[Federal Register: May 20, 2008 (Volume 73, Number 98)]
[Rules and Regulations]
[Page 29071-29073]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20my08-8]
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LIBRARY OF CONGRESS
Copyright Office
37 CFR Parts 201
[Docket No. RM 2008-5]
Late-Filed and Underpaid Royalties
AGENCY: Copyright Office, Library of Congress.
ACTION: Final rule.
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SUMMARY: The Copyright Office is amending its rules governing the
payment of interest on late or underpaid royalty fees under the
Copyright Act to clarify when interest for late and underpayments is
due in light of the Copyright Office's electronic funds transfer
requirement. In addition, the Copyright Office amends the rules to add
text that was inadvertently deleted by a previous rulemaking action.
The Copyright Office also makes a technical correction to its satellite
carrier requirements to recognize changes made to Section 119 in 2004.
EFFECTIVE DATE: May 20, 2008.
FOR FURTHER INFORMATION CONTACT: Ben Golant, Assistant General Counsel,
and Tanya M. Sandros, General Counsel, Copyright GC/I&R, P.O. Box
70400, Washington, DC 20024. Telephone: (202) 707-8380. Telefax: (202)
707-8366.
SUPPLEMENTARY INFORMATION: On August 10, 2006, the Copyright Office
published a final rule requiring the submission of royalty fees to be
made by electronic funds transfer (``EFT''). 71 FR 45739 (August 10,
2006). The purpose of this notice is to make technical amendments to
Section 201.17(i) and other similar rules for satellite carriers and
digital audio recording technologies to clarify when interest accrues
for late and underpayments in light of the recent EFT requirement. In
addition, we intend to re-insert regulatory text, originally contained
in Section 201.17(i)(2), that was incorrectly deleted from Title 37 CFR
when the EFT requirements were adopted.
I. Electronic Funds Transfer Requirement
Under the new EFT regulations, 37 CFR 201.17(i), 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. 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 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. Failure to submit the
EFT in accordance with the rules may require 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.
The rules now 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
[[Page 29072]]
information provided is true and correct.
II. Proposed Amendments
Section 201.17(c)(1) states that:
Statements of Account shall cover semiannual accounting periods of
(i) January 1 through June 30, and (ii) July 1 through December 31,
and shall be deposited in the Copyright Office, together with the
total royalty fee for such accounting periods . . . .by not later
than the immediately following August 29, if the Statement of
Account covers the January 1 through June 30 accounting period, and
by not later than the immediately following March 1, if the
Statement of Account covers the July 1 through December 31
accounting period.
Section 201.17(i)(2) (before it was deleted) stated that:
Royalty fee payments submitted as a result of late or amended
filings shall include interest. Interest shall begin to accrue
beginning on the first day after the close of the period for filing
statements of account for all underpayments of royalties for the
cable compulsory license occurring within that accounting period.
The accrual period shall end on the date appearing on the certified
check, cashier's check, money order or electronic payment submitted
by a cable system, provided that such payment is received by the
Copyright Office within five business days of that date. If the
payment is not received by the Copyright Office within five business
days of its date, then the accrual period shall end on the date of
the actual receipt by the Copyright Office.
Morever, Section 201.17(i)(2)(iii) (before it was deleted) stated
that ``Interest is not required to be paid on any royalty underpayment
or late payment from a particular accounting period if the interest
charge is less than or equal to five dollars ($5.00).''
It is important to note that the Copyright Office's regulations
concerning interest and accrual vis-a-vis late-filed SOAs for satellite
carriers is different than that for cable operators. Section
201.11(i)(1) states:
Royalty fee payments submitted as a result of late or amended
filings will include interest. Interest will begin to accrue
beginning on the first day after the close of the period for filing
statements of account for all underpayments or late payments of
royalties for the satellite carrier statutory license for secondary
transmissions for private home viewing occurring within that
accounting period. The accrual period will end on the date appearing
on the certified check, cashier's check, money order, or electronic
payment submitted by a satellite carrier, provided that such payment
is received by the Copyright Office within five business days of
that date. If the payment is not received by the Copyright Office
within five business days of its date, the accrual period will end
on the date of actual receipt by the Copyright Office. (Emphasis
added)
The Copyright Office's regulations regarding interest and accrual
vis-a-vis late-filed SOAs for digital audio recording devices is
comparable to that for satellite carriers. Section 201.28(l)(1) states:
Royalty payments submitted as a result of late payments or
underpayments shall include interest, which shall begin to accrue on
the first day after the close of the period for filing Statements of
Account for all late payments or underpayments of royalties
occurring within that accounting period. The accrual period for
interest shall end on the date appearing on the certified check,
cashier's check, money order, or electronic payment submitted by the
manufacturing or importing party, if the payment is received by the
Copyright Office within five business days of that date. If the
payment is not received by the Copyright Office within five business
days of its date, the accrual period shall end on the date of actual
receipt by the Copyright Office. (Emphasis added)
We note that the five-day language, contained in Section
201.17(i)(2) of the Copyright Office's rules (before it was deleted),
does not extend the Statement of Account filing period deadlines.
However, the appropriate interest accrual period for late-filed SOAs
has been subject to dispute because the ``five business day'' language
of Section 201.17(i)(2) applies, on its face, to underpayments, not to
late payments. It has been the Copyright Office's Licensing Division's
practice that interest on late payments begins to accrue on the first
day after the close of the period for filing statements of account
until the date payment is received by the Copyright Office. If the
``five business day'' language applied in the instance of late
payments, which it does not under the practices of the Copyright
Office, then the amount of interest due would be less.
Given the facts and circumstances, and the need for clarity and
administrative consistency, technical amendments to the existing
regulations are appropriate. We propose to amend Section 201.17(i) by
adding the phrase ``late payments'' to the existing regulatory
language. In the interest of consistency, this change would make the
rule largely parallel to Sections 201.11(i) and 201.28(l). As such, all
royalty payments made by EFT must be made the day they are due.
Interest will begin to accrue the next day for all late-filed
submissions and on royalties that are underpaid. The accrual period
ends when a full royalty payment is received by the Copyright Office.
We also propose to modify the ``five business day'' rule, currently
found in all three regulations, and apply it only to those
circumstances where a waiver of the EFT rule is granted by the
Copyright Office. While the Office has received very few waivers since
the EFT regulations were implemented, we still believe that special
provisions concerning royalty payments by check are appropriate. In
cases where a waiver is granted, the accrual period ends on the date
the mailed payment is postmarked. However, if the payment is not
received by the Copyright Office within five business days of its due
date, then the accrual period shall end on the date of the actual
receipt by the Copyright Office.
Finally, Section 201.11(i) is amended to recognize that in 2004,
Congress expanded Section 119 to include secondary transmissions to
commercial establishments. Satellite Home Viewer Extension and
Reauthorization Act of 2004, a part of the Consolidated Appropriations
Act of 2004. See Pub. L. No. 108-447, 118 Stat. 3394 (2004) (``Section
107'').
List of Subjects in 37 CFR Part 201
Copyright.
Proposed Regulation
0
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
0
1. The authority citation for part 201 continues to read as follows:
Authority: 17 U.S.C. 702.
0
2. Revise Sec. 201.11(i)(1) to read as follows:
Sec. 201.11 Satellite carrier statements of account covering
statutory licenses for secondary transmissions.
* * * * *
(i) * * *
(1) Interest. Royalty fee payments submitted as a result of late or
amended filings will include interest. Interest will begin to accrue
beginning on the first day after the close of the period for filing
statements of account for all underpayments or late payments of
royalties for the satellite carrier statutory license for secondary
transmissions for private home viewing and viewing in commercial
establishments occurring within that accounting period. The accrual
period shall end on the date the electronic payment submitted by a
satellite carrier is received by the Copyright Office. In cases where a
waiver of the electronic funds transfer requirement is approved by the
Copyright Office, and royalties payments are either late or underpaid,
the accrual period shall end on the date the payment is postmarked. If
the payment is not received by the Copyright Office within five
business
[[Page 29073]]
days of its date, then the accrual period shall end on the date of the
actual receipt by the Copyright Office.
* * * * *
0
3. Amend Sec. 201.17 by adding paragraph (i)(4) to read as follows:
Sec. 201.17 Statements of account covering compulsory licenses for
secondary transmissions by cable systems.
* * * * *
(i) * * *
(4) Royalty fee payments submitted as a result of late or amended
filings shall include interest. Interest shall begin to accrue
beginning on the first day after the close of the period for filing
statements of account for all late payments and underpayments of
royalties for the cable statutory license occurring within that
accounting period. The accrual period shall end on the date the
electronic payment submitted by a cable operator is received. The
accrual period shall end on the date the electronic payment submitted
by a satellite carrier is received by the Copyright Office. In cases
where a waiver of the electronic funds transfer requirement is approved
by the Copyright Office, and royalties payments are either late or
underpaid, the accrual period shall end on the date the payment is
postmarked. If the payment is not received by the Copyright Office
within five business days of its date, then the accrual period shall
end on the date of the actual receipt by the Copyright Office.
* * * * *
0
4. Revise Sec. 201.28(l))(1) to read as follows:
Sec. 201.28 Statements of account for digital audio recording devices
or media.
* * * * *
(l) * * *
(1) Royalty payments submitted as a result of late payments or
underpayments shall include interest, which shall begin to accrue on
the first day after the close of the period for filing Statements of
Account for all late payments or underpayments of royalties for the
digital audio recording obligation occurring within that accounting
period. The accrual period shall end on the date the electronic payment
submitted by the remitter is received. In cases where a waiver of the
electronic funds transfer requirement is approved by the Copyright
Office, and royalties payments are either late or underpaid, the
accrual period shall end on the date the payment is postmarked. If the
payment is not received by the Copyright Office within five business
days of its date, then the accrual period shall end on the date of the
actual receipt by the Copyright Office.
* * * * *
Dated: April 30, 2008.
Marybeth Peters,
Register of Copyrights.
Approved by:
James H. Billington,
The Librarian of Congress.
[FR Doc. E8-11274 Filed 5-19-08; 8:45 am]
BILLING CODE 1410-30-S