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79R524 MSE-D

By:  Chavez                                                       H.B. No. 611



A BILL TO BE ENTITLED

AN ACT

relating to distribution of recordings on consignment.                        
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 2101.002, Occupations Code, is amended 
by amending Subdivision (3) and adding Subdivisions (6) and (7) to 
read as follows:
		(3)  "Artist" means the creator of a work of art or a 
sound recording or, if the creator is dead, the creator's estate.
		(6)  "Recording distributor" means a person who 
acquires a sound recording and sells the sound recording to another 
person for use or resale.
		(7)  "Sound recording" means a tangible medium on which 
music or other sounds are recorded or otherwise stored, including a 
phonograph record, disc, tape, cassette, or other medium now 
existing or developed later on which music or other sounds are or 
can be recorded or otherwise stored or a copy or reproduction that 
duplicates in whole or in part the original.  The term does not 
include a medium on which the primary recorded information is 
information other than music or other sound, such as a motion 
picture or computer program, and that contains recorded sound as an 
integrated part of the primary recorded information.
	SECTION 2.  Chapter 2101, Occupations Code, is amended by 
adding Section 2101.004 to read as follows:
	Sec. 2101.004.  CONSIGNED SOUND RECORDINGS EXEMPT FROM 
CERTAIN LIENS OR CLAIMS.  (a)  Notwithstanding any provision of the 
Business & Commerce Code, a sound recording delivered by the artist 
who produced the music or other sound on the recording to a 
recording distributor for sale and the proceeds from the recording 
distributor's sale of the sound recording are not subject to a 
claim, lien, or security interest of a creditor of the recording 
distributor.
	(b)  Except as provided by Subsection (c), this section 
applies to the proceeds of a sale of a sound recording regardless of 
whether the recording distributor or another person purchased the 
work.
	(c)  This section does not apply to the proceeds of a sale of 
a sound recording if the artist delivered the recording to the 
recording distributor pursuant to a sale for which the artist has 
been paid in full.
	SECTION 3.  Section 9.102(a)(20), Business & Commerce Code, 
is amended to read as follows:
		(20)  "Consignment" means a transaction, regardless of 
its form, in which a person delivers goods to a merchant for the 
purpose of sale and:
			(A)  the merchant:                                                           
				(i)  deals in goods of that kind under a name 
other than the name of the person making delivery;
				(ii)  is not an auctioneer; and                                             
				(iii)  is not generally known by its 
creditors to be substantially engaged in selling the goods of 
others;
			(B)  with respect to each delivery, the aggregate 
value of the goods is $1,000 or more at the time of delivery;
			(C)  the goods are not consumer goods immediately 
before delivery;         
			(D)  the transaction does not create a security 
interest that secures an obligation; and
			(E)  the transaction does not involve delivery of 
a work of art to an art dealer or delivery of a sound recording to a 
distributor if[, as provided by] Chapter 2101, Occupations Code, 
applies to the delivery.
	SECTION 4.  This Act takes effect immediately if it receives 
a vote of two-thirds of all the members elected to each house, as 
provided by Section 39, Article III, Texas Constitution.  If this 
Act does not receive the vote necessary for immediate effect, this 
Act takes effect September 1, 2005.