authorizes an additional cable copyright royalty proceeding.

The

Senate Judiciary Committeee is considering a proposal, co-sponsored by the joint leadership of the Senate, which would give the Tribunal major new responsibilities with regard to the unauthorized reproduction of copyrighted works, in the wake of a landmark copyright decision by the Ninth Circuit Court of Appeals.

During the past year the General Accounting Office reviewed the operations and structure of the Tribunal. The GAO found that the Tribunal has operated according to its legislative mandate and completed all proceedings on schedule. The GAO also concluded that the Tribunal has not when necessary been given adequate staff and budget resources.

The Tribunal supports the efforts of this Subcommittee to reduce our operational costs indeed, it was the Tribunal

which initiated such proposals. As we have previously advised this Subcommittee, we believe that our expenses can be cut in FY 1983 by the President not filling the two terms which expire in September of this year. This recommendation has received support elsewhere in the Legislative Branch. We believe such action is consistent with reductions being considered in other agencies, and in accord with the recommendations made by the Chairman of this Subcommittee.

Due to a vacancy for part of FY 1981, the Tribunal did not expend 5% of our appropriation. Our appropriation for FY 1982

of $400,000 is less than our actual expenditures of $438,000 in FY 1981. There is no flexibility in the $400,000 allotment. With four commissioners the Tribunal's ability to meet its obligations and to operate would have been severly restricted; however, now that there are five commissioners, it is impossible.

The Tribunal has submitted a budget request which is essential if the President wants a five member body. The 1983 budget is being submitted for $526,000. Only if the President supports our re-structuring recommendations, would it be possible to make a substantial cut in our budget request. With the exception of salaries and benefits, which are for

five commissioners, the other line items are substantially the

The Tribunal's original request for fiscal year 1982 was for $500,000, This was reduced to $461,000 by the House, to $400,000 by the Senate, and then to $400,000 in Conference between the Senate and the House. The House Appropriations Committee Report on Legislative Branch Appropriations for fiscal year 1982 states that the committee, "plans to begin phasing out the availability of appropriated funds" for the operation of the Copyright Royalty Tribunal.

In addition, Senator Mattingly has recommended to the Chairman of the Senate Judiciary Committee that the Tribunal should be restructured to consist

of three rather than five Commissioners.

In its testimony before the Senate and House legislative committees the Tribunal has also made recommendations concerning the restructuring of the Tribunal, and did so with the fiscal objectives of both the Senate and House in mind. It was in light of this that, when the Tribunal learned that the vacancy left by the resignation of Commissioner James might be filled, the

Tribunal wrote a letter to Pendleton James, Assistant to the President for Presidential Personnel, informing him of the recommendations of the

congressional committees, of the Tribunal's restructuring recommendations, and that it would be necessary to request a supplemental appropriation if the President determined that it was necessary for the Tribunal to function with

five Commissioners.

However, on November 2, 1981, a fifth Commissioner to fill the James vacancy was nominated by the President.

Under the $400,000 budget with four Commissioners, the Tribunal's ability to meet its obligations and to operate would have been severly restricted. However, under the current budget appropriation to absorb the payroll of a fifth Commissioner is impossible. Unable to reduce any of the other line appropriations, the Tribunal request additional program funds of $57,000 to meet the unavoidable salary expenses upon Senate confirmation of the fifth Commissioner

In addition to the salary costs of the fifth commissioner and his assistant, the Tribunal will also require supplemental program monies of $2,000 for rental of space. This amount will allow the Tribunal to meet its current obligation level as reflected by actual expenses incurred in FY 1981 and projected expenditures for FY 1982.

At this time, the Tribunal must also request a pay supplemental for fiscal year 1982 of $36,000 to meet the additional salary requirements effected by the pay cap increase for the five commissioners and the 4.8% cost of living

adjustment for their five confidential assistants.

EFFECT OF APPROPRIATION AT 1982 LEVEL

Senator MATTINGLY. It is my intent as chairman to report a bill with a total appropriation of no greater than the amount appropriated in fiscal year 1982 plus the supplementals. Would this have any adverse effect on the Copyright Royalty Tribunal, or could you live with that figure for fiscal year 1983?

Ms. GARCIA. Yes, sir, it would have an adverse effect on the Tribunal. As you know, our fiscal year 1982 budget is $400,000 and we have asked for a supplemental of $95,000, which would be $495,000, and our 1983 rquest is for $526,000. The difference, Senator, is salaries and compensation. The 1982 figure has approximately 4 months with only four commissioners and the 1983 figure, of course, is allowing for the entire year with five commissioners, with the Tribunal at its full capacity.

Senator MATTINGLY. What is the additional $95,000 supplemental?

Ms. GARCIA. The $95,000 supplemental is for a full commissioner's salary. The $400,000 is only for four commissioners. A new commissioner was appointed February 15. So it includes the salary for a new commissioner and also for a confidential assistant for that new commissioner.

Senator MATTINGLY. What does the confidential assistant do?

Ms. GARCIA. She is the commissioner's secretary and also doubles up in assisting with the additional operations of the Tribunal. That is the only staff we have.

Senator MATTINGLY. Your predecessor made the statement for us last year that the copyright law should be changed to let the marketplace set the rates now set by the Tribunal. What is your opinion on that?

Ms. GARCIA. At present there is no interest in either the House or Senate, to change compulsory license. The cable compromise that has just come out of the Judiciary Committee and is before the Commerce Committee keeps compulsory licensing. In our experience in testifying last year, reading the trade press and talking to our oversight committee, there is no interest in doing away with compulsory licensing at this time. It is my opinion and also from discussions with our oversight committee that they want to complete the jurisdictional and legislative responsibilities of the Tribunal before they get into restructuring of the Tribunal.

CABLE TELEVISION

Senator MATTINGLY. What is involved in current Tribunal proceedings in the cable television industry?

Ms. GARCIA. At the present time the Federal Communications Commission has deregulated the distant signal retransmission and syndicated exclusivity, so the Tribunal has acquired some additional responsibility in that area. Presently we have a proceeding that commenced in October 1981 and we have 1 year in which to complete it. The hearings start June 15. We will be looking at the entire area of distant signals, especially the deregulated signals, and determine a fee schedule for those signals. That is currently before the Tribunal.

We also have a 1980 distribution proceeding on the cable royalty funds, and that is approximately $24 million.

HOME TAPING

In addition, there is legislation before the House and Senate to give us authority in the area of home taping. If it passes, the Mathias bill provides that within 30 days of passage the Tribunal should start proceedings concerning home taping.

Senator MATTINGLY. What kind of proceeding?

Ms. GARCIA. It depends on how the bill passes. If it passes in the present form, the Tribunal will be responsible for determining the royalty rate charged for both the software and the hardware for VCR and Betamax machines.

Senator MATTINGLY. How will you arrive at that?

MS. GARCIA. We will have to wait until the testimony is presented. The proceeding will require 1 year to be completed, and I am sure that both sides will present economic data to support their position.

Senator MATTINGLY. Everybody will have already testified before the House and Senate. Did anybody testify in support of a particular rate? I am sure everybody and his brother has been before the congressional hearings already.