Sound Exchange Supp Brief

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UNITED STATES C~Ul~ff0F APPEALSFOB DIST&ICT OF C,0LUMBIA CIRCUIT

R~C~~RGU~~OR T~ DISTRICT OF COLUMBIA CIRCUIT

FINAL FORMlENT NOT YET SCHEDULEDSTATES COURT OF APPEALS

Nos. 07-1123, 07-1168, 07-1172, 07-1173, 07-1174, 07-1177, 07-1178, 07-1179

INTERCOLLEGIATE BROADCAST SYS~Appellants.

V.COPYRIGHT ROYALTY BOARI

Appellee,SOUNDEXCHANGE, INC., CLERK

NATIONAL ASSOCIATION OF BROADCASTERS,Intervenors.

On Appeal from an Order ofThe Copyright Royalty Board

SUPPLEMENTAL BRIEF OF INTERVENOR SOUNDEXCHANGE, INC.

MICHAEL J. HUPPESOUNDEXCHANGE, INC.1121 Fourteenth Street, N.W., Ste. 700Washington, D.C. 20005(202) 640-5880

PAUL M. SMITHTHOMAS J. PERRELLIDAVID A. HANDZOCRAIG A. COWIEJENNER 8,: BLOCK LLP1099 New York Ave., N.W., Suite 900Washington, D.C. 20001(202) 639-6000

June 23, 2008Counsel for SoundExchange, Inc.


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CERTIFICATE AS TO PARTIES, RULINGS, AND RELATED CASESPursuant to D.C. Circuit Rule 28(a)(1), Intervenor SoundExchange certifies

as follows:1. Parties and Amici. All parties and intervenors appearing before the

Copyright Royalty Judges and in this Court are listed in the opening brief forNonCom mercial Broadcasters.

2. Rulings Under Review. The ruling under review is the DigitalPerformance Right in Sound Recordings and Ephemeral Recordings, 72 Fed. Reg.24,084 (May 1, 2007), codified at 37 C.F.R. Part 380, as modified by 72 Fed. Reg .29,886 (May 30, 2007) ("Order"). Certain appellants also challenge the April 16,2007, order denying reheating, which is not published.

3. Related Cases. This case has not come before this Court, or anyother court, before, and is a consolidation of the following cases: Nos. 07-1123,07-1168, 07-1172, 07-1173, 07-1174, 07-1177, 07-1178, and 07-1179. There isone other pending appeal of a decision by the Copyright Royalty Judges, whichinvolves some of the same parties: SoundExckange, Inc. v. Librarian of Congress,No. 08-1078 (D.C. Cir.). SoundExchange is unaware of any other related cases.

4. Deferred Appendix. A deferred appendix will be used, pursuant tothis Courts Order of November 15, 2007.


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Respectfully submitted,

JENNER & BLOCK LLP

P~uL ~. SMITHTHOMAS J. PERRELLIDAVID A. HANDZOCRAIG A. COWIEJENNER & BLOCK LLP1099 New York Avenue, N.W.Suite 900Washington, D.C. 20001(202) 639-6000MICHAEL J. HUPPESOUNDEXCHANGE, INC.1121 Fourteenth Street, N.W.,Suite 700Washington, D.C. 20005(202) 640-5880Counsel for SoundExchange, Inc.

June 23, 2008

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CORPORATE DISCLOSURE STATEMENTPursuant to Rule 26.1 of the Federal Rules of Appellate Procedure, and D.C.

Circuit Rules 26.1 and 28(a)(1)(A), SoundExchange submits the followingcorporate disclosure statement:

SoundExchange is an independent, non-profit performance rightsorganization, representing the owners of sound-recording copyrights andperformers of those recordings. SoundExchange collects royalties paid pursuant tostatutory licenses under Section 112 and 114 o f the Copyright Act, 17 U.S.C. 112, 114. SoundE xchange d istributes these royalties to the artists who createdthe sound recordings and the owners of the copyrights in those sound recordings.$oundE xchange has not issued any shares or debt securities to the public, andSoundExchange has no parent companies. SoundExchange has no subsidiaries oraffiliates that have issued any shares or debt securities to the public. No publicly-held company has a 10% or greater ownership interest in SoundExchange.Because SoundExchange meets the definition of a trade association as defined inD.C. Circuit Rule 26.1 (b), it is not required to disclose the names o f its members.

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Respectfully submitted,JENNER & BLOCK LLP

PAU~L~.~SMITH~~~/(THOMAS J. PERRELLIDAVID A. HANDZOCRAIG A. COWIEJENNER & BLOCK LLP1099 New York Avenue, N.W.Suite 900Washington, D.C. 20001(202) 639-6000MICHAEL J. HUPPESOUNDEXCHANGE, IN(..1121 Fourteenth Street, N.W.,Suite 700Washington, D.C. 20005(202) 640-5880Counsel for SoundExchange, Inc.

June 23,2008

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TABLE OF CONTENTSCERTIFICATE AS TO PARTIES, RULINGS, AND RELATED CASES ............................. iCORPORATE DISCLOSURE STATEMENT ......................................................................... iiiTABLE OF CONTENTS ............................................................................................................. vTABLE OF AUTHORITIES ...................................................................................................... viGLOSSARY .................................................................................................................................. ixSTATUTES AND REGULATIONS ........................................................................................... 1ARGUMENT .................................................................................................................................. 1I. RLI HAS WAIVED THIS CLAIM .................................................................................. 1II. THE LIBRARIAN IS A "HEAD OF DEPARTMENT" WHO CAN APPOINTCRJS .................................................................................................................................... 1III. ASSUMING ARGUENDO THAT THE APPOINTMENTS ARE

UNCONSTITUTIONAL, THE CRJS PRIOR ACTS SHOULD BE GIVEN DEFACTO VALIDITY .......................................................................................................... 5

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TABLE OF AUTHORITIES*CASES

Bowsher v. Synar, 478 U.S. 714 (1986) ................................................................3, 4*Buckley v. Valeo, 424 U.S. 1 (1976) ...............................................................2, 4, 5Carlucci v. Doe, 488 U.S. 93 (1988) ........................................................................*Eltra Corp. v. Ringer, 579 F.2d 294 (4th Cir. 1978) ..............................1, 2, 3, 4, 5Franklin Savings Ass n v. Director, Office of Thrift Supervision, 934 F.2d

1127 (10th Cir. 1991) .........................................................................................5-6Free Enterprise Fund v. PCAOB, No. 06-217, 2007 WL 891675 (D.D.C.Mar. 21, 2007), appeal docketed, No. 07-5127 (D.C. Cir. Apr. 18, 2008) ......... 3Freytag v. Commissioner, 501 U.S. 868 (1991) .......................................................2Hechinger v. Metropolitan Washington Airports Authority, 36 F.3d 97 (D.C.

Cir. 1994) .............................................................................................................Ryder v. United States, 515 U.S. 177 (1995) ............................................................6*Silver v. USPS, 951 F.2d 1033 (9th Cir. 1991) .......................................................3United States v. Olano, 507 U.S. 725 (1993) ............................................................1

STATUTES AND REGUALTIONS*2 U.S.C. 60-1 ........................................................................................................42 U.S.C. 60-130/ ...................................................................................................4*2 U.S.C. 136 .....................................................................................................2, 42 U.S.C. 437c .........................................................................................................55 U.S.C. 4802(b) ....................................................................................................3

* Authorities upon which we chiefly rely are marked with asterisks.vi


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5 U.S.C. app. 1 l(b)(2) ........................................................................................... 315 U.S.C. 41 ....................................................................................................... 2,315 U.S.C. 42 ............................................................................................................ 315 U.S.C. 78d(a) ................................................................................................. 2, 315 U.S.C. 78d(b)(1) ................................................................................................ 315 U.S.C. 721 l(e)(4) .............................................................................................. 3"17 U.S.C. 410 ....................................................................................................... 417 U.S.C. 701(a) ..................................................................................................... 447 U.S.C. 151 ......................................................................................................... 247 U.S.C. 154(a) ..................................................................................................... 347 U.S.C. 154(f)(1) ................................................................................................ 3Act of Feb.16 C.F.R. 16 C.F.R. 16 C.F.R. 16 C.F.R. 17 C.F.R.

19, 1897, ch. 265, 29 Stat. 538 .............................................................. 41.95 ......................................................................................................... 22.13 ........................................................................................................ 22.20(b)(4) ................................................................................................ 22.33 ........................................................................................................ 2200.30-4 ................................................................................................. 2

OTHER AUTHORITIESAnnual Report of the Librarian of Congress 2006, available at:http://www.libraryofcongress.gov/about/reports/annualreports/fy2OO6.pdf ....... 628 Cong. Rec. 5496-507 (May 21, 1896) ................................................................. 429 C ong. R ec. 1946 (Feb. 17 , 1897) ......................................................................... 4

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29 Cong. Rec. 316-19 (Dec. 19, 1897) ..................................................................... 4

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GLOSSARYThe following abbreviations or terms are used in this brief.

CRJsFCC Copyright Royalty JudgesFederal Communications CommissionFEC Federal Election CommissionFTC Federal Trade Comm issionLibrarianLibraryRLISEC

Librarian of CongressLibrary of CongressAppellant Royalty Logic, LLCSecurities and Exchange Commission

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STATUTES AND REGULATIONSThe addendum contains all pertinent statutes and regulations.

ARGUMENTI. RLI HAS WAIVED THIS CLAIM.

This Court should refuse to address Royalty Logics ("RLI") argument thatthe appointment by the Librarian of Congress ("Librarian") of the CopyrightRoyalty Judges ("CRJs") violated the Appointments Clause. RLI admits that itneither argued this issue to the CRJs, nor raised it in its opening brief. In thesecircumstances, an appellant generally has waived the issue. See, e.g., United Statesv. Olano, 507 U.S. 725, 731 (1993).

Finding waiver is particularly appropriate here where RLIs untimelybriefing has prevented the parties from fully addressing a significant constitutionalquestion and where, as detailed in SoundExchanges opposition to the motion forsupplemental briefing, RLI points to no compelling justification for its untimelyaction.II . THE LIBRARIAN IS A "HEAD OF DEPARTMENT" WH O CANAPPOINT CRJS.

The Librarian is the "head" of a "department" within the meaning of theAppointments C lause. See Eltra Corp. v. Ringer, 579 F.2d 294, 301 (4th Cir.1978). Therefore, the CRJs appointments were constitutional.


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As an initial matter, the Librarian is a properly appointed Officer of theUnited States, who has unlimited tenure, reports directly to the President, andundisputedly is the "head" of the Library of Congress. Id. at 300; 2 U.S.C. 136.

The term "departments" includes all entities that exercise executiveadministrative authority and are headed by officials who report directly to thePresident. It does not matter whether the entity is formally in the executive branch,as long as it is accountable to the President and not controlled by Congress or thejudiciary. As the Supreme Court stated, the term "departments" includes agenciesthat are in the executive branch or "at least have some connection with thatbranch." Buckley v. Valeo, 424 U.S. 1,127 (1976) (per curiam) (emphasis added);cf Freytag v. Comm r, 501 U.S. 868, 887 n.4 (1991) (expressly reserving questionwhether the SEC and FTC are "departments").

Numerous agencies are not expressly assigned to any particular branch. See,e.g., 15 U.S.C. 41 (FTC), 78d(a) (SEC); 47 U.S.C. 151 (FCC ). Nonetheless,these agencies exercise quasi-executive administrative powers. See, e.g., 16 C.F.R. 1.95, 2.13, 2.20(b)(4), 2.33 (FTC General Counsel institutes enforcemen tproceedings and rules on confidentiality and documentary requests); 17 C.F.R.200.30-4 (SEC Director of Enforcement has investigatory and subpoena power).See generally Buckley, 424 U.S. at 138-39.

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Further, like executive branch department heads, the heads of these agenciesare Officers, appointed by the President and confirmed by the Senate. See, e.g., 15U.S.C. 41 (FTC), 78d(a) (sEe); 47 U.S.C. 154(a) (FCC). These Officers areaccountable to the President, and Congress may not remove them, except throughimpeachment, see Bowsher v. Synar, 478 U.S. 714, 726-27 (1986).

These agencies exercise of quasi-executive power, combined with theiraccountability to the President and their independence from the other branches, issufficient "connection with the executive" to render them "departments" within themeaning of the Appointments Clause. See, e.g., Silver v. USPS, 951 F.2d 1033,1038 (9th Cir. 1991) (Postal Service); Free Enterprise Fund v. PCAOB, No. 06-217, 2007 WL 891675, at *4 (D.D.C. Mar. 21, 2007) (SEC), appeal docketed, No.07-5127 (D.C. Cir. Apr. 18, 2008). It follows that, under the Constitution, theheads of these agencies may appoint inferior officers. For example, the SECChairman appoints "such officers.., as may be necessary," including members ofthe Public Company Accounting Oversight Board. 5 U.S.C. 4802(b), app. 1l(b)(2); 15 U.S.C. 78d(b)(1), 721 l(e)(4); see also 15 U.S.C. 42 (FTC appointsits Secretary); 47 U.S.C. 154(f)(1) (FCC may "appoint... officers").

The Fourth Circuit followed the same reasoning in correctly holding that theLibrary is a "department." Eltra Corp., 579 F.2d at 300 -01. The Library, likethese other non-executive agencies, has quasi-executive administrative authority.


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For example, the Librarian has rulemaking authority, an executive/administrativefunction. Buckley, 424 U.S. at 141 n.177; 2 U .S.C. 136; see also Eltra Corp., 579F.2d at 301 (Copyright Office exercises quasi-executive power); 17 U.S.C. 410(registration of copyrights by Register).

And, as with these other agencies, the Librarian is accountable to thePresident, 2 U.S.C. 136, and may not be removed by Congress, see Carlucci v.Doe, 488 U.S. 93, 95 (1988) (power of removal is incident to power ofappointment absent a specific provision to the contrary). Nor is the Librarian anOfficer or agent of Congress. 2 U.S.C. 60-1; id. 60-130/(Librarian not listedamong "Officers and Employees" of Congress). Compare Bowsher, 478 U.S. at732 (Comptroller General is congressional agent because Congress retainedremoval authority). In fact, after debating Congresss constitutional authority toappoint the Librarian and Register of Copyrights, Congress changed the methodfor appointing the Librarian to conform to the Appointments Clause and gave theLibrarian authority to "make[] all the appointments in his department," includingthe Register, rejecting attempts to allow Congress to appoint them. 29 Cong. Rec.1946 (Feb. 17, 1897) (statements of Messrs. Quigg and Bingham); 29 Cong. Rec.316-19 (Dec. 19, 1897); 28 Cong. Rec. 5496-507 (May 21, 1896); Act of Feb. 19,1897, ch. 265, 29 Stat. 538; 17 U.S.C. 701(a). Congress retains no significantcontrol over the Librarian or the Library beyond the appropriations and oversight


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functions that it exercises over all government agencies. Indeed, given theLibrarians unlimited tenure and at-will status, he arguably has a stronger

connection with the executive branch than other agency heads who may beremoved by the President only for cause.

Given the Librarys quasi-executive powers and its independence fromCongress, its placement within the legislative branch for purposes ofappropriations and its service to Congress through the Congressional ResearchService do not sever its "connection" with the executive branch for AppointmentsClause purposes. Eltra Corp., 579 F.2d at 301 (holding that the Libraryscodification in the legislative branch, its appropriations, and its legislativefunctions are "irrelevant" to whether it is a "department"); cf 2 U.S.C. 437c(FEC, codified in the legislative branch, exercises quasi-executive rulemakingauthority).III. ASSUMING ARGUENDO THAT THE APPOINTMENTS ARE

UNCON STITUTIONAL, THE CRJS PRIOR ACTS SHO ULD BEGIVEN DE FACTO VALIDITY.If the Court nevertheless holds the CRJs appointments unconstitutional, it

should grant their past actions "de facto validity." Buckley, 424 U.S. at 142.Courts have applied this doctrine to prevent industry disruption and public harm.See, e.g., id.; Hechinger v. M etro. Wash. Airports Auth., 36 F.3d 97, 105 (D.C. Cir.1994); Franklin Say. Ass n v. Director, Office of Thrift Supervision, 934 F.2d


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1127, 1150 (10th Cir. 1991); see also Ryder v. United States, 515 U.S. 177, 180(1995) (doctrine protects public from chaos caused by invalidation).

Invalidating the CRJs determinations would cause major disruption acrossseveral industries, undoing three years of work, including three extensiveadversarial rate-setting proceedings (over 100 days of testimony) and numerousother rulemakings. In addition, the invalidation of the CRJs prior acts would castdoubt on the registration of all copyrights for over 100 years (almost 600,000registrations in 2006 alone~), and all other actions of the Register. In short,refusing to accord the CRJs prior acts de facto validity would cause gravedisruption.

Respectfully submitted,JENNER & BLOCK LLP

PAUL M MITHTHOMAS J. PEPd~LLIDAVID A. HANDZOCm~aG A. CowmJENNER & BLOCK LLP1099 New York Avenue, N.W.Suite 900Washington, D.C. 20001(202) 639-6000

Annual Report of the Librarian of Congress 2006, at 20, available at:http://www.libraryofcongress.gov/about/reports/annualreports/fy2OO6.pdf.


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MICHAEL J. HUPPESOUNDEXCHANGE, INC.1121 Fourteenth Street, N.W.,Suite 700Washington, D.C. 20005(202) 640-5880Counsel for SoundExchange, Inc.

June 23,2008


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CERTIFICATE OF COM PLIANCE WITH TYPE-VOLUMELIMITATION,TYPEFACE REQUIREMEN TS, AND TYPE STYLE REQUIREMENTS

1. This brief complies with the type-volume limitation of this CourtsOrder of May 30, 2008 because this brief contains 1,196 words, which is within the1,200 words permitted by the Court.

2. This brief complies with the typeface requirements of Fed. R. App. P.32(a)(5), as modified by D.C. Cir. R. 32(A)(1), and the type style requirements ofFed. R. App . P. 32(a)(6) because this brief has been prepared in a proportionatelyspaced typeface using Microsoft Word with 14-point Times New Roman font.

June 23,2008

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CERTIFICATE OF SERVICEI hereby certify that, this 23rd day of June, 2008, copies of the foregoing

Brief of Intervenor SoundExchange were served by electronic mail and first-classUnited States mail on the following:

James Richmond HobsonWilliam R. MaloneMatthew Karl SchettenhelmMiller & Van Eaton1155 Connecticut Avenue, NWSuite 1000Washington, DC 20036-4306202-785-0600Counsel for Intercollegiate BroadcastSystem, Incorporated, A Rhode IslandNon-Profit Corporation; HarvardRadio Broadcasting Com pany, Inc., aMassachusetts EleemosynaryCorporationDavid D. Oxenford, Jr.Ronald Gary LondonDavis Wright Tremaine LLP1919 Pennsylvania Avenue, NWSuite 200Washington, DC 20006-3402202-973-4200

William B. ColitreRoyalty Log ic, Inc.21122 Erwin StreetWoodland Hills, CA 91367818-955-8900Kenneth David FreundlichSchleimer & Freundlich LLP9100 Wilshire BoulevardSuite 615 EastBeverly Hills, CA 90212310-273-9807Counsel for Royalty Logic, LLC

Robert S. SchwartzSeth David GreensteinConstantine Cannon, PC! 627 Eye S treet, NW10th FloorWashington, DC 20006202-204-3508

Counsel for AccuRadio, LLC;Digitally Im ported, Inc.; Radioio;Radio; Paradise, Inc.

Counsel for College Broadcasters, Inc.

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Jonathan S. MasseyLaw Office of Jonathan S. Massey7504 Oldchester RoadBethesda, MD 20817301-915-0990Counsel for Digital Media Association

David A. HickersonWeil, Gotshal & Manges1501 K Street, NWSuite 100Washington, DC 20005202-682-7000Kenneth L. SteinthalDavid TaylorWeil, Gotshal & M anges, LLP201 Redwood Shores ParkwayRedwood Shores, CA 94065650-802-3000

Bruce Gary JosephKaryn Kay AblinWiley Rein LLP1776 K S treet, NW11 th FloorWashington, DC 20006-2359202-719-7000Counsel for N ational ReligiousBroadcasters, Noncomm ercial M usicLicense Committee

Counsel for Digital Media A ssociationand National Public Radio, Inc.Carter Glasgow PhillipsJennifer Beth TatelJames P. YoungRaymond Clark WadlowSidley Austin LLP1501 K Street, NWWashington, DC 20005202-736-8000Counsel for National ReligiousBroadcasters, Music License Committee;Bonneville International C orp.; NationalAssociation of Broadcasters

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Scott R. McIntoshRoom 7259U.S. Department of Justice(DO J) Civil Division, Appellate950 Pennsylvania Avenue, NWWashington, DC 20530-0001202-514-4052Mark Reiling Freeman202-514-2161Room 7228U.S. Department of Justice(DO J) Office of the Solicitor General

950 Pennsylvania Avenue, NWWashington, DC 20530202-514-2001Counsel for Copyright Royalty Board

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ADDENDUM


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INDEX2 U.S.C. 60-1 ................................................................................................... S.A.12 U.S.C. 136 .....................................................................................................A.22 U.S.C. 437c ...................................................................................................A.35 U.S.C. 4802 ...................................................................................................A.75 U.S.C. App. 1 ...................................................................................................A.815 U.S.C. 41 ...................................................................................................A.10

15 U.S.C. 42 ...................................................................................................A.I 115 U.S.C. 78d ..................................................................................................A.1215 U.S.C. 7211 ...............................................................................................A.1517 U.S.C. 410 .................................................................................................A.2117 U.S.C. 701 .................................................................................................A.2247 U.S.C. 151 .................................................................................................A.2447 U.S.C. 154 .................................................................................................A.2516 C.F.R. 1.95 ................................................................................................A.2616 C.F.R. 2. ! 3 ................................................................................................A.2716 C.F.R. 2.20 ................................................................................................A.2816 C.F.R. 2.33 ................................................................................................A.3117 C.F.R. 200.30-4 .........................................................................................A.32


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2 U.S.C. 60-1 60-1. Authority of officers of Congress over Congressional employees(a) Qualifications determinations; removal and disciplineEach officer of the Congress having responsibility for the supervision ofemployees, including employees appointed upon recommendation of Members ofCongress, shall have authority--

(1) to determine, before the appointment of any individual as an employeeunder the supervision of that officer of the Congress, whether that individualpossesses the qualifications necessary for the satisfactory performance of theduties and responsibilities to be assigned to him; and(2) to remove or otherwise discipline any employee under his supervision.

(b) "Officer of the Congress" definedAs used in this section, the term "officer of the Congress" means--

(1) an elected officer of the Senate or House of Representatives who is not aMember of the Senate or House; and(2) The Architect of the Capitol.

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136. Librarian of Congress; appointment; rules and regulationsThe Librarian of Congress shall be appointed by the President, by and with theadvice and consent of the Senate. He shall make rules and regulations for thegovernment of the Library.

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2 U.S.C. 437c 437c. Federal Election Commission(a) Establishment; membership; term of office; vacancies; qualifications;compensation; chairman and vice chairman

(1) There is established a commission to be known as the Federal ElectionCommission. The Commission is composed of the Secretary of the Senate andthe Clerk of the House of Representatives or their designees, ex officio andwithout the right to vote, and 6 mem bers appointed by the President, by andwith the advice and consent of the Senate. No more than 3 members of theCommission appointed under this paragraph may be affiliated with the samepolitical party.(2)(A) Members of the Commission shall serve for a single term of 6 years,except that of the mem bers first appointed--

(i) two of the members, not affiliated with the same political party, shallbe appointed for terms ending on April 30, 1977;(ii) two of the members, not affiliated with the same political party, shallbe appointed for terms ending on April 30, 1979; and(iii) two of the members, not affiliated with the same political party, shallbe appointed for terms ending on April 30, 1981.

(B) A member of the Commission may serve on the Commission after theexpiration of his or her term until his or her successor has taken office as amember of the Com mission.(C) An individual appointed to fill a vacancy occurring other than by theexpiration of a term of office shall be appointed only for the unexpired termof the member he or she succeeds.(D) Any vacancy occurring in the membership of the Commission shall befilled in the same manner as in the case of the original appointment.

(3) Members shall be chosen on the basis of their experience, integrity,impartiality, and good judgment and members (other than the Secretary of the

S.A.3


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Senate and the Clerk of the House of Representatives) shall be individuals who,at the time appointed to the Com mission, are not elected or appointed officersor employees in the executive, legislative, or judicial branch of the FederalGovernment. Such members of the Commission shall not engage in any otherbusiness, vocation, or employment. Any individual who is engaging in anyother business, vocation, or employment at the time of his or her appointmen t tothe Commission shall terminate or liquidate such activity no later than 90 daysafter such appointment.(4) Members of the Commission (other than the Secretary of the Senate and theClerk of the House of Representatives) shall receive compensation equivalent tothe compensation paid at level IV of the Executive Schedule (section 5315 ofTitle 5).(5) The Commission shall elect a chairman and a vice chairman from among itsmembers (other than the Secretary of the Senate and the Clerk of the House ofRepresentatives) for a term of one year. A member may serve as chairman onlyonce during any term of office to which such m ember is appointed. Thechairman and the vice chairman shall not be affiliated with the same politicalparty. The vice chairman shall act as chairman in the absence or disability of thechairman or in the event of a vacancy in such office.

(b) Administration, enforcement, and formulation of policy; exclusive jurisdictionof civil enforcement; Congressional authorities or functions with respect toelections for Federal office

(1) The Commission shall administer, seek to obtain compliance with, andformulate policy with respect to, this Act and chapter 95 and chapter 96 of Title26. The Commission shall have exclusive jurisdiction with respect to the civilenforcement of such provisions.(2) Nothing in this Act shall be construed to limit, restrict, or diminish anyinvestigatory, informational, oversight, supervisory, or disciplinary authority orfunction of the Congress or any committee of the Congress with respect toelections for Federal office.

(c) Voting requirements; delegation of authoritiesAll decisions of the Commission with respect to the exercise of its duties andpowers under the provisions of this Act shall be made by a majority vote of the

S,A.4


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members of the Commission. A member of the Commission may not delegate toany person his or her vote or any decisionmaking authority or duty vested in theCommission by the provisions of this Act, except that the affirmative vote of 4members of the Commission shall be required in order for the Commission to takeany action in accordance with paragraph (6), (7), (8), or (9) of section 437d(a) ofthis title or with chapter 95 or chapter 96 of Title 26.(d) MeetingsThe Commission shall meet at least once each month and also at the call of anymember.(e) Rules for conduct of activities; judicial notice of seal; principal officeThe Commission shall prepare written rules for the conduct of its activities, shallhave an official seal which shall be judicially noticed, and shall have its principaloffice in or near the District of Columbia (but it may meet or exercise any of itspowers anywhere in the United States).(f) Staff director and general counsel; appointment and compensation; appointmentand compensation of personnel and procurement of intermittent services by staffdirector; use of assistance, personnel, and facilities of Federal agencies anddepartments; counsel for defense of actions

(1) The Commission shall have a staff director and a general counsel who shallbe appointed by the C omm ission. The staff director shall be paid at a rate not toexceed the rate of basic pay in effect for level IV of the Executive Schedule (5U.S.C. 5315). The general counsel shall be paid at a rate not to exceed the rateof basic pay in effect for level V of the Executive Schedule (5 U.S.C. 5316).With the approval of the Commission, the staff director may appoint and fix thepay of such additional personnel as he or she considers desirable without regardto the provisions of Title 5 governing appointments in the competitive service.(2) With the approval of the Commission, the staff director may procuretemporary and intermittent services to the same extent as is authorized bysection 3109(b) of Title 5, but at rates for individuals not to exceed the dailyequivalent of the annual rate of basic pay in effect for grade GS-15 of theGeneral Schedule (5 U.S.C. 5332).

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(3) In carrying out its responsibilities under this Act, the Commission shall, tothe fullest extent practicable, avail itself of the assistance, including personneland facilities of other, agencies and departmen ts of the United States. The headsof such agencies and departments may make available to the Commission suchpersonnel, facilities, and other assistance, with or without reimbursement, as theComm ission m ay request.(4) Notwithstanding the provisions of paragraph (2), the Commission isauthorized to appear in and defend against any action instituted under this Act,either (A) by attorneys employed in its office, or (B) by counsel whom it mayappoint, on a temporary basis as may be necessary for such purpose, withoutregard to the provisions of Title 5 governing appointments in the competitiveservice, and whose compensation it may fix without regard to the provisions ofchapter 51 and subchapter III of chapter 53 of such title. The com pensation ofcounsel so appointed on a temporary basis shall be paid out of any fundsotherwise available to pay the compensation of employees of the Commission.

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5 U.S.C. 4802 4802. Securities and Exchange Commission(a) In this section, the term "Commission" means the Securities and ExchangeCommission.(b) The Commission may appoint and fix the compensation of such officers,attorneys, economists, examiners, and other employees as may be necessary forcarrying out its functions under the securities laws as defined under section 3 of theSecurities Exchange Act of 1934 (15 U .S.C. 78c).(c) Rates of basic pay for all employees of the Com mission may be set andadjusted by the Com mission without regard to the provisions of chapter 51 orsubchapter III of chapter 53.(d) The Commission may provide additional compensation and benefits toemployees of the Commission if the same type of compensation or benefits arethen being provided by any agency referred to under section 1206 of the FinancialInstitutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1833b)or, if not then being provided, could be provided by such an agency underapplicable provisions of law, rule, or regulation. In setting and adjusting the totalamount of compensation and benefits for employees, the Commission shall consultwith, and seek to maintain comparability with, the agencies referred to undersection 1206 of the Financial Institutions Reform, Recovery, and Enforcement Actof 1989 (12 U .S.C. 1833b).(e) The Commission shall consult with the Office of Personnel Management in theimplementation of this section.(f) This section shall be administered consistent with merit system principles.

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5 U.S.C. APP. 1 REORG. PLAN 10 1950Appendix 1. Reorganization Plans2REORGANIZATION PLAN NO. 10 OF 1950

Prepared by the President and transmitted to the Senate and the House ofRepresentatives in Congress assembled, March 13, 1950, pursuant to theprovisions of the Reorganization Act of 1949, approved June 20, 1949 [see section901 et seq. of this title].SECURITIES AND EXCHANGE COMMISSIONSection 1. Transfer of functions to the Chairman. (a) Subject to the provisions ofsubsection (b) of this section there are hereby transferred from the Securities andExchange Commission, hereinafter referred to as the Commission, to the Chairmanof the Commission, hereinafter referred to as the Chairman, the executive andadministrative functions of the Commission, including functions of theCommission with respect to (1) the appointment and supervision of personnelemployed under the Commission, (2) the distribution of business among suchpersonnel and among administrative units of the Commission, and (3) the use andexpenditure of funds.(b)(1) In carrying out any of his functions under the provisions of this section theChairman shall be governed by general policies of the Commission and by suchregulatory decisions, findings, and determinations as the Commission may by lawbe authorized to make.(2) The appointment by the Chairman of the heads of major administrative unitsunder the Commission shall be subject to the approval of the Commission.(3) Personnel employed regularly and full time in the immediate offices ofCommissioners other than the Chairman shall not be affected by the provisions ofthis reorganization plan.

2 Num ber and order of Appendixes editorially supplied.S.A.8


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(4) There are hereby reserved to the Commission its functions with respect torevising budget estimates and with respect to determining upon the distribution ofappropriated funds according to maj or programs and purposes.Sec. 2. Performance of transferred functions. The Chairman may from time to timemake such provisions as he shall deem appropriate authorizing the performance byany officer, employee, or administrative unit under his jurisdiction of any functiontransferred to the Chairman by the provisions of section 1 of this reorganizationplan.Sec. 3. Designation of Chairman. The functions of the Com mission with respect tochoosing a Chairman from among the Commissioners composing the Commissionare hereby transferred to the President.MESSAGE OF THE PRESIDENTTo the Congress of the United States:I transmit herewith Reorganization Plan No. 10 of 1950, prepared in accordancewith the Reorganization Act of 1949 and providing for reorganizations in theSecurities and Exchange Commission. My reasons for transmitting this plan arestated in an accompanying general message.After investigation I have found and hereby declare that each reorganizationincluded in Reorganization Plan No. 10 of 1950 is necessary to accomplish one ormore of the pu rposes set forth in section 2(a) of the Reo rganization Act of 1949.The taking effect of the reorganizations included in this plan may not in itselfresult in substantial immediate savings. However, many benefits in improvedoperations are probable during the next years which will result in a reduction inexpenditures as compared with those that would be otherwise necessary. Anitemization of these reductions in advance of actual experience under this plan isnot practicable.HARRY S. TRUMAN.THE WHITE HOUSE, March 13, 1950.

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15 U.S.C. 41 41. Federal Trade Commission established; membership; vacancies; sealA com mission is created and established, to be known as the Federal TradeCommission (hereinafter referred to as the Commission), which shall be composedof five Commissioners, who shall be appointed by the President, by and with theadvice and consent of the Senate. Not more than three of the Commissioners shallbe members of the same political party. The first Commissioners appointed shallcontinue in office for terms of three, four, five, six, and seven years, respectively,from Septem ber 26, 1914, the term of each to be designated by the President, buttheir successors shall be appointed for terms of seven years, except that any personchosen to fill a vacancy shall be appointed only for the unexpired term of theCommissioner whom he shall succeed: Provided, however, That upon theexpiration of his term of office a Commissioner shall continue to serve until hissuccessor shall have been appointed and shall have qualified. The President shallchoose a chairman from the Commissions membership. No Commissioner shallengage in any other business, vocation, or employment. Any Commissioner maybe removed by the President for inefficiency, neglect of duty, or malfeasance inoffice. A vacancy in the Commission shall not impair the right of the remainingCommissioners to exercise all the powers of the Commission.The Commission shall have an official seal, which shall be judicially noticed.

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15 U.S.C. 42 42. Employees; expensesEach Commissioner shall receive a salary, payable in the same manner as thesalaries of the judges of the courts of the United States. The Commission shallappoint a secretary, who shall receive a salary, and it shall have authority toemploy and fix the compensation of such attorneys, special experts, examiners,clerks, and other employees as it may from time to time find necessary for theproper performance of its duties and as may be from time to time app ropriated forby Congress.With the exception of the secretary, a clerk to each Commissioner, the attorneys,and such special experts and examiners as the Commission may from time to timefind necessary for the conduct of its work, all employees of the Commission shallbe a part of the classified civil service, and shall enter the service under such rulesand regulations as may be prescribed by the Com mission and by the D irector of theOffice of Personnel Management.All of the expenses of the Commission, including all necessary expenses fortransportation incurred by the Commissioners or by their employees under theirorders, in making any investigation, or upon official business in any other placesthan in the city of Washington, shall be allowed and paid on the presentation ofitemized vouchers therefor approved by the Commission.Until otherwise provided by law, the Commission may rent suitable offices for itsuse.

The Government Accountability Office shall receive and examine all accounts ofexpenditures of the Commission.

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15 U.S.C. 78d 78d. Securities and Exchange Commission(a) Establishment; composition; limitations on commissioners; terms of officeThere is hereby established a Securities and Exchange Commission (hereinafterreferred to as the "Com mission") to be composed of five comm issioners to beappointed by the President by and with the advice and consent of the Senate. Notmore than three of such commissioners shall be members of the same politicalparty, and in making appointments members of different political parties shall beappointed alternately as nearly as may be practicable. No commissioner shallengage in any other business, vocation, or employment than that of serving ascommissioner, nor shall any commissioner participate, directly or indirectly, in anystock-market operations or transactions of a character subject to regulation by theCommission pursuant to this chapter. Each commissioner shall hold office for aterm of five years and until his successor is appointed and has qualified, except thathe shall not so continue to serve beyond the expiration of the next session ofCongress subsequent to the expiration of said fixed term of office, and except (1)any commissioner appointed to fill a vacancy occurring prior to the expiration ofthe term for wh ich his predecessor was appointed shall be appointed for theremainder of such term, and (2) the terms of office of the commissioners firsttaking office after June 6, 1934, shall expire as designated by the President at thetime of nomination, one at the end of one year, one at the end of two years, one atthe end of three years, one at the end of four years, and one at the end of five years,after June 6, 1934.(b) Appointment and compensation of staff and leasing authority

(1) Appointment and compensationThe Comm ission shall appoint and com pensate officers, attorneys, economists,examiners, and other employees in accordance with section 4802 of Title 5.(2) Reporting of informationIn establishing and adjusting schedules of compensation and benefits forofficers, attorneys, economists, examiners, and other employees of theCommission under applicable provisions of law, the Commission shall informthe heads of the agencies referred to under section 1833b of Title 12 and

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Congress of such com pensation and benefits and shall seek to maintaincomparability with such agencies regarding compensation and benefits.(3) Leasing authorityNotwithstanding any other provision of law, the Commission is authorized toenter directly into leases for real property for office, meeting, storage, and suchother space as is necessary to carry out its functions, and shall be exem pt fromany General Services Administration space management regulations ordirectives.

(c) Acceptance of travel support for Comm ission activities from non-Federalsources; regulationsNotwithstanding any other provision of law, in accordance with regulations whichthe Commission shall prescribe to prevent conflicts of interest, the Commissionmay accept payment and reimbursement, in cash or in kind, from non-Federalagencies, organizations, and individuals for travel, subsistence, and other necessaryexpenses incurred by Commission members and employees in attending meetingsand conferences concerning the functions or activities of the Commission. Anypayment or reimbursement accepted shall be credited to the appropriated funds ofthe Com mission. The amount of travel, subsistence, and other necessary expensesfor members and employees paid or reimbursed under this subsection may exceedper diem amounts established in official travel regulations, but the Commissionmay include in its regulations under this subsection a limitation on such amounts.(d) Acceptance of relocation expenses from former employers by professionalfellows program participantsNotwithstanding any other provision of law, former employers of participants inthe Commissions professional fellows programs may pay such participants theiractual expenses for relocation to Washington, District of Columbia, to facilitatetheir participation in such programs, and program participants may accept suchpayments.(e) Fee paymentsNotwithstanding any other provision of law, whenever any fee is required to bepaid to the Commission pursuant to any provision of the securities laws or anyother law, the Commission may provide by rule that such fee shall be paid in a

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manner other than in cash and the Commission may also specify the time that suchfee shall be determined and paid relative to the filing of any statement or documentwith the Commission.(f) Reimbursement of expenses for assisting foreign securities authoritiesNotwithstanding any other provision of law, the Commission may accept paymentand reimbursement, in cash or in kind, from a foreign securities authority, or madeon behalf of such authority, for necessary expenses incurred by the Com mission,its members, and employees in carrying out any investigation pursuant to section78u(a)(2) of this title or in providing any other assistance to a foreign securitiesauthority. Any payment or reimbursement accepted shall be considered areimbursement to the appropriated funds of the Commission.

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7211. Establishment; administrative provisions

(a) Establishment of BoardThere is established the Public Company Accounting Oversight Board, to overseethe audit of public companies that are subject to the securities laws, and relatedmatters, in order to protect the interests of investors and further the public interestin the preparation of informative, accurate, and independent audit reports forcompanies the securities of which are sold to, and held by and for, public investors.The Board shall be a body corporate, operate as a nonprofit corporation, and havesuccession until dissolved by an A ct of Congress.(b) StatusThe Board shall not be an agency or establishment of the United StatesGovernment, and, except as otherwise provided in this Act, shall be subject to, andhave all the powers conferred upon a nonprofit corporation by, the District ofColumbia Nonprofit Corporation Act. No member or person employed by, or agentfor, the Board shall be deemed to be an officer or employee of or agent for theFederal Government by reason of such service.(c) Duties of the BoardThe Board shall, subject to action by the Com mission under section 7217 of thistitle, and once a determination is made by the Commission under subsection (d) ofthis section--

(1) register public accounting firms that prepare audit reports for issuers, inaccordance with section 7212 of this title;(2) establish or adopt, or both, by rule, auditing, quality control, ethics,independence, and other standards relating to the preparation of audit reportsfor issuers, in accordance with section 7213 of this title;(3) conduct inspections of registered public accounting firms, in accordancewith section 7214 of this title and the rules of the Board;

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(4) conduct investigations and disciplinary proceedings concerning, and imposeappropriate sanctions where justified upon, registered public accounting firmsand associated persons of such firms, in accordance with section 7215 of thistitle;(5) perform such other duties or functions as the Board (or the Com mission, byrule or order) determines are necessary or appropriate to promote highprofessional standards among, and improve the quality of audit services offeredby, registered public accounting firms and associated persons thereof, orotherwise to carry out this A ct, in order to protect investors, or to further thepublic interest;(6) enforce compliance with this Act, the rules of the Board, professionalstandards, and the securities laws relating to the preparation and issuance ofaudit reports and the obligations and liabilities of accountants with respectthereto, by registered public accounting firms and associated persons thereof;and(7) set the budget and m anage the operations of the Board and the staff of theBoard.

(d) Commission determination

The members of the Board shall take such action (including hiring of staff,proposal of rules, and adoption of initial and transitional auditing and otherprofessional standards) as may be necessary or appropriate to enable theCommission to determine, not later than 270 days after July 30, 2002, that theBoard is so organized and has the capacity to carry out the requiremen ts of thissubchapter, and to enforce com pliance with this subchapter by registered publicaccounting firms and associated persons thereof. The Commission shall beresponsible, prior to the appointment of the Board, for the planning for theestablishment and administrative transition to the Boards operation.(e) Board m embership

(1) CompositionThe Board shall have 5 members, appointed from among prominent individualsof integrity and reputation who have a demonstrated commitment to theinterests of investors and the public, and an understanding of the responsibilities

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for and nature of the financial disclosures required of issuers under thesecurities laws and the obligations of accountants with respect to thepreparation and issuance o f audit reports with respect to such d isclosures.(2) LimitationTwo members, and only 2 m embers, of the Board shall be or have beencertified public accountants pursuant to the laws o f 1 or more States, providedthat, if 1 of those 2 members is the chairperson, he or she may not have been apracticing certified public accountant for at least 5 years prior to his or herappointment to the Board.(3) Full-time independent serviceEach member of the Board shall serve on a full-time basis, and may not,concurrent with service on the Board, be employed by any other person orengage in any other professional or business activity. No member of the Boardmay share in any of the profits of, or receive payments from, a publicaccounting firm (or any other person, as determined by rule of theCommission), other than fixed continuing payments, subject to such conditionsas the Commission may impose, under standard arrangements for the retirementof members of public accounting firms.(4) Appointment of Board members

(A) Initial BoardNot later than 90 days after July 30, 2002, the Commission, afterconsultation with the Chairman of the Board of Governors of the FederalReserve System and the Secretary of the Treasury, shall appoint thechairperson and other initial members of the Board, and shall designate aterm of service for each.(B) VacanciesA vacancy on the Board shall not affect the powers of the Board, but shall befilled in the same manner as provided for appointments under this section.

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(A) In generalThe term of service of each Board member shall be 5 years, and until asuccessor is appointed, except that--

(i) the terms of office of the initial Board members (other than thechairperson) shall expire in annual increments, 1 on each of the first 4anniversaries of the initial date of appointment; and(ii) any Board member appointed to fill a vacancy occurring before theexpiration of the term for which the predecessor was appointed shall beappointed only for the remainder of that term.

(B) Term limitationNo person m ay serve as a mem ber of the Board, or as chairperson of theBoard, for more than 2 terms, whether or not such terms of service areconsecutive.

(6) Removal from officeA member of the Board may be removed by the Commission from office, inaccordance w ith section 7217(d)(3) of this title, for good cause shown beforethe expiration of the term of that member.

(f) Powers of the BoardIn addition to any authority granted to the Board otherwise in this Act, the Boardshall have the power, subject to section 7217 of this title--

(1) to sue and be sued, complain and defend, in its corporate name and throughits own counsel, with the approval of the Commission, in any Federal, State, orother court;(2) to conduct its operations and maintain offices, and to exercise all otherrights and powers authorized by this Act, in any State, without regard to anyqualification, licensing, or other provision of law in effect in such State (or apolitical subdivision thereof);

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(3) to lease, purchase, accept gifts or donations of or otherw ise acquire,improve, use, sell, exchange, or convey, all of or an interest in any property,wherever situated;

(4) to appoint such employees, accountants, attorneys, and other agents as m aybe necessary or appropriate, and to determine their qualifications, define theirduties, and fix their salaries or other compensation (at a level that is comparableto private sector self-regulatory, accounting, technical, supervisory, or otherstaff or management positions);(5) to allocate, assess, and collect accounting support fees established pursuantto section 7219 of this title, for the Board, and other fees and charges im posedunder this subchapter; and(6) to enter into contracts, execute instruments, incur liabilities, and do any andall other acts and things necessary, appropriate, or incidental to the conduct ofits operations and the exercise of its obligations, rights, and pow ers imposed orgranted by this subchapter.

(g) Rules of the boardThe rules of the Board shall, subject to the approval of the Commission--

(1) provide for the operation and administration of the Board, the exercise of itsauthority, and the performance of its responsibilities under this Act;(2) permit, as the Board determines necessary or appropriate, delegation by theBoard of any of its functions to an individual member or employee of theBoard, or to a division of the Board, including functions with respect to hearing,determining, ordering, certifying, reporting, or otherwise acting as to anymatter, except that--

(A) the Board shall retain a discretionary right to review any action pursuantto any such delegated function, upon its own motion;(B) a person shall be entitled to a review by the Board with respect to anymatter so delegated, and the decision of the Board upon such review shall bedeemed to be the action of the Board for all purposes (including appeal orreview thereof); and

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(C) if the right to exercise a review described in subparagraph (A) isdeclined, or if no such review is sought within the time stated in the rules ofthe Board, then the action taken by the holder of such delegation shall for allpurposes, including appeal or review thereof, be deemed to be the action ofthe Board;

(3) establish ethics rules and standards of conduct for Board mem bers and staff,including a bar on practice before the Board (and the Commission, with respectto Board-related matters) of 1 year for former mem bers of the Board, andappropriate periods (not to exceed 1 year) for former staff of the Board; and(4) provide as otherwise required by this Act.

(h) Annual report to the CommissionThe Board shall submit an annual report (including its audited financial statements)to the Commission, and the Commission shall transmit a copy of that report to theCommittee on Banking, Housing, and Urban Affairs of the Senate, and theCommittee on Financial Services of the House of Representatives, not later than 30days after the date of receipt of that report by the Comm ission.

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17 U.S.C. 410 410. Registration of claim and issuance of certificate(a) When, after examination, the Register of Copyrights determines that, inaccordance with the provisions of this title, the material deposited constitutescopyrightable subject matter and that the other legal and formal requirements ofthis title have been met, the Register shall register the claim and issue to theapplicant a certificate of registration under the seal of the Copyright Office. Thecertificate shall contain the information given in the application, together with thenumber and effective date of the registration.(b) In any case in which the Register of Copyrights determines that, in accordancewith the provisions of this title, the material deposited does not constitutecopyrightable subject matter or that the claim is invalid for any other reason, theRegister shall refuse registration and shall notify the applicant in writing of thereasons for such refusal.(c) In any judicial proceedings the certificate of a registration made before orwithin five years after first publication of the work shall constitute prima facieevidence of the validity of the copyright and of the facts stated in the certificate.The evidentiary weight to be accorded the certificate of a registration madethereafter shall be within the discretion of the court.(d) The effective date of a copyright registration is the day on w hich, anapplication, deposit, and fee, which are later determined by the Register ofCopyrights or by a cou rt of competent jurisdiction to be acceptable for registration,have all been received in the Copyright Office.

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17 U.S.C. 701 701. The Copyright Office: General responsibilities and organization(a) All administrative functions and duties under this title, except as otherwisespecified, are the responsibility of the Register of Copyrights as director of theCopyright Office of the Library of Congress. The Register of Copyrights, togetherwith the subordinate officers and employees of the Copyright Office, shall beappointed by the Librarian of Congress, and shall act under the Librarians generaldirection and supervision.(b) In addition to the functions and duties set out elsewhere in this chapter, theRegister of Copyrights shall perform the following functions:

(1) Advise Congress on national and international issues relating to copyright,other matters arising under this title, and related matters.(2) Provide information and assistance to Federal departments and agencies andthe Judiciary on national and international issues relating to copyright, othermatters arising under this title, and related matters.(3) Participate in meetings of international intergovernmental organizations andmeetings with foreign government officials relating to copyright, other mattersarising under this title, and related matters, including as a member of UnitedStates delegations as authorized by the appropriate Executive branch authority.(4) Con~tuct studies and prog rams regarding copyright, other matters arisingunder this title, and related matters, the administration of the Copyright Office,or any function vested in the Copyright Office by law, including educationalprograms conducted cooperatively with foreign intellectual property offices andinternational intergovernmental organizations.(5) Perform such other functions as Congress may direct, or as may beappropriate in furtherance of the functions and duties specifically set forth inthis title.

(c) The Reg ister of Copyrights shall adopt a seal to be used on and after January 1,1978, to authenticate all certified documents issued by the Copyright Office.

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(d) The Register of Copyrights shall make an annual report to the Librarian ofCongress of the work and accomplishments of the Copyright Office during theprevious fiscal year. The annual report of the Register of Copyrights shall bepublished separately and as a part of the annual report of the Librarian of Congress.(e) Except as provided by section 706(b) and the regulations issued thereunder, allactions taken by the Register of Copyrights under this title are subject to theprovisions of the Administrative Procedure Act of June 11, 1946, as amended (c.324, 60 Stat. 237, title 5, United States Code , Chapter 5, Subchapter II and Chapter7).(f) The Register of Copyrights shall be compensated at the rate of pay in effect forlevel III of the Executive Schedule under section 5314 of title 5. The Librarian ofCongress shall establish not more than fou r positions for Associate iRegisters ofCopyrights, in accordance with the recommendations of the Register ofCopyrights. The Librarian shall make appointments to such positions afterconsultation with the Register of Copyrights. Each Associate Register ofCopyrights shall be paid at a rate not to exceed the maximum annual rate of basicpay payable for GS-18 of the General Schedule under section 5332 of title 5.

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47 U.S.C. 151 151. Purposes of chapter; Federal Communications Commission createdFor the purpose of regulating interstate and foreign commerce in communicationby wire and radio so as to make available, so far as possible, to all the people of theUnited States, without discrimination on the basis of race, color, religion, nationalorigin, or sex, a rapid, efficient, Nation-wide, and world-wide wire and radiocommunication service with adequate facilities at reasonable charges, for thepurpose of the national defense, for the purpose of prom oting safety of life andproperty through the use of wire and radio comm unications, and for the purpose ofsecuring a more effective execution of this policy by centralizing authorityheretofore granted by law to several agencies and by granting additional authoritywith respect to interstate and foreign commerce in wire and radio communication,there is created a commission to be known as the "Federal CommunicationsCommission", which shall be constituted as hereinafter provided, and which shallexecute and enforce the p rovisions of this chapter.

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47 U.S.C. 154 154. Federal Communications Commission(a) Number of commissioners; appointmentThe Federal Communications Commission (in this chapter referred to as the"Commission") shall be composed of five commissioners appointed by thePresident, by and with the advice and consent of the Senate, one of whom thePresident shall designate as chairman.

(f) Employees and assistants; compensation of members of Field Engineering andMonitoring Bureau; use of amateur volunteers for certain purposes; commercialradio operator examinations

(1) The Commission shall have authority, subject to the provisions of the civil-service laws and chapter 51 and subchapter III of chapter 53 of Title 5, toappoint such officers, engineers, accountants, attorneys, inspectors, examiners,and other employees as are necessary in the exercise of its functions.

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16 C.F.R. 1.95 1.95 P rocedures upon election.(a) After receipt of the notification of election to apply the procedures of thissection pursuant to 1.93, the Com mission shall promptly assess such penalty as itdeems appropriate, in accordance with 1.97.(b) If the civil penalty has not been paid within 60 calendar days after theassessment order has been issued under paragraph (a) of this section, the GeneralCounsel, unless otherwise directed, shall institute an action in the appropriatedistrict court of the United States for an order enforcing the assessment of the civilpenalty.(c) Any election to have this section apply may not be revoked except with theconsent of the Commission.

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16 C.F.R. 2.13 2.13 Noncompliance with compulsory processes.(a) In cases of failure to comply with Com mission compulsory processes,appropriate action may be initiated by the Commission or the Attorney General,including actions for enforcement, forfeiture, or penalties or criminal actions.(b) The General Counsel, pursuant to delegation of authority by the Commission,without power of redelegation, is authorized:

(1) To institute, on behalf of the Commission, an enforcement proceeding inconnection w ith the failure or refusal of a person, partnership, or corporation tocomply with, or to obey, a subpoena, or civil investigative demand if the returndate or any extension thereof has passed;(2) To approve and have prepared and issued, in the name of the Commissionwhen deemed appropriate by the General Counsel, a notice of default inconnection with the failure of a person, partnership, or corporation to timely filea report pursuant to section 6(b) of the Federal Trade Comm ission Act, if thereturn date or any extension thereof has passed;(3) To institute, on behalf of the Commission, an enforcement proceeding andto request, on behalf of the Commission, the institution, when deemedappropriate by the General Counsel, of a civil action in connection with thefailure of a person, partnership, or corporation to timely file a report pursuant toan order under section 6(b) of the Federal Trade Com mission Act, if the returndate or any extension thereof has passed; and(4) To seek civil contempt in cases where a court order enforcing compulsoryprocess has been violated.

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16 C.F.R. 2.20 2.20 Petitions for review of requests for additional information or documentarymaterial.(a) For purposes of this section, "second request" refers to a request for additionalinformation or documentary material issued under 16 CFR 803.20.(b) Second request procedures--

(1) Notice. Every request for additional information or documentary materialissued under 16 CFR 803.20 shall inform the recipient(s) of the request that therecipient has a fight to discuss modifications or clarifications of the request withan authorized representative of the Commission. The request shall identify thename and telephone number of at least one such representative.(2) Second request conference. An authorized representative of the Commissionshall invite the recipient to discuss the request for additional information ordocumentary material soon after the request is issued. At the conference, theauthorized representative shall discuss the competitive issues raised by theproposed transaction, to the extent then known, and confer with the recipientabout the most effective way to obtain information and documents relating tothe competitive issues raised. The conference will ordinarily take place within 5business days of issuance of the request, unless the recipient declines theinvitation or requests a later date.(3) Modification of requests. The authorized representative shall modify therequest for additional information or documentary material, or recommend suchmodification to the responsible Assistant Director of the Bureau ofCompetition, if he or she determines that a less burdensome request would beconsistent with the needs of the investigation. A request for additionalinformation or documentary material may be modified only in writing signed bythe authorized representative.(4) Review of request decisions.

(i) If the recipient of a request for additional information or documentarymaterial believes that compliance with portions of the request should not berequired and the recipient has exhausted reasonable efforts to obtainclarifications or modifications of the request from an authorized

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representative, the recipient may petition the General Counsel to considerand rule on unresolved issues. Such petition shall be submitted by letter tothe General Counsel with a copy to the authorized representative whoparticipated in the second request conference held under paragraph (b)(3) ofthis section. The petition shall not, without leave of the General Counsel,exceed 500 words, excluding any cover, table of contents, table ofauthorities, glossaries, proposed form of relief and any appendicescontaining only sections of statutes or regulations, and shall addresspetitioners efforts to obtain modification from the authorized representative.(ii) Within 2 business days after receiving such a petition, the GeneralCounsel shall set a date for a conference with the petitioner and theauthorized representative.(iii) Such conference shall take place within 7 business days after theGeneral Counsel receives the petition, unless the request recipient agrees toa later date or declines to attend a con ference.(iv) Not later than 3 business days before the date of the conference, thepetitioner and the authorized representative may each submit memorandaregarding the issues presented in the petition. Such memoranda shall not,without leave of the General Counsel, exceed 1250 words, excluding anycover, table of con tents, table of authorities, glossaries, proposed form ofrelief and appendices containing only sections of statutes or regulations.Such memoranda shall be delivered to counsel for the other participants onthe same day they are delivered to the General Counsel.(v) The petitioners memorandum shall include a concise statement ofreasons why the request should be m odified, together with proposedmodifications, or a concise explanation why the recipient believes it hassubstantially complied with the request for additional information ordocumentary material.(vi) The authorized representatives memorandum shall include a concisestatement of reasons why the petitioners proposed modifications areinappropriate or a concise statement of the reasons why the representativebelieves that the petitioner has not substantially complied with the requestfor additional information and documentary material.

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(vii) The General Counsel shall advise the petitioner and the authorizedrepresentative of his or her decision within 3 business days following theconference.

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2.33 Compliance procedure.The Commission may in its discretion require that a proposed agreementcontaining an order to cease and desist be accompanied by an initial report signedby the respondent setting forth in precise detail the manner in which the respondentwill comply with the order when and if entered. Such report will not become partof the public record unless and until the accompanying agreement and order areaccepted by the Com mission. At the time any such report is submitted a respondentmay request confidentiality for any portion thereof with a precise showing ofjustification therefor as set out in 4.9(c) and the General Counsel or the GeneralCounsels designee will dispose of such requests in accordance with that section.

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17 C.F.R. 200.30-4 200.30-4 Delegation of authority to Director of Division of Enforcement.Pursuant to the provisions of Pub.L. No. 100-181,101 Stat. 1254, 1255 (15 U.S.C.78d-1, 78d-2), the Securities and Exchange Commission hereby delegates, until theCommission orders otherwise, the following functions to the Director of theDivision of Enforcement to be performed by him or under his direction by suchother person or persons as may be designated from time to time by the Chairman ofthe Commission.(a)(1) To designate officers empowered to administer oaths and affirmations,subpena witnesses, compel their attendance, take evidence, and require theproduction of any books, papers, correspondence, m emoranda, con tracts,agreements, or other records in the course of investigations instituted by theCom mission pursuant to section 19(b) of the Securities Act of 1933 (15 U .S.C.77s(b)), section 21(b) of the Secu rities Exchange Act of 1934 (15 U .S.C. 78u(b)),section 18(c) of the Public Utility Holding Company Act of 1935 (15 U.S.C.79r(c)), section 42(b) of the Investment Com pany Ac t of 1940 (15 U.S.C. 80a-41(b)) and section 209(b) of the Investment Advisers Act of 1940 (15 U .S.C. 80b-9(b)).

(2) In nonpublic investigative proceedings, to grant requests of persons toprocure copies of the transcript of their testimony under 203.6 of this chapter.(3) To terminate and close all investigations authorized by the Commissionpursuant to section 20 of the Securities Act of 1933 (15 U.S.C. 77t), section 21of the Securities Exchange Act of 1934 (15 U.S.C. 78u), section 18 of thePublic Utility Holding Company Act of 1935 (15 U.S.C. 79r), section 42 of theInvestment Company Act of 1940 (15 U.S.C. 80a-41) and section 209 of theInvestment Advisers Act of 1940 (15 U.S.C. 80b-9).(4) To terminate the authority to administer oaths and affirmations, subpoenawitnesses, compel their attendance, take evidence, and require the production ofany books, papers, correspondence, mem oranda, contracts, agreements, or otherrecords in the course of investigations instituted by the Commission pursuant tosection 19(b) of the Securities Act of 1933 (15 U .S.C. 77s(b)), section 21 (b) ofthe Securities Exchange Act of 1934 (15 U.S.C. 78u(b)), section 18(c) of thePublic Utility Holding Company Act of 1935 (15 U.S.C. 79r(c)), section 42(b)

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of the Investment Company Act of 1940 (15 U.S.C. 80a-41(b)) and section209(b) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-9(b)).(5) To grant or deny applications made pursuant to Rule 193 of theCommissions Rules of Practice, 201.193 of this chapter, provided, that, in theevent of a denial, the applicant shall be notified that such a denial may beappealed to the Commission for review.(6) To notify the Securities Investor Protection C orporation ("SIPC") of factsconcerning the activities and the operational and financial condition of anyregistered broker or dealer which is or appears to be a mem ber of SIPC andwhich is in or approaching financial difficulty within the meaning of section 5of the Securities Investor Protection Act of 1970, as amended, 15 U .S.C. 78aaaet seq.(7) To adm inister the provisions of 240 .24c- 1 of this chapter; provided thataccess to nonpub lic information as defined in such section shall be providedonly with the concurrence of the head of the Commission division or officeresponsible for such information or the files containing such information.(8) Pursuant to Rule 204-2(j)(3)(ii)( 275.204-2(j)(3)(ii) of this chapter) underthe Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.), to make writtendemands upon non-resident investment advisers subject to the provisions ofsuch rule to furnish to the Com mission true, correct, complete and currentcopies of any or all books and records which such non-resident investmen tadvisers are required to make, keep current or preserve pursuant to anyprovision of any rule or regulation of the Commission adopted under theInvestment Advisers Act of 1940, or any part of such books and records whichmay be specified in any such demand.(9) To administer the provisions of Section 24(d) of the Securities ExchangeAct of 1934 (15 U .S.C. 78x(d)).(10) To institute subpoena enforcement proceedings in federal court to seek anorder compelling the production of documents or an individuals appearance fortestimony pursuant to subpoenas issued pursuant to paragraph (a)(1) of thissection in connection with investigations pursuant to section 19(b) of theSecurities Act of 1933 (15 U.S.C. 77s(b)), section 21 (b) of the SecuritiesExchange Act of 1934 (15 U.S.C. 78u(b)), section 18(c) of the Public UtilitiesHolding C ompany Act of 1935 (15 U .S.C. 79r(c)), section 42(b) of the

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Investment Company Act of 1940 (15 U.S.C. 80a-41(b)) and section 209(b) ofthe Investment Advisers Act of 1940 (15 U.S.C. 80b-9(b)).(11) To authorize staff to appear in federal bankruptcy court to preserveCommission claims in connection with investigations pursuant to section 19(b)of the Securities Act of 1933 (15 U .S.C. 77s(b)), section 21(b) of the SecuritiesExchange Act of 1934 (15 U.S.C. 78u(b)), section 18(c) of the Public UtilityHolding C ompany Act of 1935 (15 U .S.C. 79r(c)), section 42(b) of theInvestment Company Act of 1940 (15 U.S.C. 80a-41(b)) and section 209(b) ofthe Investment Advisers Act of 1940 (15 U.S.C. 80b-9(b)).(12) Pursuant to Section 36 o f the Securities Exchange A ct o f 1934 ( 15 U .S.C.78mm) to review and, either unconditionally or on specified terms andconditions, grant, or deny exemptions from rule 17a-25 of the Act ( 240.17a-25 of this chapter), provided that the Division of Market Regulation is notifiedof any such granting or denial of an exemption.

(b) Notwithstanding anything in the foregoing, in any case in which the Director ofthe Division of Enforcement believes it appropriate, he may submit the matter tothe Comm ission.

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