senate Bill S4988

Amended

Relates to consignments of works of art to art merchants by artists and their successors in interest

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 02 / May / 2011
    • REFERRED TO CULTURAL AFFAIRS, TOURISM, PARKS AND RECREATION
  • 06 / Jun / 2011
    • 1ST REPORT CAL.1008
  • 07 / Jun / 2011
    • 2ND REPORT CAL.
  • 13 / Jun / 2011
    • ADVANCED TO THIRD READING
  • 24 / Jun / 2011
    • COMMITTED TO RULES
  • 04 / Jan / 2012
    • REFERRED TO CULTURAL AFFAIRS, TOURISM, PARKS AND RECREATION
  • 25 / May / 2012
    • AMEND (T) AND RECOMMIT TO CULTURAL AFFAIRS, TOURISM, PARKS AND RECREATION
  • 25 / May / 2012
    • PRINT NUMBER 4988A
  • 05 / Jun / 2012
    • 1ST REPORT CAL.1018
  • 06 / Jun / 2012
    • AMENDED 4988B
  • 06 / Jun / 2012
    • 2ND REPORT CAL.
  • 11 / Jun / 2012
    • ADVANCED TO THIRD READING
  • 20 / Jun / 2012
    • SUBSTITUTED BY A8604B

Summary

Relates to consignments of works of art to art merchants by artists and their successors in interest.

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Bill Details

Versions:
S4988
S4988A
S4988B
Legislative Cycle:
2011-2012
Law Section:
Arts and Cultural Affairs Law
Laws Affected:
Amd ยงยง11.01 & 12.01, Arts & Cul L

Sponsor Memo

BILL NUMBER:S4988

TITLE OF BILL:
An act
to amend the arts and cultural affairs law, in relation to consignments
of works of art to art merchants by artists, their heirs and personal
representatives

PURPOSE:
To provide increase protections for a consignor or his or her heirs
when their works of art are under the fiduciary care of a consignee
or art merchant and to mandate that such works of art shall never
become property of the consignee, particularly when a consignee is
paying a creditor's claim.

SUMMARY OF PROVISIONS:
Section 1. Amends section 11.01 of the arts and cultural affairs law,
as amended by chapter 849 of the laws of 1984, subdivisions 11 and 20
as amended, subdivision 18 as added subdivision 19 and 21 as
renumbered by chapter 940 of the laws of 1990 to add and modify
several definitions.

Section 2. Amends section 12.01 of the arts and cultural affairs law,
as added by chapter 849 of the laws of 1984 and paragraph (c) of
subdivision 1 as added by chapter 675 of the laws of 1995 to clarify
artist-art merchant relationships to provide increased protections
for a consignor's trust property under the fiduciary care of a
consignee, including cases of bankruptcy and provides for the
consignor's ability to recover damages.

Section 3. Contains the effective date.

JUSTIFICATION:
The current law governing artist-art merchant relationships does not
go far enough to protect the artist and his or her heirs from having
the works of art they consign to art merchants taken from them
without financial compensation when the galleries of such merchants
are mismanaged and or when the art merchant decides to use the funds
gained from the sale of a work of art for reasons other than to
compensate the artist. For instance, in past bankruptcy proceedings,
some art merchants, as the consignees of the works of art, have used
the proceeds from the sales of
such works to payoff claims of creditors, violating their fiduciary
duties to protect the consignor's work and to compensate him or her
when the work is sold.

Galleries receive compensation from an artist in the form of a fixed
fee or percentage of the work of art when such work is sold. This
legislation would ensure that the law is clear in prohibiting
galleries from unrightfully taking works of art from artist and not
properly compensating them.

LEGISLATIVE HISTORY:
New Bill.

FISCAL IMPLICATIONS:
None.

LOCAL FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
This act shall take effect on the thirtieth day after it shall have
become law.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  4988

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                               May 2, 2011
                               ___________

Introduced  by  Sen.  LITTLE -- read twice and ordered printed, and when
  printed to be committed to the Committee on Cultural Affairs, Tourism,
  Parks and Recreation

AN ACT to amend the arts  and  cultural  affairs  law,  in  relation  to
  consignments  of works of art to art merchants by artists, their heirs
  and personal representatives

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  Section  11.01  of  the arts and cultural affairs law, as
added by chapter 849 of the laws of 1984,  subdivisions  11  and  20  as
amended,  subdivision  18  as added and subdivisions 19 and 21 as renum-
bered by chapter 940 of the laws of 1990, is amended to read as follows:
  S 11.01. Definitions. As used in this title:
  1. "Artist" means the creator of a work of fine art or, in the case of
multiples, the person who  conceived  or  created  the  image  which  is
contained  in  or which constitutes the master from which the individual
print was made.
  2. "Art merchant" means a person who is in the  business  of  dealing,
exclusively  or non-exclusively, in works of fine art or multiples, or a
person who by his occupation holds himself  OR  HERSELF  out  as  having
knowledge  or skill peculiar to such works, or to whom such knowledge or
skill may be attributed by his OR HER employment of an  agent  or  other
intermediary  who  by his OR HER occupation holds himself OR HERSELF out
as having such knowledge or skill.  The term "art merchant" includes  an
auctioneer  who  sells  such  works at public auction, and except in the
case of multiples, includes persons, not otherwise defined or treated as
art merchants herein, who are consignors or principals of auctioneers.
  3. "Author" or "authorship" refers to the creator of a  work  of  fine
art or multiple or to the period, culture, source or origin, as the case
may  be,  with  which  the  creation  of  such work is identified in the
description of the work.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09750-01-1

S. 4988                             2

  4. "Creditors" means "creditor" as defined in  subdivision  twelve  of
section 1-201 of the uniform [commerical] COMMERCIAL code.
  5. "Counterfeit" means a work of fine art or multiple made, altered or
copied,  with  or  without  intent  to  deceive,  in such manner that it
appears or is claimed to have an authorship which it does  not  in  fact
possess.
  6.  "Certificate  of authenticity" means a written statement by an art
merchant confirming, approving or attesting to the authorship of a  work
of fine art or multiple, which is capable of being used to the advantage
or disadvantage of some person.
  7. "Conservation" means acts taken to correct deterioration and alter-
ation and acts taken to prevent, stop or retard deterioration.
  8.  "Craft"  means  a  functional  or non-functional work individually
designed, and crafted by hand, in any medium including but  not  limited
to  textile,  tile,  paper,  clay, glass, fiber, wood, metal or plastic;
provided, however, that  if  produced  in  multiples,  craft  shall  not
include works mass produced or produced in other than a limited edition.
  9. "Fine art" means a painting, sculpture, drawing, or work of graphic
art, and print, but not multiples.
  10.  "HEIR" SHALL HAVE THE MEANING PROVIDED IN THE ESTATES, POWERS AND
TRUSTS LAW.
  11. "Limited edition" means works of art produced from a  master,  all
of which are the same image and bear numbers or other markings to denote
the  limited production thereof to a stated maximum number of multiples,
or are otherwise held out as limited to a maximum number of multiples.
  [11.] 12. "Master" when used alone is used in lieu of  and  means  the
same as such things as printing plate, stone, block, screen, photograph-
ic  negative  or  other  like  material  which contains an image used to
produce visual art objects in multiples, or in the case of sculptures, a
mold, model, cast, form or other prototype, other than from glass, which
additional multiples of sculpture are produced, fabricated or carved.
  [12.] 13. "On consignment" means that no title to, estate in, or right
to possession of, the work of fine art or multiple that is  superior  to
that  of  the  consignor  vests  in  the  consignee, notwithstanding the
consignee's power or authority to transfer  or  convey  all  the  right,
title  and  interest  of  the consignor, in and to such work, to a third
person.
  [13.] 14. "Person"  means  an  individual,  partnership,  corporation,
association or other group, however organized.
  15.  "PERSONAL  REPRESENTATIVE" SHALL HAVE THE MEANING PROVIDED IN THE
ESTATES, POWERS AND TRUSTS LAW.
  [14.] 16. "Print" in addition to meaning a multiple produced  by,  but
not  limited  to,  such  processes  as  engraving, etching, woodcutting,
lithography and serigraphy, also means multiples produced  or  developed
from photographic negatives, or any combination thereof.
  [15.]  17.  "Proofs"  means multiples which are the same as, and which
are produced from the same  masters  as,  the  multiples  in  a  limited
edition, but which, whether so designated or not, are set aside from and
are in addition to the limited edition to which they relate.
  [16.]  18.  "Reproduction"  means  a copy, in any medium, of a work of
fine art, that is  displayed  or  published  under  circumstances  that,
reasonably  construed, evinces an intent that it be taken as a represen-
tation of a work of fine art as created by the artist.
  [17.] 19. "Reproduction right" means a  right  to  reproduce,  prepare
derivative  works of, distribute copies of, publicly perform or publicly
display a work of fine art.

S. 4988                             3

  [18.] 20.  "Sculpture"  means  a  three-dimensional  fine  art  object
produced,  fabricated  or  carved  in multiple from a mold, model, cast,
form or other prototype, other than from glass, sold, offered  for  sale
or  consigned  in,  into  or  from this state for an amount in excess of
fifteen hundred dollars.
  [19.] 21. "Signed" means autographed by the artist's own hand, and not
by  mechanical  means  of reproduction, after the multiple was produced,
whether or not the master was signed or unsigned.
  [20.] 22. "Visual art multiples" or "multiples" means  prints,  photo-
graphs, positive or negative, sculpture and similar art objects produced
in  more  than one copy and sold, offered for sale or consigned in, into
or from this state for an amount in excess of one hundred dollars exclu-
sive of any frame or in the case of sculpture, an amount  in  excess  of
fifteen  hundred dollars. Pages or sheets taken from books and magazines
and offered for sale or sold as visual art objects  shall  be  included,
but books and magazines are excluded.
  [21.]  23.  "Written instrument" means a written or printed agreement,
bill of sale, invoice, certificate of  authenticity,  catalogue  or  any
other written or printed note or memorandum or label describing the work
of  fine  art or multiple which is to be sold, exchanged or consigned by
an art merchant.
  S 2. Section 12.01 of the arts and cultural affairs law, as  added  by
chapter  849  of  the laws of 1984 and paragraph (c) of subdivision 1 as
added by chapter 675 of the laws of 1995, is amended to read as follows:
  S 12.01. Artist-art merchant  relationships.  1.  Notwithstanding  any
custom,  practice  or  usage  of the trade, any provision of the uniform
commercial code or any other law, statute, requirement or rule,  or  any
agreement, note, memorandum or writing to the contrary:
  (a) Whenever an artist or craftsperson, [his] OR THE heirs or personal
representatives OF SUCH ARTIST OR CRAFTSPERSON, delivers or causes to be
delivered a work of fine art, craft or a print of [his] SUCH ARTIST'S OR
CRAFTSPERSON'S  own creation to an art merchant for the purpose of exhi-
bition and/or sale on a commission, fee or other basis of  compensation,
the delivery to and acceptance thereof by the art merchant establishes a
consignor/consignee relationship as between such artist or craftsperson,
OR THE HEIRS OR PERSONAL REPRESENTATIVES OF SUCH ARTIST OR CRAFTSPERSON,
and such art merchant with respect to the said work, and:
  (i)  such consignee shall thereafter be deemed to be the agent of such
consignor with respect to the said work;
  (ii) such work is trust property in the hands of the consignee for the
benefit of the consignor;
  (iii) any proceeds from the sale of such work are trust funds  in  the
hands of the consignee for the benefit of the consignor;
  (iv)  such  work  shall  remain  trust  property  notwithstanding  its
purchase by the consignee for his own account until the price is paid in
full to the consignor; provided that, if such work is resold to  a  bona
fide  third party before the consignor has been paid in full, the resale
proceeds are trust funds in the hands of the consignee for  the  benefit
of the consignor to the extent necessary to pay any balance still due to
the  consignor  and  such trusteeship shall continue until the fiduciary
obligation  of  the  consignee  with  respect  to  such  transaction  is
discharged in full; and
  (v)  SUCH  TRUST PROPERTY AND TRUST FUNDS SHALL BE CONSIDERED PROPERTY
HELD IN STATUTORY TRUST AS DEFINED AND CONTEMPLATED BY 11 U.S.C. SECTION
541 AND OTHER RELEVANT BANKRUPTCY LAW, AND no  such  trust  property  or
trust  funds shall BECOME THE PROPERTY OF THE CONSIGNEE OR be subject or

S. 4988                             4

subordinate to any claims, liens or security interest  of  any  kind  or
nature whatsoever OF THE CONSIGNEE'S CREDITORS.
  (b) Waiver of any provision of this section is absolutely void [except
that  a  consignor  may lawfully waive the provisions of clause (iii) of
paragraph (a) of this subdivision, if such waiver is clear, conspicuous,
in writing and subscribed by the consignor, provided:
  (i) no such waiver shall be valid with respect to the first two  thou-
sand  five  hundred  dollars  of gross proceeds of sales received in any
twelve-month period commencing with the date of the  execution  of  such
waiver;
  (ii)  no  such waiver shall be valid with respect to the proceeds of a
work initially received on consignment but subsequently purchased by the
consignee directly or indirectly for his own account; and
  (iii) no such waiver shall inure to the  benefit  of  the  consignee's
creditors in any manner which might be inconsistent with the consignor's
rights under this subdivision].
  (c)  [proceeds]  PROCEEDS  from the sale of consigned works covered by
this section shall be deemed to be revenue from  the  sale  of  tangible
goods and not revenue from the provision of services to the consignor or
others,  except that the provisions of this paragraph shall not apply to
proceeds from the sale of consigned works sold at public auction.
  2.  IF A CONSIGNEE FAILS TO TREAT THE TRUST PROPERTY  OR  TRUST  FUNDS
IDENTIFIED  IN  PARAGRAPH  (A)  OF  SUBDIVISION  ONE  OF THIS SECTION IN
ACCORDANCE WITH THE REQUIREMENTS OF FIDUCIARIES IN SECTION 11-1.6 OF THE
ESTATES,  POWERS  AND  TRUSTS  LAW,  SUCH  FAILURE  SHALL  CONSTITUTE  A
VIOLATION  OF  THIS ARTICLE AND OF SECTION 11-1.6 OF THE ESTATES, POWERS
AND TRUSTS LAW AND SHALL BE SUBJECT TO THE PENALTIES PROVIDED THEREIN.
  3. ANY PERSON WHO HAS BEEN INJURED BY REASON OF A  VIOLATION  OF  THIS
ARTICLE MAY BRING AN ACTION IN HIS OR HER OWN NAME TO ENJOIN SUCH UNLAW-
FUL  ACT,  TO  RECOVER HIS OR HER ACTUAL DAMAGES, OR BOTH. THE COURT MAY
AWARD REASONABLE ATTORNEYS' FEES, COSTS AND  EXPENSES  TO  A  PREVAILING
PLAINTIFF  IN  ANY  SUCH  ACTION. UPON A CONSIGNOR'S ESTABLISHING IN ANY
SUCH ACTION A PRIMA FACIE CASE THAT THE CONSIGNOR DELIVERED OR CAUSED TO
BE DELIVERED SUCH WORK OF FINE ART, CRAFT OR PRINT  TO  A  CONSIGNEE  AS
DESCRIBED IN PARAGRAPH (A) OF SUBDIVISION ONE OF THIS SECTION AND MADE A
DEMAND FOR RETURN OF THE WORK OR SALE PROCEEDS, THE CONSIGNEE SHALL HAVE
THE  BURDEN  OF PROVING ITS DEFENSES TO THE CONSIGNOR'S CLAIMED RIGHT TO
RETURN OF SUCH WORK OR SALE PROCEEDS THEREFROM.
  4. Nothing in this section shall be construed to have any effect  upon
any  written  or  oral  contract  or  arrangement  in existence prior to
September first, nineteen hundred sixty-nine or  to  any  extensions  or
renewals  thereof  except  by  the mutual written consent of the parties
thereto.
  S 3. This act shall take effect on the thirtieth day  after  it  shall
have become a law.

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