fractional licensing nor requires full-work licensing .” Judge Stanton ’ s ruling counters DOJ ’ s recent announcement that full-work licensing is required under the decree . Full-work licensing means that a PRO may only grant rights to a musical work with multiple rights owners when each owner agrees . The PROs argue that the decree allows licensing of the portion of a musical work they represent .
Technically , the judge ’ s ruling applies only to BMI because it was issued by the court presiding over BMI ’ s rates . ASCAP ’ s decree is supervised by a separate court . The consent decrees intend to promote a competitive market and protect against antitrust violations while fairly compensating songwriters and providing efficiency for businesses who use music . DOJ is expected to file an appeal .
DOJ Decision on ASCAP and BMI
The full-work licensing issue was part of an in-depth DOJ analysis culminating in DOJ ’ s decision to keep the overall structure for music licensing already in place for ASCAP and BMI . Specifically , DOJ will retain the long-standing antitrust consent decrees that set rates for ASCAP and BMI . Importantly , DOJ upheld the consent decree requirement that licensing fees do not discriminate against similarly situated industries or other consumers who use music .
Subject to certain exceptions and individual circumstances , copyright law may require a license for the right to “ perform ” or play copyright-protected music in public places , which can include lobbies and other common areas in apartment communities . Together , ASCAP and BMI handle public performance licensing for more than 90 percent of music in the U . S . SESAC , a third PRO , covers about 10 percent of the market .
ASCAP has announced record earnings for general licensing , which includes performance rights for the use of music in businesses like restaurants , bars , hotels and fitness facilities . BMI says it added 15,000 new businesses that pay for public performance rights .
NMHC / NAA members-only guidance provides detailed information and strategies for identifying potential licensing obligations for apartment companies that may use music . We continue to monitor the debate on federal copyright policy as the music industry continues to change .
HUD Makes No Changes to Methodology for Calculating Fair Market Rents
On August 26 , HUD announced the FY 2017 Fair Market Rents ( FMRs ), noting that no changes will be made from the current FY 2016 methodology for calculating them . FMRs are used by HUD to establish maximum allowable rents the government will pay to a private apartment owner who rents to a family with a Section 8 Housing Choice Voucher .
Although HUD is not making changes to its methodology for calculating FMRs , NAA / NMHC ask that members look at the FMRs for the areas where they operate . And , if there are any potential issues , that they please contact NMHC ’ s Caitlin Walter or Lisa Blackwell .
FMRs are not a cap on the rent a private apartment owner can charge , but a cap on the amount HUD will pay . Most families with a Section 8 voucher pay 30 percent of their monthly adjusted income as their portion of the rent . Then , the government pays the difference between this amount and the FMR .
“ The Housing Opportunities through Modernization Act of 2016 ” was signed by President Obama in July and revises the procedure by which HUD publishes its annual FMRs by announcing them through www . huduser . gov . The newly announced FY 2017 FMRs will take effect October 1 unless interested parties request a review by September 26 .
Importantly , NAA / NMHC provided detailed feedback to HUD in August on a proposal that would change how Section 8 Housing Choice Voucher ( HCV ) FMRs are set in many areas nationwide . The proposal calls for certain areas to set FMRs by ZIP code – what HUD calls Small Area Fair Market Rents ( SAFMRs ) – instead of the current metropolitan area-wide standard with an adjustment for high-cost areas .
This rule has not gone into effect and , as of September 30 , all areas currently subject to SAFMRs ( except the Dallas metro area ) will begin using FMRs unless the PHA requests a waiver .
House Bill Raises Concerns about Future of EB-5 Investor Visa Program
Reps . Robert Goodlatte ( R-Va .) and John Conyers ( D-Mich .) introduced EB-5 legislation on Sept . 12 that focuses on EB-5 Investor Visa Program reforms , including measures that would raise investment minimums , help prevent fraud and extend the program another five years . Importantly , the program is set to expire on Sept . 30 if Congress cannot agree on reforms . The EB-5 program allows a foreign investor and his or her family to obtain a U . S . green card by making an investment in a capital project that results in the creation of jobs . The program continues to be an important source of investor capital for the multifamily industry .
As anticipated , the bill would raise the minimum amount that would need to be invested in order to get a green card . But another provision has raised concerns in the real estate industry because it would require current investors to retroactively invest additional amounts , potentially resulting in investors pulling their financing out of U . S . real estate projects and compromising existing development as a result .
The EB-5 program has long been a topic of debate in both the House and Senate . On the Senate side , Judiciary Committee Chairman and Ranking Member Chuck Grassley ( R-Iowa ) and Pat Leahy ( D-Vt .) are pushing for reforms to stop what they consider rampant fraud and abuse plaguing the program . Senate leadership went as far as to threaten to let the program expire if meaningful changes are not made .
NAA / NMHC continue to support the EB-5 program as a vital source of capital for multifamily developers . We are encouraging lawmakers to approve a permanent extension of the program and address potential abuses , as well as improve the efficiency of the investment process without compromising the ability of this important program to attract foreign investment to American real estate .
The legislation was scheduled to be marked up by a House committee on Sept . 14 , but it was canceled and postponed for a later date . Ultimately , negotiations between the House and Senate are expected to go right up until the Sept . 30 funding deadline . www . aamdhq . org OCTOBER 2016 • TRENDS | 31