Resurrected Legislation Introduces Royalties for Visual Artists
By Rachael Wallace
New York Democratic Representative Jerrold Nadler hopes to reintroduce his “Equity for Visual Artists Act” in Congress this year. In 2011, Rep. Nadler first introduced the bill , which would provide visual artists with a 7% royalty on artwork resold for more than $10,000 after the initial sale. But the act has many opponents and is particularly unpopular among art museums and auction houses.
Seattle’s own Kimerly Rorschach, President of the Seattle Art Museum, was recently quoted by the Huffington Post opposing resale royalty acts for visual artists, claiming the bill would “encourage closed-door, private sales at the expense of public auctions, potentially depriving museums of vital information about the availability and pricing of works of art.”
Many European countries already recognize visual artists’ right to profit from the resale of their art. For example, France has embraced resale royalties for visual artists—called droit de suite—since the 1920s. Yet many art coalitions, museums, and auction houses disagree with the European system. Attorney Simon Frankel represented Sotheby’s, Inc. and Christie’s Inc. in opposing the 2011 bill: “Under the U.S. model, copyright law seeks to balance the author’s incentive to create new works against the public interest in accessing and using such works. A resale royalty right would upset this balance by likely reducing the prices paid to artists in the primary market for their works … while providing artists with little or no additional incentive to create.” Frankel also argued the resale royalty right was contrary to property rights in the United States.
Some states have unsuccessfully enacted similar legislation. In 2011, California passed the California Resale Royalty Act, providing visual artists a 5% royalty on resale of pieces of art purchased for over $1000. But this legislation was tested when a group of artists and their heirs sued Sotheby’s, Christie’s, and eBay for failure to comply with the Royalty Act. The District Court for the Central District of California found California’s legislation unconstitutional because it violated the Commerce Clause. The court found “the [California Resale Royalty Act] has the ‘practical effect’ of controlling commerce ‘occurring wholly outside the boundaries’ of California even though it may have some ‘effects within the State.’”
So if artists or their heirs want royalties on resold work, they’re going to have to do it through federal legislation. Nadler’s 2011 bill died swiftly in the House of Representatives, and it looks like the major powerhouses in the art world strongly oppose any royalty bills, especially ones that only target public sales. Half of the royalties from resales under the legislation would go to nonprofit art museums to help purchase new works of contemporary art.
Yet Nadler says his re-write of the 2011 bill will take into account prior criticism and help artists reap what they sowed. What changes Nadler plans to make to his new bill remain to be seen, but with the strength of the opposition, it looks like artists should not hold their breath waiting for this new legislation.