California Resale Royalty Act Declared Unconstitutional
Plaintiffs plan appeal
Under California Civil Code Section 986, which went into effect in 1978, an artist is entitled to a royalty upon the resale of his/her work, under specific circumstances. With a few exceptions, the seller must pay the artist (or a deceased artist's estate or heirs) five percent of that resale price.
When the seller, gallery or auction house cannot find the artist, the royalty payments are sent to the California Arts Council to distribute to the artists, when it can find them. By law, when the artists cannot be found the monies are used for Art in Public Places. Over the years, the California Arts Council has distributed 76% of the royalties it has received to the rightful payees; potential payees have been contacted in another roughly 20% of cases.
More on the California Resale Royalty Act.