senate Bill S4988A

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:S4988A

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 and their
successors in interest

PURPOSE OR GENERAL IDEA OF BILL:
To provide increased 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
the property of the consignee, particularly when a consignee is paving a
creditor's claim.

SUMMARY OF SPECIFIC PROVISIONS:
Section 1- Amends section 11.01 of the arts and cultural affairs law,
subdivision 21 as renumbered by chapter 940 of the laws of 1990, are
renumbered subdivisions 21 and 22 and a new subdivision 20 is added to
define "successor in interest"

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 subdivi-
sion 1 as added by chapter 575 of the laws of 1995 to clarifies 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- Sets forth 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 arc they consign to art merchants taken from them without any
financial compensation when the galleries of such merchants are misman-
aged and or when the art merchant decides to use the funds gain 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, a percentage of the work of art when such work is sold. This legis-
lation would ensure that the law is clear in prohibiting galleries from
unrightfully taking works of art from artists and not properly compen-
sating them.

LEGISLATIVE HISTORY:
New Bill.

FISCAL IMPLICATIONS:
None to the State.

EFFECTIVE DATE:
This act shall take effect on the sixtieth day after it shall have
become law an,d shall apply to all contracts or arrangements entered
into, extended or renewed after such effective date.

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

                                 4988--A

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                               May 2, 2011
                               ___________

Introduced by Sens. LITTLE, LANZA -- read twice and ordered printed, and
  when  printed  to  be  committed to the Committee on Cultural Affairs,
  Tourism, Parks and Recreation  --  recommitted  to  the  Committee  on
  Cultural  Affairs,  Tourism,  Parks  and Recreation in accordance with
  Senate Rule 6, sec. 8 -- committee discharged, bill  amended,  ordered
  reprinted as amended and recommitted to said committee

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

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

  Section 1. Subdivisions 20 and 21 of section 11.01  of  the  arts  and
cultural affairs law, subdivision 21 as renumbered by chapter 940 of the
laws  of  1990, are renumbered subdivisions 21 and 22 and a new subdivi-
sion 20 is added to read as follows:
  20. "SUCCESSOR IN INTEREST" SHALL MEAN  A  "PERSONAL  REPRESENTATIVE",
"TESTAMENTARY BENEFICIARY", TRUSTEE OR BENEFICIARY OF A "LIFETIME TRUST"
OR AN "HEIR" (INCLUDING HEIRS WHO ACQUIRE THE WORK OF FINE ART, CRAFT OR
PRINT  FROM THE ARTIST OR CRAFTSPERSON OR FROM ANOTHER HEIR OR BENEFICI-
ARY OF THE ARTIST OR CRAFTSPERSON), WHICH  TERMS  SHALL  HAVE  THE  SAME
MEANINGS AS SET FORTH IN THE ESTATES, POWERS AND TRUSTS LAW.
  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 heirs or personal  repre-
sentatives]  OR  A SUCCESSOR IN INTEREST OF SUCH ARTIST OR CRAFTSPERSON,
delivers or causes to be delivered a work of fine art, craft or a  print

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09750-02-2

S. 4988--A                          2

of [his] SUCH ARTIST'S OR CRAFTSPERSON'S own creation to an art merchant
for  the purpose of exhibition 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 SUCCESSOR IN INTEREST 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
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, IN WORDS WHICH CLEARLY AND SPECIFICALLY APPRISE THE CONSIG-
NOR THAT THE CONSIGNOR IS WAIVING RIGHTS UNDER THIS SECTION WITH RESPECT
TO PROCEEDS FROM THE SALE OF THE CONSIGNOR'S WORK, 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.

S. 4988--A                          3

  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.
  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 sixtieth day after it shall
have become a law and shall  apply  to  all  contracts  or  arrangements
entered into, extended or renewed after such effective date.

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