H.R. 4017: American Royalties Too Act of 2025

This bill, known as the "American Royalties Too Act of 2025," proposes several key changes to copyright law that specifically aim to secure the rights of visual artists regarding the resale of their artwork. Here are the main components of the bill:

Resale Royalties for Visual Artists

• Definition of Resale Royalties: The bill introduces a system where visual artists (or their heirs) are entitled to receive royalties each time their artwork is resold in the commercial market for a price of $5,000 or more.
• Royalty Rate: The amount owed to the artist for each resale is set at either 5% of the resale price or $50,000, whichever is less. This figure will be adjusted annually based on cost-of-living changes.
• Duration of Rights: The entitlement to receive these royalties lasts for the entire duration of the copyright of the artwork.

Roles and Responsibilities

• Art Market Professionals: These include galleries and auction houses that sell works of visual art. They must collect the royalty from the buyer and pay it to designated collecting societies on behalf of the artist.
• Artists' Collecting Societies: Organizations designated to administer the royalty collection and distribution process will receive payments from art market professionals and distribute them to the artists or their successors.
• Payment Timing: Art market professionals must make the payment to the collecting societies within 90 days after the sale's final payment.

Distribution of Royalties

• Quarterly Distribution: Collecting societies are required to distribute the royalties collected to the authors or their successors at least quarterly, after deducting reasonable administrative costs.
• Successor Rights: In cases where the artist has passed away, the royalty rights are outlined to determine how the royalty payments are inherited, prioritizing spouses and children.
• Unclaimed Royalties: If the collecting society cannot locate the artist or their heirs after several attempts, unclaimed royalties will be placed in an escrow account. Unclaimed funds after three years will go to the Copyright Office for artist support initiatives.

Compliance and Enforcement

• Right to Legal Action: The bill provides a legal framework for artists and their heirs to sue if their royalties are not paid as stipulated, with potential for significant penalties for non-compliance.
• Administration and Oversight: The Register of Copyrights is empowered to create regulations to oversee the administration of these royalties, including the designation of collecting societies and processes for how royalties are managed.

Exclusions and Studies

• Non-applicability to Certain Works: The provisions of the bill will not apply to specific works of visual art created under different copyright rules.
• Required Study: A study must be conducted five years after the bill's enactment to assess its implementation and effectiveness.

Effective Date

The bill is set to take effect one year after it is enacted.

Relevant Companies

• CHGG - Chegg, which has involved itself in art educational resources, may need to adapt its services based on changes in artists' rights and marketplace dynamics.
• CWEN - Clearway Energy could be impacted as artworks associated with renewable energy projects may lead to increased sales and corresponding royalty obligations.