PROCEDURE CR2044 - ROYALTY PAYMENTS FOR THE USE OF COPYRIGHTED MUSIC AT ALL LOCATIONS
Systems and Procedures
A Division of The Corporate Controller's Office
IN

Procedure CR2044 - Royalty Payments for the Use of Copyrighted Music at all Locations

Office of the Corporate Controller

Policy Steward facilitating procedure: Associated Vice President for Finance and Corporate Controller

Table of Contents:


GENERAL:

The Copyright Revision Act of 1976, which became effective January 1, 1978, requires educational institutions to pay royalties for the internal use, and in some cases, the public performance of nondramatic musical compositions. As a result, in order to comply with the law, the University has entered into contractual agreements with three separate licensing agencies; The American Society of Composers, Authors, and Publishers (ASCAP), Broadcast Music Incorporated (BMI), and the Society of European Stage Authors and Composers (SESAC). Royalties are paid to these agencies based on Full Time Equivalent (FTE) students. The annual fee is not dependent upon the University paying a fee for the performance.

These contracts do not apply to dramas, plays, operas, operettas, reviews, musical comedies, ballets, and like works. These examples are considered "dramatico-musical" works, and are not included or covered under the license agreements.

The Public Broadcasting Service (PBS) and National Public Radio (NPR) have negotiated voluntary license agreements with the three licensing agencies. The University's radio or television stations affiliated with PBS or NPR are covered by those agreements, and do not fall under the University's agreement with the three licensing agencies, nor do they require a separate agreement with the licensing agencies.

All University locations are affected by the law and reporting requirements. As individual contracts are renegotiated, some of the conditions contained in this procedure may change, and will be revised as necessary.

All contracts must be signed as specified in Policy FN11 .

This procedure outlines compliance with the three licensing agencies regarding royalty payments for copyrighted music, and is not intended to outline compliance with the Copyright Act of 1976 in its entirety.

PROCEDURE:

ANNUAL FEES:

The amount of the annual fee is based on the total "FTE" student fall semester enrollment figures for graduate and undergraduate students submitted annually by the University in the Integrated Postsecondary Education Data Systems (IPEDS) report. The rates per student are specified in the contracts of the agencies.

ASCAP:

This annual fee covers all uses of copyrighted "musical attractions," with some limitations (e.g., limited to nondramatic performances, does not authorize the broadcasting, telecasting, or transmission by wire,etc.). University radio stations are excluded from this agreement, and therefore, must have a separate agreement, unless affiliated with NPR or PBS.

BMI:

This annual fee is a general coverage provision which covers the majority of the "internal" uses of music subject to royalties. Radio stations with less than $10,000 in revenue from the sale of air time are covered under the University's blanket licensing agreement with BMI.

SESAC:

This fee is paid upon receipt of invoice, and covers all uses of music, including performances. This agreement includes coverage for "carrier current" radio stations and class "D" FM radio with 20 watts or less power broadcasting within the confines of campus.

University Radio Stations:

FCC Licensed:

The Board of Trustees holds the license for two University radio stations.

WPSU

University Park is affiliated with NPR, which has agreements with the three licensing agencies, and therefore it is not necessary for WPSU to be covered under the University's agreement with the three licensing agencies.

WPSE

Penn State Erie, The Behrend College is a commercial radio station, and has separate agreements with the licensing agents, the amount which is specified in the contract.

Limited Area Broadcasting:

Limited Area Broadcasting - There are several "limited area broadcasting" radio stations at University Park and non-University Park locations. Additional fees are not due BMI or SESAC if the radio stations do not exceed specified minimum budgetary or gross income requirements (see BMI and SESAC, above). A separate agreement is required with ASCAP.

NOTE: "Limited area broadcasting" is defined as a broadcast system that does not use conventional free-radiating antenna techniques, but rather employs:
  1. A cable distribution system that allows reception only by direct connection to a radio or television, or
  2. Operates under Part 15 of the FCC Regulations using systems referred to as "carrier-current" or "leaky cable."

REPORTING REQUIREMENTS

To The University

Any University department, agency, or organization which presents a musical work must submit three copies of the program to the Deputy Controller's office, which acts as coordinator of music royalty fees, on the last working day of each month. It is the responsibility of the Financial Officer to ensure that the performances are reported to the Deputy Controller's office. The Deputy Controller's office is responsible for submitting the programs to the agencies by the date specified in the respective contracts.

The reporting requirements applicable to the various FCC-Station licensed and "limited area broadcasting" radio stations are transmitted to the Deputy Controller's office via the Report Form ( Exhibit "A." ), which is issued annually from the Deputy Controller's office to the Financial Officer of each non-University Park location, and to the Financial Officer of the School of Communications at University Park. Each Financial Officer completes and returns the Report Form to the Deputy Controller's office by the specified date. If radio station activities change after the annual report is returned to the Deputy Controller's office, a new report is completed and sent to the Deputy Controller's office.

The Deputy Controller monitors for compliance, and notifies the respective Financial Officer when a contract is needed for compliance.

PAYMENT AND DISTRIBUTION OF FEES

Annual fees for all three copyright agreements are paid from University general funds. Funds to cover the majority of the annual fee are budgeted on a permanent basis each year to account number 01-089-43.

Fees for ASCAP, and BMI are paid annually by dates specified in their respective contracts, while SESAC is paid upon receipt of their invoice. Funds used to pay these fees are disbursed via Special Request For Check by the Deputy Controller's office from: Account 01-089-43, Music Copyright Fees, Fund 1001.

For ASCAP and BMI, a copy of the program for each musical attraction are submitted to each agency on a quarterly basis, by dates specified in their respective contracts.

The Deputy Controller's office completes the annual enrollment reports to the agencies as requested and/or defined in their respective contracts.

SOURCE AND COLLECTION FEES

The Associated Student Activities (ASA) and the Center for the Performing Arts (CPA), contribute to account 01-089-43 on an annual basis. The amount that each department (ASA and CPA) contributes is determined by the Deputy Controller's office and each department is notified of their respective share.

Collection of the funds from ASA and CPA is accomplished by the use of either a Journal Voucher (CPA) or a University Invoice (ASA), which is initiated by the Deputy Controller's office.

AUDIT COORDINATION - FINANCIAL AND PROCEDURAL

The Financial Officer is responsible for ensuring that procedures pertaining to the accountability and safeguarding of all cash receipts, cash funds, and other assets are established and followed in accordance with approved University policies and procedures. Regular audits relating to advances, cash, travel, equipment accountability, and other expenditures provide a means to protect University assets. The Financial Officer is responsible for working with Internal Audit when audits are being performed in the administrative area, as well as performing an annual audit that is submitted to the Assistant Controller.

RECORD RETENTION, DISPOSITION AND DESTRUCTION:

Record retention must be managed in accordance with Policy AD35 - University Archives and Records Management , and records schedules approved by the Records Management Advisory Committee, Office of General Counsel, and Office of the President. These retention requirements are the University's retention criteria, either derived or based upon federal, state, and local statute or regulations, industry standards, and business needs. Retention beyond recommended time periods require justifiable reasons and warrant review by the Records Management Officer or designee. All documents must be maintained in such a manner so as to provide ease of access for review, and to provide a suitable audit trail for all transactions.

Upon expiration of a stated period of time, documents must be discarded and/or destroyed, unless permission is granted by Records Management Officer or designee to retain the records. Archival records created more than 20 years prior to the current date must be reviewed before destruction. Units should also contact the University Archivist before discarding any document which may be of permanent or historical value to the University. To safeguard the privacy of individuals, documents that contain salary information, personally identifiable information (PII), or student records must also be shredded. See Policy AD53 - Privacy Policy and AD22 - Health Insurance Portability and Accountability Act for additional information regarding privacy and the protection of an individual's personal information. For documents that must be shredded, departments may arrange for Blue Bag service by contacting the Blue/White Shredding Program of the Office of Physical Plant. Exceptions to the practice are as follows:

Additional questions may be directed to the University Archivist or the Records Management Officer.

EXHIBITS:

CONTACT INFORMATION:

For questions, additional detail, or to request changes to this procedures, please contact the Associate Controller.

CROSS REFERENCES:


Procedure Status:

Date Approved: 07-27-93

Most recent changes:

Revision History