By: Lucio S.B. No. 526
A BILL TO BE ENTITLED
AN ACT
1-1 relating to certain business practices used in the collection of
1-2 copyright royalties, providing penalties.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. SHORT TITLE. This Act may be cited as the
1-5 Copyright Royalty Collection Practices Act.
1-6 SECTION 2. DEFINITIONS. As used in this act:
1-7 (a) "Area" means a geographical region having a 25-mile
1-8 radius surrounding the business location of a proprietor. In the
1-9 case of a proprietor with more than one business location, there
1-10 shall be a separate area for each location for the purposes of this
1-11 act.
1-12 (b) "Copyright owner" means the owner of a copyright of a
1-13 nondramatic musical or similar work recognized and enforceable
1-14 under the copyright laws of the United States pursuant to Title 17
1-15 of the United States Code, Pub. L. 94-553 (17 U.S.C. 101 et seq.).
1-16 (c) "Performing rights society" means an association or
1-17 corporation that licenses the public performance of nondramatic
1-18 musical works on behalf of copyright owners, such as the American
1-19 Society of Composers, Authors and Publishers (ASCAP), Broadcast
1-20 Music, Inc. (BMI), and SESAC, Inc.
1-21 (d) "Proprietor" means the owner of a retail establishment,
1-22 restaurant, inn, bar, tavern, or any other similar place of
1-23 business located in this State in which the public may assemble and
2-1 in which nondramatic musical works or similar copyrighted works may
2-2 be performed, broadcast, or otherwise transmitted.
2-3 (e) "Royalty" or "royalties" means the fees payable to a
2-4 copyright owner or performing rights society.
2-5 SECTION 3. LICENSING NEGOTIATIONS. No performing rights
2-6 society shall enter into, or offer to enter into, a contract for
2-7 the payment of royalties by a proprietor unless, at the time of the
2-8 offer, it provides to the proprietor, in writing, the following:
2-9 (a) a schedule of the rates and terms of royalties under the
2-10 contract;
2-11 (b) a schedule of the rates and terms of royalties under
2-12 agreements executed by the performing rights society and
2-13 proprietors of comparable businesses in the area;
2-14 (c) a list of the copyright owners represented by the
2-15 society and the works licensed under the contract;
2-16 (d) in the case of a performing right society which offers
2-17 discounts to proprietors in the area on any basis, the amounts and
2-18 terms of those discounts;
2-19 (e) an explanation of any exceptions to the copyright laws
2-20 of the United States, including what is commonly referred to as the
2-21 "home-style" exemption;
2-22 (f) notice of the provisions of this Act and the information
2-23 contained in this section, and that the failure of the performing
2-24 rights society or its agents or employees to comply with this Act
2-25 is a violation of the provisions of this Act subjecting the
3-1 violator to civil liability and penalties.
3-2 SECTION 4. FORM OF CONTRACT. Every contract for the payment
3-3 of royalties executed in this State shall:
3-4 (a) be in writing;
3-5 (b) be signed by the parties;
3-6 (c) not exceed one year; and
3-7 (d) include at least the following information:
3-8 (1) the proprietor's name and business address and the
3-9 name and location of each place of business to which the contract
3-10 applies;
3-11 (2) if requested by the proprietor, the name and
3-12 address of the copyright owner(s) and any performing rights society
3-13 authorized by him to act on his behalf;
3-14 (3) if requested by the proprietor, the copyrighted
3-15 works licensed under the contract in a format convenient to the
3-16 proprietor;
3-17 (4) the duration of the contract;
3-18 (5) the schedule of rates and terms of the royalties
3-19 to be collected under the contract, including any sliding scale or
3-20 schedule for any increase or decrease of those rates for the
3-21 duration of that contract; and
3-22 (6) provide that all billings, invoices or other
3-23 requests for payment include an itemization showing the charge for
3-24 each licensed activity and the manner in which it is assessed.
3-25 SECTION 5. LICENSING OF AGENTS OR EMPLOYEES. (a) No person
4-1 shall act on behalf of, attempt to negotiate for, contact, or
4-2 contract with any proprietor for a performing rights society
4-3 without first obtaining a license.
4-4 (b) An application for a license under this Act shall be in
4-5 the form prescribed by the Department of Licensing and Regulation.
4-6 The application shall include:
4-7 (1) the full name and business address of the
4-8 applicant;
4-9 (2) two recent photographs of the applicant; and
4-10 (3) any other information, evidence, statement, or
4-11 documents as may be required by the Department of Licensing and
4-12 Regulation.
4-13 (c) A pocket card shall be issued by the Department of
4-14 Licensing and Regulation to each individual agent or employee. The
4-15 pocket card must state the name of the individual who is registered
4-16 and the entity or entities represented by that individual.
4-17 (d) When an individual to whom a pocket card has been issued
4-18 under this Act terminates his position the individual shall return
4-19 the pocket card to the Department of Licensing and Regulation.
4-20 (e) A license issued under this Act expires at 12 midnight
4-21 on the last day of the 11th month after the month in which it is
4-22 issued.
4-23 (f) The renewal period for a license is the month preceding
4-24 the month in which it expires.
4-25 (g) A person may renew an unexpired license by paying to the
5-1 Department of Licensing and Regulation, before the expiration date
5-2 of the license, the required renewal fee.
5-3 (h) Upon a determination by the Department of Licensing and
5-4 Regulation that a person licensed under this Act has violated any
5-5 provision of this Act, the person's license shall be revoked. A
5-6 revoked license may not be reinstated for a period of 6 months.
5-7 (i) Revocation or non-renewal of a license shall not
5-8 prohibit the bringing of disciplinary proceedings for an act
5-9 committed before the license was terminated.
5-10 (j) The Department of Licensing and Regulation by rule shall
5-11 assess and collect a fee from all holders of a license issued under
5-12 this Act by the Department of Licensing and Regulation. The fee
5-13 shall be set at a level so that the anticipated total of all fees
5-14 collected by the Department of Licensing and Regulation for a
5-15 fiscal year are equal to the anticipated cost of issuing the
5-16 license and administering this Act.
5-17 SECTION 6. IMPROPER LICENSING PRACTICES. No performing
5-18 rights society, or any agent or employee thereof shall:
5-19 (a) enter onto the premises of a proprietor's business
5-20 without first identifying himself to the proprietor or his
5-21 employees and making known to them the purpose of the visit;
5-22 (b) collect, or attempt to collect, a royalty payment or any
5-23 other fee except as provided in a contract executed pursuant to the
5-24 provisions of this act;
5-25 (c) use or attempt to use any harassing or intimidating act
6-1 or practice in negotiating with a proprietor for the payment of
6-2 royalties, including, but not limited to:
6-3 (1) using profane or obscene language or language that
6-4 is abusive to the proprietor;
6-5 (2) placing phone calls without disclosing the name of
6-6 the person making the call, who the person represents, and the
6-7 nature of the call prior to commencing any further conversation; or
6-8 (3) causing expense to any proprietor in the form of
6-9 long distance telephone tolls, telegram fees, or other charges
6-10 incurred by a medium of communication, without first disclosing the
6-11 name of the person making the call, who the person represents, and
6-12 the nature of the communication;
6-13 (d) divulge to any other person, except as may be required
6-14 by law, any information concerning a proprietor.
6-15 SECTION 7. PENALTY. A person who violates any provision of
6-16 this Act may be assessed a civil penalty by the Department of
6-17 Licensing and Regulation to be paid to the State of Texas not to
6-18 exceed One Thousand Dollars ($1,000) for each violation, together
6-19 with the reasonable costs of prosecuting the case.
6-20 SECTION 8. CAUSE OF ACTION. (a) A proprietor may bring an
6-21 action or assert a counterclaim, in a court of competent
6-22 jurisdiction, against a performing rights society, its' agent or
6-23 employee, to enjoin any violation of this Act. A proprietor may
6-24 recover from a performing rights society any damages sustained by
6-25 the proprietor as a result of a violation of this act. The
7-1 proprietor may petition the court to terminate a contract which
7-2 violates the provisions of this act. A proprietor shall be
7-3 entitled to recover the greater of $1,000 or the damages sustained
7-4 by him, together with reasonable attorney's fees, filing fees and
7-5 reasonable costs of suit, in addition to any other legal or
7-6 equitable relief.
7-7 (b) The rights, remedies and prohibitions accorded by the
7-8 provisions of this act shall be in addition to and cumulative of
7-9 any other right remedy or prohibition accorded by common law,
7-10 federal law or the statutes of this State, and nothing contained
7-11 herein shall be construed to deny, abrogate or impair any common
7-12 law or statutory right, remedy or prohibition.
7-13 SECTION 9. APPLICATION. This act shall not apply to
7-14 contracts between performing rights societies and broadcasters
7-15 licensed by the Federal Communications Commission, except that if a
7-16 performing rights society is licensed by the Federal Communications
7-17 Commission, this act shall apply to contracts between that
7-18 performing rights society and a proprietor as otherwise provided
7-19 herein.
7-20 SECTION 10. SEVERABILITY. If any provision of this Act or
7-21 its application to any person or circumstance is held invalid, the
7-22 invalidity does not affect other provisions or applications of this
7-23 Act that can be given effect without the invalid provision or
7-24 application, and to this end the provisions of this Act are
7-25 declared to be severable.
8-1 SECTION 11. This Act takes effect September 1, 1995.
8-2 SECTION 12. The importance of this legislation and the
8-3 crowded condition of the calendars in both houses create an
8-4 emergency and an imperative public necessity that the
8-5 constitutional rule requiring bills to be read on three several
8-6 days in each house be suspended, and this rule is hereby suspended.