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A Brief History of Art Law in America (and Its Future?)

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Little fanfare met the introduction of a new bill into Congress, the Equity for Visual Artists Act, in December of 2011. Well, it was close to Christmas, so how excited about artists are people supposed to get? It isn't clear how excited anyone is ever going to be about this proposed legislation, which requires auction houses and art dealers with annual revenues of $25 million or more to set aside 7 percent of any sale of modern or contemporary art, with those proceeds split between the American artist (or the artist's heirs) and an art acquisition fund for nonprofit art museums, but it is the most recent piece of art law to be brought up to Congress (or anywhere else).

Over the past 40 years, a body of art law has been established on the municipal, state and federal levels, some of it aimed at helping art collectors and some intended to assist individual artists. Among the main points in this already sizable body of law are:

Artist-dealer consignment laws in 31 states around the country (requiring dealers to whom artists have consigned their work to hold proceeds from sales in trust and out of reach of any claims by gallery creditors);
Art print disclosure laws for the sale of limited edition graphic works of art in 15 states (Arkansas, California, Georgia, Hawaii, Illinois, Iowa, Maryland, Massachusetts, Michigan, Minnesota, New York, North Carolina, Oregon, Rhode Island, South Carolina and Wisconsin), requiring buyers to be furnished with detailed information;
Requirements for auction houses to indicate by some symbol the lots in which they have a financial interest, such as a guarantee or a loan made to a consignor (New York State), and that art galleries make clear to the public whether or not works on display are actually for sale to the public by, among other things, listing prices (New York City);
Allowance for artwork to be used as payment of an artist's estate taxes (Connecticut, Maine and New Mexico);
Percent-for-art statutes on the municipal, county, state and federal levels that require one (and sometimes one-and-a-half) percent of capital expenditures to be spent on the acquisition or commissioning of artwork at the site of a new or renovated government building;
Federal labeling requirements for art materials with potentially toxic ingredients;
An amendment to the federal copyright law, the Visual Artists Rights Act, which provides visual artists with the right of attribution (to claim "authorship" of their work and object to false attribution). The law also affords artists the right to prevent the owners of their work from distorting or altering their creations without their consent and, in the case of works of "recognized stature," to prevent their destruction;
The Indian Arts and Crafts Act, a truth-in-advertising statute that stipulates penalties for the creators and sellers of this material who knowingly make false claims about the heritage of those who made the artwork;
Tax-free zones for artists in Maryland and Rhode Island;
A resale royalty law in California, requiring art dealers, auction houses and private collectors living or operating in California have been required to pay five percent of all profits of the secondary market sales of their work where the price exceeded $1,000;
State "moral rights" enacted before the adoption of the Visual Artists Rights Act (in California, Connecticut, Louisiana, Maine, Massachusetts, Nevada, New Jersey, New Mexico, New York, Pennsylvania and Rhode Island). In addition, three states (Massachusetts, New York and North Carolina) permit artists to deduct the cost of their living-working space for tax purposes. Massachusetts even has a "Schlock Art" law (requiring dealers of low cost, mass-produced paintings to label these works "nonoriginal").

These laws are not perfect. In 2012, a court in California struck down the California resale royalty law as unconstitutional (violates the Commerce Clause of the U.S. Constitution), after a series of lawsuits against California collectors, auction houses and even eBay for nonpayment of royalties to artists. That decision is under appeal.

The federal labeling law for art materials requires manufacturers to identify the specific ingredients that are known to be toxic. However, Monona Rossol, director of the New York City-based Arts, Crafts and Theater Safety, an organization that evaluates health-related concerns of performing and visual artists, noted that she doesn't trust many of the artists' materials manufacturers, "because they won't tell you all the ingredients in their products" on the federal government-required Material Safety Data Sheets. "Many of the ingredients in their products have never been tested for toxicity, so how can they claim they won't harm you?

The Indian Arts and Crafts Act has cut down on the sale of imported "Native American" artifacts, although the rules defining who is or may claim to be an American Indian has discriminated against artists whose ancestors were removed from reservations by the federal government or may have married outside of their tribe, and the New York City Department of Consumer Affairs has yet to bring a single action against an art gallery that doesn't list prices since its regulations went into effect in the mid-1980s.

Even with all these laws, artists and art collectors still look for more. Capital gains taxes on real estate and securities were reduced from 28 to 15 percent in tax relief measures in 1997 and 2003 but not the capital gains tax on the sale of artwork, which remains at the higher number. Similarly, individual artists have sought repeatedly to change the 1969 law that allowed artists to deduct only the cost of their materials, rather than the fair market value, when they donate one of their own artworks to a museum or other nonprofit institution.

Artists' resale royalties is likely to be another measure likely to languish. Still, it doesn't hurt to keep trying.