The Artist-Museum Partnership Act and American Royalties Too Act Re-Introduced (again)

In looking for something to post this evening I saw that I missed the re-introduction of the Artist-Museum Partnership Act and the American Royalties Too Act in the US Congress.  These bills, although important to many, have been on a cycle of being introduced and re-introduced for years, and they never seem to get out of committee for a floor vote.  I assume the same will happen again, and although not really news until the bills gather some traction, we as appraisers should be aware of what is happening.

The Art Newspaper reports

Two bills introduced this week in US Congress aim to improve the lives of artists. One proposal seeks to bring droit de suite, also known as the artist’s resale royalty, to the US. The other encourages artists to donate their own work to museums by allowing them to deduct the works’ fair market value from their taxes. Both bills have been proposed repeatedly in recent years, but have never successfully passed into law.

The senators Tammy Baldwin and Ed Markey and the representative Jerrold Nadler introduced the American Royalties Too (ART) Act of 2015 on 16 April. The legislation would give artists a 5% royalty (up to $35,000) on works sold at auction for $5,000 or more. Seven representatives have signed on as co-sponsors.

A similar proposal attracted more than a dozen co-sponsors last year, but drew opposition from auction houses that complained they were unfairly targeted by the legislation. (The latest proposal requires the US Copyright Office to reconsider the law after five years to determine whether it should be expanded to include private sales.) “At a time when more than 70 other countries properly compensate visual artists for their work, it is time for the United States to do the same,” representative Nadler says in a statement.

Congress held hearings on the resale royalty last summer, but failed to vote on the bill before the end of the legislative session. Advocates say the odds are better this time around because other government agencies have voiced support for the reform. “After two decades resisting the idea, the US Copyright Office reversed itself a year and a half ago with a report generally favouring the resale royalty regime,” says Theodore Feder, the president of the Artists Rights Society. Furthermore, “the fact that last year’s GOP-controlled House [of Representatives] held these hearings demonstrates that this issue is not vulnerable to the partisan divide in Congress,” says Bruce Lehman, the former director of the US Patent and Trademark Office.

The Artist-Museum Partnership Act, proposed by the senator Patrick Leahy on 14 April, would boost artists’ bottom lines in a more indirect fashion. The legislation would allow them to deduct the fair market value of works they donate to museums or other educational institutions. Under current law, artists are only permitted to deduct the cost of materials, while a collector who donates the same work would be entitled to the full estimated market value.

“The prospect of creating an incentive for artists and their heirs to donate works to collections for their care and exhibition will do wonders for preserving the legacy of our nation’s creative output,” says Alex Aldrich, the director of the Vermont Arts Council, in a statement. Senator Leahy first proposed the bill in 2005.

It remains unclear whether either bill will gain enough traction to become law. Democrats authored both proposals; Republicans control both houses in US Congress for the first time in Barack Obama’s presidency. Whether or not the bills have bipartisan support, political gridlock is likely only to increase in the two years leading up to the next presidential election.

Source: The Art Newspaper