BILL ANALYSIS



C.S.H.B. 1530
By: Eiland
4-11-95
Committee Report (Substituted)


BACKGROUND

Restaurants, retail shops, professional offices and other places
open to the public are required by federal law to pay copyright
fees for playing music. Music licensing organizations such as
Broadcast Music Inc. and the American Society of Composers, Authors
and Publishers act as intermediaries between the artists and their
works and those establishments which broadcast public performances
of these artists' work.  Background music, music used in television
broadcasts, Karaoke, elevator background music and even music
played on the telephone while callers are on hold fall under the
application of this federal act.

The standard practice for licensing organizations to collect fees
for background music usually begins with an agent of the
organization randomly entering a business unannounced to inspect
the way a public performance of the works they license is being
used.  The agent then sends an un-itemized bill to the proprietor
with a letter warning that failure to pay violates federal law and
will result in significant fines.

PURPOSE

To provide regulation of copyright royalty collection practices.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly
grant any additional rulemaking authority to a state officer,
department, agency or institution.

SECTION BY SECTION ANALYSIS

SECTION 1.  SHORT TITLE.  Provides that the Act may be cited as the
Copyright Royalty Collection Practices Act.

SECTION 2.  DEFINITIONS.  Defines: 

     (a)   "Copyright owner";
     (b)   "Performing rights society";
     (c)   "Proprietor";
     (d)   "Royalty".

SECTION 3.  LICENSING NEGOTIATIONS.  Provides that when offering a
contract for the payment of royalties to a proprietor, a performing
rights society shall provide the following:

     (a)   a schedule of rates and terms under the contract;
     (b)   the opportunity to review the most current available
           list of the members or affiliates represented by the
           society;
     (c)   notice that it will make available, upon written
           request, the most current available listing of the
           copyrighted musical works in such performing rights
           society's repertory.

SECTION 4.  FORM OF CONTRACT.  States that every contract between
a performing rights society and proprietor for the payment of
royalties shall:

     (a)   be in writing;
     (b)   be signed by the parties;
     (c)   include the following:
           (1) proprietor's name, business address, and the
               name and location of each place of business to
               which the contract applies; 
           (2) name and address of the performing rights
               society; 
           (3) duration of the contract; 
           (4) schedule of rates and terms of the royalties
               to be collected under the contract.

SECTION 5.  IMPROPER LICENSING PRACTICES.  No performing rights
society, or any agent or employee shall:

     (a)   collect a fee not covered by a contract complying with
           this Act.

SECTION 6.  CIVIL REMEDIES:  INJUNCTION.  Provides any person
damaged by a violation of this Act with a cause of action in which
an injunction and actual damages incurred may be recovered with
costs of court and attorney's fees.

SECTION 7.  APPLICATION.  Clarifies that the Act does not apply to
contracts between performing rights societies, broadcasters, or to
motion picture or audiovisual works.

SECTION 8.  SEVERABILITY.  Provides that the provisions of the Act
are severable should any provision be found invalid.

SECTION 9.  Effective date:  September 1, 1995.

SECTION 10.  Emergency clause.

COMPARISON OF ORIGINAL TO SUBSTITUTE

SECTION 1. Changed so as to not specify a particular placement
           within a code or statute.  Provides a short title for
           reference.  Deleted the definition "area" to avoid the
           difficulty of identifying similar proprietors in a 25-mile radius of each location.

SECTION 2. (a) Deleted reference to similar works to avoid the
           unintentional inclusion of copyrighted works.

           (c) Reference to "similar businesses" deleted to assure
           that businesses not intended to be covered by the Act
           did not come within its preview.

           (d) Removes copyright owners from the definition of
           royalties to assure that the Act does not apply to
           artists or composers.

SECTION 3. Amended to allow time for providing the materials
           required by the Act.  Also deleted to avoid the
           difficulty of identifying similar proprietors in a 25-mile radius of each location.

           (c) Amended to make the proprietor provide a written
           request as well as pay for the listing.  This was
           changed due to the volume of works covered by the
           license.

           Deletes the case of a performing rights society offering
           discounts to proprietors.  Deleted because discounts are
           not allowed under a Federal consent decree.

           Deleted explanation of any exceptions to the copyright
           laws, including the "home-style" exemption.  Deleted to
           avoid providing legal advice by a layperson.

           Deleted the failure to comply is a violation of the
           provisions.  Deleted to avoid providing legal advice by
           a layperson.

SECTION 4. Changed "Form of Contract" to clarify that the Act only
           applies to contracts between performing rights societies
           and proprietors.  Deleted that the contract would not
           exceed one year.  Deleted to allow contracts up to the
           federal limit of five years.

           (c)(2) Deleted copyright owners because the Act does not
           apply to them.

           Deleted that if requested, the contract be put in a
           format convenient to the proprietor.  This is covered
           in another section of the Act.

           Deleted the requirement of an itemization showing the
           charge for each activity on all billings.  Deleted to
           avoid differing billing standards from state-to-state.

SECTION 5. (a) Deleted reference to other fees which are not
           covered in the contract.

           Deleted using profane or obscene language to the
           proprietor.  Deleted as redundant of other provisions
           of law.

           Deleted placing phone calls without disclosing
           information of the call.  Deleted to allow monitoring
           of the use of music by a proprietor.

           Deleted causing expense by any medium of communication
           without disclosing information of the call or message. 
           Deleted to avoid questions concerning the ability to
           charge for on-line services.

           Deleted divulging any information concerning a
           proprietor.  Deleted to avoid conflicts with other
           provisions of the law.

           Deleted fine paid for each violation.  Deleted due to
           concerns over the impact of enforcement on agents of
           performing rights societies.

SECTION 6. Shortened for brevity and conciseness in expression. 
           $1,000 minimum penalty removed as it might unduly impact
           the collection of royalties.

SECTION 7. Amended to assure that the Act would not reach to
           audio/visual works, cable, or prohibitions on
           bootlegging of copyrighted works.

SUMMARY OF COMMITTEE ACTION

The Business and Industry Committee considered H.B. 1530 in a
public hearing on March 28, 1995.  The committee considered a
complete substitute for H.B. 1530.  The substitute was withdrawn
without objection.  The following persons testified for H.B. 1530: 
Richard E. Galvan, representing himself; Glen Garey, representing
the Texas Restaurant Association; Bob Stout, representing Mitchell
Energy and Development Corporation; and Richie Jackson,
representing the Texas Restaurant Association.  The following
persons testified against H.B. 1530:  George Cisneros, representing
himself; Margaret A. Boulware, representing herself; Chris Wall,
representing himself; David Halley, Jr., representing himself;
Marcia Ball, representing herself; Richard Perna, representing
himself; Daniel Gold, representing Broadcast Music, Incorporated
(BMI); Pat Collins, representing ASCAP; Laurie Hughes, representing
SESAC, Inc.; Harry B. Friedman II, representing himself; Jeff A.
McDaniel, representing ASCAP; Mike Workman, representing the Texas
Music Industry Council.  H.B. 1530 was referred to the following
subcommittee:  Representatives Corte-chair, Rhodes, Giddings.  H.B.
1530 was considered in subcommittee in a formal meeting on April 6,
1995.  The subcommittee considered a complete committee substitute
for H.B. 1530.  The substitute was adopted without objection.  H.B.
1530, as substituted, was reported favorably to the full committee
by a record vote of 2 (two) ayes, 0 (zero) nays, 0 (zero) present-not-voting, 1 (one) absent.  H.B. 1530 was considered on
subcommittee report by the full committee in a public hearing on
April 11, 1995.  The full committee adopted the committee
substitute without objection.  H.B. 1530, as substituted, was
reported favorably with the recommendation that it do pass and be
printed and be sent to the Committee on Local and Consent
Calendars, by a record vote of 9 (nine) ayes, 0 (zero) nays, 0
(zero) present-not-voting, 0 (zero) absent.