Sections 59-1401 to 59-1406 shall be known and may be cited as the Music Licensing Agency Act.

For purposes of the Music Licensing Agency Act:

(1) Copyright owner means the owner of a copyright of a nondramatic musical work recognized and enforceable under the copyright laws of the United States pursuant to 17 U.S.C. 101 et seq., as such sections existed on January 1, 2018, and does not include the owner of a copyright in a motion picture or audiovisual work or in part of a motion picture or audiovisual work;

(2) Music licensing agency means an association or corporation that licenses the public performance of nondramatic musical works on behalf of copyright owners;

(3) Performing right means the right to perform a copyrighted nondramatic musical work publicly for profit;

(4) Person means any individual, resident or nonresident of this state, and every domestic, foreign, or alien partnership, limited liability company, society, association, corporation, or music licensing agency;

(5) Proprietor means the owner of a retail establishment, restaurant, inn, bar, tavern, sports or entertainment facility, multi-family residential dwelling, or other similar place of business or professional office located in this state in which the public may assemble and in which nondramatic musical works or similar copyrighted works may be performed, broadcast, or otherwise transmitted for the enjoyment of members of the public there assembled; and

(6) Royalty means the fees payable to a copyright owner for a performing right.

There is hereby levied and there shall be collected a tax for the act or privilege of selling, licensing, or otherwise disposing in this state of performing rights in any musical composition, which has been copyrighted under the laws of the United States, in an amount equal to three percent of the gross receipts of all such sales, licenses, or other dispositions of performing rights in this state, payable to the Department of Revenue annually on or before March 15 of each year with respect to the gross receipts of the preceding calendar year. The department shall adopt and promulgate rules and regulations not in conflict with this section, as well as a form of return and any other forms necessary to carry out this section.

(1) Beginning January 1, 2019, a music licensing agency shall not license or attempt to license the use of or collect or attempt to collect any compensation with regard to any sale, license, or other disposition of a performing right unless the music licensing agency registers and files annually, on or before February 15, with the Department of Revenue an electronic copy of each variation of the performing-rights agreement providing for the payment of royalties made available from the music licensing agency to any proprietor within this state. The registration shall be valid for the calendar year. The department shall impose a fine for failure to renew or register in the amount of ten thousand dollars for each forty-five-day period which has passed since February 15 of the registration year if a music licensing agency fails to renew a registration or engages in business without registration.

(2) Each registered music licensing agency shall make available electronically to proprietors the most current available list of members and affiliates represented by the music licensing agency and the most current available list of the performed works that the music licensing agency licenses.

(1) Beginning January 1, 2019, no music licensing agency may enter into, or offer to enter into, a contract for the payment of royalties by a proprietor unless at least seventy-two hours prior to the execution of that contract it provides to the proprietor or the proprietor's employees, in writing, the following:

(a) A schedule of the rates and terms of royalties under the contract; and

(b) Notice that the proprietor is entitled to the information filed with the Department of Revenue pursuant to section 59-1403.01.

(2) Beginning January 1, 2019, a contract for the payment of royalties executed in this state shall:

(a) Be in writing;

(b) Be signed by the parties; and

(c) Include, at least, the following information:

(i) The proprietor's name and business address;

(ii) The name and location of each place of business to which the contract applies;

(iii) The duration of the contract; and

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

(1) Beginning January 1, 2019, before seeking payment or a contract for payment of royalties for the use of copyrighted works by that proprietor, a representative or agent for a music licensing agency shall identify himself or herself to the proprietor or the proprietor's employees, disclose that he or she is acting on behalf of a music licensing agency, and disclose the purpose for being on the premises.

(2) A representative or agent of a music licensing agency shall not:

(a) Use obscene, abusive, or profane language when communicating with a proprietor or his or her employees;

(b) Communicate by telephone or in person with a proprietor other than at the proprietor's place of business during the hours when the proprietor's business is open to the public unless otherwise authorized by the proprietor or the proprietor's agents, employees, or representatives;

(c) Engage in any coercive conduct, act, or practice that is substantially disruptive to a proprietor's business;

(d) Use or attempt to use any unfair or deceptive act or practice in negotiating with a proprietor; or

(e) Communicate with an unlicensed proprietor about licensing performances of musical works at the proprietor's establishment after receiving notification in writing from an attorney representing the proprietor that all further communications related to the licensing of the proprietor's establishment by the music licensing agency should be addressed to the attorney. However, the music licensing agency may resume communicating directly with the proprietor if the attorney fails to respond to communications from the music licensing agency within sixty days or the attorney becomes nonresponsive for a period of sixty days or more.

The Department of Revenue shall inform proprietors of their rights and responsibilities regarding the public performance of copyrighted music as part of the business licensing service.

Nothing in the Music Licensing Agency Act may be construed to prohibit a music licensing agency from conducting an investigation to determine the existence of music use by a proprietor's business or informing a proprietor of the proprietor's obligations under the copyright laws of the United States pursuant to 17 U.S.C. 101 et seq., as such sections existed on January 1, 2018.

Upon compliance with the Music Licensing Agency Act, the copyright owner, and his or her assigns and licensees, of a nondramatic musical work copyrighted under the laws of the United States shall be entitled to all the benefits thereof.

All music licensing agencies who sell, license the use of, or in any manner whatsoever dispose of, in this state, the performing rights in or to any copyrighted musical composition shall refrain from discriminating in price or terms between licensees similarly situated, except that differentials based upon applicable business factors which justify different prices or terms shall not be considered discriminations within the meaning of this section. Nothing contained in this section shall prevent price changes from time to time by reason of changing conditions affecting the market for or marketability of performing rights.

Any person violating the Music Licensing Agency Act shall be fined an amount not less than five hundred dollars and not more than two thousand dollars. Multiple violations on a single day may be considered separate violations.