work regardless of whether such publication was 
with the consent of the author. In no other cir-
cumstances is a work of visual art considered to 
have been published prior to January 1, 1978, un-
less such publication has been authorized by the ex-
press written consent of the author of such work.’’; 
(4) inserting after the definition of ‘‘registra-
tion’’ and prior to the definition of ‘‘sound record-
ings’’ the following: 
‘‘For purposes of sections 106(b) and 701(b)(5), 
‘sale’ means transfer of ownership or physical pos-
session of a work as the result of the auction of that 
work.’’; and 
(5) amending paragraph (1) of the definition of 
a ‘‘work of visual art’’ to read as follows: 
‘‘(1) a painting, drawing, print, sculpture, or 
photograph, existing either in the original embodi-
ment or in a limited edition of 200 copies or fewer 
that bear the signature or other identifying mark of 
the author and are consecutively numbered by the 
author, or, in the case of a sculpture in multiple 
cast, carved, or fabricated sculptures of 200 or fewer 
that are consecutively numbered by the author and 
bear the signature or other identifying mark of the 
author; or’’. 
VerDate Mar 15 2010 
02:10 Dec 23, 2011
Jkt 019200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H3688.IH
H3688
tjames on DSK6SPTVN1PROD with BILLS
SEC. 3. EXCLUSIVE RIGHTS. 
Section 106 of title 17, United States Code, is 
amended by— 
(1) inserting ‘‘(a)’’ before ‘‘Subject to sections 
107 through 122’’; and 
(2) adding at the end the following: 
‘‘(b)(1) In this subsection, the term ‘net royalty’ 
means the royalty amount collected less administrative ex-
penses of the visual artists’ collecting society. In no case 
shall the administrative expenses of the visual artists’ col-
lecting society subtracted from the royalty amount col-
lected exceed 18 percent. 
‘‘(2) Whenever a work of visual art is sold as the re-
sult of auction of that work by someone other than the 
artist who is the author of the work, the entity that col-
lects the money or other consideration paid for the sale 
of the work shall, within 90 days of collecting such money 
or other consideration, pay out of the proceeds of the sale 
a royalty equal to 7 percent of the price. Such royalty shall 
be paid to a visual artists’ collecting society. The collecting 
society shall distribute, no fewer than 4 times per year, 
50 percent of the net royalty to the artist or his or her 
successor as copyright owner. After payment to the artist 
or his or her successor as copyright owner, the remaining 
50 percent of the net royalty shall be deposited into an 
escrow account established by the collecting society for the 
VerDate Mar 15 2010 
02:10 Dec 23, 2011
Jkt 019200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H3688.IH
H3688
tjames on DSK6SPTVN1PROD with BILLS
purposes of funding purchases by nonprofit art museums 
in the United States of works of visual art authored by 
living artists domiciled in the United States. The right to 
receive such royalty and the obligation to deposit the re-
maining share of sale proceeds into the escrow account 
provided in this subsection may not be waived by the artist 
or his successor as copyright owner. Failure of the entity 
collecting the money or other consideration resulting from 
the sale of the work to pay the royalty provided under 
this section shall constitute an infringement of copyright. 
Any such infringement shall be subject to the payment of 
statutory damages under section 504. 
‘‘(3) Paragraph (2) shall not apply to the sale of a 
work for a gross sales price of less than $10,000, or in 
exchange for property with a fair market value of less than 
$10,000.’’. 
SEC. 4. NOTICE OF COPYRIGHT. 
Section 401 of title 17, United States Code, is 
amended by adding at the end the following: 
‘‘(e) NON APPLICABILITY
TO WORKS
OF VISUAL 
ART.—The provisions of this section shall not apply to a 
work of visual art.’’. 
SEC. 5. COPYRIGHT OFFICE. 
Section 701(b) of title 17, United States Code, is 
amended by— 
VerDate Mar 15 2010 
02:10 Dec 23, 2011
Jkt 019200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H3688.IH
H3688
tjames on DSK6SPTVN1PROD with BILLS
(1) redesignating paragraph (5) as paragraph 
(6); and 
(2) inserting after paragraph (4) the following: 
‘‘(5) Issue regulations governing visual artists’ 
collecting societies pursuant to section 106(b), which 
shall, at a minimum— 
‘‘(A) establish a process by which entities 
would be determined to be and designated as 
visual artists’ collecting societies; 
‘‘(B) require that a visual artists’ col-
lecting society authorized to administer royalty 
collections and distributions under this title 
shall have had prior experience in licensing the 
copyrights of authors of works of visual art in 
the United States, or have been authorized by 
no fewer than 10,000 authors of works of visual 
art, either directly or by virtue of reciprocal 
agreements with foreign collecting societies, to 
license the rights granted under section 106; 
‘‘(C) exclude any entity from being consid-
ered a visual artists’ collecting society where, 
after having been designated a visual artists’ 
collecting society, the royalties collected for at 
least 5 consecutive years have not been distrib-
VerDate Mar 15 2010 
02:10 Dec 23, 2011
Jkt 019200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H3688.IH
H3688
tjames on DSK6SPTVN1PROD with BILLS
uted directly to authors after deduction of ad-
ministrative expenses; 
‘‘(D) establish the methodology and proce-
dures pursuant to which visual artists’ col-
lecting societies shall make grants to nonprofit 
museums for the purchase of works with the es-
crow funds provided in this section, after notice 
and opportunity to comment, including— 
‘‘(i) the criteria to be used by the vis-
ual artists’ collecting societies for applica-
tion by nonprofit art museums for the pur-
chase of works out of the funds held in es-
crow for that purpose by such societies; 
‘‘(ii) the amount of the maximum 
grant for the purchase of an individual 
work of visual art; 
‘‘(iii) the maximum amount that may 
be granted to a nonprofit museum; and 
‘‘(iv) criteria for the award of grants 
when the amounts requested exceed the 
total amount of funds held in escrow; 
‘‘(E) require that each such society provide 
the Register of Copyrights with an annual audit 
of 
royalty 
funds 
collected 
under 
section 
106(b)(1) that includes the total amount re-
VerDate Mar 15 2010 
02:10 Dec 23, 2011
Jkt 019200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H3688.IH
H3688
tjames on DSK6SPTVN1PROD with BILLS
ceived from the sales of works of visual art, the 
total amount paid in distributions to artists or, 
if deceased, to their successors as owners of 
copyright, and the total amount paid in grants 
to each nonprofit museum for the purchase of 
works of visual art; and 
‘‘(F) make publicly available an annual re-
port to the Congress setting forth the total 
amount of royalties received by each visual art-
ists’ collecting society and the amount disbursed 
to each nonprofit art museum receiving a grant 
or grants from the escrow funds established by 
each visual artists’ collecting society. 
Except as necessary for the report to Congress re-
quired pursuant to subparagraph (F), the Register 
of Copyrights shall not disclose any confidential or 
proprietary information provided to it in the annual 
audits made available pursuant to this section.’’. 
SEC. 6. COPYRIGHT OFFICE FEES. 
Section 708(a) of title 17, United States Code, is 
amended— 
(1) by redesignating paragraphs (10) and (11) 
as paragraphs (11) and (12), respectively; 
(2) by inserting after paragraph (9) the fol-
lowing: 
VerDate Mar 15 2010 
02:10 Dec 23, 2011
Jkt 019200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H3688.IH
H3688
tjames on DSK6SPTVN1PROD with BILLS
‘‘(10) for expenses associated with carrying out 
its responsibilities under section 701(b)(5), provided 
that such fees shall be paid out of the total royalty 
payments received by collecting societies pursuant to 
section 106(b), before deduction of such societies’ 
administrative expenses; and provided further, that 
following the initial rulemaking necessary to carry 
out its obligations under section 701(b)(5), such fees 
shall not exceed 5 percent of the total annual 
amount of royalties received by such collecting soci-
eties;’’; and 
(3) in the matter following paragraph (12), as 
so redesignated, in the second sentence, by striking 
‘‘(10) and (11)’’ and inserting ‘‘(11) and (12)’’. 
SEC. 7. EFFECTIVE DATE. 
This Act and the amendments made by this Act shall 
take effect on the date that is 1 year after the date of 
enactment of this Act. 
Æ 
VerDate Mar 15 2010 
02:10 Dec 23, 2011
Jkt 019200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6301
E:\BILLS\H3688.IH
H3688
tjames on DSK6SPTVN1PROD with BILLS