[Federal Register: July 28, 1994]
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LIBRARY OF CONGRESS
Copyright Office
37 CFR Part 201
[Docket No. RM 94-5A]
Copyright Office Fees; Deposit Accounts
AGENCY: Copyright Office, Library of Congress.
ACTION: Notice of intention to amend regulations and request for
comments.
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SUMMARY: This document is issued to inform the public that the
Copyright Office intends to amend 37 CFR 201.6 to institute fees for
Deposit Account services, as authorized by the Copyright Code. The new
fees would reflect the actual cost of providing Deposit Account
benefits and services. This document sets out our proposal for
instituting fees and also requests comments on this proposal or other
alternatives.
DATES: Written comments should be received by September 26, 1994.
ADDRESSES: Fifteen copies of written comments should be addressed, if
sent by mail, to: Eric Schwartz, Acting General Counsel, Copyright GC/
I&R, P.O. Box 70400, Southwest Station, Washington, DC 20024.
If delivered by hand, copies should be brought to: Office of the
General Counsel, Copyright Office, James Madison Memorial Building,
Room 407, First and Independence Avenue, SE., Washington, DC.
FOR FURTHER INFORMATION CONTACT: Eric Schwartz, Acting General Counsel,
U.S. Copyright Office Library of Congress, Washington, DC 20540.
Telephone: (202) 707-8380. Telefax (202) 707-8366.
SUPPLEMENTARY INFORMATION:
1. Background
The Copyright Office today issues two separate, but associated
documents about fees for providing certain discretionary services to
the public. This Notice addresses proposals for instituting a schedule
of fees for establishing, providing, and maintaining Deposit Accounts.
Published elsewhere in today's Federal Register is an associated
document covering increases or institution of fees for special services
authorized under the Copyright Code. These documents are issued
following a comprehensive analysis of the costs the Office incurs for
providing special user services, including Deposit Accounts, and a
determination that current fees charged for various special services do
not offset the costs of providing them. In an effort to reflect more
accurately the costs associated with providing certain services to the
public, and because of limited Congressional appropriations and
uncertain revenue flow, we have concluded that we must take action
under title 17 of the United States Code, which authorizes the Register
of Copyrights to require payment ``for any other special services
requiring a substantial amount of time or expense . . .'' based on
``the cost of providing the service.'' 17 U.S.C. 708(a)(10). In this
document, we invite public comment on our proposal to improve the
operation of the Deposit Account system and recover our expenses with
respect to providing and maintaining Deposit Accounts.
2. The Deposit Account System
The Copyright Office maintains a system of Deposit Accounts for the
convenience of those who frequently use its services. The system allows
an individual or firm to establish a Deposit Account in the Copyright
Office and to make advance deposits into that account. Deposit Account
holders can charge copyright fees against the balance in their accounts
instead of sending separate remittances with applications and other
requests for services.
Deposit Accounts do not operate in the same way as commercial
charge accounts, and cannot be overdrawn or used as a form of advance
credit. The Copyright Office cannot perform any services before payment
is made. Funds must, therefore, be available in a Deposit Account for
the payment of copyright fees before an application for registration
can be accepted or other services performed.
As it currently operates, the Copyright Office Deposit Account
system involves substantial benefits to the depositors and substantial
costs to the Copyright Office. At present, however, the obligations
imposed on depositors with respect to opening and maintaining Deposit
Accounts are minimal. At the same time, the Office provides its Deposit
Account services free of charge and makes no effort to recoup the costs
incurred as a result of insufficient funds and uncollectible
replenishment checks.
3. Current Requirements for Opening and Maintaining Deposit
Accounts
Under our present regulations, the requirements for opening and
maintaining a Deposit Account are that the holder make an initial
deposit of at least $250.00, and that later replenishment amount to a
minimum of $250.00. The Deposit Account holder is also obliged to make
at least 12 transactions a year, to provide the exact name and number
of the account on all applications for registration or requests for
service, and to maintain a sufficient balance to cover all charges
against the account.
4. Deposit Account Services Provided by the Copyright Office
a. Basic Services. There is substantial workload involved in the
initial establishment of a Deposit Account. A great deal of recurring
clerical and accounting work is also required in maintaining and
servicing accounts after they have been established: producing and
mailing monthly statements of account; keeping account information up
to date; entering replenishment checks; responding to inquiries from
account holders; and providing additional statements of account or
transaction histories upon request.
b. Insufficient Funds and Uncollectible Checks. In the case of a
Deposit Account holder whose account does not have sufficient funds to
process new requests for services, or whose checks are returned as
uncollectible, the Office faces a substantial burden of staff time and
expense in handling both the Deposit Account and the fee service
requests to be charged against it.
When funds on hand are insufficient to process new claims or other
fee service requests that are to be charged against a Deposit Account,
the Office must put a hold on the account, identify and store the
pertinent material, and notify the applicant by telephone, telefax, or
mail that the account is depleted. When the account holder deposits
additional funds, the Office staff must re-activate the account, update
it to show the replenishment, then find the material, stamp the
application with the ``funds received'' date, and forward the claim for
regular processing. This is a substantial extra workload. In recent
experience, the number of claims received for which there are
insufficient funds available in the Deposit Account has grown to the
point where a large-scale tagging and shelving system has been devised
to keep track of the material and the account with which it is
associated.
There is also added work involved when replenishment checks are
uncollectible. We must then remove the amount from the account balance,
inform the Deposit Account holder of the problem, and solicit a
replacement check which, when received, involves still more processing.
5. Summary of Copyright Office Proposals
In summary, we are proposing to amend our regulations to establish
a schedule of fees for various Deposit Account benefits and services;
(1) An initial fee for opening a Deposit Account;
(2) An annual service fee for maintaining and servicing a Deposit
Account;
(3) A handling fee in cases of insufficient funds; and
(4) A fee for uncollectible replenishment checks.
In addition, we propose to establish procedures for closing Deposit
Accounts in cases of failure to respond to requests for replenishment
or repeated attempts to charge fees against an account with
insufficient funds.
6. Proposed Fee for Opening and Maintaining a Deposit Account
When we began our study and cost analysis of the Deposit Account
system we sought to identify each of the work load items associated
with the system and to determine what it costs the Office to perform
the particular service. The costs for opening an account run, on the
average, to $50.00, to cover necessary correspondence, accounting
procedures, and clerical work. We have also established that the same
amount, $50.00, would cover the total annual cost involved in servicing
the account. Thus, rather than establishing separate fees for each
Deposit Account service performed, we believe that it would be more
economical for both account holders and the Office to establish a flat
fee of $50.00 for opening an account and another $50.00 annual fee to
be deducted from accounts each January for maintaining the account. We
also propose to remove the requirement that a Deposit Account holder
must make 12 transactions a year.
7. Proposed Fee in Case of Insufficient Funds
The storage and servicing of ``insufficient funds'' claims is not
only costly, but it is also a service of direct benefit to Deposit
Account holders. When an ordinary, non-Deposit Account claim comes in
without funds its handling depends on whether the work is unpublished
or published. If the work is unpublished, the entire case (application,
deposit, and accompanying correspondence) is usually returned to the
sender. If the work is published, the case is held and the sender is
given an opportunity to remit the missing funds; then, lacking a prompt
reply, we forward the deposits to the Library of Congress in accordance
with our regulations based on Sections 407 and 408 of the Copyright
Code. Copies forwarded to the Library are not retrievable for
registration purposes and, if another copyright registration is
attempted, the remitter must refile the application and replace the
deposit materials.
In contrast, when a Deposit Account holder submits a claim to be
charged against an account with a balance insufficient to cover it, all
of the material submitted is held to await replenishment of the
account. Because their material is held rather than being returned or
forwarded to the Library, account holders are spared the expenses of
postage, handling, and replacing applications and deposits.
Because of the substantial extra workload required, we have
calculated the costs connected with handling each case of insufficient
Deposit Account funds at no less than $50.00. We therefore propose to
deduct a handling fee of $50.00 from any Deposit Account whose remitter
attempts to charge a copyright claim (or other fee service) when there
are insufficient funds in the Deposit Account. However, we do not
propose to make this change cumulative. Regardless of how many or how
long claims are pending during the period when the account is depleted,
we propose to make only one $50.00 charge, to be deducted from the
account at the time a replenishment check is credited.
8. Proposed Fee in Case of Uncollectible Check
We have calculated the extra cost of handling each case involving a
check received for replenishing a Deposit Account that is returned as
uncollected at no less than $35.00 per check. We therefore propose to
establish a fee of $35.00 to be charged against the account in each
such case.
9. Proposed Changes in Minimum Account Requirements
We do not propose to change the current monetary requirements with
respect to the minimum amount required to open a Deposit Account
($250.00) and the minimum amount required for a remittance to replenish
an account (also $250.00). However, we now propose to establish new
procedures and requirements for handling cases in which a balance drops
below $100.00, as well as those in which the balance is insufficient to
cover pending claims. In both cases (Deposit Accounts with a balance of
less than the $100.00 minimum and those with a balance of any amount
that is not sufficient to cover the charges made against it) the
Copyright Office will notify the account holder of the deficiency and
state a reasonable deadline (we recommend 60 days) after the date of
the Notice by which replenishment must be received. If replenishment is
not made before the deadline, we propose to dispose of pending claims,
in the same way we dispose of ordinary, non-Deposit Account claims
received with payment of insufficient fees.
We also propose to set forth and implement a procedure for closing
a Deposit Account when the holder has attempted to charge fees against
an account with insufficient funds more than two times within a
calendar year. In such cases, an initial service charge ($250 deposit
plus $50 opening fee) would be required to re-open the account).
10. Official Point of Contact
Traditionally we have had one contact person for each Deposit
Account. We send monthly statements of account, notification of
insufficient funds, and announcements relating to Deposit Accounts to
this person. We have become aware that in some cases this contact
person is in a corporate business office or accounting department and
may have little communication with the persons in the organization who
file copyright applications and make other fee service requests.
Because we now intend to impose fees in cases where Deposit
Accounts have insufficient funds to cover pending charges, or where a
replenishment check is returned uncollectible, we believe that Deposit
Account holders need to establish mechanisms for communicating
information regarding account balances and copyright service requests
when these are handled by different units in their organizations.
Specifically, we believe that each Deposit Account holder should
provide us with the name, organizational title, and organizational
address and number of an ``official point of contact'' for the account.
All statements and other communications with respect to the account
will be diverted to that individual, who will then be held responsible
for monitoring the account and maintaining sufficient funds in it. The
Deposit Account holder would also need to inform us when the person who
is the official point of ``contact'' has charged.
11. Conclusion
It may be possible to implement some of these proposed changes
without amending our existing regulations. We invite comments on the
proposal in general and any other alternatives for improving Deposit
Account operations and recovering costs.
Dated: July 19, 1994.
Barbara Ringer,
Acting Register of Copyrights.
Approved:
James H. Billington,
Librarian of Congress.
[FR Doc. 94-18307 Filed 7-27-94; 8:45 am]
BILLING CODE 1410-07-P