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.