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Federal Register / Vol. 86, No. 13 / Friday, January 22, 2021 / Rules and Regulations
greater than 500,000 during the prior Annual Calculation Period.
b Annual Calculation Period. The calculation period for annual minimum fees shall be the 12-month period that ends on the September 30th immediately preceding the start of the assessment period e.g., the annual minimum fee calculation period for the 2021 Annual Assessment shall be October 1, 2019 to September 30, 2020.
c Calculation by Licensee certification 2021 and 20221 2021.
Each Licensee in operation on or before the license availability date shall submit to the MLC,no later than February 15, 2021, its Certified Minimum Fee Disclosure for the 2021 annual minimum fee i.e., for the period from October 1, 2019, to September 30, 2020.
Each Licensee shall submit the appropriate annual minimum fee as calculated under paragraph a of this section for the 2021 Assessment simultaneously with its Certified Minimum Fee Disclosure.
2 2022. Each Licensee shall submit to the MLC by November 1, 2021, a Certified Minimum Fee Disclosure for the 2022 Assessment and shall pay by January 15, 2022, the appropriate annual minimum fee.
d Calculation by the MLC 2023 and subsequent years. Beginning with the 2023 Assessment and continuing in subsequent years, the MLC will calculate each Licensees annual minimum fee based on usage reporting received from Licensees pursuant to 17
U.S.C. 115d4. The MLC shall send invoices for the appropriate annual minimum fee to each Licensee.
Licensees shall pay the annual minimum fee invoices from the MLC by the later of:
1 30 days from receipt of the invoice from the MLC; or 2 January 15th of the respective Annual Assessment year.
e New licensees. 1 A New Licensee shall remit the lowest annual fee set forth in paragraph a1 or 2 of this section, as applicable, along with its notice of license or notice of nonblanket activity to be attributable to the calendar year in which such Licensee begins engaging in covered activities.
2 A New Licensee shall initially be deemed a Flat Fee Licensee. When the MLC calculates the Quarterly Allocation with the first calculation period pursuant to 390.4b during which the New Licensee was engaged in covered activities, whether such activities were for all or part of the calculation period, the MLC shall calculate the New Licensees Unique Sound Recording Count for that calculation period. In the event that such New Licensee has not
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provided timely reporting, the MLC may instead, in its discretion, use the most recent reporting from that New Licensee for such calculation. If such New Licensee is calculated to have a Unique Sound Recordings Count that exceeds the amount that would qualify it to be a Flat Fee Licensee under paragraph a1 of this section, it shall be deemed an Allocated Licensee for that Quarterly Allocation and the remainder of the calendar year and shall be invoiced and pay the assessment as calculated in 390.4 for the respective quarters, with such New Licensees Unique Sound Recordings Count to be included in the Aggregate Sound Recording Count for such quarters.
3 A New Licensee shall be subject to the provisions of paragraphs a through d of this section, as applicable, to determine the amount and timing of the annual minimum fees owed for the calendar year following the year when the Licensee begins engaging in covered activities, and for such purposes a New Licensee shall be treated as having a Unique Sound Recordings Count of zero for the Annual Calculation Period if it began engaging in covered activities after the end of the Annual Calculation Period. A New Licensee that has been deemed an Allocated Licensee pursuant to paragraph e2 of this section shall be subject to the provisions of paragraphs a through d of this section, as applicable, to determine its status as a Flat Fee Licensee or Allocated Licensee, for calendar years following the calendar year in which it is first deemed an Allocated Licensee.
4. Revise 390.4 to read as follows:
390.4 Annual Assessment allocation and payment.

a Allocation formula. Each Annual Assessment shall be divided into four equal Quarterly Allocations, after first subtracting annual fees payable by Flat Fee Licensees. The MLC may adjust Quarterly Allocations to compensate for any adjustments to the Flat Fee Licensee annual fees that occur after the initial division of the Annual Assessment.
Each Quarterly Allocation shall be allocated and paid on a calendar quarterly basis. Each Quarterly Allocation shall be divided into two equal parts, allocated among Licensees according to the following formula:
1 Allocated Licensee Assessment Pool. The Allocated Licensee Assessment Pool shall be allocated on a pro rata basis across all Allocated Licensees based on each Licensees share of the Aggregate Sound Recordings Count.
2 Threshold Licensee Assessment Pool. The Threshold Licensee
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Assessment Pool shall be allocated on a pro rata basis across Threshold Licensees based on each Threshold Licensees share of the aggregate Unique Sound Recordings Counts of all Threshold Licensees. In the event that no Threshold Licensees exist for a Quarterly Allocation, the Threshold Licensee Assessment Pool shall become payable by all Allocated Licensees in the same manner as the Allocated Licensee Assessment Pool.
b Calculation periods and timing.
The calculation period for each Quarterly Allocation shall be the threemonth period that ends three months prior to the start of the respective quarter, except that the calculation period for the Quarterly Allocation for the first and second quarters of 2021
shall be the same as for the annual minimum fee for the 2021 Annual Assessment and shall be calculated based upon the information provided in the Certified Minimum Fee Disclosures, as required by this part. The MLC shall make all calculations for each respective period based upon the reporting for such period received from Licensees as of the time of calculation by the MLC, which calculation time shall not be earlier than the legal deadline for submission of reporting by Licensees for the respective period. In the event that a Licensee has not provided timely reporting for the respective calculation period at the time the MLC calculates a Quarterly Allocation, the MLC may instead use, in its discretion, the most recent reporting from that Licensee to determine that Licensees Unique Sound Recordings Count, for the purposes of calculating the Quarterly Allocation.
c Invoicing and payment of allocation1 Deadline for payment. i Invoices from the MLC for Quarterly Allocation shares shall be payable pursuant to the MLC invoice no later than 45 days after receipt of the invoice from the MLC.
ii Invoices from the MLC to Licensees shall be deemed received on the business day after electronic transmission.
2 Format of invoices. i The quarterly invoices issued by the MLC
shall include at least the following information, where applicable:
A Invoice issuance date;
B Invoice payment due date;
C Amount owed, by share of Allocated Licensee Assessment Pool and Threshold Licensee Assessment Pool;
D Allocation of Startup Assessment;
E Offset of minimum fee payment against quarterly assessment; and F Amount of credit for un-recouped minimum fee.

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