Lost Royalties and Residuals: How California Holds Funds for Artists and Creators
In the vast and dynamic world of entertainment and the arts, California stands as a beacon for countless creators—musicians, actors, visual artists, and writers—who contribute to the state’s rich cultural tapestry. Yet, amidst the glamour and creativity, a less visible issue persists: unclaimed royalties and residuals. These are earnings rightfully owed to artists but remain undistributed due to various factors, including outdated contact information, administrative oversights, or the complexities of the entertainment industry’s payment structures.unclaimed.com
The State of California, recognizing the significance of this issue, has established mechanisms to safeguard these unclaimed funds, ensuring they remain available for rightful owners to claim. This article delves into the intricacies of unclaimed royalties and residuals in California, exploring the state’s role in holding these funds and guiding artists and creators on how to reclaim their earnings.copyright.gov+1crowe.com+1
Understanding Unclaimed Royalties and Residuals
What Are Royalties and Residuals?
Royalties are payments made to artists, musicians, writers, and other creators for the ongoing use of their intellectual property. This includes earnings from book sales, music streams, or licensing of artwork.
Residuals, on the other hand, are specific to the entertainment industry, particularly for actors and performers. They are payments made when a film, television show, or commercial is rebroadcast or reused beyond its initial airing.
How Do These Funds Become Unclaimed?
Several factors contribute to royalties and residuals going unclaimed:
- Outdated Contact Information: Artists may change addresses or contact details without updating relevant organizations.sco.ca.gov
- Administrative Errors: Mistakes in record-keeping can lead to payments being misdirected or withheld.crowe.com
- Lack of Awareness: Some artists may be unaware of earnings owed to them, especially if they are not actively monitoring their rights and contracts.
California’s Role in Safeguarding Unclaimed Funds
The State Controller’s Office (SCO)
The California State Controller’s Office is responsible for collecting and holding unclaimed property, including royalties and residuals. Under the Unclaimed Property Law, businesses and organizations must report and transfer unclaimed funds to the SCO after a specified period of inactivity, typically three years. sco.ca.gov+4sco.ca.gov+4kcra.com+4sco.ca.gov+2sco.ca.gov+2sco.ca.gov+2
Types of Unclaimed Property
The SCO holds various types of unclaimed property, such as:sco.ca.gov+4sco.ca.gov+4sco.ca.gov+4
- Bank accounts and safe deposit box contentskcra.com+5sco.ca.gov+5a42.asmdc.org+5
- Stocks, mutual funds, bonds, and dividendsa42.asmdc.org+1sco.ca.gov+1
- Uncashed cashier’s checks and money orderssco.ca.gov+1a42.asmdc.org+1
- Certificates of depositsco.ca.gov+1a42.asmdc.org+1
- Matured or terminated insurance policiessco.ca.gov+1a42.asmdc.org+1
- Estatessco.ca.gov+1a42.asmdc.org+1
- Mineral interests and royalty paymentssco.ca.gov+1a42.asmdc.org+1
- Trust funds and escrow accountscrowe.com+3sco.ca.gov+3a42.asmdc.org+3
- Utility account deposits sco.ca.gov+1sco.ca.gov+1
It’s important to note that real estate is not considered unclaimed property under California law.crowe.com+3sco.ca.gov+3sco.ca.gov+3
Industry Organizations and Unclaimed Funds
AFM & SAG-AFTRA Intellectual Property Rights Distribution Fund
The AFM & SAG-AFTRA Fund is dedicated to collecting and distributing royalties to non-featured musicians and vocalists. They maintain a searchable database of unclaimed royalties, allowing artists to check if they are owed payments. crowe.com+3sagaftra.org+3afmsagaftrafund.org+3afmsagaftrafund.org
Performing Rights Organizations (PROs)
Organizations like ASCAP, BMI, and SESAC collect performance royalties on behalf of songwriters and publishers. However, due to challenges in tracking down rightful owners, some funds remain unclaimed. One PRO estimates that about one-third of the money collected from online music services isn’t distributed because the artists, producers, or labels can’t be located. crowe.com+1copyright.gov+1
The California Resale Royalty Act
The California Resale Royalty Act, enacted in 1977, entitled artists to a 5% royalty on the resale of their artwork under certain conditions. However, in 2018, the U.S. Court of Appeals for the Ninth Circuit ruled that the Act was preempted by the federal Copyright Act, effectively nullifying its provisions. cardozoaelj.com+2en.wikipedia.org+2cypressllp.com+2
Steps to Reclaim Unclaimed Royalties and Residuals
1. Search the SCO Database
Artists and creators can search for unclaimed property through the California State Controller’s Office website: claimit.ca.gov. This user-friendly platform allows individuals to search by name and initiate claims for any listed property.a42.asmdc.org
2. Check Industry-Specific Databases
For performers and musicians, it’s advisable to check with relevant industry organizations:
- AFM & SAG-AFTRA Fund: afmsagaftrafund.orgafmsagaftrafund.org+1afmsagaftrafund.org+1
- Performing Rights Organizations: Contact ASCAP, BMI, or SESAC to inquire about any unclaimed royalties.
3. Update Contact Information
Ensure that all relevant organizations have your current contact details. Regularly updating this information can prevent future payments from becoming unclaimed.
4. Monitor Earnings and Contracts
Stay informed about your rights and earnings by regularly reviewing contracts and royalty statements. Engaging with a legal or financial advisor can also help in managing and tracking your income streams.crowe.com
Conclusion
Unclaimed royalties and residuals represent not just lost income but also a disconnect between artists and the recognition of their work. California’s efforts to hold and eventually reunite these funds with their rightful owners underscore the importance of vigilance and proactive management by artists and creators. By leveraging available resources and maintaining up-to-date records, artists can ensure they receive the compensation they deserve for their contributions to the cultural landscape.