Section 390.4 - Annual Assessment allocation and payment(a)Allocation formula. Each Annual Assessment shall be divided into four equal Quarterly Allocations, after first subtracting annual fees payable by Flat Fee Licensees. The MLC may adjust Quarterly Allocations to compensate for any adjustments to the Flat Fee Licensee annual fees that occur after the initial division of the Annual Assessment. Each Quarterly Allocation shall be allocated and paid on a calendar quarterly basis. Each Quarterly Allocation shall be divided into two equal parts, allocated among Licensees according to the following formula:(1)Allocated Licensee Assessment Pool. The Allocated Licensee Assessment Pool shall be allocated on a pro rata basis across all Allocated Licensees based on each Licensee's share of the Aggregate Sound Recordings Count.(2)Threshold Licensee Assessment Pool. The Threshold Licensee Assessment Pool shall be allocated on a pro rata basis across Threshold Licensees based on each Threshold Licensee's share of the aggregate Unique Sound Recordings Counts of all Threshold Licensees. In the event that no Threshold Licensees exist for a Quarterly Allocation, the Threshold Licensee Assessment Pool shall become payable by all Allocated Licensees in the same manner as the Allocated Licensee Assessment Pool.(b)Calculation periods and timing. The calculation period for each Quarterly Allocation shall be the three-month period that ends three months prior to the start of the respective quarter. The MLC shall make all calculations for each respective period based upon the reporting for such period received from Licensees as of the time of calculation by the MLC, which calculation time shall not be earlier than the legal deadline for submission of reporting by Licensees for the respective period. In the event that a Licensee has not provided timely reporting for the respective calculation period at the time the MLC calculates a Quarterly Allocation, the MLC may instead use, in its discretion, the most recent reporting from that Licensee to determine that Licensee's Unique Sound Recordings Count, for the purposes of calculating the Quarterly Allocation.(c)Invoicing and payment of allocation - (1)Deadline for payment.(i) Invoices from the MLC for Quarterly Allocation shares shall be payable pursuant to the MLC invoice no later than 45 days after receipt of the invoice from the MLC.(ii) Invoices from the MLC to Licensees shall be deemed received on the business day after electronic transmission.(2)Format of invoices.(i) The quarterly invoices issued by the MLC shall include at least the following information, where applicable:(A) Invoice issuance date;(B) Invoice payment due date;(C) Amount owed, by share of Allocated Licensee Assessment Pool and Threshold Licensee Assessment Pool;(D) Offset of minimum fee payment against quarterly assessment; and(E) Amount of credit for un-recouped minimum fee.(ii) Invoices issued as a result of an allocation adjustment shall include all of the information set forth in paragraphs (c)(2)(i)(A) through (F) of this section that may be relevant, as well as an explanation of the change from the prior invoices that are affected, and the reason(s) for the adjustment.(d)Late reporting. The MLC shall promptly notify the DLC of any known Licensees who have not timely submitted reports of usage as required each month pursuant to 17 U.S.C. 115(d) and 37 CFR part 210.(e)Recalculation of Allocated Assessment invoices. The MLC may, in its discretion, recalculate allocations and adjust prior invoices, with the written consent of the DLC, within twelve months after the initial issuance of such invoices, in circumstances including, but not limited to, where new usage reporting is received or where a correction would alter one or more of any Licensee's Quarterly Allocation shares by at least 10%.(f)Recoupment of minimum-fee. Each Allocated Licensee's minimum fee will be offset against its Quarterly Allocation shares, if any, and additional payment will not be due from a Licensee unless and until its total Quarterly Allocation shares exceed its annual minimum fee payment. To the extent that an Allocated Licensee's minimum fee exceeds that Licensee's Quarterly Allocation shares for a given Assessment period, the excess amounts will be pooled and credited pro rata to all Allocated Licensees based on the Quarterly Allocation shares for the first quarter of the following year.(g)Reports to DLC. The MLC shall report to the DLC no later than 75 days after the end of every quarter the Aggregate Sound Recordings Count for that quarter.(h)2023 Annual Assessment allocation and payment. The 2023 Annual Assessment shall be paid in two separate processes:(1) The MLC will collect from Licensees the amount of $30,235,650 pursuant to the standard procedures outlined in the other provisions of this part for collection of the 2023 Annual Assessment, including the collection of Annual Minimum Fees and Quarterly Allocations.(2) The MLC will collect from Allocated Licensees the amount of $2,664,350 through a separately invoiced, one-time collection, with no minimum fees applied. The amount shall be divided into two equal parts and allocated among Licensees using the formulas set forth in paragraphs (a)(1) and (a)(2) of this section. The calculation period shall be the first three months of 2023. The MLC may invoice for this collection at any time, with payment to be due no later than 45 days after receipt of the invoice from the MLC.86 FR 6570, Jan. 22, 2021, as amended at 88 FR 69039, Oct. 5, 2023 85 FR 832, 1/8/2020; 86 FR 6570, 1/22/2021; as amended at 88 FR 69039, 10/5/2023