E6-13113. Electronic Payment of Royalties

AGENCY:

Copyright Office, Library of Congress.

ACTION:

Final rule.

SUMMARY:

The Copyright Office is publishing a final rule amending its rules governing the submission of royalty fees to the Copyright Office to require such payments to be made by electronic funds transfer.

DATES:

October 1, 2006.

FOR FURTHER INFORMATION CONTACT:

Tanya M. Sandros, Associate General Counsel, Copyright GC/I&R, P.O. Box 70400, Southwest Station, Washington, DC 20024. Telephone: [phone]. Telefax: [phone].

SUPPLEMENTARY INFORMATION:

On April 27, 2006, the Copyright Office published a notice of proposed rulemaking seeking comment on amending its rules requiring the submission of royalty fees to be made by electronic funds transfer. 71 FR 24829 (April 27, 2006). The purpose of this notice is to announce the final rule.

Cable systems and satellite carriers that retransmit broadcast signals in accordance with the provisions governing the statutory licenses set forth in sections 111 and 119 of the Copyright Act, title 17 of the United States Code, respectively, are required to pay royalty fees to the Copyright Office. The Copyright Office also receives statutory fees from manufacturers and importers of digital audio recording devices and media who distribute these products in the United States. 17 U.S.C. chapter 10. Payments made under the cable and satellite carrier statutory licenses are remitted semiannually to the Copyright Office. 17 U.S.C. 111(d)(1) and 119(b)(1). Payments made under the Audio Home Recording Act of 1992 are made quarterly. 17 U.S.C. 1003(c). The Copyright Office invests the royalties in United States Treasury securities pending distribution of these funds to those copyright owners who are entitled to receive a share of the fees. 17 U.S.C. 111(d)(2), 119(b)(2) and 1005.

Under the proposed amended regulations, a number of changes were made regarding the payment of copyright royalties. The most important change was that payment could only be made through an electronic funds transfer (“ETF”). This change eliminates the options of payment by certified or cashier's check, or money order. Most payors already use EFTs, and requiring the use of EFTs substantially enhances the efficiency of the collection process. The proposed regulations also require that the parties submit specific identifying and linking information as part of the EFT, and/or as part of a “remittance advice” which accompanies Statement(s) of Account and that the “remittance advice” be faxed or emailed to the Licensing Division.

The new rules allow the Copyright Office to return any EFT which fails to properly identify statements to which they relate and requires the remitter to resubmit the EFT correctly. Should this occur, the remitter will be responsible for any assessed interest charge that accrues as a result of a late payment or an underpayment. Additionally, the new rules require that “remittance advice” information be included with Statements of Account in order to accurately identify what is submitted and how fees are to be allocated among the statements.

Finally, the new rules include a waiver provision for those situations where there may be circumstances which make it virtually impossible for a remitter to use the electronic payment option or imposes a financial or other hardship. Requests for a waiver must include a statement setting forth the reasons why the waiver should be granted and the statement must be signed by a duly authorized representative of the entity making the payment, certifying that the information provided is true and correct.

In response to the publication of the proposed rules, the Copyright Office did not receive any comments. Consequently, the Copyright Office is adopting the previously proposed text with minor stylistic changes, as final rules.

List of Subjects in 37 CFR Part 201

Copyright.

Final Regulation

In consideration of the foregoing, the Copyright Office is amending part 201 of 37 CFR, chapter II in the manner set forth below:

PART 201—GENERAL PROVISIONS

1. The authority citation for part 201 continues to read as follows:

Authority: 17 U.S.C. 702.

2. Revise § 201.11 (f) to read as follows:

§ 201.11

Satellite carrier statements of account covering statutory licenses for secondary transmissions.

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(f) Royalty fee payment. (1) All royalty fees shall be paid by a single electronic funds transfer and payment must be received in the designated bank by the filing deadline for the relevant accounting period. The following information shall be provided as part of the EFT and/or as part of the remittance advice as provided for in circulars issued by the Copyright Office:

(i) Remitter's name and address;

(ii) Name of a contact person, telephone number and extension, and email address;

(iii) The actual or anticipated date that the EFT will be transmitted;

(iv) Type of royalty payment (i.e. satellite);

(v) Total amount submitted via the EFT;

(vi) Total amount to be paid by year and period;

(vii) Number of Statements of Account that the EFT covers;

(viii) ID numbers assigned by the Licensing Division;

(ix) Legal name of the owner for each Statement of Account.

(2) The remittance advice shall be attached to the Statement(s) of Account. In addition, a copy of the remittance advice shall be emailed or sent by facsimile to the Licensing Division.

(3) The Office may waive the requirement for payment by electronic funds transfer as set forth in paragraph (f)(1) of this section. To obtain a waiver, the remitter shall submit to the Licensing Division at least 60 days prior to the royalty fee due date a certified statement setting forth the reasons explaining why payment by an electronic funds transfer would be virtually impossible or, alternatively, why it would impose a financial or other hardship on the remitter. The certified statement must be signed by a duly authorized representative of the entity making the payment. A waiver shall cover only a single payment period. Failure to obtain a waiver may result in the remittance being returned to the remitter.

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3. Revise § 201.17(i) to read as follows:

§ 201.17

Statements of account covering compulsory licenses for secondary transmissions by cable systems.

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(i) Royalty fee payment. (1) All royalty fees must be paid by a single electronic funds transfer, and must be received in the designated bank by the filing deadline for the relevant accounting period. The following information must be provided as part of the EFT and/or as part of the remittance advice as provided for in circulars issued by the Copyright Office:

(i) Remitter's name and address;

(ii) Name of a contact person, telephone number and extension, and e-mail address;

(iii) The actual or anticipated date that the EFT will be transmitted;

(iv) Type of royalty payment (i.e. cable);

(v) Total amount submitted via the EFT;

(vi) Total amount to be paid by year and period;

(vii) Number of Statements of Account that the EFT covers;

(viii) ID numbers assigned by the Licensing Division;

(ix) Legal name of the owner for each Statement of Account;

(x) Identification of the first community served (city and state).

(2) The remittance advice shall be attached to the Statement(s) of Account. In addition, a copy of the remittance advice shall be emailed or sent by facsimile to the Licensing Division.

(3) The Office may waive the requirement for payment by electronic funds transfer as set forth in paragraph (i)(1) of this section. To obtain a waiver, the remitter shall submit to the Licensing Division at least 60 days prior to the royalty fee due date a certified statement setting forth the reasons explaining why payment by an electronic funds transfer would be virtually impossible or, alternatively, why it would impose a financial or other hardship on the remitter. The certified statement must be signed by a duly authorized representative of the entity making the payment. A waiver shall cover only a single payment period. Failure to obtain a waiver may result in the remittance being returned to the remitter.

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4. Amend § 201.28 as follows:

a. By revising paragraph (e)(3)(ii);

b. By redesignating paragraphs (h) through (l) as paragraphs (i) through (m) respectively, and adding a new paragraph (h);

c. By amending newly redesignated paragraph (j)(1)(ii) to remove “(i)(2)” and add in its place “(j)(2)”;

d. By amending newly redesignated paragraph (j)(3)(i) to remove “(i)(3)” and add in its place “(j)(3)”;

e. By amending newly redesignated paragraph (j)(3)(vi) to remove “(i)” and add in its place “(j)”.

§ 201.28

Statements of account for digital audio recording devices or media.

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(e) * * *

(3) * * *

(ii) The amount of the royalty payment shall be calculated in accordance with the instructions specified in the quarterly Statement of Account form. Payment shall be made as specified in § 201.28(h).

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(h) Royalty fee payment. (1) All royalty fees must be paid by a single electronic funds transfer, and must be received in the designated bank by the filing deadline for the relevant accounting period. The following information must be provided as part of the EFT and/or as part of the remittance advice as provided for in circulars issued by the Copyright Office:

(i) Remitter's name and address;

(ii) Name of a contact person, telephone number and extension, and email address;

(iii) The actual or anticipated date that the EFT will be transmitted;

(iv) Type of royalty payment (i.e. DART);

(v) Total amount submitted via the EFT;

(vi) Total amount to be paid by year and period;

(vii) Number of Statements of Account that the EFT covers;

(viii) ID numbers assigned by the Licensing Division;

(ix) Legal name of the owner for each Statement of Account.

(2) The remittance advice shall be attached to the Statement(s) of Account. In addition, a copy of the remittance advice shall be emailed or sent by facsimile to the Licensing Division.

(3) The Office may waive the requirement for payment by electronic funds transfer as set forth in paragraph (1) of this section. To obtain a waiver, the remitter shall submit to the Licensing Division at least 60 days prior to the royalty fee due date a certified statement setting forth the reasons explaining why payment by an electronic funds transfer would be virtually impossible or, alternatively, why it would impose a financial or other hardship on the remitter. The certified statement must be signed by a duly authorized representative of the entity making the payment. A waiver shall cover only a single payment period. Failure to obtain a waiver may result in the remittance being returned to the remitter.

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Dated: July 19, 2006.

Marybeth Peters,

Register of Copyrights.

Approved by:

James H. Billington,

Librarian of Congress.