t exceed the
percentage increase in the Consumer Price Index during the period under
review.

(b) Digital Audio Recording Media. The royalty payment due under section
1003 for each digital audio recording medium imported into and
distributed in the United States, or manufactured and distributed in the
United States, shall be 3 percent of the transfer price. Only the first
person to manufacture and distribute or import and distribute such
medium shall be required to pay the royalty with respect to such medium.

Section 1005. Deposit of royalty payments and deduction of expenses [3]

The Register of Copyrights shall receive all royalty payments deposited
under this chapter and, after deducting the reasonable costs incurred by
the Copyright Office under this chapter, shall deposit the balance in
the Treasury of the United States as offsetting receipts, in such manner
as the Secretary of the Treasury directs. All funds held by the
Secretary of the Treasury shall be invested in interest-bearing United
States securities for later distribution with interest under section
1007. The Register may, in the Register's discretion, 4 years after the
close of any calendar year, close out the royalty payments account for
that calendar year, and may treat any funds remaining in such account
and any subsequent deposits that would otherwise be attributable to that
calendar year as attributable to the succeeding calendar year.

Section 1006. Entitlement to royalty payments [4]

(a) Interested Copyright Parties. The royalty payments deposited
pursuant to section 1005 shall, in accordance with the procedures
specified in section 1007, be distributed to any interested copyright
party-

(1) whose musical work or sound recording has been-

(A) embodied in a digital musical recording or an analog musical
recording lawfully made under this title that has been distributed, and

(B) distributed in the form of digital musical recordings or analog
musical recordings or disseminated to the public in transmissions,
during the period to which such payments pertain; and

(2) who has filed a claim under section 1007.

(b) Allocation of Royalty Payments to Groups. The royalty payments shall
be divided into 2 funds as follows:

(1) The sound recordings fund. 66 2/3 percent of the royalty payments
shall be allocated to the Sound Recordings Fund. 2 5/8 percent of the
royalty payments allocated to the Sound Recordings Fund shall be placed
i