Short title

This Act may be cited as the

American Royalties Too Act of 2014

Definitions

Section 101 of title 17, United States Code, is amended— (1)by inserting after the definition of architectural work the following:

An auction means a public sale at which a work of visual art is sold to the highest bidder and which is run by an entity that sold not less than $1,000,000 of works of visual art during the previous year.

;

(2)by inserting after the definition of Pictorial, graphic, and sculptural works the following:

For purposes of section 106(b), price means the aggregate of all installments paid in cash or in-kind by or on behalf of a purchaser for a work of visual art as the result of the auction of that work.

;

(3)by inserting after the definition of registration the following:

For purposes of sections 106(b) and 701(b)(5), sale means transfer of ownership or physical possession of a work of visual art as the result of the auction of that work.

; and

(4)in the definition of work of visual art, by striking A work of visual art is— and all that follows through by the author. and inserting the following: A work of visual art is a painting, drawing, print, sculpture, or photograph, existing either in the original embodiment 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..

Exclusive rights

Section 106 of title 17, United States Code, is amended— (1)by inserting (a) In general.— before Subject to sections 107 through 122; (2)in paragraph (5), by striking and at the end; (3)in paragraph (6), by striking the period at the end and inserting ; and; and (4)by adding at the end the following:

(7)in the case of a work of visual art, to collect a royalty for the work if the work is sold by a person other than the author of the work for a price of not less than $5,000 as the result of an auction. (b)

Collection of royalty

(1)

In general

The collection of a royalty under subsection (a)(7) shall be conducted in accordance with this subsection. (2)

Calculation of royalty

(A)

In general

The royalty shall be an amount equal to the lesser of— (i)5 percent of the price paid for the work of visual art; or (ii)$35,000. (B)

Adjustment of amount

In 2015 and each year thereafter, the dollar amount described in subparagraph (A)(ii) shall be increased by an amount equal to the product of— (i)that dollar amount; and (ii)the cost-of-living adjustment determined under section 1(f)(3) of the Internal Revenue Code of 1986 for the year, determined by substituting calender year 2015 for calendar year 1992 in subparagraph (B) thereof. (3)

Collection of royalty

(A)

Collection

Not later than 90 days after the date on which the auction occurs, the entity that conducts the auction shall— (i)collect the royalty; and (ii)pay the royalty to a visual artists’ copyright collecting society. (B)

Distribution

Not fewer than 4 times each year, the visual artists’ copyright collecting society shall distribute to the author or his or her successor as copyright owner an amount equal to the difference between— (i)the net royalty attributable to the sales of the author; and (ii)the reasonable administrative expenses of the collecting society as determined by regulations issued under section 701(b)(5). (4)

Failure to pay royalty

Failure to pay a royalty provided for under this subsection shall— (A)constitute an infringement of copyright; and (B)be subject to— (i)the payment of statutory damages under section 504(c); and (ii)liability for payment of the full royalty due. (5)

Right to collect royalty

The right to collect a royalty under this subsection may not be sold, assigned, or waived except as provided in section 201. (6)

Eligibility to receive royalty payment

The royalty shall be paid to— (A)any author of a work of visual art— (i)who is a citizen of or domiciled in the United States; (ii)who is a citizen of or domiciled in a country that provides resale royalty rights; or (iii)whose work of visual art is first created in the United States or in a country that provides resale royalty rights; or (B)the successor as copyright owner of an author described in subparagraph (A).

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.

Section 701(b) of title 17, United States Code, is amended by— (1)redesignating paragraph (5) as paragraph (6); and (2)inserting after paragraph (4) the following:

(5)Issue regulations governing visual artists’ copyright collecting societies described in section 106, that— (A)establish a process by which an entity is determined to be and designated as a visual artists’ copyright collecting society, that— (i)requires that a visual artists’ copyright collecting society authorized to administer royalty collections and distributions under this title shall— (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 10,000 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 (ii)prohibits an entity from being 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 entity is designated as a visual artists’ copyright collecting society, the entity 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 section 106(b)(3)(B); (B)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 section 106(b)(3); and (C)establish a process by which— (i)not less frequently than annually, a visual artists’ copyright collecting society may request from any entity that conducts auctions a list of each work of visual art sold in those auctions that is by an author represented by the collecting society; and (ii)an author of a work of visual art may obtain from a visual artists’ copyright collecting society any information requested by the collecting society under clause (i) that relates to a sale 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.

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 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 described in paragraph (1), including any recommendations for legislation.

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.