        find, the sound recording--
                ``(i) in the records of schedules filed in the 
            Copyright Office as described in subsection (f)(5)(A); and
                ``(ii) on services offering a comprehensive set of 
            sound recordings for sale or streaming;
            ``(B) the person engaging in the noncommercial use files a 
        notice identifying the sound recording and the nature of the 
        use in the Copyright Office in accordance with the regulations 
        issued under paragraph (3)(B); and
            ``(C) during the 90-day period beginning on the date on 
        which the notice described in subparagraph (B) is indexed into 
        the public records of the Copyright Office, the rights owner of 
        the sound recording does not, in its discretion, opt out of the 
        noncommercial use by filing notice thereof in the Copyright 
        Office in accordance with the regulations issued under 
        paragraph (5).
        ``(2) Rules of construction.--For purposes of this subsection--
            ``(A) merely recovering costs of production and 
        distribution of a sound recording resulting from a use 
        otherwise permitted under this subsection does not itself 
        necessarily constitute a commercial use of the sound recording;
            ``(B) the fact that a person engaging in the use of a sound 
        recording also engages in commercial activities does not itself 
        necessarily render the use commercial; and
            ``(C) the fact that a person files notice of a 
        noncommercial use of a sound recording in accordance with the 
        regulations issued under paragraph (3)(B) does not itself 
        affect any limitation on the exclusive rights of a copyright 
        owner described in section 107, 108, 109, 110, or 112(f) as 
        applied to a claim under subsection (a) of this section 
        pursuant to subsection (f)(1)(A) of this section.
        ``(3) Notice of covered activity.--Not later than 180 days 
    after the date of enactment of this section, the Register of 
    Copyrights shall issue regulations that--
            ``(A) provide specific, reasonable steps that, if taken by 
        a filer, are sufficient to constitute a good faith, reasonable 
        search under paragraph (1)(A) to determine whether a recording 
        is being commercially exploited, including the services that 
        satisfy the good faith, reasonable search requirement under 
        paragraph (1)(A) for purposes of the safe harbor described in 
        paragraph (4)(A); and
            ``(B) establish the form, content, and procedures for the 
        filing of notices under paragraph (1)(B).
        ``(4) Safe harbor.--
            ``(A) In general.--A person engaging in a noncommercial use 
        of a sound recording otherwise permitted under this subsection 
        who establishes that the person made a good faith, reasonable 
        search under paragraph (1)(A) without finding commercial 
        exploitation of the sound recording by or under the authority 
        of the rights owner shall not be found to be in violation of 
        subsection (a).
            ``(B) Steps sufficient but not necessary.--Taking the 
        specific, reasonable steps identified by the Register of 
        Copyrights in the regulations issued under paragraph (3)(A) 
        shall be sufficient, but not necessary, for a filer to satisfy 
        the requirement to conduct a good faith, reasonable search 
        under paragraph (1)(A) for purposes of subparagraph (A) of this 
        paragraph.
        ``(5) Opting out of covered activity.--
            ``(A) In general.--Not later than 180 days after the date 
        of enactment of this section, the Register of Copyrights shall 
        issue regulations establishing the form, content, and 
        procedures for the rights owner of a sound recording that is 
        the subject of a notice under paragraph (1)(B) to, in its 
        discretion, file notice opting out of the covered activity 
        described in the notice under paragraph (1)(B) during the 90-
        day period beginning on the date on which the notice under 
        paragraph (1)(B) is indexed into the public records of the 
        Copyright Office.
            ``(B) Rule of construction.--The fact that a rights holder 
        opts out of a noncommercial use of a sound recording by filing 
        notice thereof in the Copyright Office in accordance with the 
        regulations issued under subparagraph (A) does not itself 
        enlarge or diminish any limitation on the exclusive rights of a 
        copyright owner described in section 107, 108, 109, 110, or 
        112(f) as applied to a claim under subsection (a) of this 
        section pursuant to subsection (f)(1)(A) of this section.
        ``(6) Civil penalties for certain acts.--
            ``(A) Filing of notices of noncommercial use.--Any person 
        who willfully engages in a pattern or practice of filing a 
        notice of noncommercial use of a sound recording as described 
        in paragraph (1)(B) fraudulently describing the use proposed, 
        or knowing that the use proposed is not permitted under this 
        subsection, shall be assessed a civil penalty in an amount that 
        is not less than $250, and not more than $1000, for each such 
        notice, in addition to any other remedies that may be available 
        under this title based on the actual use made.
            ``(B) Filing of opt-out notices.--
                ``(i) In general.--Any person who files an opt-out 
            notice as described in paragraph (1)(C), knowing that the 
            person is not the rights owner or authorized to act on 
            behalf of the rights owner of the sound recording to which 
            the notice pertains, shall be assessed a civil penalty in 
            an amount not less than $250, and not more than $1,000, for 
            each such notice.
                ``(ii) Pattern or practice.--Any person who engages in 
            a pattern or practice of making filings as described in 
            clause (i) shall be assessed a civil penalty in an amount 
            not less than $10,000 for each such filing.
            ``(C) Definition.--For purposes of this paragraph, the term 
        `knowing'--
                ``(i) does not require specific intent to defraud; and
                ``(ii) with respect to information about ownership of 
            the sound recording in question, means that the person--

                    ``(I) has actual knowledge of the information;
                    ``(II) acts in deliberate ignorance of the truth or 
                falsity of the information; or
                    ``(III) acts in grossly negligent disregard of the 
                truth or falsity of the information.

    ``(d) Payment of Royalties for Transmissions of Performances by 
Direct Licensing of Statutory Services.--
        ``(1) In general.--A public performance by means of a digital 
    audio transmission of a sound recording fixed before February 15, 
    1972, shall, for purposes of subsection (a), be considered to be 
    authorized and made with the consent of the rights owner if the 
    transmission is made pursuant to a license agreement voluntarily 
    negotiated at any time between the rights owner and the entity 
    performing the sound recording.
        ``(2) Payment of royalties to nonprofit collective under 
    certain license agreements.--
            ``(A) Licenses entered into on or after date of 
        enactment.--To the extent that a license agreement described in 
        paragraph (1) entered into on or after the date of enactment of 
        this section extends to a public performance by means of a 
        digital audio transmission of a sound recording fixed before 
        February 15, 1972, that meets the conditions of subsection 
        (b)--
                ``(i) the licensee shall, with respect to such 
            transmission, pay to the collective designated to 
            distribute receipts from the licensing of transmissions in 
            accordance with section 114(f), 50 percent of the 
            performance royalties for that transmission due under the 
            license; and
                ``(ii) the royalties paid under clause (i) shall be 
            fully credited as payments due under the license.
            ``(B) Certain agreements entered into before enactment.--To 
        the extent that a license agreement described in paragraph (1), 
        entered into during the period beginning on January 1 of the 
        year in which this section is enacted and ending on the day 
        before the date of enactment of this section, or a settlement 
        agreement with a preexisting satellite digital audio radio 
        service (as defined in section 114(j)) entered into during the 
        period beginning on January 1, 2015, and ending on the day 
        before the date of enactment of this section, extends to a 
        public performance by means of a digital audio transmission of 
        a sound recording fixed before February 15, 1972, that meets 
        the conditions of subsection (b)--
                ``(i) the rights owner shall, with respect to such 
            transmission, pay to the collective designated to 
            distribute receipts from the licensing of transmissions in 
            accordance with section 114(f) an amount that is equal to 
            the difference between--

                    ``(I) 50 percent of the difference between--

                        ``(aa) the rights owner's total gross 
                    performance royalty fee receipts or settlement 
                    monies received for all such transmissions covered 
                    under the license or settlement agreement, as 
                    applicable; and
                        ``(bb) the rights owner's total payments for 
                    outside legal expenses, including any payments of 
                    third-party claims, that are directly attributable 
                    to the license or settlement agreement, as 
                    applicable; and

                    ``(II) the amount of any royalty receipts or 
                settlement monies under the agreement that are 
                distributed by the rights owner to featured and 
                nonfeatured artists before the date of enactment of 
                this section; and

                ``(ii) the royalties paid under clause (i) shall be 
            fully credited as payments due under the license or 
            settlement agreement, as applicable.
        ``(3) Distribution of royalties and settlement monies by 
    collective.--The collective described in paragraph (2) shall, in 
    accordance with subparagraphs (B) through (D) of section 114(g)(2), 
    and paragraphs (5) and (6) of section 114(g), distribute the 
    royalties or settlement monies received under paragraph (2) under a 
    license or settlement described in paragraph (2), which shall be 
    the only payments to which featured and nonfeatured artists are 
    entitled by virtue of the transmissions described in paragraph (2), 
    except for settlement monies described in paragraph (2) that are 
    distributed by the rights owner to featured and nonfeatured artists 
    before the date of enactment of this section.
        ``(4) Payment of royalties under license agreements entered 
    before enactment or not otherwise described in paragraph (2).--
            ``(A) In general.--To the extent that a license agreement 
        described in paragraph (1) entered into before the date of 
        enactment of this section, or any other license agreement not 
        as described in paragraph (2), extends to a public performance 
        by means of a digital audio transmission of a sound recording 
        fixed before February 15, 1972, that meets the conditions of 
        subsection (b), the payments made by the licensee pursuant to 
        the license shall be made in accordance with the agreement.
            ``(B) Additional payments not required.--To the extent that 
        a licensee has made, or will make in the future, payments 
        pursuant to a license as described in subparagraph (A), the 
        provisions of paragraphs (2) and (3) shall not require any 
        additional payments from, or additional financial obligations 
        on the part of, the licensee.
            ``(C) Rule of construction.--Nothing in this subsection may 
        be construed to prohibit the collective designated to 
        distribute receipts from the licensing of transmissions in 
        accordance with section 114(f) from administering royalty 
        payments under any license not described in paragraph (2).
    ``(e) Preemption With Respect to Certain Past Acts.--
        ``(1) In general.--This section preempts any claim of common 
    law copyright or equivalent right under the laws of any State 
    arising from a digital audio transmission or reproduction that is 
    made before the date of enactment of this section of a sound 
    recording fixed before February 15, 1972, if--
            ``(A) the digital audio transmission would have satisfied 
        the requirements for statutory licensing under section 
        114(d)(2) or been exempt under section 114(d)(1), or the 
        reproduction would have satisfied the requirements of section 
        112(e)(1), as the case may be, if the sound recording were 
        fixed on or after February 15, 1972; and
            ``(B) either--
                ``(i) except in the case of a transmission that would 
            have been exempt under section 114(d)(1), not later than 
            270 days after the date of enactment of this section, the 
            transmitting entity pays statutory royalties and provides 
            notice of the use of the relevant sound recordings in the 
            same manner as required by regulations adopted by the 
            Copyright Royalty Judges for sound recordings that are 
            fixed on or after February 15, 1972, for all the digital 
            audio transmissions and reproductions satisfying the 
            requirements for statutory licensing under sections 
            112(e)(1) and 114(d)(2) during the 3 years before that date 
            of enactment; or
                ``(ii) an agreement voluntarily negotiated between the 
            rights owner and the entity performing the sound recording 
            (including a litigation settlement agreement entered into 
            before the date of enactment of this section) authorizes or 
            waives liability for any such transmission or reproduction 
            and the transmitting entity has paid for and reported such 
            digital audio transmission under that agreement.
        ``(2) Rule of construction for common law copyright.--For 
    purposes of paragraph (1), a claim of common law copyright or 
    equivalent right under the laws of any State includes a claim that 
    characterizes conduct subject to that paragraph as an unlawful 
    distribution, act of record piracy, or similar violation.
        ``(3) Rule of construction for public performance rights.--
    Nothing in this section may be construed to recognize or negate the 
    existence of public performance rights in sound recordings under 
    the laws of any State.
    ``(f) Limitations on Remedies.--
        ``(1) Fair use; uses by libraries, archives, and educational 
    institutions.--
            ``(A) In general.--The limitations on the exclusive rights 
        of a copyright owner described in sections 107, 108, 109, 110, 
        and 112(f) shall apply to a claim under subsection (a) with 
        respect to a sound recording fixed before February 15, 1972.
            ``(B) Rule of construction for section 108(h).--With 
        respect to the application of section 108(h) to a claim under 
        subsection (a) with respect to a sound recording fixed before 
        February 15, 1972, the phrase `during the last 20 years of any 
        term of copyright of a published work' in such section 108(h) 
        shall be construed to mean at any time after the date of 
        enactment of this section.
        ``(2) Actions.--The limitations on actions described in section 
    507 shall apply to a claim under subsection (a) with respect to a 
    sound recording fixed before February 15, 1972.
        ``(3) Material online.--Section 512 shall apply to a claim 
    under subsection (a) with respect to a sound recording fixed before 
    February 15, 1972.
        ``(4) Principles of equity.--Principles of equity apply to 
    remedies for a violation of this section to the same extent as such 
    principles apply to remedies for infringement of copyright.
        ``(5) Filing requirement for statutory damages and attorneys' 
    fees.--
            ``(A) Filing of information on sound recordings.--
                ``(i) Filing requirement.--Except in the case of a 
            transmitting entity that has filed contact information for 
            that transmitting entity under subparagraph (B), in any 
            action under this section, an award of statutory damages or 
            of attorneys' fees under section 504 or 505 may be made 
            with respect to an unauthorized use of a sound recording 
            under subsection (a) only if--

                    ``(I) the rights owner has filed with the Copyright 
                Office a schedule that specifies the title, artist, and 
                rights owner of the sound recording and contains such 
                other information, as practicable, as the Register of 
                Copyrights prescribes by regulation; and
                    ``(II) the use occurs after the end of the 90-day 
                period beginning on the date on which the information 
                described in subclause (I) is indexed into the public 
                records of the Copyright Office.

                ``(ii) Regulations.--Not later than 180 days after the 
            date of enactment of this section, the Register of 
            Copyrights shall issue regulations that--

                    ``(I) establish the form, content, and procedures 
                for the filing of schedules under clause (i);
                    ``(II) provide that a person may request that the 
                person receive timely notification of a filing 
                described in subclause (I); and
                    ``(III) set forth the manner in which a person may 
                make a request under subclause (II).

            ``(B) Filing of contact information for transmitting 
        entities.--
                ``(i) Filing requirement.--Not later than 30 days after 
            the date of enactment of this section, the Register of 
            Copyrights shall issue regulations establishing the form, 
            content, and procedures for the filing of contact 
            information by any entity that, as of the date of enactment 
            of this section, performs a sound recording fixed before 
            February 15, 1972, by means of a digital audio 
            transmission.
                ``(ii) Time limit on filings.--The Register of 
            Copyrights may accept filings under clause (i) only until 
            the 180th day after the date of enactment of this section.
                ``(iii) Limitation on statutory damages and attorneys' 
            fees.--

                    ``(I) Limitation.--An award of statutory damages or 
                of attorneys' fees under section 504 or 505 may not be 
                made against an entity that has filed contact 
                information for that entity under clause (i) with 
                respect to an unauthorized use by that entity of a 
                sound recording under subsection (a) if the use occurs 
                before the end of the 90-day period beginning on the 
                date on which the entity receives a notice that--

                        ``(aa) is sent by or on behalf of the rights 
                    owner of the sound recording;
                        ``(bb) states that the entity is not legally 
                    authorized to use that sound recording under 
                    subsection (a); and
                        ``(cc) identifies the sound recording in a 
                    schedule conforming to the requirements prescribed 
                    by the regulations issued under subparagraph 
                    (A)(ii).

                    ``(II) Undeliverable notices.--In any case in which 
                a notice under subclause (I) is sent to an entity by 
                mail or courier service and the notice is returned to 
                the sender because the entity either is no longer 
                located at the address provided in the contact 
                information filed under clause (i) or has refused to 
                accept delivery, or the notice is sent by electronic 
                mail and is undeliverable, the 90-day period under 
                subclause (I) shall begin on the date of the attempted 
                delivery.

            ``(C) Section 412.--Section 412 shall not limit an award of 
        statutory damages under section 504(c) or attorneys' fees under 
        section 505 with respect to a covered activity in violation of 
        subsection (a).
        ``(6) Applicability of other provisions.--
            ``(A) In general.--Subject to subparagraph (B), no 
        provision of this title shall apply to or limit the remedies 
        available under this section except as otherwise provided in 
        this section.
            ``(B) Applicability of definitions.--Any term used in this 
        section that is defined in section 101 shall have the meaning 
        given that term in section 101.
    ``(g) Application of Section 230 Safe Harbor.--For purposes of 
section 230 of the Communications Act of 1934 (47 U.S.C. 230), 
subsection (a) shall be considered to be a `law pertaining to 
intellectual property' under subsection (e)(2) of such section 230.
    ``(h) Application to Rights Owners.--
        ``(1) Transfers.--With respect to a rights owner described in 
    subsection (l)(2)(B)--
            ``(A) subsections (d) and (e) of section 201 and section 
        204 shall apply to a transfer described in subsection (l)(2)(B) 
        to the same extent as with respect to a transfer of copyright 
        ownership; and
            ``(B) notwithstanding section 411, that rights owner may 
        institute an action with respect to a violation of this section 
        to the same extent as the owner of an exclusive right under a 
        copyright may institute an action under section 501(b).
        ``(2) Application of other provisions.--The following 
    provisions shall apply to a rights owner under this section to the 
    same extent as any copyright owner:
            ``(A) Section 112(e)(2).
            ``(B) Section 112(e)(7).
            ``(C) Section 114(e).
            ``(D) Section 114(h).
    ``(i) Ephemeral Recordings.--An authorized reproduction made under 
this section shall be subject to section 112(g) to the same extent as a 
reproduction of a sound recording fixed on or after February 15, 1972.
    ``(j) Rule of Construction.--A rights owner of, or featured 
recording artist who performs on, a sound recording under this chapter 
shall be deemed to be an interested copyright party, as defined in 
section 1001, to the same extent as a copyright owner or featured 
recording artist under chapter 10.
    ``(k) Treatment of States and State Instrumentalities, Officers, 
and Employees.--Any State, and any instrumentality, officer, or 
employee described in subsection (a)(3), shall be subject to the 
provisions of this section in the same manner and to the same extent as 
any nongovernmental entity.
    ``(l) Definitions.--In this section:
        ``(1) Covered activity.--The term `covered activity' means any 
    activity that the copyright owner of a sound recording would have 
    the exclusive right to do or authorize under section 106 or 602, or 
    that would violate section 1201 or 1202, if the sound recording 
    were fixed on or after February 15, 1972.
        ``(2) Rights owner.--The term `rights owner' means--
            ``(A) the person that has the exclusive right to reproduce 
        a sound recording under the laws of any State, as of the day 
        before the date of enactment of this section; or
            ``(B) any person to which a right to enforce a violation of 
        this section may be transferred, in whole or in part, after the 
        date of enactment of this section, under--
                ``(i) subsections (d) and (e) of section 201; and
                ``(ii) section 204.''.
    (b) Conforming Amendment.--The table of chapters for title 17, 
United States Code, is amended by adding at the end the following:

``14.  Unauthorized use of pre-1972 sound recordings.............1401''.

               TITLE III--ALLOCATION FOR MUSIC PRODUCERS

    SEC. 301. SHORT TITLE.
    This title may be cited as the ``Allocation for Music Producers 
Act'' or the ``AMP Act''.
    SEC. 302. PAYMENT OF STATUTORY PERFORMANCE ROYALTIES.
    (a) Letter of Direction.--Section 114(g) of title 17, United States 
Code, is amended by adding at the end the following:
        ``(5) Letter of direction.--
            ``(A) In general.--A nonprofit collective designated by the 
        Copyright Royalty Judges to distribute receipts from the 
        licensing of transmissions in accordance with subsection (f) 
        shall adopt and reasonably implement a policy that provides, in 
        circumstances determined by the collective to be appropriate, 
        for acceptance of instructions from a payee identified under 
        subparagraph (A) or (D) of paragraph (2) to distribute, to a 
        producer, mixer, or sound engineer who was part of the creative 
        process that created a sound recording, a portion of the 
        payments to which the payee would otherwise be entitled from 
        the licensing of transmissions of the sound recording. In this 
        section, such instructions shall be referred to as a `letter of 
        direction'.
            ``(B) Acceptance of letter.--To the extent that a 
        collective described in subparagraph (A) accepts a letter of 
        direction under that subparagraph, the person entitled to 
        payment pursuant to the letter of direction shall, during the 
        period in which the letter of direction is in effect and 
        carried out by the collective, be treated for all purposes as 
        the owner of the right to receive such payment, and the payee 
        providing the letter of direction to the collective shall be 
        treated as having no interest in such payment.
            ``(C) Authority of collective.--This paragraph shall not be 
        construed in such a manner so that the collective is not 
        authorized to accept or act upon payment instructions in 
        circumstances other than those to which this paragraph 
        applies.''.
    (b) Additional Provisions for Recordings Fixed Before November 1, 
1995.--Section 114(g) of title 17, United States Code, as amended by 
subsection (a), is further amended by adding at the end the following:
        ``(6) Sound recordings fixed before november 1, 1995.--
            ``(A) Payment absent letter of direction.--A nonprofit 
        collective designated by the Copyright Royalty Judges to 
        distribute receipts from the licensing of transmissions in 
        accordance with subsection (f) (in this paragraph referred to 
        as the `collective') shall adopt and reasonably implement a 
        policy that provides, in circumstances determined by the 
        collective to be appropriate, for the deduction of 2 percent of 
        all the receipts that are collected from the licensing of 
        transmissions of a sound recording fixed before November 1, 
        1995, but which is withdrawn from the amount otherwise payable 
        under paragraph (2)(D) to the recording artist or artists 
        featured on the sound recording (or the persons conveying 
        rights in the artists' performance in the sound recording), and 
        the distribution of such amount to 1 or more persons described 
        in subparagraph (B) of this paragraph, after deduction of costs 
        described in paragraph (3) or (4), as applicable, if each of 
        the following requirements is met:
                ``(i) Certification of attempt to obtain a letter of 
            direction.--The person described in subparagraph (B) who is 
            to receive the distribution has certified to the 
            collective, under penalty of perjury, that--

                    ``(I) for a period of not less than 120 days, that 
                person made reasonable efforts to contact the artist 
                payee for such sound recording to request and obtain a 
                letter of direction instructing the collective to pay 
                to that person a portion of the royalties payable to 
                the featured recording artist or artists; and
                    ``(II) during the period beginning on the date on 
                which that person began the reasonable efforts 
                described in subclause (I) and ending on the date of 
                that person's certification to the collective, the 
                artist payee did not affirm or deny in writing the 
                request for a letter of direction.

                ``(ii) Collective attempt to contact artist.--After 
            receipt of the certification described in clause (i) and 
            for a period of not less than 120 days before the first 
            distribution by the collective to the person described in 
            subparagraph (B), the collective attempts, in a reasonable 
            manner as determined by the collective, to notify the 
            artist payee of the certification made by the person 
            described in subparagraph (B).
                ``(iii) No objection received.--The artist payee does 
            not, as of the date that was 10 business days before the 
            date on which the first distribution is made, submit to the 
            collective in writing an objection to the distribution.
            ``(B) Eligibility for payment.--A person shall be eligible 
        for payment under subparagraph (A) if the person--
                ``(i) is a producer, mixer, or sound engineer of the 
            sound recording;
                ``(ii) has entered into a written contract with a 
            record company involved in the creation or lawful 
            exploitation of the sound recording, or with the recording 
            artist or artists featured on the sound recording (or the 
            persons conveying rights in the artists' performance in the 
            sound recording), under which the person seeking payment is 
            entitled to participate in royalty payments that are based 
            on the exploitation of the sound recording and are payable 
            from royalties otherwise payable to the recording artist or 
            artists featured on the sound recording (or the persons 
            conveying rights in the artists' performance in the sound 
            recording);
                ``(iii) made a creative contribution to the creation of 
            the sound recording; and
                ``(iv) submits to the collective--

                    ``(I) a written certification stating, under 
                penalty of perjury, that the person meets the 
                requirements in clauses (i) through (iii); and
                    ``(II) a true copy of the contract described in 
                clause (ii).

            ``(C) Multiple certifications.--Subject to subparagraph 
        (D), in a case in which more than 1 person described in 
        subparagraph (B) has met the requirements for a distribution 
        under subparagraph (A) with respect to a sound recording as of 
        the date that is 10 business days before the date on which the 
        distribution is made, the collective shall divide the 2 percent 
        distribution equally among all such persons.
            ``(D) Objection to payment.--Not later than 10 business 
        days after the date on which the collective receives from the 
        artist payee a written objection to a distribution made 
        pursuant to subparagraph (A), the collective shall cease making 
        any further payment relating to such distribution. In any case 
        in which the collective has made 1 or more distributions 
        pursuant to subparagraph (A) to a person described in 
        subparagraph (B) before the date that is 10 business days after 
        the date on which the collective receives from the artist payee 
        an objection to such distribution, the objection shall not 
        affect that person's entitlement to any distribution made 
        before the collective ceases such distribution under this 
        subparagraph.
            ``(E) Ownership of the right to receive payments.--To the 
        extent that the collective determines that a distribution will 
        be made under subparagraph (A) to a person described in 
        subparagraph (B), such person shall, during the period covered 
        by such distribution, be treated for all purposes as the owner 
        of the right to receive such payments, and the artist payee to 
        whom such payments would otherwise be payable shall be treated 
        as having no interest in such payments.
            ``(F) Artist payee defined.--In this paragraph, the term 
        `artist payee' means a person, other than a person described in 
        subparagraph (B), who owns the right to receive all or part of 
        the receipts payable under paragraph (2)(D) with respect to a 
        sound recording. In a case in which there are multiple artist 
        payees with respect to a sound recording, an objection by 1 
        such payee shall apply only to that payee's share of the 
        receipts payable under paragraph (2)(D), and shall not preclude 
        payment under subparagraph (A) from the share of an artist 
        payee that does not so object.''.
    (c) Technical and Conforming Amendments.--Section 114(g) of title 
17, United States Code, as amended by subsections (a) and (b), is 
further amended--
        (1) in paragraph (2), by striking ``An agent designated'' and 
    inserting ``Except as provided for in paragraph (6), a nonprofit 
    collective designated by the Copyright Royalty Judges'';
        (2) in paragraph (3)--
            (A) by striking ``nonprofit agent designated'' and 
        inserting ``nonprofit collective designated by the Copyright 
        Royalty Judges'';
            (B) by striking ``another designated agent'' and inserting 
        ``another designated nonprofit collective''; and
            (C) by striking ``agent'' and inserting ``collective'' each 
        subsequent place it appears;
        (3) in paragraph (4)--
            (A) by striking ``designated agent'' and inserting 
        ``nonprofit collective''; and
            (B) by striking ``agent'' and inserting ``collective'' each 
        subsequent place it appears; and
        (4) by adding at the end the following:
        ``(7) Preemption of state property laws.--The holding and 
    distribution of receipts under section 112 and this section by a 
    nonprofit collective designated by the Copyright Royalty Judges in 
    accordance with this subsection and regulations adopted by the 
    Copyright Royalty Judges, or by an independent administrator 
    pursuant to subparagraphs (B) and (C) of section 114(g)(2), shall 
    supersede and preempt any State law (including common law) 
    concerning escheatment or abandoned property, or any analogous 
    provision, that might otherwise apply.''.
    SEC. 303. EFFECTIVE DATE.
    (a) In General.--Except as provided in subsection (b), this title 
and the amendments made by this title shall take effect on the date of 
enactment of this Act.
    (b) Delayed Effective Date.--Paragraphs (5)(B) and (6)(E) of 
section 114(g) of title 17, United States Code, as added by section 
302, shall take effect on January 1, 2020.

                         TITLE IV--SEVERABILITY

    SEC. 401. SEVERABILITY.
    If any provision of this Act or any amendment made by this Act, or 
any application of such provision or amendment to any person or 
circumstance, is held to be unconstitutional, the remainder of the 
provisions of this Act and the amendments made by this Act, and the 
application of the provision or amendment to any other person or 
circumstance, shall not be affected.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.