04/03/1996 01:30 PM Senate JUD

           SB 263 COPYRIGHT ROYALTIES AND LICENSING                           
                                                                              
 SHERMAN ERNOUF, Senate Labor and Commerce Committee aide, explained           
 SB 263 was introduced at the request of CHARR and has been a few              
 years in the making.  Senate Judiciary Committee staff has worked             
 with CHARR to prepare the proposed committee substitute.                      
                                                                               
 SENATOR MILLER moved adoption of CSSB 263(JUD).  SENATOR ADAMS                
 objected to ask if the five proposed amendments were included in              
 the committee substitute.  CHAIRMAN TAYLOR clarified the amendments           
 are not.  SENATOR ADAMS removed his objection, therefore CSSB
(JUD) was adopted.                                                         
                                                                               
 Number 349                                                                    
                                                                               
 CAROL WILSON, Executive Director of the Anchorage Restaurant and              
 Beverage Association (ARBA) and the Cabaret, Hotel, Restaurant and            
 Retailers Association (CHARR), testified in support of CSSB 263.              
 Members of ARBA and CHARR are small business owners in the State of           
 Alaska, who are not trying to escape paying something they are                
 legally required to pay, but want identification of what they are             
 charged for.  Performing rights societies ask those businesses to             
 pay for unidentified services.  CSSB 263 provides all retailers,              
 not just restaurants and bars, with certain rights under contracts            
 entered into in this state.  Although music licensing copyright law           
 is federal law, this bill accomplishes a lot to help businesses.              
 She read a letter of support from a business owner demonstrating              
 the frustration business owners are experiencing when dealing with            
 music licensing agencies.  Thirteen other states have adopted                 
 similar legislation, 11 states have legislation pending, and two              
 states have passed legislation and are awaiting governor's                    
 signatures. CHARR has attempted to work with other interested                 
 parties; one of the performing rights societies was represented in            
 discussions on the proposed committee substitute.  CHARR has agreed           
 to support the proposed amendments.                                           
                                                                               
 MS. WILSON explained the amendments.  The first amendment decreases           
 the length of time when notification is required from 7 days to 72            
 hours.  The second amendment requires the performing rights                   
 societies to make available their most recent list of the people              
 they represent and the list of the copyrighted musical works in               
 their repertoire.  That file can be made available electronically             
 and would be made accessible through the CHARR office.  Business              
 owners want to be able to work with only one of the societies to              
 save money.  To remain legal, they need to know what songs are                
 copyrighted by a particular society so that they play only those              
 songs.  Right now there is no way to get that information.                    
                                                                               
 SENATOR MILLER asked how a business that is not a CHARR member                
 would access that information.  MS. WILSON replied she has asked              
 that the information be made available on computer disk, and she              
 would be willing to make it available to other businesses.                    
                                                                               
 SENATOR MILLER expressed concern that the legislation apply to                
 businesses statewide, and questioned how other businesses would               
 know to contact CHARR for that information.  MS. WILSON stated she            
 would not be opposed to having the information available through a            
 state agency.                                                                 
                                                                               
 MS. WILSON explained the third amendment deletes a section that               
 pertains to notice after a violation.  This deletion was requested            
 by the performing rights societies because they believe the section           
 would hamper their attempts to investigate.  The fourth amendment             
 deals with people who are reproducing sound recordings without                
 consent, and specifies that it does not apply to investigations by            
 a law enforcement agency or other persons concerning a suspected              
 violation.                                                                    
                                                                               
 MS. WILSON noted the fifth amendment was added by Legal Services.             
 Originally a violation was called an unfair trade practice, but               
 because prohibited practices and a course of action are included in           
 the bill, the unfair trade practice violation was removed.                    
                                                                               
 CHAIRMAN TAYLOR moved all five amendments as one amendment.  There            
 being no objection, the motion carried.                                       
                                                                               
 MAURICE MCDONALD, a restaurant owner from Anchorage, stated he has            
 followed this issue in Washington, D.C. and has attended several              
 task force meetings on this issue.  SB 263 is important to not only           
 the restaurant industry, but to all of the small shops where                  
 background music is played.  The businesses do not have a problem             
 paying the fee to play the music, but as electronics have become              
 more popular, BMI and AMCAP have found more ways to double and                
 triple charge for their music.  There seems to be no way to slow              
 them down.  Business owners are demanding they be provided with a             
 list of the products they are purchasing.  When representatives of            
 the music copyright industry arrive at a restaurant they will have            
 to identify who they are and why they are there before looking                
 through a restaurant's music and video inventory.  Business owners            
 are currently negotiating in Washington, D.C. to get a compromise             
 agreement with the performing rights societies.  This bill will               
 help businesses to know who, what, and why they are paying the                
 charges.  Currently, there is no consistency in charges, because              
 the performing rights societies arbitrarily make deals with                   
 different businesses.                                                         
                                                                               
 Number 504                                                                    
                                                                               
 SENATOR GREEN questioned whether the bill before the committee                
 adequately covers the concern of business owners that                         
 representatives of the performing rights societies can just walk              
 into a business and demand to look at its inventory.  MR. MCDONALD            
 believed it does because AMCAP and BMI would be on notice that when           
 doing business in Alaska, they will have certain responsibilities.            
                                                                               
 CHAIRMAN TAYLOR commented at one time crew members brought videos             
 on the ferry system to show to passengers, at no charge, but the              
 practice was disallowed because it was considered a commercial                
 service by the performing rights societies.  He asked if that                 
 situation is being remedied in this bill.  MR. MCDONALD responded             
 that is under the jurisdiction of federal law and is considered               
 incidental use of music and video.  Congress must address those               
 situations, but SB 263 will endorse the need for reform of the                
 federal legislation.                                                          
                                                                               
 Number 513                                                                    
                                                                               
 SENATOR GREEN moved CSSB 263 as amended from committee with                   
 individual recommendations.  There being no objection, the motion             
 carried.