Title: American Royalties Too Act of 2018
Policy area: Commerce

Summary:
American Royalties Too Act of 2018
This bill creates a right under copyright entitling artists to a royalty for the sale of their works of visual art, if the work was sold in an auction by someone other than the artist.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 3488 Introduced in Senate (IS)]

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115th CONGRESS
  2d Session
                                S. 3488

 To amend title 17, United States Code, to secure the rights of visual 
 artists to copyright, to provide for resale royalties, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 25, 2018

 Mr. Hatch (for himself and Mr. Leahy) introduced the following bill; 
  which was read twice and referred to the Committee on the Judiciary

_______________________________________________________________________

                                 A BILL


 
 To amend title 17, United States Code, to secure the rights of visual 
 artists to copyright, to provide for resale royalties, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``American Royalties Too Act of 
2018''.

SEC. 2. DEFINITION.

    Section 101 of title 17, United States Code, is amended by 
inserting after the definition of ``architectural work'' the following:
            ``An `auction' is a public sale at which a copy of a work 
        of visual art is sold to the highest bidder and which is run by 
        a person that sold not less than $1,000,000 of copies of works 
        of visual art during the previous year. A person that conducts 
        all sales exclusively online does not conduct an `auction' for 
        purposes of this title.''.

SEC. 3. EXCLUSIVE RIGHTS.

    (a) Exclusive Rights in Copyrighted Works.--Section 106 of title 
17, United States Code, is amended--
            (1) in paragraph (5), by striking ``and'' at the end;
            (2) in paragraph (6), by striking the period at the end and 
        inserting ``; and''; and
            (3) by adding at the end the following:
            ``(7) in the case of a work of visual art, to collect a 
        royalty for the sale of a copy of the work if the copy is sold 
        by a person other than the author of the work or, if 
        applicable, the author's successor as copyright owner for a 
        price of not less than $5,000 as the result of an auction.''.
    (b) Collection of Resale Royalty for Visual Art.--
            (1) In general.--Chapter 1 of title 17, United States Code, 
        is amended by inserting after section 106A the following:
``Sec. 106B. Collection of resale royalty for visual art
    ``(a) Definitions.--In this section--
            ``(1) the term `price' means the aggregate of all 
        installments paid in cash or in-kind by or on behalf of a 
        purchaser for a copy of a work of visual art sold as the result 
        of the auction of that copy; and
            ``(2) the term `sale' means a transfer of ownership of a 
        copy of a work of visual art as the result of the auction of 
        that copy.
    ``(b) Collection Generally.--The collection of a royalty under 
section 106(7) shall be conducted in accordance with this section.
    ``(c) Calculation of Royalty.--
            ``(1) In general.--The royalty shall be an amount equal to 
        the lesser of--
                    ``(A) 5 percent of the price of the copy of the 
                work of visual art as sold at auction; or
                    ``(B) $35,000.
            ``(2) Adjustment of amount.--In 2019 and each year 
        thereafter, the dollar amount described in paragraph (1)(B) 
        shall be increased by an amount equal to the product of--
                    ``(A) that dollar amount; and
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3)(A) of the Internal Revenue Code 
                of 1986 for the year, determined by substituting `the 
                C-CPI-U for calendar year 2017' for `the CPI for 
                calendar year 2016' and all that follows in clause (ii) 
                of that section.
            ``(3) Joint works.--In the case of a work of visual art 
        that is a joint work, each author of the work or, if 
        applicable, author's successor as copyright owner shall be 
        entitled to an equal share of any royalty for the sale of a 
        copy of the work.
    ``(d) Collection and Payment of Royalty.--
            ``(1) Collection.--Not later than 90 days after the date on 
        which the final payment of the price of the copy of the work is 
        made, the person that conducts the auction shall pay the resale 
        royalty calculated under subsection (c) to a visual artists' 
        copyright collecting society designated by the Register of 
        Copyrights under subsection (h).
            ``(2) Distribution.--Not fewer than 4 times each year, a 
        visual artists' copyright collecting society to which payments 
        are made under paragraph (1) shall distribute to the author or 
        the author's successor as copyright owner an amount equal to 
        the difference between--
                    ``(A) all royalties attributable to the sales of 
                copies of works by the author; and
                    ``(B) the reasonable administrative expenses of the 
                collecting society as determined by regulations issued 
                under subsection (h).
            ``(3) Unclaimed royalties.--
                    ``(A) Escrow.--Subject to subparagraph (B), if, 
                after a good faith effort, a visual artists' copyright 
                collecting society is not able to make a timely 
                distribution under paragraph (2) because the copyright 
                collecting society is unable to locate the author or 
                author's successor as copyright owner, the copyright 
                collecting society shall--
                            ``(i) deposit the amount that would have 
                        been distributed to the author or author's 
                        successor as copyright owner into an interest-
                        bearing escrow account until the author or 
                        author's successor as copyright owner has been 
                        identified and located; and
                            ``(ii) upon locating the author or author's 
                        successor as copyright owner, distribute the 
                        amount described in clause (i), including 
                        interest, to the author or author's successor 
                        as copyright owner.
                    ``(B) Transfer.--If the author or author's 
                successor as copyright owner of a work of visual art is 
                not identified and located during the 3-year period 
                beginning on the date on which the sale of the copy of 
                the work of visual art occurs, the amount that would 
                have been distributed to the author or author's 
                successor as copyright owner under paragraph (2) shall 
                be transferred to the Copyright Office for the purposes 
                of developing and conducting programs, symposia, and 
                education initiatives in support of artists in the 
                United States.
            ``(4) Administration.--A visual artists' copyright 
        collecting society shall administer all amounts collected under 
        this subsection in accordance with generally accepted 
        accounting principles.
    ``(e) Failure To Pay Royalty.--
            ``(1) Right of action.--Except as provided in paragraph 
        (2), if a person fails to pay or distribute a royalty in 
        accordance with subsection (d), the person to which the royalty 
        is due may bring an action in an appropriate district court of 
        the United States to recover either--
                    ``(A) the amount of the royalty; or
                    ``(B) statutory damages in an amount available 
                under section 504(c).
            ``(2) Exception.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), a person shall not be liable in an 
                action brought against the person under paragraph (1) 
                if, not later than 60 days after the date on which the 
                royalty was due, the person pays or distributes an 
                amount equal to the sum of--
                            ``(i) the royalty due; and
                            ``(ii) a late fee determined in accordance 
                        with appropriate regulations as may be 
                        promulgated by the Register of Copyrights.
                    ``(B) Willful or repeated failure to pay.--
                Subparagraph (A) shall not apply if the failure of the 
                person to pay or distribute a royalty in accordance 
                with subsection (d) was willful or repeated.
            ``(3) Exclusive remedies.--The remedies provided under this 
        subsection shall be the exclusive remedies for a failure to pay 
        or distribute a royalty in accordance with subsection (d).
    ``(f) Transfer of Right.--The right to collect a royalty under this 
section may not be sold, assigned, or otherwise transferred or waived 
except as provided in section 201.
    ``(g) Eligibility To Receive Royalty Payment.--A visual artists' 
copyright collecting society that collects a royalty under this section 
for the sale of a copy of a work of visual art shall distribute the 
royalty to--
            ``(1) any author of a work of visual art--
                    ``(A) who is a citizen of or domiciled in the 
                United States;
                    ``(B) who is a citizen of or domiciled in a country 
                that provides a royalty for the resale of a copy of a 
                work of visual art; or
                    ``(C) whose work of visual art is first created in 
                the United States or in a country that provides a 
                royalty for the resale of a copy of a work of visual 
                art; or
            ``(2) the successor as copyright owner of an author 
        described in paragraph (1).
    ``(h) Regulations.--The Register of Copyrights shall issue 
regulations governing visual artists' copyright collecting societies 
described in this section, including regulations that--
            ``(1) establish a process by which a person is determined 
        to be and designated as a visual artists' copyright collecting 
        society, which process shall--
                    ``(A) require a visual artists' copyright 
                collecting society authorized to administer royalty 
                collections and distributions under this title to--
                            ``(i) have prior experience in licensing 
                        the copyrights of authors of works of visual 
                        art in the United States; or
                            ``(ii) have been authorized by not fewer 
                        than 500 authors of works of visual art, either 
                        directly or through reciprocal agreements with 
                        foreign collecting societies, to license the 
                        rights granted under section 106; and
                    ``(B) provide that a person shall no longer be 
                designated as a visual artists' copyright collecting 
                society if, during a period of not less than 5 years 
                that begins after the date on which the person is 
                designated as a visual artists' copyright collecting 
                society, the person does not distribute directly to 
                each author, or to the successor as copyright owner of 
                each author, the amount of the royalties required to be 
                distributed under subsection (d);
            ``(2) determine a reasonable amount of administrative 
        expenses that a visual artists' copyright collecting society 
        may deduct from the royalties payable to an author of a work of 
        visual art under subsection (d)(2); and
            ``(3) establish a process by which--
                    ``(A) not less frequently than annually, a visual 
                artists' copyright collecting society may obtain from 
                any person that conducts auctions a list of each copy 
                of a work of visual art sold in those auctions that is 
                by an author represented by the collecting society; and
                    ``(B) an author of a work of visual art or, if 
                applicable, an author's successor as copyright owner 
                may obtain from a visual artists' copyright collecting 
                society any information in the possession of the 
                collecting society that relates to a sale of a copy of 
                a work of visual art by the author, including the 
                amount of any royalty paid to the collecting society on 
                behalf of the author or the author's successor as 
                copyright owner.''.
            (2) Technical and conforming amendment.--The table of 
        sections for chapter 1 of title 17, United States Code, is 
        amended by inserting after the item relating to section 106A 
        the following:

``106B. Collection of resale royalty for visual art.''.

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. STUDY REQUIRED.

    Not later than 5 years after the date of enactment of this Act, the 
Register of Copyrights shall--
            (1) conduct a study on--
                    (A) the effects, if any, of the implementation of 
                this Act, and the amendments made by this Act, on the 
                art market in the United States; and
                    (B) whether the provisions of this Act, and the 
                amendments made by this Act, should be expanded to 
                cover dealers, galleries, or other professionals 
                engaged in the sale of copies of works of visual art; 
                and
            (2) submit to the Committee on the Judiciary of the Senate 
        and the Committee on the Judiciary of the House of 
        Representatives a report on the study conducted under paragraph 
        (1), including any recommendations for legislation.

SEC. 6. 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.
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