The Royalty Transparency Act expands financial disclosure requirements for certain federal advisory board members and mandates detailed reporting of royalties received by executive branch employees and federal contractors to prevent conflicts of interest.
Rand Paul
Senator
KY
The Royalty Transparency Act expands financial disclosure requirements for certain federal advisory board members and mandates that executive branch employees and covered advisors report the source and value of royalties received, including those from government-developed inventions. The bill also updates federal acquisition rules to prevent organizational conflicts of interest by requiring agencies to review contractor royalty payments during conflict checks. Finally, it establishes new procedures for public access to these financial reports and mandates annual reporting on royalty-related conflicts to Congress.
New Transparency Act Forces Federal Advisors and Employees to Disclose Government-Related Royalties
The Royalty Transparency Act is stepping up the financial disclosure game for thousands of people working in the Executive Branch and on key federal advisory boards. The core of this bill is simple: if you’re an executive branch employee or serving on certain science and health advisory committees, you, your spouse, and your dependent kids now have to report the original source and the exact dollar amount of any royalties received—especially if that royalty came from an invention developed while you were working for the U.S. Government, like under the Federal Technology Transfer Act of 1986 (Sec. 2).
Who’s Suddenly Filing Paperwork?
This bill significantly expands the net for financial disclosures. Currently, many members of federal advisory boards don't have to file public reports. This Act changes that by specifically adding members of high-profile advisory groups, such as the National Science Advisory Board for Biosecurity and the Advisory Committee on Immunization Practices (ACIP), to the list of required filers (Sec. 2). The catch is that the Government Accountability Office (GAO) has to first determine that the committee’s public health recommendations have actually been implemented over the last decade. The GAO gets 180 days to publish the initial list, and then an annual update. If you’re on one of these boards, get ready to file, though this specific requirement for advisory board members is set to disappear five years after the Act becomes law.
The Royalties Rule: Following the Money
This is where the rubber meets the road for government scientists and innovators. If you invented something on the government's dime—like developing a new drug or technology at a federal lab—and you are now receiving royalty payments from licensing that invention, you have to report it publicly. This is a massive change, as it aims to track potential conflicts where a government employee might be influencing policy or funding decisions related to a technology they personally profit from (Sec. 2). Agencies must now post these reports online for public inspection. Furthermore, if you’re one of the folks who files a confidential disclosure, the agency must now publish your name and the source/amount of those royalties if they stem from a government-related invention, which is a big shift away from typical confidentiality rules.
Checking the Contractors’ Pockets
Beyond individual employees, the Act targets companies doing business with the government. Section 3 requires the Federal Acquisition Regulatory Council and the Office of Management and Budget (OMB) to update the rules for checking organizational conflicts of interest. Now, when a company applies for a federal contract or grant, the government must look at the royalties that company received in the previous calendar year as part of the conflict review process. This means if a company is pitching a technology to the government, and key decision-makers at that company are earning significant royalties from related inventions, that could flag a potential conflict. Agencies will have to report annually to Congress on how many royalty-related conflicts they found and how they mitigated them, ensuring that federal contracts are awarded fairly and without undue influence.