I'm also confused as to how anybody expects to create an upload filter system that respects fair use, given how subjective the fair use criteria are. We have already have seen how this works out with sites like YouTube - it simply does not work.
I'm triply confused as to how this interacts with the DMCA safe harbor provisions. If this doesn't override them, as the bill authors say, how does it accomplish anything? Even The Pirate Bay nominally accepts DMCA takedown requests - so if sites can continue with their existing DMCA processes and be safe from being sued, why would anybody bother with implementing the technical measures?