Resale Right for Visual Artists Bill

Resale Right for Visual Artists Bill

Government Bill

236—1

Explanatory note

General policy statement

This Bill establishes an Artist Resale Royalty (ARR) scheme in New Zealand. The scheme provides a mandatory resale right to eligible visual artists that entitles them to receive a royalty payment when their qualifying artwork sells on the secondary art market.

The Free Trade Agreement between New Zealand and the United Kingdom of Great Britain and Northern Ireland (the NZ–UK FTA) requires New Zealand to introduce a reciprocal ARR scheme within 2 years of the NZ–UK FTA coming into force in 2023. The Free Trade Agreement between the European Union and New Zealand (the NZ–EU FTA) also commits New Zealand to introducing an ARR scheme within 2 years of the NZ–EU FTA coming into force.

To meet the terms of both free trade agreements, legislation is required because an ARR scheme cannot be implemented through private solutions or existing arrangements. New legislation is required because the alternative, amending the Copyright Act 1994, is not desirable because that Act is under review with no expected time frame for completion.

Policy objectives

The policy objectives of the ARR scheme are to—

  • meet New Zealand’s obligations under Article 17.46 of the NZ–UK FTA and Article 18.14 of the NZ–EU FTA to introduce an ARR scheme within 2 years of those free trade agreements coming into force:

  • maximise the benefits of the scheme to visual artists and their estates:

  • minimise the costs and impacts on art market professionals and the secondary art market:

  • support a well-functioning New Zealand secondary art market:

  • ensure that the scheme is as simple and cost-effective as possible to administer, with the long-term goal of it ultimately becoming self-sustaining.

Those objectives seek to create a scheme that provides benefits to visual artists and their estates without negatively impacting the secondary art market or placing an undue burden on art market professionals and buyers and sellers of art. A simple scheme will encourage compliance and reduce cost so that the scheme can ultimately be sustained without government funding.

Eligibility for resale right

The resale right will enable the right holder (the artist or, if the artist is deceased, their estate) to receive a royalty payment each time their artwork is resold on the secondary art market. The resale right will apply only when ownership in a work is transferred by sale after the first transfer of ownership of that work by the artist (it will not apply to the first transfer or sale of an artwork).

The right will be available to New Zealand citizens (including those residing overseas) and individuals domiciled or resident in New Zealand, as well as to nationals and residents of countries with which New Zealand has a reciprocal arrangement in place. This aligns with the requirements of the NZ–UK FTA and will ensure that a wide range of artists benefit and that right holders are easy to identify.

In line with the requirements of the NZ–UK FTA and the NZ–EU FTA, the resale right will be inalienable and unable to be waived or assigned regardless of whether the artist who created the artwork owns the copyright for that work. The resale right will be able to be transmitted only upon the death of the holder of the right. On death, the resale right will pass to the person entitled to it under the artist’s will. This will enable artists to determine who they want to inherit the right, which could include their iwi or hapū. If there is no will, the right passes by operation of succession law.

The duration of the resale right will be the same as the duration of copyright in a work, which is currently the life of the artist plus 50 years after their death. The resale right has linkages to copyright and having the same duration for both ensures that the 2 rights will be aligned. If the duration of copyright extends in the future to 70 years post-death (as has been committed to under both the NZ–UK FTA and the NZ–EU FTA), the duration of the resale right will also extend to 70 years post-death via a consequential amendment to this legislation.

Resales covered by resale right

A resale royalty will only be payable on sales that are equal to or above a specified minimum threshold in value, with this dollar threshold to be set through supporting regulations. The Bill specifies that this threshold must sit within the range of $500–$5,000. Almost all international ARR schemes have a minimum threshold because having no threshold (and therefore covering all sales, even those of very low value) is not administratively feasible or cost-effective. The rationale for the proposed range is that a threshold lower than $500 would make the scheme administratively unviable and a threshold above $5,000 would only benefit a small number of wealthy and established artists and their estates, which is misaligned with the scheme’s objectives.

Not every visual artwork will be covered by the scheme. The Bill defines visual artwork for the purposes of the scheme by first clarifying what art is excluded (a building, literary work, dramatic work, or musical work, as defined in the Copyright Act 1994) and then by clarifying what artworks are included. The examples in the Bill have been chosen to be inclusive of the range of artworks sold in New Zealand and they include specific reference to the “cultural expression of Māori and Pacific peoples” as well as to “ethnic and cultural varieties of the listed artworks”. The Bill provides the flexibility to exclude other forms of visual artwork further through regulations. This will enable the scheme to respond to any significant developments or changes in artistic practice.

The obligation to pay a resale royalty arises at the time when a visual artwork is sold on the secondary art market through a transaction involving an art market professional or a transaction to or from a public museum or public art gallery. For the purposes of the scheme, the Bill defines art market professional as “a person who is in the business of dealing in visual artworks”. The Bill also provides examples of who is considered an art market professional, specifically, auctioneers who specialise in visual artworks, art dealers, and art consultants.

While private resales between 2 or more individuals will not attract a mandatory resale royalty, the Bill provides for those involved in those sales to opt in to the scheme and voluntarily choose to pay a resale royalty of an amount of their choosing. Stakeholder engagement found a strong interest in enabling parties of private resales to opt in to the scheme voluntarily as works by certain groups, such as Māori, Pacific, and female artists, are more likely to be resold privately. Enabling parties of private resales to opt in seeks to help address current inequities in secondary art market sales.

Payment of resale royalty

Resale royalties will be payable to living artists or to those entitled under a deceased artist’s will (or their successors). The rate of the resale royalty will be an additional flat 5% of the resale price (excluding any fees such as buyer’s premium, seller’s commission, duty, or tax charged under the Goods and Services Tax Act 1985). A 5% royalty rate seeks to strike a balance between ensuring that royalties go to artists and not placing too large a financial burden on buyers, sellers, and art market professionals. A flat percentage royalty was chosen, rather than a sliding scale with brackets for different rates as in the United Kingdom scheme, because a flat percentage is simpler to administer and is more future-proofed because the dollar brackets would need to be adjusted for inflation.

In contrast to the United Kingdom and many European Union countries (but in line with the Australian scheme), there will be no cap on the maximum royalty payable. This acknowledges that artworks in New Zealand do not sell for the high prices seen in the United Kingdom and European Union markets. It will also be an essential factor in the scheme ultimately becoming self-sustaining as the collection agency will rely on the administrative fees taken from higher-value sales to meet the costs of collecting and distributing royalty payments from lower-value sales.

A resale royalty will always be collected on eligible resales and the right holder cannot opt out of the royalty being collected. However, the right holder can choose to decline to receive a resale royalty payment if they do not wish to interact with the scheme. Always collecting a royalty on eligible resales will prevent art market professionals from pressuring artists to opt out of the scheme as a condition of sale and also assist in protecting the long-term viability of the scheme because an administrative fee will always be collected. In the event that a royalty payment is declined, that royalty payment would go into a cultural fund for the purposes of supporting visual artists’ career sustainability. In that way, the cultural fund seeks to provide a mechanism to ensure that declined royalty payments are still redistributed to benefit the artistic community. Further details of the fund will be set out in regulations.

The seller, together with the art market professional involved in the sale, will be jointly and severally liable for payment of a resale royalty (or, if there is no art market professional, for example, with a sale between a private individual and public museum or public art gallery, the seller and the buyer will be liable). Liability to pay a resale royalty will arise on the completion of the resale. Joint liability aligns with the United Kingdom and Australian schemes and spreads the financial burden of the royalty payment. Joint liability also means that, in the event of non-compliance, there are multiple parties who are liable for enforcement action.

Management of resale royalty scheme

A single, non-governmental collection agency will be authorised to manage the resale right, including the collection and distribution of resale royalties on behalf of artists. A non-governmental organisation (NGO) is commonly assigned to this role in many overseas schemes (including in Australia and the United Kingdom) as it enables the scheme to be administered independently of government. It also enables NGOs with existing systems, processes, and expertise in collecting royalties (which government does not have) to take on the role. Unlike the United Kingdom market, the New Zealand secondary art market is not large enough to sustain more than 1 agency so the Bill stipulates that there may be only 1 collection agency.

Only the collection agency will be entitled to receive information on any resale in order to secure payment of royalties, and it must treat this information as confidential in accordance with the Privacy Act 2020. Art market professionals will be required to provide relevant information on resales to the collection agency so that the agency can determine whether a royalty is payable and, if so, how much and to whom. If no art market professional is involved in the resale, then the public museum or art gallery must provide the relevant information. For private resales among those who opt in to the scheme, the individuals involved in the private resale are responsible for providing relevant information to the collection agency.

The Bill devolves power to Ministers to determine the instrument of appointment of the collection agency and the terms and conditions of the appointment. Ministers will also be able to revoke the appointment of the collection agency if it is determined that the agency is not meeting its obligations or that the agency no longer wants to act as the collection agency. The collection agency will be monitored by Manatū Taonga the Ministry for Culture and Heritage, which has the necessary sector expertise and monitoring experience.

As the collection agency is an NGO, the Bill does not prescribe how it must operate. However, the Bill sets out the following principles to guide the collection agency’s operation, which stipulate that the agency must—

  • operate in a way that is transparent, accountable, and respectful; and

  • act in the best interests of the artists and their estates whose royalties it collects; and

  • in carrying out its functions and duties,—

    • acknowledge and respect the role of Māori as tangata whenua and provide culturally appropriate support to Māori artists; and

    • be inclusive of, and recognise the different needs of, all peoples in New Zealand.

In return for managing the scheme, the collection agency will be entitled to charge a fixed administrative fee or percentage of the royalty, with the process for setting this fee to be outlined in regulations. Regulations will also provide detail on the collection agency’s operation, including—

  • the manner in which the agency must collect, hold, and distribute resale royalties; and

  • the representation of right holders in the management of the agency; and

  • the disclosure of the financial affairs of the agency; and

  • access to, and disclosure of, records held by the agency; and

  • how the agency must gather, hold, and disclose that information; and

  • any other matters relating to the conduct or operation of the agency.

Enforcement

Enforcement provisions will provide a mechanism in the event of non-compliance by parties who have obligations under the scheme. Non-payment of resale royalties and failure to provide information as required under the Act will be subject to civil proceedings. Civil proceedings under the Act can be pursued only by the collection agency, on behalf of the right holder. However, this would not prevent a right holder taking court action independently to enforce their right. A court may make orders compelling the provision of necessary information to the collection agency or the payment of a resale royalty. Nothing in this Bill would affect any other power of a court.

Commencement of legislation

The Bill states the legislation will come into force on a date set through Order in Council, with this date to be no later than 1 December 2024. The date is to be set through Order in Council because the legislation cannot commence until a collection agency has been appointed and relevant systems and processes are in place for the scheme to begin operating. A commencement date of no later than 1 December 2024 will ensure that the legislation is in force within the time frames required by the NZ–UK FTA.

Departmental disclosure statement

The Ministry for Culture and Heritage is required to prepare a disclosure statement to assist with the scrutiny of this Bill. The disclosure statement provides access to information about the policy development of the Bill and identifies any significant or unusual legislative features of the Bill.

A copy of the statement can be found at http://legislation.govt.nz/disclosure.aspx?type=bill&subtype=government&year=2023&no=236

Regulatory impact statement

The Ministry for Culture and Heritage produced a regulatory impact statement on 4 August 2022 to help inform the main policy decisions taken by the Government relating to the contents of this Bill.

A copy of this regulatory impact statement can be found at—

Clause by clause analysis

Clause 1 is the Title clause.

Clause 2 is the commencement clause. It provides that the Bill comes into force on a date set by Order in Council or on 1 December 2024, whichever occurs first.

Part 1Preliminary provisions

Clause 3 sets out the purpose of the Bill.

Clause 4 defines terms used in the Bill. Some of the key definitions (such as the definitions of original visual artwork and qualifying resale) are set out in separate clauses.

Clause 5 gives effect to the transitional, savings, and related provisions set out in the Schedule.

Clause 6 provides that the Bill binds the Crown.

Part 2Resale right for visual artists

Resale right

Clause 7 is the key operative provision in Part 2. It gives an artist the right to be paid a royalty on a resale of their artwork if 4 conditions are met.

First, the artwork must be an original visual artwork, as defined in clause 8. Clause 8 includes examples of visual artworks. See section 23 of the Legislation Act 2019 for the status of examples.

Second, the resale must be a qualifying resale, as defined in clause 9. One of the requirements for a qualifying resale is that resale value meets or exceeds a threshold resale value to be set by the regulations (within the range of $500 to $5,000). The other requirement is that at least 1 party to the resale is a New Zealand-based art market professional (defined in clause 11), publicly funded art gallery, or publicly funded museum that collects and displays artworks. These resales are referred to in the Bill as professional resales. Other resales may be qualifying resales if all the parties to the resale agree that the resale should be qualifying, and these resales are referred to in the Bill as voluntary qualifying resales.

Third, the qualifying resale must occur during the period described in clause 15. That period begins when the artwork is created and ends after 50 years has passed since the end of the calendar year in which the artist dies. See also clause 3 of the Schedule, the effect of which is that resale contracts entered into before this Bill comes into force cannot be qualifying resales.

Finally, at the time of the qualifying resale, the artist must meet the eligibility criteria in clause 7(2). If the artist is not alive at that time, they must have satisfied those eligibility criteria at the time of their death. The eligibility criteria require a person to be—

  • a New Zealand citizen or resident; or

  • a citizen, subject, or resident of a reciprocating country specified by an Order in Council made under clause 28.

Clause 7(3) makes clear that the resale right is separate from copyright in an artwork.

Nature of resale right

Clause 12 is about artworks created by the collaboration of 2 or more artists (a joint artwork). If a resale right arises for a joint artwork, it is shared between only those joint artists who meet the eligibility criteria in clause 7(1)(d) and (2).

Clause 13 provides that a resale right is inalienable while it is held by the artist.

Clause 14 is about who holds resale rights after an artist’s death. The rights are initially held by the person who inherits them under the will or on the intestacy of the artist. That person and subsequent successors may transfer the right as personal property.

However, the resale rights of an artist who dies before this Bill comes into force cannot be inherited because they did not exist at the time of the artist’s death. Clause 2 of the Schedule deems these rights to have been inherited by the family members who would have inherited them—

  • if the right to hold the artist’s resale right had existed at the time of the artist’s death; and

  • if the property right associated with the resale rights had subsequently passed according to the intestacy legislation that applied at the time of the artist’s death (and, in the case of any successor who dies before this Bill comes into force, at the time of the successor’s death).

See Part 3 of the Administration Act 1969 for the current rules about how intestate estates are distributed.

Resale royalty payments

The amount of a resale royalty is set by clause 16. For a professional resale, the amount is 5% of the resale value. For a voluntary qualifying resale, the amount is the percentage of the resale value that the parties agree.

Clause 17 sets out who is liable to pay a resale royalty to the collection agency and sets out when that liability arises and is discharged. Any agreement to share or repay the resale royalty other than as provided for in the Bill is void.

Clause 18 sets out when the collection agency is liable to pay resale royalties to right holders and when that liability is discharged.

Clause 19 enables a right holder to decline to receive payment of a resale royalty. Regulations will set out how the collection agency must use or manage royalties that right holders decline.

Other matters relating to resale royalties

Clause 20 entitles the collection agency to retain a specified percentage of the resale royalties it collects. This is for the purpose of funding the collection agency’s activities under the Bill. The specified percentage will be set by or under the regulations.

Clause 21 requires certain parties to a qualifying resale to provide information about the resale to the collection agency.

Collection agency

Clause 22 requires there to be a collection agency at all times. The collection agency is appointed by the Minister for Arts, Culture and Heritage (the Minister) according to a process set by or under the regulations. The Minister may appoint as the collection agency a natural person, a corporation sole, a body corporate, or an unincorporated body (see the definition of person in section 13 of the Legislation Act 2019). The power to appoint a collection agency includes the related powers described in section 45 of the Legislation Act 2019.

Clause 23 sets out the function and duties of the collection agency and provides for its rules of operation to be specified by the regulations.

Clause 24 requires the chief executive of the Ministry for Culture and Heritage (the Ministry) to monitor and report on the performance of the collection agency.

Enforcement and remedies

Clause 25 enables the collection agency to apply to a court for orders to enforce compliance. This clause does not limit the proceedings that may otherwise be taken by the collection agency, a right holder, or any other person.

Clause 26 sets out the orders that a court may make in proceedings brought under clause 25.

Secondary legislation and other instruments

Clause 27 is a regulation-making power. Regulations may—

  • specify classes of artwork that are excluded from the meaning of visual artwork (see clause 8(2)):

  • specify the threshold resale value for qualifying resales (see clause 9(1)(b)):

  • set out how payments to right holders must be made (see clause 18(5)):

  • specify how the collection agency must use or manage royalty amounts that are declined by right holders (see clause 19(2)):

  • for the purpose of clause 20, either—

    • specify the percentage of resale royalties that the collection agency is entitled to retain for the purpose of funding its activities; or

    • authorise the Minister to specify that percentage by notice, and specify the process the Minister must follow when they specify the percentage:

  • specify any information that a party to a qualifying resale must provide to the collection agency in addition to the information listed in clause 21(2):

  • specify the manner in which information must be provided to the collection agency under clause 21:

  • either—

    • specify the process the Minister must follow when appointing a collection agency under clause 22; or

    • authorise the Minister to specify that process by notice, and specify any criteria that the Minister must apply, or conditions that the Minister must comply with, when they specify the process:

  • set the collection agency’s rules of operation (see clause 23), which may include providing for the collection agency to establish and maintain a register of right holders:

  • set requirements for how the chief executive of the Ministry must monitor and report on the performance of the collection agency (see clause 24):

  • provide for anything incidental that is necessary for carrying out, or giving full effect to, this Bill (see clause 27(1)(b)).

The regulations will be secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements).

If the regulations authorise the Minister to do things by notice, those notices will be secondary legislation and the regulations must contain a statement to that effect.

Clause 28 provides for an Order in Council to specify a reciprocating country for the purposes of the Bill. The Order in Council may only be made on the recommendation of the Minister. The Minister must be satisfied that the law of the reciprocating country does or will provide for a reciprocal resale right. An Order in Council made under clause 28 is not secondary legislation, but must be published on the website of the Ministry and notified in the Gazette.

Hon Carmel Sepuloni

Resale Right for Visual Artists Bill

Government Bill

236—1

The Parliament of New Zealand enacts as follows:

1 Title

This Act is the Resale Right for Visual Artists Act 2023.

2 Commencement

(1)

This Act comes into force—

(a)

on a single date appointed by the Governor-General by Order in Council; or

(b)

on 1 December 2024, if it has not commenced by then.

(2)

An Order in Council made under this section is secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements).

Part 1 Preliminary provisions

3 Purpose

The purpose of this Act is—

(a)

to provide a right for eligible artists and successive right holders to receive a royalty on qualifying resales of original visual artworks; and

(b)

to enable royalties to be administered in a way that—

(i)

acknowledges and respects the role of Māori as tangata whenua and provides culturally appropriate support to Māori artists; and

(ii)

is inclusive of, and recognises the different needs of, all peoples in New Zealand.

4 Interpretation

In this Act, unless the context otherwise requires,—

art market professional has the meaning set out in section 11

collection agency means the person appointed as the collection agency under section 22

expiry date, in relation to the period during which a qualifying resale of an original visual artwork creates a resale right, has the meaning set out in section 15

original visual artwork has the meaning set out in section 8(1)

professional resale has the meaning set out in section 9(2)

qualifying resale has the meaning set out in section 9(1)

reciprocating country means an entity that is specified in an Order in Council made under section 28

regulations means regulations made under section 27

resale, in relation to a visual artwork, does not include the first transfer of ownership of the artwork, irrespective of whether the first transfer of ownership was made for money or other consideration

resale right means the right described in section 7

resale royalty means the royalty described in section 7

resale value has the meaning set out in section 10

right holder, in relation to a resale right that arises under section 7, means—

(a)

the artist, if they are alive at the time that the contract for the qualifying resale is entered into; or

(b)

the person who holds the artist’s resale right after their death and at the time that the contract for the qualifying resale is entered into (see section 14)

visual artwork has the meaning set out in section 8(2)

voluntary qualifying resale has the meaning set out in section 9(3).

5 Transitional, savings, and related provisions

The transitional, savings, and related provisions set out in the Schedule have effect according to their terms.

6 Act binds the Crown

This Act binds the Crown.

Part 2 Resale right for visual artists

Resale right

7 Eligible artists have resale right

(1)

An eligible artist has a right to be paid a royalty on the resale of a visual artwork if—

(a)

the visual artwork is an original visual artwork by that artist (see section 8); and

(b)

the resale is a qualifying resale (see section 9); and

(c)

the contract for the resale is entered into on or before the expiry date of the period during which the right may apply (see section 15); and

(d)

either—

(i)

the artist is alive at the time that the contract for the resale is entered into, and they are eligible at that time; or

(ii)

the artist is not alive at that time, but they were eligible at the time of their death.

(2)

The artist is eligible if they are one of the following at the necessary time:

(a)

a New Zealand citizen, as defined in section 4 of the Immigration Act 2009:

(b)

a person domiciled or resident in New Zealand:

(c)

a citizen or subject of, or a person domiciled or resident in, a reciprocating country.

(3)

An artist has a right under this section irrespective of whether they are or were the first owner of copyright in the artwork.

(4)

A person other than the artist may hold the right after the artist’s death (see section 14).

8 Meaning of original visual artwork

(1)

An artwork is an original visual artwork if it is—

(a)

a visual artwork created by, or under the authority of, an artist; or

(b)

one of a limited number of copies of a visual artwork made by that artist or under their authority.

(2)

In this Act, visual artwork means any visual artwork that is not—

(a)

a building, as defined in section 2(1) of the Copyright Act 1994:

(b)

a literary work, dramatic work, or musical work, as those terms are defined in section 2(1) of the Copyright Act 1994:

(c)

any other class of artwork that is specified by the regulations.

Examples

The following are examples of visual artworks (to the extent that they are not excluded by this subsection):

(a)

visual works of cultural expression of Māori:

(b)

visual works of cultural expression of Pacific peoples:

(c)

paintings, drawings, carvings, engravings, etchings, lithographs, woodcuts, and prints (including books of prints):

(d)

photographs, sculptures, collages, and models:

(e)

works of art in the form of crafts, ceramics, glass-ware, jewellery, textiles, weaving, metalware, and furniture:

(f)

visual works of art created using computers or other electronic devices:

(g)

visual works of art that are an ethnic or cultural variety of any of the works described in paragraphs (c) to (f).

9 Meaning of qualifying resale

(1)

A resale of an original visual artwork is a qualifying resale if—

(a)

it is a professional resale or a voluntary qualifying resale; and

(b)

the resale value is no less than the amount specified by the regulations, which must be within the range of $500 to $5,000.

(2)

A resale is a professional resale if—

(a)

at least 1 party to the resale is—

(i)

an art market professional acting in that capacity; or

(ii)

a publicly funded art gallery; or

(iii)

a publicly funded museum whose primary purpose includes the collection and display of artworks; and

(b)

the resale has a connection to New Zealand, in that—

(i)

the person described in paragraph (a) is resident, incorporated, registered, or carrying on business in New Zealand; and

(ii)

the resale relates to that part of the person’s dealings in visual artworks that occur (in part or otherwise) within New Zealand.

(3)

Any other resale may be a voluntary qualifying resale if—

(a)

all the parties to the resale agree in writing that the resale is a qualifying resale for the purpose of this Act; and

(b)

the agreement records the percentage of the resale value that the parties agree will be payable as a resale royalty (see section 16); and

(c)

the agreement records which party will provide information about the qualifying resale to the collection agency (see section 21).

10 Meaning of resale value

(1)

In this Act, resale value, in relation to a qualifying resale of an original visual artwork, means the value of the consideration given for the visual artwork under the contract for resale, which may include—

(a)

an amount paid in New Zealand dollars:

(b)

if an amount is paid in a currency other than New Zealand dollars, that amount converted to New Zealand dollars at the Reserve Bank of New Zealand reference rate as at the date of payment:

(c)

the value of goods or services paid in kind.

(2)

However, resale value does not include—

(a)

goods and services tax payable under the Goods and Services Tax Act 1985; or

(b)

any duty, tax, fee, charge, or levy imposed on goods under the Customs and Excise Act 2018; or

(c)

any costs associated with the resale, for example, a commission or a buyer’s premium.

11 Meaning of art market professional

In this Act, art market professional means a person who is in the business of dealing in visual artworks.

Examples

The following are examples of art market professionals:

(a)

persons who carry on business as an auctioneer (within the meaning of section 5(3) of the Auctioneers Act 2013) and who specialise in visual artworks:

(b)

art dealers:

(c)

art consultants whose business includes dealing in visual artworks.

Nature of resale right

12 Right held in shares where artwork created jointly

(1)

This section applies if a resale right arises in relation to an original visual artwork that is created by the collaboration of 2 or more artists (joint artists).

(2)

The resale right—

(a)

belongs only to those joint artists who are eligible at the necessary time (see section 7(1)(d) and (2)); and

(b)

is held by those eligible joint artists in equal shares or in any other shares that are specified in a written agreement signed by or on behalf of all of the eligible joint artists.

13 Right is inalienable while held by artist

(1)

This section applies to a resale right while it is held by the artist.

(2)

The resale right cannot be waived, assigned, or charged.

(3)

Any waiver or assignment of, or charge over, the resale right is void.

(4)

See section 19, which enables a right holder to decline to receive payment of a resale royalty.

14 Who holds right after artist’s death

(1)

This section sets out who holds an artist’s resale rights after their death.

(2)

The resale right that arises on a qualifying resale is held by—

(a)

the person who inherited the resale right under the will or on the intestacy of the artist, if they still hold that right at the time that the contract for the qualifying resale is entered into; or

(b)

the person who holds the right at that time after 1 or more transfers of the right under subsection (3).

(3)

The person who inherited the resale rights, or any subsequent successor, may transfer the resale rights to another person, as personal property, by—

(a)

assignment; or

(b)

testamentary disposition; or

(c)

operation of law.

(4)

If 2 or more persons hold a resale right after the artist’s death, each person holds the share of the right that they inherit or that is transferred to them.

15 Duration of resale right period

(1)

This section sets out the period during which a qualifying resale of an original visual artwork creates a resale right.

(2)

The period begins when the artwork is created and ends at the close of the last day (the expiry date) of the following period:

(a)

if the artwork is created by 1 artist, the period of 50 years after the end of the calendar year in which the artist dies:

(b)

if the artwork is created by the collaboration of 2 or more artists, the period of 50 years after the end of the calendar year in which the last of those artists dies.

Resale royalty payments

16 Amount of royalty

The resale royalty payable in respect of a qualifying resale is,—

(a)

for a professional resale, 5% of the resale value; and

(b)

for a voluntary qualifying resale, the percentage of the resale value that the parties have agreed to.

17 Liability for payment of resale royalties to collection agency

(1)

The following persons are jointly and severally liable to pay a resale royalty to the collection agency:

(a)

the seller; and

(b)

either—

(i)

the agent acting for the seller on the resale; or

(ii)

if the seller does not have an agent, the agent acting for the buyer on the resale; or

(iii)

if there are no agents, the buyer.

(2)

The liability arises on the completion of the qualifying resale.

(3)

The liability is discharged when the total amount of the resale royalty is paid to the collection agency.

(4)

Any agreement to share or repay the resale royalty, other than as provided for in this Act, is void.

18 Liability for payment of resale royalties to right holders

(1)

The collection agency is liable to pay, to the right holder, each resale royalty it receives under section 17.

(2)

The liability arises when the total amount of the resale royalty is paid to the collection agency.

(3)

The liability is discharged if the total amount, less the percentage that the collection agency is entitled to retain (see section 20), is paid to the right holder.

(4)

If there are 2 or more right holders (see section 12 or 14), the liability to each right holder is discharged if that right holder is paid the share of the amount to be paid under subsection (3) that corresponds to the person’s share of the right.

(5)

Payments to right holders must be made in accordance with the regulations.

19 Right holder may decline resale royalty payment

(1)

A right holder may, by notice in writing to the collection agency, decline to receive payment of all or part of a resale royalty.

(2)

If a right holder declines to receive payment of any amount of a resale royalty, the collection agency must use or manage the amount in the manner specified by the regulations.

Other matters relating to resale royalties

20 Collection agency entitled to retain percentage of resale royalties

(1)

For the purpose of funding its activities under this Act, the collection agency is entitled to retain a specified percentage of the resale royalties it collects.

(2)

The specified percentage is the percentage specified by or under the regulations.

(3)

The regulations may—

(a)

specify the percentage; or

(b)

authorise the Minister, by notice in the Gazette, to specify the percentage in accordance with the process specified in the regulations.

(4)

A notice made under this section is secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements).

21 Requirement to provide collection agency with information about qualifying resales

(1)

This section applies to the following parties to a qualifying resale of an original visual artwork:

(a)

in the case of a professional resale,—

(i)

each art market professional that is a party to the resale; or

(ii)

if none of the parties to the resale is an art market professional, each art gallery or museum referred to in section 9(2)(a) that is a party to the resale:

(b)

in the case of a voluntary qualifying resale, the person that the parties to the resale agreed would be responsible for providing information to the collection agency.

(2)

Each party must ensure that the following information about the resale is provided to the collection agency:

(a)

the name of the artwork, if known:

(b)

a brief description of the artwork:

(c)

the resale value:

(d)

the name of the artist, if known:

(e)

the name and contact details of the persons liable under section 17 to pay the resale royalty, if known:

(f)

any other information specified by the regulations.

(3)

The information must be provided in the manner specified by the regulations.

Collection agency

22 Minister may appoint collection agency

(1)

There must at all times be a collection agency appointed by the Minister.

(2)

The Minister may, by notice in the Gazette and in accordance with the process specified by or under the regulations, appoint a person as the collection agency for the purposes of this Act.

(3)

Before appointing a person as the collection agency, the Minister must be satisfied that the appointee has the appropriate knowledge, skills, and experience to carry out the functions of the collection agency under this Act.

(4)

The collection agency holds office for the term specified in the notice.

(5)

A person is not to be regarded as being employed in the service of the Crown for the purposes of the Public Service Act 2020 or the Government Superannuation Fund Act 1956 solely because of their appointment as the collection agency.

(6)

The regulations may—

(a)

specify the process for appointing a collection agency; or

(b)

authorise the Minister, by notice in the Gazette and subject to any criteria or conditions specified in the regulations, to specify a process for appointing a collection agency.

23 Function, duties, and operation of collection agency

(1)

The function of the collection agency is to collect and distribute resale royalties to right holders.

(2)

The collection agency must—

(a)

comply with the rules of operation set out in the regulations; and

(b)

operate in a way that is transparent, accountable, and respectful; and

(c)

act in the best interests of right holders; and

(d)

in carrying out its function and duties,—

(i)

acknowledge and respect the role of Māori as tangata whenua and provide culturally appropriate support to Māori artists; and

(ii)

be inclusive of, and recognise the different needs of, all peoples in New Zealand.

(3)

The regulations may specify the rules of operation of the collection agency, including rules in relation to any or all of the following matters:

(a)

how resale royalties are to be collected, held, and distributed:

(b)

how resale royalties that are not distributed are to be used or managed (for example, where right holders decline payment or cannot be found):

(c)

how right holders are to be represented in the management of the collection agency:

(d)

how financial records are to be disclosed:

(e)

how information relating to resale rights is to be collected and retained:

(f)

how records held by the collection agency are to be kept and made available:

(g)

any other matter that relates to the role of the collection agency under this Act.

(4)

The regulations may provide for the collection agency to establish and maintain a register of right holders.

24 Chief executive must monitor performance of collection agency

The chief executive of the Ministry must monitor and report on the performance of the collection agency in the manner required by the regulations.

Enforcement and remedies

25 Enforcement

(1)

The collection agency may apply to a court of competent jurisdiction for orders under section 26 if—

(a)

information is not provided in accordance with section 21:

(b)

a person liable under section 17 to make resale royalty payments fails to do so:

(c)

any other requirement under this Act is not complied with in accordance with this Act.

(2)

This section does not limit any proceedings that may otherwise be taken by the collection agency, a right holder, or any other person.

26 Remedies

(1)

In proceedings brought under section 25, the court may grant relief by making orders that—

(a)

the necessary information be provided, as required by section 21:

(b)

payment be made of any resale royalties owing under section 17:

(c)

are appropriate for an infringement of a property right.

(2)

Nothing in this section affects any other power of the court.

Secondary legislation and other instruments

27 Regulations

(1)

The Governor-General may, by Order in Council, make regulations for any or all of the following purposes:

(a)

providing for anything this Act says may or must be provided for by regulations:

(b)

providing for anything incidental that is necessary for carrying out, or giving full effect to, this Act.

(2)

Regulations made under this section are secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements).

(3)

If regulations authorise the Minister to do anything specified in section 20(3)(b) or 22(6)(b) by notice,—

(a)

the notice is secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements); and

(b)

the regulations must contain a statement to that effect.

28 Reciprocating countries

(1)

The Governor-General may, by Order in Council made on the recommendation of the Minister, specify a reciprocating country for the purposes of this Act.

(2)

The reciprocating country must be an entity (whether a State, part of a State, a territory for whose international relations a State is responsible, a political union, an international organisation, or any other entity).

(3)

The Minister must, before recommending that an order be made, be satisfied that the law of the reciprocating country does or will provide for a reciprocal resale right.

(4)

An Order in Council made under this section must be—

(a)

published on an Internet site maintained by or on behalf of the Ministry; and

(b)

notified in the Gazette.

Schedule Transitional, savings, and related provisions

s 5

Part 1 Provisions relating to this Act as enacted

1 Interpretation

In this Part, commencement date means the date on which this Act comes into force.

2 Who holds resale rights of artists deceased before commencement date

(1)

This clause applies to the resale rights of an artist who dies before the commencement date.

(2)

Section 14 applies as if the person who holds the resale rights on the commencement date were the person who would have been beneficially entitled to them immediately before the commencement date if all of the following were true:

(a)

the right to hold the artist’s resale rights (the property right) existed at the time of the artist’s death:

(b)

the artist died intestate:

(c)

the property right passed to 1 or more successors in accordance with the intestacy legislation as in force at the time of the artist’s death:

(d)

if a successor (S) dies before the commencement date,—

(i)

they died intestate; and

(ii)

their share of the property right passed to 1 or more other successors under the intestacy legislation as in force at the time of S’s death.

(3)

The person who holds the resale rights in accordance with this clause must be treated for the purpose of section 14(3) as the person who inherited the rights from the artist, and section 14(2)(a) does not apply.

(4)

In this section, intestacy legislation means—

(a)

the provisions about intestacy in the Administration Act 1969 (see in particular Part 3 of that Act); or

(b)

any repealed or amended legislation about intestacy that the Administration Act 1969 replaces or corresponds to, with or without modification.

3 Resales agreed to before commencement date are not qualifying resales

The resale of an original visual artwork is not a qualifying resale if the contract for the resale was entered into before the commencement date, even if 1 or more of the terms of the contract are satisfied on or after the commencement date.