Congressman Jerrold Nadler

By Rachael Wallace

We previously covered the upcoming art royalty legislation in Congress, and now Congress has finally seen the bill in question, aptly named the American Royalties Too (ART) Act. Congressman Jerrold Nadler, the sponsor of the 2011 Equity for Visual Artists Act, introduced the bill on July 15, 2014 in a House subcommittee meeting.

ART would require a 5% royalty on resale to go to the artist for pieces of art that sell for $5,000 or more at auctions. Royalties would be capped at $35,000. The 2011 bill required a 7% royalty on pieces of art over $10,000. After the 2011 bill died in the House, the United States Copyright Office collected feedback and testimony regarding royalties on art. It issued a report of its analysis in December, concluding that there was “no evidence to conclusively establish that [establishing resale royalties] would harm the U.S. visual market.” The Copyright Office then made 10 recommendations for the legislation. Many of the changes in the current legislation come from those recommendations.

Nadler — a Democrat from New York — is a Ranking Member of the House Judiciary Subcommittee on Courts, Intellectual Property and the Internet. Despite his powerful presence in the House, opponents are already in full swing to kill the bill early. Auction houses are hiring formidable lobbying groups to help kill or amend the bill. They complain that the Act unfairly targets auction houses and will hinder the art market, and that the Act will discourage auctions in exchange for private sales that would avoid the royalty. (Only auction houses that made more than $1 million in the previous year are subject to the bill.)

Ted Feder, President of Artist Rights Society, is optimistic that the bill will pass, especially considering the speed with which it is gaining sponsors. Despite the support, Feder believes that ART will likely become part of a larger copyright bill coming next year.

The Act has more sponsors and more publicity than the 2011 bill, and may make it further in Congress. But, like any bill in Congress, it faces an uphill battle. Considering the powerful opposition of auction houses and companies such as eBay, what becomes of ART remains to be seen.