By Eiland                                             H.B. No. 1530
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to certain business practices used in the collection of
    1-3  copyright royalties, providing penalties.
    1-4        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-5        SECTION 1.  Title 2, Business and Commerce Code, is amended
    1-6  by adding a new Chapter 20 to read as follows:
    1-7         CHAPTER 20.  COPYRIGHT ROYALTY COLLECTION PRACTICES.
    1-8        SECTION 20.01.  DEFINITIONS.  As used in this chapter:
    1-9        (a)  "Area" means a geographical region having a 25-mile
   1-10  radius surrounding the business location of a proprietor.  In the
   1-11  case of a proprietor with more than one business location, there
   1-12  shall be a separate area for each location for the purposes of this
   1-13  chapter.
   1-14        (b)  "Copyright owner" means the owner of a copyright of a
   1-15  nondramatic musical or similar work recognized and enforceable
   1-16  under the copyright laws of the United States pursuant to Title 17
   1-17  of the United States Code, Pub. L.  94-553 (17 U.S.C. 101 et seq.).
   1-18        (c)  "Performing rights society" means an association or
   1-19  corporation that licenses the public performance of nondramatic
   1-20  musical works on behalf of copyright owners, such as the American
   1-21  Society of Composers, Authors and Publishers (ASCAP), Broadcast
   1-22  Music, Inc. (BMI), and SESAC, Inc.
   1-23        (d)  "Proprietor" means the owner of a retail establishment,
    2-1  restaurant, inn, bar, tavern, or any other similar place of
    2-2  business located in this State in which the public may assemble and
    2-3  in which nondramatic musical works or similar copyrighted works may
    2-4  be performed, broadcast, or otherwise transmitted.
    2-5        (e)  "Royalty" or "royalties" means the fees payable to a
    2-6  copyright owner or performing rights society.
    2-7        SECTION 20.02.  LICENSING NEGOTIATIONS.  No performing rights
    2-8  society shall enter into, or offer to enter into, a contract for
    2-9  the payment of royalties by a proprietor unless, at the time of the
   2-10  offer, it provides to the proprietor, in writing, the following:
   2-11        (a)  a schedule of the rates and terms of royalties under the
   2-12  contract;
   2-13        (b)  a schedule of the rates and terms of royalties under
   2-14  agreements executed by the performing rights society and
   2-15  proprietors of comparable businesses in the area;
   2-16        (c)  a list of the copyright owners represented by the
   2-17  society and the works licensed under the contract;
   2-18        (d)  in the case of a performing right society which offers
   2-19  discounts to proprietors in the area on any basis, the amounts and
   2-20  terms of those discounts;
   2-21        (e)  an explanation of any exceptions to the copyright laws
   2-22  of the United States, including what is commonly referred to as the
   2-23  "home-style" exemption;
   2-24        (f)  notice of the provisions of this chapter and the
   2-25  information contained in this section, and that the failure of the
    3-1  performing rights society or its agents or employees to comply with
    3-2  this chapter is a violation of the provisions of this chapter
    3-3  subjecting the violator to civil liability and penalties.
    3-4        SECTION 20.03.  FORM OF CONTRACT.  Every contract for the
    3-5  payment of royalties executed in this State shall:
    3-6        (a)  be in writing;
    3-7        (b)  be signed by the parties;
    3-8        (c)  not exceed one year; and
    3-9        (d)  include at least the following information:
   3-10              (1)  the proprietor's name and business address and the
   3-11  name and location of each place of business to which the contract
   3-12  applies;
   3-13              (2)  if requested by the proprietor, the name and
   3-14  address of the copyright owner(s) and any performing rights society
   3-15  authorized by him to act on his behalf;
   3-16              (3)  if requested by the proprietor, the copyrighted
   3-17  works licensed under the contract in a format convenient to the
   3-18  proprietor;
   3-19              (4)  the duration of the contract;
   3-20              (5)  the schedule of rates and terms of the royalties
   3-21  to be collected under the contract, including any sliding scale or
   3-22  schedule for any increase or decrease of those rates for the
   3-23  duration of that contract; and
   3-24              (6)  provide that all billings, invoices or other
   3-25  requests for payment include an itemization showing the charge for
    4-1  each licensed activity and the manner in which it is assessed.
    4-2        SECTION 20.04.  IMPROPER COLLECTION PRACTICES.  No performing
    4-3  rights society, or any agent or employee thereof shall:
    4-4        (a)  enter onto the premises of a proprietor's business
    4-5  without first identifying himself to the proprietor or his
    4-6  employees and making known to them the purpose of the visit;
    4-7        (b)  collect, or attempt to collect, a royalty payment or any
    4-8  other fee except as provided in a contract executed pursuant to the
    4-9  provisions of this chapter;
   4-10        (c)  use or attempt to use any harassing or intimidating act
   4-11  or practice in negotiating with a proprietor for the payment of
   4-12  royalties, including, but not limited to:
   4-13              (1)  using profane or obscene language or language that
   4-14  is abusive to the proprietor;
   4-15              (2)  placing phone calls without disclosing the name of
   4-16  the person making the call, who the person represents, and the
   4-17  nature of the call prior to commencing any further conversation; or
   4-18              (3)  causing expense to any proprietor in the form of
   4-19  long distance telephone tolls, telegram fees, or other charges
   4-20  incurred by a medium of communication, without first disclosing the
   4-21  name of the person making the call, who the person represents, and
   4-22  the nature of the communication;
   4-23        (d)  divulge to any other person, except as may be required
   4-24  by law, any information concerning a proprietor.
   4-25        SECTION 30.05.  PENALTY.  A person who violates any provision
    5-1  of this chapter may be assessed a civil penalty by the Attorney
    5-2  General to be paid to the State of Texas not to exceed One Thousand
    5-3  Dollars ($1,000) for each violation, together with the reasonable
    5-4  costs of prosecuting the case.
    5-5        SECTION 20.06.  CAUSE OF ACTION.  (a)  A proprietor may bring
    5-6  an action or assert a counterclaim, in a court of competent
    5-7  jurisdiction, against a performing rights society, its' agent or
    5-8  employee, to enjoin any violation of this chapter.  A proprietor
    5-9  may recover from a performing rights society any damages sustained
   5-10  by the proprietor as a result of a violation of this  chapter.  The
   5-11  proprietor may petition the court to terminate a contract which
   5-12  violates the provisions of this chapter.  A proprietor shall be
   5-13  entitled to recover the greater of $1,000 or the damages sustained
   5-14  by him, together with reasonable attorney's fees, filing fees and
   5-15  reasonable costs of suit, in addition to any other legal or
   5-16  equitable relief.
   5-17        (b)  The rights, remedies and prohibitions accorded by the
   5-18  provisions of this chapter shall be in addition to and cumulative
   5-19  of any other right remedy or prohibition accorded by common law,
   5-20  federal law or the statutes of this State, and nothing contained
   5-21  herein shall be construed to deny, abrogate or impair any common
   5-22  law or statutory right, remedy or prohibition.
   5-23        SECTION 20.07.  APPLICATION.  This chapter shall not apply to
   5-24  contracts between performing rights societies and broadcasters
   5-25  licensed by the Federal Communications Commission, except that if a
    6-1  performing rights society is licensed by the Federal Communications
    6-2  Commission, this chapter shall apply to contracts between that
    6-3  performing rights society and a proprietor as otherwise provided
    6-4  herein.
    6-5        SECTION 2.  SEVERABILITY.  If any provision of this Act or
    6-6  its application to any person or circumstance is held invalid, the
    6-7  invalidity does not affect other provisions or applications of this
    6-8  Act that can be given effect without the invalid provision or
    6-9  application, and to this end the provisions of this Act are
   6-10  declared to be severable.
   6-11        SECTION 3.  This Act takes effect September 1, 1995.
   6-12        SECTION 4.  The importance of this legislation and the
   6-13  crowded condition of the calendars in both houses create an
   6-14  emergency and an imperative public necessity that the
   6-15  constitutional rule requiring bills to be read on three several
   6-16  days in each house to be suspended, and this rule is hereby
   6-17  suspended.