S4520

An Act concerning public library contracts for electronic literary materials and supplementing chapter 73 of Title 18A of the New Jersey Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. As used in this act:

“Aggregator” means one whose business is the licensing of access to electronic literary material collections that include electronic literary materials from multiple publishers.

“Borrower” means a person or organization, including another library, to which a public library loans electronic library materials to.

“Digital audiobook” means a published work that is in the form of a narrated voice recording and is released as a digital audio file.

“Electronic book” means a published work that is in written form and is released as a digital text file.

“Electronic literary material” means any digital audiobooks or electronic books.

“Governing body” means a board of trustees, director or other chief administrative officer, a county library commission, or board of county commissioners of a public library; or a board of education of a school district; or the governing board of a public institution of higher education.

“Public library” means a library that serves, free of charge, all residents of an area as established pursuant to chapter 33 or chapter 54 of Title 40 of the Revised Statutes, and receives financial support, in whole or in part, from public funds; or a library established pursuant to N.J.S.15A:1-1 et seq. and receiving public funds pursuant to R.S.40:54-35; State Library; a school library; and any library operated by a public institution of higher education.

“Publisher” means one whose business is the manufacture, promulgation, license, or sale of books, audiobooks, newspapers, or other literary productions, including those in the form of electronic literary materials. A publisher shall include an aggregator who enters into contracts with libraries for the purpose of providing materials for purchase or license from a publisher.

“Technological protection measures” means any technology that ensures the secure loaning or circulation by a public library of electronic library materials.

2. Notwithstanding any law, rule, or regulation to the contrary, a contract or license between a publisher, distributor, and any other selling or licensing electronic literary material to a public library and the governing body of a public library for the procurement or licensing of electronic literary materials shall not include a provision which:

a. precludes, limits, or restricts the library from performing customary operational functions, including:

(1) licensing electronic literary materials from publishers;

(2) employing technological protection measures necessary to loan electronic literary materials;

(3) making non-public preservation copies of electronic literary materials; and

(4) loaning electronic literary materials using an interlibrary loan system;

b. precludes, limits, or restricts the library from performing customary lending functions, including:

(1) loaning electronic literary materials to borrowers;

(2) restricting the library’s right to determine loan periods for licensed electronic literary materials;

(3) requiring the library to acquire a license for any electronic literary material at a price greater than that charged to the public for the same item;

(4) restricting the number of licenses for electronic literary materials that the library may acquire after the same item is made available to the public;

(5) requiring the library to pay a cost-per-circulation fee to loan electronic literary materials, unless the cost of which is substantially lower than the cost of purchasing the item outright;

(6) restricting the total number of times a library may loan any licensed electronic literary material over the course of any license agreement or restricting the duration of any license agreement, unless the publisher also offers a license agreement to public libraries for perpetual public use without such restrictions, at a price which is considered reasonable and equitable as agreed upon by both parties; and

(7) restricting or limiting the public library’s ability to virtually recite text and display artwork of any materials to library patrons such that the materials would not have the same educational utility as when recited or displayed at a public library facility;

c. restricts the public library from disclosing any terms of the contract to other public libraries, the Legislature, or the Attorney General; or

d. requires, coerces, or enables a public library to violate the provisions of section 2 of P.L.1985, c.172 (C.18A:73-43.2).

3. Nothing in this act shall be construed to require the governing body of a public library to purchase, or otherwise acquire, a library material for inclusion in its collection.

4. a. Any violation of this act shall be considered an unfair method of competition and unfair and deceptive acts or practices within the meaning of the New Jersey consumer fraud act, P.L.1960, c.39 (C.56:8-1 et seq.).

b. An action for relief may be bought by libraries or borrowers, or the attorney general, pursuant to section 3 of P.L.1960, c.39 (C.56:8-3).

c. Any remedy provided pursuant to P.L.1960, c.39 (C.56:8-1 et seq.) shall be available for the enforcement of this act.

5. Contracts to license electronic literary materials to a public library that include prohibited provisions pursuant to this act are unconscionable within the meaning of N.J.S.12A:2-302 and are deemed unenforceable. Any waiver of the provisions of this act shall be deemed unenforceable and void.

6. This act shall take effect immediately and shall first apply to contracts entered into on or after the effective date of this act.

STATEMENT

This bill prohibits contracts for the procurement and licensing of electronic literary materials between public libraries and publishers, distributors, and any other entity selling or licensing electronic literary material to a public library from including certain provisions.

Under the bill, a contract or license between a publisher and the governing body of a public library for the procurement or licensing of electronic literary materials is not to include a provision which: (1) precludes, limits, or restricts the library from performing customary operational functions; (2) precludes, limits, or restricts the library from performing customary lending functions; (3) restricts the public library from disclosing any terms of the contract to other public libraries, the Legislature, or the Attorney General; or (4) requires, coerces, or enables a public library to violate the provision of current law which, except in certain circumstances, prohibits the disclosure of library records which contain the names or other personally identifiable details regarding the users of the libraries.

The provisions of the bill are not to apply to existing contracts, except renewal of the contract is subject to the provisions of the bill.

The bill stipulates that a violation of the provisions of the bill is to be considered an unfair method of competition and unfair and deceptive acts or practices within the meaning of the New Jersey consumer fraud act. Finally, the bill stipulates that contracts to license electronic literary materials to a public library that include prohibited provisions pursuant to this act are unconscionable and are deemed unenforceable. Any waiver of the provisions of this act is to be deemed unenforceable and void.