[Second Reprint]

SENATE, No. 1004

STATE OF NEW JERSEY

INTRODUCED MARCH 21, 1996

By Senators BENNETT, ADLER, Ciesla, Kyrillos, Scott, Littell, Haines, McNamara, Sinagra, Kosco, Ewing, Bubba, Kenny, Casey, Gormley, Cardinale, Bassano, Lynch, Bryant, O'Connor, Palaia and McGreevey

An Act concerning the enforcement of certain music licenses and supplementing Title 56 of the Revised Statutes.

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

    1. This act shall be known and may be cited as the "Music Licensing Practices Act."

    2. As used in this act:

    ²["Area" means a circular geographic region having a 25 mile radius surrounding each business location of a proprietor;]²

    "Copyright owner" means the owner of a copyright of a ²[nondramatic]² musical work, other than a motion picture or audiovisual work;

    "Performing rights society" means an association or corporation that licenses the public performance of ²[nondramatic]² musical works on behalf of copyright owners, such as the American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music, Inc. (BMI) and SESAC, Inc.;

    "Proprietor" means the owner of a retail establishment, restaurant, inn, bar, tavern or any other similar place of business or professional office located in this State in which the public may assemble and in which ²[nondramatic]²musical works may be performed, broadcast, or otherwise transmitted for the enjoyment of the members of the public there assembled;

    "Royalty" or "royalties" means the fees payable to a copyright owner or performing rights society for the public performance of a ²[nondramatic]² musical work.

    3. a. Every performing rights society ²[doing business] licensing music² in this State shall file a current list of ²not less than² the ²performed² copyrighted ²[nondramatic]² musical works for which the performing rights society collects royalties on behalf of copyright owners with the Secretary of State at least annually.

    b. The list required by this section may be relied upon by a proprietor in making an informed decision before entering into a contract with a performing rights society and shall be binding between the parties for the period of any contract once executed pursuant to this act.

    c. The list required by this section shall be provided at a reasonable cost to any person upon request.

    d. Every performing rights society ²[doing business] licensing music² in this State shall establish a toll free telephone number which can be used to answer inquiries regarding specific ²[nondramatic]² musical works licensed by that performing rights society.

    4. A performing rights society shall not enter into or execute a contract for the payment of royalties by a proprietor unless, no later than 72 hours prior to the execution of the contract, the performing rights society provides to the proprietor, in writing, the following:

    a. a schedule of the rates and terms of royalties under the contract;

    b. ²notice that the performing rights society shall, upon request by a proprietor, provide, before entering into a contract with that proprietor,² a schedule of the rates and terms of royalties under agreements executed by the performing rights society and proprietors of comparable businesses in the ²[area] same county²;

    c. notice of its most recent filing with the Secretary of State pursuant to section 3 of this act and the rights and responsibilities of the performing rights society and the proprietor appurtenant thereto;

    d. the toll free telephone number required by subsection d. of section 3 of this act;

    e. in the case of a performing rights society which offers discounts to proprietors in the ²[area] same county² on any basis, the amounts and terms of those discounts; and

    f. notice that the proprietor is entitled to the information required under this act and that the failure of the performing rights society to provide that information is a violation of this act ²[and may render a contract unenforceable under this act]².

    5. A contract between a performing rights society and a proprietor for the payment of royalties shall be offered for a term of one year, but the parties may agree to contract for a term other than one year. ²The provisions of this section shall not apply to contracts which contain terms negotiated between a performing rights society and a bonafide national trade association representing a substantial percentage of proprietors of the same type.²

    6. Every contract between a performing rights society and a proprietor for the payment of royalties executed or renewed in this State shall:

    a. be in writing;

    b. be signed by the parties to the contract; and

    c. include at least the following information:

    (1) the proprietors' name and business address and the name and location of each place of business to which the contract applies;

    (2) the name and business address of the performing rights society;

    (3) the duration of the contract; and

    (4) the schedule of rates and terms of royalties to be collected under the contract, including any sliding scale, discount or schedule for any increase or decrease of those rates for the duration of the contract.

    7. No performing rights society, or any agent or employee thereof shall:

    a. enter onto the premises of a proprietor's business for the purpose of discussing a contract for the payment of royalties by that proprietor without first identifying himself to the proprietor or his employees and disclosing that he is acting on behalf of the performing rights society and disclosing the purpose of the discussion;

    b. collect or attempt to collect a royalty payment or any other fee except as provided in a contract executed pursuant to the provisions of this act on or after the effective date of this act;

    c. use or attempt to use any act or practice in negotiating with a proprietor, or in retaliation for a proprietor's failure or refusal to negotiate, with the intent of coercing the proprietor to negotiate or enter into a contract for the payment of royalties, including, but not limited to:

    (1) any act or practice that ²unduly² disrupts the proprietor's business; or

    (2) threatening to commence legal proceedings in connection with an alleged copyright violation.

    8. Nothing in this act shall be construed to prevent a performing rights society from informing the proprietor of the proprietor's obligations under the federal copyright law pursuant to Title 17 of the United States Code.

    9. A person who ²willfully² violates any provision of this act shall be liable to pay a penalty of not more than $2,500 for a first violation and not more than $10,000 for a second or subsequent violation. The penalty shall be collected and enforced in the name of the State by the Attorney General in a court of competent jurisdiction in a summary proceeding pursuant to "the penalty enforcement law," N.J.S.2A:58-1 et seq.

    10. a. A proprietor may bring an action in a court of competent jurisdiction or assert a counterclaim against a performing rights society to enjoin a violation of this act and to recover ²[any] actual² damages sustained as a result of that violation.

    b. The prevailing party in an action brought under this act shall be awarded reasonable attorney's fees and costs of suit.

    ¹11. a. This act shall not apply to contracts between performing rights societies and broadcasters licensed by the Federal Communications Commission, except that if a performing rights society is licensed by the Federal Communications Commission, this act shall apply to contracts between that performing rights society and a proprietor as otherwise provided herein.

    b. This act shall not apply to any conduct ²by law enforcement officers or other persons² engaged in for the enforcement of section 1 of P.L. 1991, c. 125 (C. 2C:21-21).¹

    ¹[11.] 12.¹ This act shall take effect ²[immediately] on the 90th day following enactment².

Regulates certain music licensing practices.