Music Licensing Reform Act of 1996 - Exempts from copyright infringement the communication of a performance of nondramatic musical works on the premises of small commercial establishments, unless a charge is made to see or hear the transmission or the transmission received is further transmitted to the public. Directs the Register of Copyrights to define the term "small commercial establishment" for purposes of this Act using specific, verifiable criteria.

Directs the Register to promulgate regulations to establish a code of conduct for the licensing negotiations and practices between a proprietor and a performing rights society (PRS). Allows either party to enforce such code of conduct through a civil action in district court.

Directs the Register to ensure that a PRS provides reasonable access to its repertoire so that a person engaged in the public performance of a nondramatic musical work may determine whether the public performance of a particular work may be licensed by a particular licensor. Provides for civil enforcement of such access. Provides restrictions for a PRS not in compliance.

Directs the Register to report to the Senate and House Judiciary Committees on the administration by the U.S. District Court for the Southern District of New York of the consent decree of March 14, 1950, in United States v. American Society of Composers, Authors, and Publishers and the consent decree of December 29, 1966, in United States v. Broadcast Music, Inc.

Preempts any State copyright licensing law made inconsistent by this Act.