Minimum Balance Requirement and Automatic Replenishment Option for Deposit Account Holders, 62345-62348 [2010-25129]
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Federal Register / Vol. 75, No. 195 / Friday, October 8, 2010 / Proposed Rules
offenses. The Commission recently
voted to promulgate a proposed rule for
public comment that would remove the
different ratings for crack and powder
cocaine crimes. The proposed rule also
makes minor revisions to the breakdown
of drug weights in the interest of greater
clarity and consistency.
Executive Order 12866
The U.S. Parole Commission has
determined that this proposed rule does
not constitute a significant rule within
the meaning of Executive Order 12866.
Executive Order 13132
This regulation will not have
substantial direct effects on the States,
on the relationship between the national
government and the States, or on the
distribution of power and
responsibilities among the various
levels of government. Under Executive
Order 13132, this rule does not have
sufficient federalism implications to
require a Federalism Assessment.
Regulatory Flexibility Act
The proposed rule will not have a
significant economic impact upon a
substantial number of small entities
within the meaning of the Regulatory
Flexibility Act, 5 U.S.C. 605(b).
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Unfunded Mandates Reform Act of
1995
The rule will not cause State, local, or
tribal governments, or the private sector,
to spend $100,000,000 or more in any
one year, and it will not significantly or
uniquely affect small governments. No
action under the Unfunded Mandates
Reform Act of 1995 is necessary.
Small Business Regulatory Enforcement
Fairness Act of 1996 (Subtitle E—
Congressional Review Act)
This rule is not a ‘‘major rule’’ as
defined by Section 804 of the Small
Business Regulatory Enforcement
Fairness Act of 1996 (Subtitle E—
Congressional Review Act), now
codified at 5 U.S.C. 804(2). The rule will
not result in an annual effect on the
economy of $100,000,000 or more; a
major increase in costs or prices; or
significant adverse effects on the ability
of United States-based companies to
compete with foreign-based companies.
Moreover, this is a rule of agency
practice or procedure that does not
substantially affect the rights or
obligations of non-agency parties, and
does not come within the meaning of
the term ‘‘rule’’ as used in Section
804(3)(c), now codified at 5 U.S.C.
804(3)(c). Therefore, the reporting
requirement of 5 U.S.C. 801 does not
apply.
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List of Subjects in 28 CFR Part 2
Administrative practice and
procedure, Prisoners, Probation and
parole.
The Proposed Rule
Accordingly, the U.S. Parole
Commission is proposing the following
amendment to 28 CFR part 2.
PART 2—[AMENDED]
1. The authority citation for 28 CFR
part 2 continues to read as follows:
Authority: 18 U.S.C. 4203(a)(1) and
4204(a)(6).
2. Amend § 2.20, in the U.S. Parole
Commission Offense Behavior Severity
Index, Chapter Nine—Offenses
Involving Illicit Drugs, by revising the
entry entitled ‘‘921 Distribution or
Possession With Intent To Distribute’’ in
Subchapter C—Cocaine Offenses to read
as follows:
§ 2.20 Paroling policy guidelines:
Statement of general policy.
*
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U.S. Parole Commission Offense
Behavior Severity Index
*
*
*
*
*
Chapter Nine—Offenses Involving Illicit
Drugs
*
*
*
*
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Subchapter C—Cocaine Offenses
921 Distribution or Possession With
Intent To Distribute
(a) If extremely large scale (e.g.,
involving 15 kilograms or more cocaine
powder of 100% purity, or equivalent
amount; or 15 kilograms of a substance
containing a detectable amount of
cocaine base), grade as Category Eight
[except as noted in (c) below];
(b) If very large scale (e.g., involving
at least 5 kilograms but less than 15
kilograms cocaine powder of 100%
purity, or equivalent amount; or at least
5 kilograms but less than 15 kilograms
of a substance containing a detectable
amount of cocaine base), grade as
Category Seven [except as noted in (c)
below];
(c) Where the Commission finds that
the offender had only a peripheral role*,
grade conduct under (a) or (b) as
Category Six;
(d) If large scale (e.g., involving at
least 1 kilogram but less than 5
kilograms cocaine powder of 100%
purity, or equivalent amount; or at least
1 kilogram but less than 5 kilograms of
a substance containing a detectable
amount of cocaine base), grade as
Category Six [except as noted in (e)
below];
(e) Where the Commission finds that
the offender had only a peripheral role,
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62345
grade conduct under (d) as Category
Five;
(f) If medium scale (e.g., involving at
least 100 grams but less than 1 kilogram
cocaine powder of 100% purity, or
equivalent amount; or at least 100 grams
but less than 1 kilogram of a substance
containing a detectable amount of
cocaine base), grade as Category Five;
(g) If small scale (e.g., involving at
least 5 grams but less than 100 grams
cocaine powder of 100% purity, or
equivalent amount; or at least 5 grams
but less than 100 grams of a substance
containing a detectable amount of
cocaine base), grade as Category Four;
(h) If very small scale (e.g., involving
at least 1 gram but less than 5 grams
cocaine powder of 100% purity, or
equivalent amount; or at least 1 gram
but less than 5 grams of a substance
containing a detectable amount of
cocaine base), grade as Category Three;
(i) If extremely small scale (e.g.,
involving less than 1 gram cocaine
powder of 100% purity, or equivalent
amount; or less than 1 gram of a
substance containing a detectable
amount of cocaine base), grade as
Category Two.
*
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*
Dated: September 17, 2010.
Isaac Fulwood,
Chairman, U.S. Parole Commission.
[FR Doc. 2010–24648 Filed 10–7–10; 8:45 am]
BILLING CODE 4410–31–P
LIBRARY OF CONGRESS
Copyright Office
37 CFR Part 201
[Docket No. RM 2009–4]
Minimum Balance Requirement and
Automatic Replenishment Option for
Deposit Account Holders
Copyright Office, Library of
Congress.
ACTION: Notice of proposed rulemaking.
AGENCY:
The Copyright Office is
proposing to amend its regulations to set
the minimum level of activity required
to hold a deposit account at 12
transactions per year; require deposit
account holders to maintain a minimum
balance in that account; mandate the
closure of a deposit account the second
time it is overdrawn; and offer deposit
account holders the option of automatic
replenishment of their account via their
bank account or credit card.
DATES: Written comments must be
received in the Office of the General
SUMMARY:
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Federal Register / Vol. 75, No. 195 / Friday, October 8, 2010 / Proposed Rules
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Counsel of the Copyright Office no later
than November 22, 2010.
ADDRESSES: If hand delivered by a
private party, an original and five copies
of a comment or reply comment should
be brought to the Library of Congress,
U.S. Copyright Office, Room LM–401,
James Madison Building, 101
Independence Ave., SE., Washington,
DC 20559, between 8:30 a.m. and 5 p.m.
The envelope should be addressed as
follows: Office of the General Counsel,
U.S. Copyright Office.
If delivered by a commercial courier,
an original and five copies of a comment
or reply comment must be delivered to
the Congressional Courier Acceptance
Site (‘‘CCAS’’) located at 2nd and D
Streets, SE., Washington, DC between
8:30 a.m. and 4 p.m. The envelope
should be addressed as follows: Office
of the General Counsel, U.S. Copyright
Office, LM–403, James Madison
Building, 101 Independence Avenue,
SE., Washington, DC 20559. Please note
that CCAS will not accept delivery by
means of overnight delivery services
such as Federal Express, United Parcel
Service or DHL.
If sent by mail (including overnight
delivery using U.S. Postal Service
Express Mail), an original and five
copies of a comment or reply comment
should be addressed to U.S. Copyright
Office, Copyright GC/I&R, P.O. Box
70400, Washington, DC 20024.
FOR FURTHER INFORMATION CONTACT:
Tanya Sandros, Deputy General Counsel
or, Chris Weston, Attorney Advisor.
Copyright GC/I&R, P.O. Box 70400,
Washington, DC 20024. Telephone:
(202) 707–8380. Telefax: (202) 707–
8366.
SUPPLEMENTARY INFORMATION:
Deposit Account Background
The Copyright Office maintains a
system of deposit accounts for those
who frequently use its services. An
individual or entity may establish a
deposit account, make advance deposits
into that account, and charge copyright
fees against the balance instead of
sending separate payments with
applications and other requests for
services. This process has proven to be
more efficient and less expensive for
both the Office and the applicant than
sending separate payments to the
Copyright Office for each application for
registration or for other services.
Prior Notice of Proposed Rulemaking
On July 14, 2009, the Copyright Office
published a notice in the Federal
Register, 74 FR 33930, seeking public
comment on a proposed amendment to
its copyright registration regulations (37
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CFR 201 and 202). The amendment
would have required that applications
for copyright registration paid for by
deposit account debits be submitted
using the electronic Copyright Office
(eCO) registration system (eService).
The July 2009 Notice of Proposed
Rulemaking also sought comment on
whether registration applicants continue
to find deposit accounts to be a valuable
service.
The goal of the July 2009 Notice of
Proposed Rulemaking (and the goal of
the present Notice) was to solve the
problem of paper registration
applications being suspended for lack of
deposit account funds. As the Notice
explained, when the deposit account
being used for payment has insufficient
funds to process a paper application, the
Copyright Office suspends processing of
the application to notify the account
holder that replenishment of the
account is needed, and places the
pending application and associated
deposit copies in temporary storage. The
suspended applications, which may
number 3,000 or more at any one time,
must be reviewed regularly by Office
staff to locate those that are newly
funded and reprocess them. Thus,
insufficient deposit account funding
effectively doubles—at a minimum—the
time Office staff must spend processing
an application, time that would
otherwise be more profitably spent on
processing properly filed claims in a
more timely manner.
On average, three to four percent of
paper applications for registration are
suspended each year due to lack of
sufficient deposit account funds. In
fiscal 2007, between 16,000 and 22,000
applications were put on hold for
insufficient deposit account funds, and
the amount appears to have remained
consistent throughout 2008 and 2009.
The Office has expended substantial
resources managing these suspended
applications and deposits. While the
Office assesses service charges for
deposit account overdrafts ($165) and
dishonored deposit account
replenishment checks ($85), see 37 CFR
201.3(d), these penalties do not recover
all costs or solve the fundamental
problems associated with the additional
handling and the delay in processing.
In July 2009, the Copyright Office
proposed that the problem of
insufficient deposit account funds for
paper applications should be solved by
requiring all deposit account holders to
file their applications via eService, the
Office’s electronic registration system.
An application for registration made via
eService cannot be completed until the
method of payment is verified by, for
example, ensuring that sufficient funds
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are present in the deposit account and
payment has been made. This method is
much more efficient than filing paper
applications, which must go through a
number of processing steps before the
validity of the proffered method of
payment can be ascertained. The
proposal also noted that electronic
registration benefits applicants in that it
offers a lower fee than paper
registrations ($35 instead of $65) and
helps to establish an earlier effective
date of registration.
Comments Received in Response to
Proposal for Mandatory Electronic
Registration for Deposit Account
Holders
Even though approximately 3,000
entities currently use deposit accounts,
the July 2009 Notice of Proposed
Rulemaking garnered only six public
comments. Of these, the American
Society of Media Photographers, Inc.
(ASMP), the Historical Publications
Section of the North Carolina
Department of Cultural Resources
(NCDCR), and Perseus Book Group
supported the proposed eService
application requirement. The Motion
Picture Association of America (MPAA),
the National Intellectual Property
Researchers Association (NIPRA), and
Government Liaison Services, Inc. (GLS)
opposed the proposal. Four of the
commenters also discussed the
continued value of deposit accounts.
The MPAA, NCDCR, and Perseus
vigorously maintained that deposit
accounts still offer significant benefits.
ASMP, on the other hand, offered
conditional support for their
elimination.
For those commenters who voiced
approval of the mandatory electronic
registration proposal—praising the
current functionality of eService,
NCDCR comment at 2, and stating that
the requirement ‘‘would substantially
improve the speed, efficiency and
economy of processing applications,’’
ASMP comment at 1–2—the benefits of
electronic registration will of course
remain available.
The MPAA comments, however,
challenged the initial proposed rule as
premature and suggested an alternative
whereby each deposit account holder
would be charged an up-front $100 fee
that would be held as a kind of security
deposit. MPAA comment at 2.
According to the MPAA proposal, if an
applicant has insufficient funds in its
deposit account to pay for a paper
application, the Copyright Office should
close the deposit account and use the
security deposit to pay for returning the
application to the applicant. The MPAA
argued that rights-holders should not be
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denied the option of continuing to use
paper applications because of the
actions of ‘‘irresponsible’’ deposit
account holders. See MPAA comment
at 4.
MPAA also expressed its skepticism
of eService’s reliability. ‘‘eService is
relatively new and there continues to be
some ‘bugs’ in the system,’’ it stated.
Specifically, ‘‘MPAA member
companies have experienced difficulties
in allowing multiple users to access the
system at the same time, and there is a
need for the new system to have a
meaningful review capability, which
would include true search
functionality.’’ MPAA comment at 3.
MPAA’s comment dates from August
2009, and since then the Office has
significantly improved eService’s
capabilities.
Two other commenters also took issue
with the Copyright Office’s claims for
eService efficiency. NIPRA and GLS
challenged the Copyright Office’s
estimation of how long eService
registration applications take to be
processed, arguing that since the advent
of electronic registration, processing
time has actually increased to two years.
NIPRA comment at 2; GLS comment at
2. In fact the processing time increase—
which is real—represents for the most
part the increased time needed to
process paper applications, which now
have to be transcribed into the Office’s
digital system. eService applications
with sufficient funds are not subject to
this additional step, and thus generally
enjoy quicker processing. Currently,
90% of eService registration
applications are processed in slightly
more than five months (meaning many
are completed much sooner), compared
to 25 months for paper applications.
NIPRA and GLS further charged that
‘‘given the Copyright Office requirement
for deposits consisting of the ‘best
edition’ of works, the physical
limitations of the electronic system will
render compliance with the requirement
impossible for works such as
voluminous texts, motion pictures and
many software filings.’’ NIPRA comment
at 2. This concern is misplaced.
Electronic registration does not require
the submission of an electronic deposit.
Applicants have an option of either
uploading the deposit as an electronic
file or sending the deposit to the Office
using the packing slip provided during
the electronic registration process. 37
CFR 202.3(b)(2)(ii)(A)–(B). Whether a
deposit copy is sent electronically or
physically depends upon its native
format and the Library’s needs. Most
works subject to the best edition
requirement must be submitted in hard
copy form, since in most cases the
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Library’s best edition requirements
specify a physical format. See 37 CFR
202.20(b)(1). This requirement does not
preclude the use of eService to file an
application or to pay the application fee.
It is only when a work is published
‘‘solely in an electronic format’’ (e.g., not
in a physically tangible format) that
‘‘submission of the digital file[s] in exact
first-publication form and content’’ is
required. 37 CFR 202.20(b)(2)(iii)(B).
NIPRA and GLS also questioned the
security of electronic deposit copies.
NIPRA comment at 2; GLS comment at
1–2. The Copyright Office is unaware
that the uploading of files to the
Copyright Office via eService presents
any security concerns. Of course, the
security and integrity of all eService
transactions are of paramount
importance to the Copyright Office, and
it has implemented robust security
measures, which continue to be
improved. However, the prior eService
amendment only concerned the
registration application, not the deposit
copies which, in the majority of cases
may continue to be sent separately in
physical, tangible formats.
The Copyright Office carefully
considered each of the comments
discussed above and it has been
persuaded that mandatory electronic
application was not the most
appropriate solution to its problems of
underfunded paper applications. While
the Office still feels strongly that
electronic registration is vastly more
efficient than paper registration, and
redounds to the benefit of applicants as
much as to the benefit of the Office, it
has concluded that mandatory
electronic registration was an overgeneral solution to the specific problems
described. Its current proposal of a
minimum deposit account balance
requirement and optional automatic
replenishment discussed herein is a
more targeted response to the problems
facing the Office.
Comments Received in Response to
Question Regarding the Continued
Availability of Deposit Accounts
In its July 15th, 2009, notice, the
Copyright Office also sought public
comment on whether it should cease
offering deposit accounts altogether. It
noted that, in an era when paper
applications and payment via check
were the norm, a separate, simplified
deposit account system presented
attractive efficiencies to frequent
applicants and to the Office. It also
pointed out that in an era of electronic
registration and payment via corporate
or other credit cards, the administrative
costs of maintaining a separate deposit
account system are no longer clearly
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62347
offset by its advantages; hence, the
reason for the Office’s inquiry
concerning abolition of the deposit
account system.
While one commenter stated that
there was ‘‘no apparent need’’ for the
Copyright Office to continue offering
deposit accounts, ASMP comment at 2,
three other commenters argued that the
elimination of deposit accounts would
certainly be harmful. Perseus stated that
deposit accounts are a ‘‘valuable and
relevant service’’ that make it easier to
track its copyright budget. Perseus
comment at 1. NCDCR, referencing its
particular administrative issues as a
state agency, said that deposit accounts
offer significant efficiencies over
individual payments. NCDCR comment
at 2. Finally, MPAA argued that
corporate credit cards are not an
effective alternative because they
require spending controls that, if
improperly monitored, could result in
registration applications being delayed
for insufficient funds. MPAA comment
at 4.
The Copyright Office acknowledges
that deposit accounts are a useful and
efficient option for copyright owners
who frequently use its services,
including, but not limited to
registration. Consequently, it will
continue to offer deposit accounts for
the foreseeable future, but reserves its
prerogative to revisit the question of
their utility and cost to the Office.
New Proposal
After considering the comments filed
to the initial NPRM, the Copyright
Office explored other options for
addressing its problems with
underfunded deposit accounts and is
now proposing a number of
administrative requirements to solve the
problem. Specifically, the Office is
proposing to amend its regulations to
(1) Set the minimum level of activity
required to hold a deposit account at 12
transactions per year; (2) require deposit
account holders to maintain a minimum
balance in that account; (3) mandate the
closure of a deposit account the second
time it is overdrawn; and (4) offer
deposit account holders the option of
automatic replenishment of their
account via their bank account or credit
card.
1. Mandatory Minimum Deposit
Account Activity and Balance
The Copyright Office proposes to
replace the words ‘‘a considerable
amount of business’’ with ‘‘12 or more
transactions a year’’ in section 37 CFR
201.6(b) in order to more clearly
delineate the intended users of the
deposit account program. The program’s
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Federal Register / Vol. 75, No. 195 / Friday, October 8, 2010 / Proposed Rules
goal is to better serve rights-holders who
engage in regular, multiple registrations
and other transactions with the
Copyright Office every year, and the
proposed language reflects this intent
with specificity.
The Office also proposes to institute
a requirement that every deposit
account holder must establish, in
consultation with the Copyright Office,
a minimum balance for its deposit
account. Ideally, this balance will be the
lowest amount a deposit account holder
can have in his or her account and still
be able to pay for their regular number
of copyright registration applications.
This amount will be set collaboratively
so that both the account holder and the
office are comfortable that it will be
sufficient for the account holder’s
expected activity.
In the event a deposit account reaches
its minimum balance, the Copyright
Office will automatically notify the
account holder, but take no further
action. The minimum balance
requirement is intended to act primarily
as an indicator to the account holder
that the account may need
replenishment; going below a minimum
balance does not in itself expose the
account holder to any adverse
consequences.
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2. Consequences of Overdrawing a
Deposit Account
The Copyright Office proposes that
upon the second occasion that a deposit
account is overdrawn—meaning the
second time there is not enough money
in an account to pay the fee for a
submitted registration—the account will
be closed. In practice this rule will only
affect deposit account holders who use
paper applications, because eService
will not allow an application to be
submitted without sufficient funds.
However, a deposit account holder
whose account is closed because it has
been overdrawn twice is not foreclosed
from using a deposit account in the
future. The deposit account holder may
re-open a new account on the condition
that it is funded through the automatic
replenishment option. This condition is
to protect the account holder from the
risk of overdrawing again and to protect
the Copyright Office from the risk of
further suspended applications.
3. Voluntary Automatic Replenishment
The Copyright Office proposes to offer
a voluntary automatic replenishment
program to all deposit account holders.
Under this program, the deposit account
holder would provide pre-authorization
to the Copyright Office to replenish the
account from the account holder’s credit
card or bank account. Replenishment
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would take place when the deposit
account reaches its minimum balance,
at which time the Office will also
immediately notify the account holder
of the replenishment. The account
holder would determine the amount of
replenishment above the predetermined minimum balance at the
time the account holder enters the
program.
The Office seeks comment from the
public on the following proposed
regulations for governing deposit
accounts maintained by the Copyright
Office.
List of Subjects in 37 CFR Part 201
Copyright, General provisions.
Proposed Regulations
In consideration of the foregoing, the
Copyright Office proposes to amend 37
CFR Ch. II as follows:
PART 201—GENERAL PROVISIONS
1. The authority citation for part 201
continues to read as follows:
Authority: 17 U.S.C. 702.
2. Section 201.6(b) is revised to read
as follows:
§ 201.6 Payment and refund of Copyright
Office fees.
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(b) Deposit accounts. (1) Persons or
firms having 12 or more transactions a
year with the Copyright Office may
prepay copyright expenses by
establishing a Deposit Account. The
Office and the Deposit Account holder
will cooperatively determine an
appropriate minimum balance for the
Deposit Account, and the Office will
automatically notify the Deposit
Account holder when the account
reaches that balance.
(2) The Copyright Office will close a
Deposit Account the second time the
Deposit Account holder overdraws his
or her account. An account closed for
this reason can be re-opened only if the
holder elects to fund it through
automatic replenishment.
(3) In order to ensure that a Deposit
Account’s funds are sufficiently
maintained, a Deposit Account holder
may authorize the Copyright Office to
automatically replenish the account
from the holder’s bank account or credit
card. The amount by which a Deposit
Account will be replenished will be
determined by the deposit account
holder. Automatic replenishment will
be triggered when the Deposit Account
reaches the minimum level of funding
established pursuant to section (b)(1),
and Deposit Account holders will be
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automatically notified of the
replenishment.
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Dated: October 1, 2010.
Tanya Sandros,
Deputy General Counsel.
[FR Doc. 2010–25129 Filed 10–7–10; 8:45 am]
BILLING CODE 1410–30–P
DEPARTMENT OF VETERANS
AFFAIRS
38 CFR Part 17
RIN 2900–AN55
Reimbursement Offsets for Medical
Care or Services
Department of Veterans Affairs.
Proposed rule.
AGENCY:
ACTION:
The Department of Veterans
Affairs (VA) proposes to amend its
regulations concerning the
reimbursement of medical care and
services delivered to veterans for
nonservice-connected conditions. The
proposed rule would apply in situations
where third-party payers are required to
reimburse VA for costs related to care
provided by VA to a veteran covered
under the third-party payer’s plan. This
proposed rule would add a new section
barring offsets by third-party payers and
establishing a process by which thirdparty payers would submit a request for
a refund on claims for which there is an
alleged overpayment.
DATES: Comments must be received on
or before December 7, 2010.
ADDRESSES: Written comments may be
submitted through https://
www.Regulations.gov; by mail or hand
delivery to the Director, Regulations
Management (02REG), Department of
Veterans Affairs, 810 Vermont Avenue,
NW., Room 1068, Washington, DC
20420; or by fax to (202) 273–9026.
Comments should indicate that they are
submitted in response to ‘‘RIN 2900–
AN55, Reimbursement Offsets for
Medical Care or Services.’’ Copies of
comments received will be available for
public inspection in the Office of
Regulation Policy and Management,
Room 1063B, between the hours of 8
a.m. and 4:30 p.m. Monday through
Friday (except holidays). Please call
(202) 461–4902 for an appointment.
(This is not a toll-free number.) In
addition, during the comment period,
comments may be viewed online
through the Federal Docket Management
System at https://www.Regulations.gov.
FOR FURTHER INFORMATION CONTACT:
Anthony Norris, Program Analyst,
SUMMARY:
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Agencies
[Federal Register Volume 75, Number 195 (Friday, October 8, 2010)]
[Proposed Rules]
[Pages 62345-62348]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-25129]
=======================================================================
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LIBRARY OF CONGRESS
Copyright Office
37 CFR Part 201
[Docket No. RM 2009-4]
Minimum Balance Requirement and Automatic Replenishment Option
for Deposit Account Holders
AGENCY: Copyright Office, Library of Congress.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: The Copyright Office is proposing to amend its regulations to
set the minimum level of activity required to hold a deposit account at
12 transactions per year; require deposit account holders to maintain a
minimum balance in that account; mandate the closure of a deposit
account the second time it is overdrawn; and offer deposit account
holders the option of automatic replenishment of their account via
their bank account or credit card.
DATES: Written comments must be received in the Office of the General
[[Page 62346]]
Counsel of the Copyright Office no later than November 22, 2010.
ADDRESSES: If hand delivered by a private party, an original and five
copies of a comment or reply comment should be brought to the Library
of Congress, U.S. Copyright Office, Room LM-401, James Madison
Building, 101 Independence Ave., SE., Washington, DC 20559, between
8:30 a.m. and 5 p.m. The envelope should be addressed as follows:
Office of the General Counsel, U.S. Copyright Office.
If delivered by a commercial courier, an original and five copies
of a comment or reply comment must be delivered to the Congressional
Courier Acceptance Site (``CCAS'') located at 2nd and D Streets, SE.,
Washington, DC between 8:30 a.m. and 4 p.m. The envelope should be
addressed as follows: Office of the General Counsel, U.S. Copyright
Office, LM-403, James Madison Building, 101 Independence Avenue, SE.,
Washington, DC 20559. Please note that CCAS will not accept delivery by
means of overnight delivery services such as Federal Express, United
Parcel Service or DHL.
If sent by mail (including overnight delivery using U.S. Postal
Service Express Mail), an original and five copies of a comment or
reply comment should be addressed to U.S. Copyright Office, Copyright
GC/I&R, P.O. Box 70400, Washington, DC 20024.
FOR FURTHER INFORMATION CONTACT: Tanya Sandros, Deputy General Counsel
or, Chris Weston, Attorney Advisor. Copyright GC/I&R, P.O. Box 70400,
Washington, DC 20024. Telephone: (202) 707-8380. Telefax: (202) 707-
8366.
SUPPLEMENTARY INFORMATION:
Deposit Account Background
The Copyright Office maintains a system of deposit accounts for
those who frequently use its services. An individual or entity may
establish a deposit account, make advance deposits into that account,
and charge copyright fees against the balance instead of sending
separate payments with applications and other requests for services.
This process has proven to be more efficient and less expensive for
both the Office and the applicant than sending separate payments to the
Copyright Office for each application for registration or for other
services.
Prior Notice of Proposed Rulemaking
On July 14, 2009, the Copyright Office published a notice in the
Federal Register, 74 FR 33930, seeking public comment on a proposed
amendment to its copyright registration regulations (37 CFR 201 and
202). The amendment would have required that applications for copyright
registration paid for by deposit account debits be submitted using the
electronic Copyright Office (eCO) registration system (eService). The
July 2009 Notice of Proposed Rulemaking also sought comment on whether
registration applicants continue to find deposit accounts to be a
valuable service.
The goal of the July 2009 Notice of Proposed Rulemaking (and the
goal of the present Notice) was to solve the problem of paper
registration applications being suspended for lack of deposit account
funds. As the Notice explained, when the deposit account being used for
payment has insufficient funds to process a paper application, the
Copyright Office suspends processing of the application to notify the
account holder that replenishment of the account is needed, and places
the pending application and associated deposit copies in temporary
storage. The suspended applications, which may number 3,000 or more at
any one time, must be reviewed regularly by Office staff to locate
those that are newly funded and reprocess them. Thus, insufficient
deposit account funding effectively doubles--at a minimum--the time
Office staff must spend processing an application, time that would
otherwise be more profitably spent on processing properly filed claims
in a more timely manner.
On average, three to four percent of paper applications for
registration are suspended each year due to lack of sufficient deposit
account funds. In fiscal 2007, between 16,000 and 22,000 applications
were put on hold for insufficient deposit account funds, and the amount
appears to have remained consistent throughout 2008 and 2009. The
Office has expended substantial resources managing these suspended
applications and deposits. While the Office assesses service charges
for deposit account overdrafts ($165) and dishonored deposit account
replenishment checks ($85), see 37 CFR 201.3(d), these penalties do not
recover all costs or solve the fundamental problems associated with the
additional handling and the delay in processing.
In July 2009, the Copyright Office proposed that the problem of
insufficient deposit account funds for paper applications should be
solved by requiring all deposit account holders to file their
applications via eService, the Office's electronic registration system.
An application for registration made via eService cannot be completed
until the method of payment is verified by, for example, ensuring that
sufficient funds are present in the deposit account and payment has
been made. This method is much more efficient than filing paper
applications, which must go through a number of processing steps before
the validity of the proffered method of payment can be ascertained. The
proposal also noted that electronic registration benefits applicants in
that it offers a lower fee than paper registrations ($35 instead of
$65) and helps to establish an earlier effective date of registration.
Comments Received in Response to Proposal for Mandatory Electronic
Registration for Deposit Account Holders
Even though approximately 3,000 entities currently use deposit
accounts, the July 2009 Notice of Proposed Rulemaking garnered only six
public comments. Of these, the American Society of Media Photographers,
Inc. (ASMP), the Historical Publications Section of the North Carolina
Department of Cultural Resources (NCDCR), and Perseus Book Group
supported the proposed eService application requirement. The Motion
Picture Association of America (MPAA), the National Intellectual
Property Researchers Association (NIPRA), and Government Liaison
Services, Inc. (GLS) opposed the proposal. Four of the commenters also
discussed the continued value of deposit accounts. The MPAA, NCDCR, and
Perseus vigorously maintained that deposit accounts still offer
significant benefits. ASMP, on the other hand, offered conditional
support for their elimination.
For those commenters who voiced approval of the mandatory
electronic registration proposal--praising the current functionality of
eService, NCDCR comment at 2, and stating that the requirement ``would
substantially improve the speed, efficiency and economy of processing
applications,'' ASMP comment at 1-2--the benefits of electronic
registration will of course remain available.
The MPAA comments, however, challenged the initial proposed rule as
premature and suggested an alternative whereby each deposit account
holder would be charged an up-front $100 fee that would be held as a
kind of security deposit. MPAA comment at 2. According to the MPAA
proposal, if an applicant has insufficient funds in its deposit account
to pay for a paper application, the Copyright Office should close the
deposit account and use the security deposit to pay for returning the
application to the applicant. The MPAA argued that rights-holders
should not be
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denied the option of continuing to use paper applications because of
the actions of ``irresponsible'' deposit account holders. See MPAA
comment at 4.
MPAA also expressed its skepticism of eService's reliability.
``eService is relatively new and there continues to be some `bugs' in
the system,'' it stated. Specifically, ``MPAA member companies have
experienced difficulties in allowing multiple users to access the
system at the same time, and there is a need for the new system to have
a meaningful review capability, which would include true search
functionality.'' MPAA comment at 3. MPAA's comment dates from August
2009, and since then the Office has significantly improved eService's
capabilities.
Two other commenters also took issue with the Copyright Office's
claims for eService efficiency. NIPRA and GLS challenged the Copyright
Office's estimation of how long eService registration applications take
to be processed, arguing that since the advent of electronic
registration, processing time has actually increased to two years.
NIPRA comment at 2; GLS comment at 2. In fact the processing time
increase--which is real--represents for the most part the increased
time needed to process paper applications, which now have to be
transcribed into the Office's digital system. eService applications
with sufficient funds are not subject to this additional step, and thus
generally enjoy quicker processing. Currently, 90% of eService
registration applications are processed in slightly more than five
months (meaning many are completed much sooner), compared to 25 months
for paper applications.
NIPRA and GLS further charged that ``given the Copyright Office
requirement for deposits consisting of the `best edition' of works, the
physical limitations of the electronic system will render compliance
with the requirement impossible for works such as voluminous texts,
motion pictures and many software filings.'' NIPRA comment at 2. This
concern is misplaced. Electronic registration does not require the
submission of an electronic deposit. Applicants have an option of
either uploading the deposit as an electronic file or sending the
deposit to the Office using the packing slip provided during the
electronic registration process. 37 CFR 202.3(b)(2)(ii)(A)-(B). Whether
a deposit copy is sent electronically or physically depends upon its
native format and the Library's needs. Most works subject to the best
edition requirement must be submitted in hard copy form, since in most
cases the Library's best edition requirements specify a physical
format. See 37 CFR 202.20(b)(1). This requirement does not preclude the
use of eService to file an application or to pay the application fee.
It is only when a work is published ``solely in an electronic format''
(e.g., not in a physically tangible format) that ``submission of the
digital file[s] in exact first-publication form and content'' is
required. 37 CFR 202.20(b)(2)(iii)(B).
NIPRA and GLS also questioned the security of electronic deposit
copies. NIPRA comment at 2; GLS comment at 1-2. The Copyright Office is
unaware that the uploading of files to the Copyright Office via
eService presents any security concerns. Of course, the security and
integrity of all eService transactions are of paramount importance to
the Copyright Office, and it has implemented robust security measures,
which continue to be improved. However, the prior eService amendment
only concerned the registration application, not the deposit copies
which, in the majority of cases may continue to be sent separately in
physical, tangible formats.
The Copyright Office carefully considered each of the comments
discussed above and it has been persuaded that mandatory electronic
application was not the most appropriate solution to its problems of
underfunded paper applications. While the Office still feels strongly
that electronic registration is vastly more efficient than paper
registration, and redounds to the benefit of applicants as much as to
the benefit of the Office, it has concluded that mandatory electronic
registration was an over-general solution to the specific problems
described. Its current proposal of a minimum deposit account balance
requirement and optional automatic replenishment discussed herein is a
more targeted response to the problems facing the Office.
Comments Received in Response to Question Regarding the Continued
Availability of Deposit Accounts
In its July 15th, 2009, notice, the Copyright Office also sought
public comment on whether it should cease offering deposit accounts
altogether. It noted that, in an era when paper applications and
payment via check were the norm, a separate, simplified deposit account
system presented attractive efficiencies to frequent applicants and to
the Office. It also pointed out that in an era of electronic
registration and payment via corporate or other credit cards, the
administrative costs of maintaining a separate deposit account system
are no longer clearly offset by its advantages; hence, the reason for
the Office's inquiry concerning abolition of the deposit account
system.
While one commenter stated that there was ``no apparent need'' for
the Copyright Office to continue offering deposit accounts, ASMP
comment at 2, three other commenters argued that the elimination of
deposit accounts would certainly be harmful. Perseus stated that
deposit accounts are a ``valuable and relevant service'' that make it
easier to track its copyright budget. Perseus comment at 1. NCDCR,
referencing its particular administrative issues as a state agency,
said that deposit accounts offer significant efficiencies over
individual payments. NCDCR comment at 2. Finally, MPAA argued that
corporate credit cards are not an effective alternative because they
require spending controls that, if improperly monitored, could result
in registration applications being delayed for insufficient funds. MPAA
comment at 4.
The Copyright Office acknowledges that deposit accounts are a
useful and efficient option for copyright owners who frequently use its
services, including, but not limited to registration. Consequently, it
will continue to offer deposit accounts for the foreseeable future, but
reserves its prerogative to revisit the question of their utility and
cost to the Office.
New Proposal
After considering the comments filed to the initial NPRM, the
Copyright Office explored other options for addressing its problems
with underfunded deposit accounts and is now proposing a number of
administrative requirements to solve the problem. Specifically, the
Office is proposing to amend its regulations to (1) Set the minimum
level of activity required to hold a deposit account at 12 transactions
per year; (2) require deposit account holders to maintain a minimum
balance in that account; (3) mandate the closure of a deposit account
the second time it is overdrawn; and (4) offer deposit account holders
the option of automatic replenishment of their account via their bank
account or credit card.
1. Mandatory Minimum Deposit Account Activity and Balance
The Copyright Office proposes to replace the words ``a considerable
amount of business'' with ``12 or more transactions a year'' in section
37 CFR 201.6(b) in order to more clearly delineate the intended users
of the deposit account program. The program's
[[Page 62348]]
goal is to better serve rights-holders who engage in regular, multiple
registrations and other transactions with the Copyright Office every
year, and the proposed language reflects this intent with specificity.
The Office also proposes to institute a requirement that every
deposit account holder must establish, in consultation with the
Copyright Office, a minimum balance for its deposit account. Ideally,
this balance will be the lowest amount a deposit account holder can
have in his or her account and still be able to pay for their regular
number of copyright registration applications. This amount will be set
collaboratively so that both the account holder and the office are
comfortable that it will be sufficient for the account holder's
expected activity.
In the event a deposit account reaches its minimum balance, the
Copyright Office will automatically notify the account holder, but take
no further action. The minimum balance requirement is intended to act
primarily as an indicator to the account holder that the account may
need replenishment; going below a minimum balance does not in itself
expose the account holder to any adverse consequences.
2. Consequences of Overdrawing a Deposit Account
The Copyright Office proposes that upon the second occasion that a
deposit account is overdrawn--meaning the second time there is not
enough money in an account to pay the fee for a submitted
registration--the account will be closed. In practice this rule will
only affect deposit account holders who use paper applications, because
eService will not allow an application to be submitted without
sufficient funds.
However, a deposit account holder whose account is closed because
it has been overdrawn twice is not foreclosed from using a deposit
account in the future. The deposit account holder may re-open a new
account on the condition that it is funded through the automatic
replenishment option. This condition is to protect the account holder
from the risk of overdrawing again and to protect the Copyright Office
from the risk of further suspended applications.
3. Voluntary Automatic Replenishment
The Copyright Office proposes to offer a voluntary automatic
replenishment program to all deposit account holders. Under this
program, the deposit account holder would provide pre-authorization to
the Copyright Office to replenish the account from the account holder's
credit card or bank account. Replenishment would take place when the
deposit account reaches its minimum balance, at which time the Office
will also immediately notify the account holder of the replenishment.
The account holder would determine the amount of replenishment above
the pre-determined minimum balance at the time the account holder
enters the program.
The Office seeks comment from the public on the following proposed
regulations for governing deposit accounts maintained by the Copyright
Office.
List of Subjects in 37 CFR Part 201
Copyright, General provisions.
Proposed Regulations
In consideration of the foregoing, the Copyright Office proposes to
amend 37 CFR Ch. II as follows:
PART 201--GENERAL PROVISIONS
1. The authority citation for part 201 continues to read as
follows:
Authority: 17 U.S.C. 702.
2. Section 201.6(b) is revised to read as follows:
Sec. 201.6 Payment and refund of Copyright Office fees.
* * * * *
(b) Deposit accounts. (1) Persons or firms having 12 or more
transactions a year with the Copyright Office may prepay copyright
expenses by establishing a Deposit Account. The Office and the Deposit
Account holder will cooperatively determine an appropriate minimum
balance for the Deposit Account, and the Office will automatically
notify the Deposit Account holder when the account reaches that
balance.
(2) The Copyright Office will close a Deposit Account the second
time the Deposit Account holder overdraws his or her account. An
account closed for this reason can be re-opened only if the holder
elects to fund it through automatic replenishment.
(3) In order to ensure that a Deposit Account's funds are
sufficiently maintained, a Deposit Account holder may authorize the
Copyright Office to automatically replenish the account from the
holder's bank account or credit card. The amount by which a Deposit
Account will be replenished will be determined by the deposit account
holder. Automatic replenishment will be triggered when the Deposit
Account reaches the minimum level of funding established pursuant to
section (b)(1), and Deposit Account holders will be automatically
notified of the replenishment.
* * * * *
Dated: October 1, 2010.
Tanya Sandros,
Deputy General Counsel.
[FR Doc. 2010-25129 Filed 10-7-10; 8:45 am]
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