A piece of legislation known as the Free Artists from Industry Restrictions (FAIR) Act has long divided the music industry in California, with powerful forces on both sides taking positions. If enacted, FAIR would undo a 35-year-old amendment to the state’s historic “seven-year statute” and effectively remove the power of record labels to sue artists for damages if they exit their contracts after seven years without having turned in the number of albums specified in their contracts. Once left for dead in the California Assembly, the FAIR Act (now known as AB 983) has now been newly taken up in the Senate in a back-door fashion known as “gut-and-amend.”
Mike Montgomery is the executive director of CALinnovates, a nonpartisan technology advocacy coalition. He weighs in for Variety on what he sees as the looming danger of the revived legislation:
For the last two years, a small group of wealthy music managers and lawyers have been trying to advance a bill in Sacramento that would change the rules for recording agreements to benefit elite stars and their representatives while driving down advance payments and royalties for everyone else and making it harder for diverse new voices to get signed.
The first version of this proposal failed to receive a hearing or a vote and it died at the end of 2021. The second version was scheduled for a hearing before the Assembly Arts and Entertainment Committee in April but at the last minute the sponsor, Ash Kalra, pulled the bill off the agenda because he did not have the votes to move it forward.
That’s no surprise – why on earth would any Assembly member support a bill to help the rich get richer while holding back the next generation of artists? Especially when doing so would devastate our state’s music economy and long tradition of leadership in music and the arts.
Indeed, back in the early 2000s the Legislature rejected a virtually identical bill after extensive public hearings and testimony recognizing the harm it would do to working musicians and new voices trying to get signed, including when the principal megastar advocate for the bill already said the quiet part out loud: “If [major labels] would sign less artists, I think everybody would be better off.” And a new study confirms the Assembly’s wisdom in refusing to advance this bill, predicting it could cost the state as much as $600 million in music-related GDP each year.
But now a new effort is underway to revive this zombie legislation — using highly controversial “gut and amend” maneuvers to thwart the will of the Assembly and short circuit Committee consideration and review of this high-risk bill. It’s the epitome of a shady backroom deal that breaches the basic rules of the legislative road.
Here’s how it works. A bill needs to pass both the Assembly and the Senate to become law. But this bill failed to make it through Assembly review — rightly, given the harm it would do our state — and that should be the end of it.
But instead of regrouping to develop a more thoughtful proposal that could satisfy critics’ concerns, the sponsors have instead leapfrogged to the Senate, taken a completely unrelated bill, gutted out its entire contents, and replaced them with the same proposal the Assembly refused to pass. And that’s how a bill that passed the Assembly back in May 2021 to promote lithium batteries and Salton Sea geothermal resources is now pending in the Senate as a music contracts bill!
Common Cause has long complained that “gut-and-amend bills are tantamount to ‘bait-and-switch schemes’,” and the Sacramento Bee has warned: “Gut-and-amend legislation is a pernicious practice that needs to come to an end.” NBC4 in Los Angeles has explained the fundamental problem in detail: “[B]ills are supposed to be vetted through numerous committee hearings where individuals, experts and organizations . . . speak up. Sometimes they win and sometimes they lose, but the process is transparent.”
And the Press Enterprise boiled the problem down even further, putting its finger on the way gut-and-amend is used to jam through a flawed and dangerous idea that benefits the privileged few at the expense of everybody else: “Stuffing backroom deals into gutted bills is an idiotic way to make laws, unless you think laws should benefit only the well-connected players in Sacramento at the expense of rational economic outcomes.”
And that’s exactly what’s happening here. A handful of music power brokers and lawyers are trying to game the legislative process to give themselves new leverage and create churn in recording contracts that pads their own bottom line while stealing opportunity from new talent and diverse voices trying to break into the business.
The Assembly was wise to stop this effort to strip mine our state’s music business. The Senate should not allow procedural manipulation to give a bad idea new life.