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.