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

                                  3078

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                             March 10, 2009
                               ___________

Introduced  by  Sen. VALESKY -- read twice and ordered printed, and when
  printed to be committed to the Committee on Investigations and Govern-
  ment Operations

AN ACT to amend the arts and cultural affairs law, in relation to indem-
  nity for domestic exhibitions and artifacts; and to  amend  the  state
  finance law, in relation to creating the New York state arts and arti-
  facts indemnity fund

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

  Section 1. The arts and cultural affairs law is amended  by  adding  a
new title X to read as follows:

                                 TITLE X
                         DOMESTIC INDEMNITY ACT
                               ARTICLE 62
                         DOMESTIC INDEMNITY ACT

SECTION 62.01. DEFINITIONS.
        62.02. AGREEMENTS TO INDEMNIFY AGAINST LOSS OR DAMAGE.
        62.03. ITEMS ELIGIBLE FOR INDEMNITY AGREEMENTS.
        62.04. APPLICATION FOR INDEMNITY AGREEMENTS.
        62.05. INDEMNITY LIMITS.
        62.06. PREMIUMS.
        62.07. CLAIMS FOR LOSSES.
        62.08. AUTHORIZATION OF APPROPRIATIONS.
  S  62.01.  DEFINITIONS.  NOTWITHSTANDING ANY OTHER PROVISION OF LAW TO
THE CONTRARY, FOR THE PURPOSES OF THIS ARTICLE THE FOLLOWING DEFINITIONS
SHALL APPLY:
  1. "EXHIBITOR" SHALL MEAN A MUSEUM DOMICILED IN NEW YORK  STATE  WHICH
AS  ITS  PRIMARY  MISSION DISPLAYS FOR PUBLIC VIEWING ANY ITEMS ELIGIBLE
FOR INDEMNIFICATION PURSUANT TO SECTION 62.02 OF THIS ARTICLE.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD08151-01-9
              

S. 3078                             2

  2. "ON EXHIBITION" SHALL MEAN AN ORIGINAL  OR  SUPPLEMENTAL  INDEMNITY
AGREEMENT  MADE  UNDER  THIS  TITLE  SHALL COVER ELIGIBLE ITEMS WHILE ON
EXHIBITION IN NEW YORK STATE OR ELIGIBLE ITEMS HELD BY A NEW YORK  STATE
DOMICILED  INSTITUTION  WHILE  ON EXHIBITION ELSEWHERE WITHIN A STATE OR
TERRITORY OF THE UNITED STATES, WHEN PART OF AN EXCHANGE OF EXHIBITIONS.
A  TERRORISM  INDEMNITY  AGREEMENT  SHALL  COVER ELIGIBLE ITEMS WHILE ON
EXHIBITION IN NEW YORK STATE OR ELIGIBLE ITEMS HELD BY A NEW YORK  STATE
DOMICILED  INSTITUTION  WHILE  ON EXHIBITION BOTH WITHIN NEW YORK STATE,
AND ANYWHERE OUTSIDE THE BORDERS OF THIS STATE.  FOR  PURPOSES  OF  THIS
TITLE,  THE  TERM "ON EXHIBITION" INCLUDES THAT PERIOD OF TIME BEGINNING
ON THE DATE THE ELIGIBLE ITEMS LEAVE THE PREMISES OF THE LENDER OR PLACE
DESIGNATED BY THE LENDER AND ENDING ON THE DATE SUCH ITEMS ARE  RETURNED
TO  THE  PREMISES  OF  THE LENDER OR PLACE DESIGNATED BY THE LENDER, AND
SHALL INCLUDE ALL THAT TIME DURING WHICH SUCH  ITEMS  ARE  BEING  TRANS-
PORTED.
  3.  "ORIGINAL  INDEMNITY AGREEMENT" SHALL MEAN AN AGREEMENT BETWEEN AN
EXHIBITOR AND THE STATE WHERE THE  STATE  IS  PROVIDING  SOLE  INDEMNITY
COVERAGE UNDER THIS ARTICLE.
  4.  "SUPPLEMENTAL INDEMNITY AGREEMENT" SHALL MEAN AN AGREEMENT BETWEEN
AN EXHIBITOR AND THE STATE WHERE THE STATE IS PROVIDING INDEMNITY COVER-
AGE FOR ELIGIBLE ITEMS  ON  EXHIBITION,  WHICH,  ALREADY  HAVE  APPROVED
INDEMNITY  AGREEMENTS  UNDER THE UNITED STATES ARTS AND ARTIFACTS INDEM-
NITY PROGRAM ADMINISTERED BY THE NATIONAL ENDOWMENT FOR THE ARTS.
  5. "TERRORISM INDEMNITY AGREEMENT" SHALL MEAN AN AGREEMENT BETWEEN  AN
EXHIBITOR  AND THE STATE WHERE THE STATE IS PROVIDING INDEMNITY COVERAGE
FOR ELIGIBLE ITEMS ON EXHIBITION WHEN  LOSS  OR  DAMAGE  TO  SUCH  ITEMS
RESULTS FROM AN ACT OF TERRORISM.
  S  62.02. AGREEMENTS TO INDEMNIFY AGAINST LOSS OR DAMAGE. THE NEW YORK
STATE COUNCIL ON THE ARTS ESTABLISHED BY ARTICLE THREE OF  THIS  CHAPTER
IS AUTHORIZED TO ENTER INTO AGREEMENTS TO INDEMNIFY THOSE ITEMS ELIGIBLE
UNDER SECTION 62.03 OF THIS ARTICLE AGAINST LOSS OR DAMAGE.  SUCH INDEM-
NITY AGREEMENTS SHALL:
  1. BE IN ACCORDANCE WITH THE PROVISIONS OF THIS TITLE; AND
  2.  BE  ON SUCH TERMS AND CONDITIONS AS THE COUNCIL SHALL PRESCRIBE BY
REGULATION, IN ORDER TO ACHIEVE THE PURPOSES OF THIS TITLE AND, CONSIST-
ENT WITH SUCH PURPOSES, TO PROTECT THE FINANCIAL INTERESTS OF THE STATE.
  S 62.03. ITEMS ELIGIBLE FOR INDEMNITY AGREEMENTS. WORKS OF ART; PRINT-
ED OR PUBLISHED MATERIALS;  OTHER  ARTIFACTS  OR  OBJECTS;  PHOTOGRAPHS,
MOTION  PICTURES,  OR TAPES. THE COUNCIL MAY MAKE AN INDEMNITY AGREEMENT
UNDER THIS TITLE
  1. WITH RESPECT TO:
  A. WORKS OF ART, INCLUDING TAPESTRIES, PAINTINGS, SCULPTURE, FOLK ART,
GRAPHICS, AND CRAFT ARTS;
  B. MANUSCRIPTS, RARE DOCUMENTS, BOOKS, AND OTHER PRINTED OR  PUBLISHED
MATERIALS;
  C. OTHER ARTIFACTS OR OBJECTS; OR
  D. PHOTOGRAPHS, MOTION PICTURES, OR AUDIO AND VIDEO TAPE; AND
  2. WHICH ARE:
  A. OF EDUCATIONAL, CULTURAL, HISTORICAL, OR SCIENTIFIC VALUE, AND
  B.  THE  EXHIBITION  OF  WHICH  IS CERTIFIED BY THE CHAIRPERSON OF THE
COUNCIL ON THE ARTS OR HIS OR HER  DESIGNEE  AS  BEING  IN  THE  STATE'S
INTEREST.
  S  62.04. APPLICATION FOR INDEMNITY AGREEMENTS. 1. PARTIES. ANY EXHIB-
ITOR DESIRING TO MAKE AN INDEMNITY AGREEMENT FOR  ELIGIBLE  ITEMS  UNDER
THIS  TITLE  SHALL  MAKE  APPLICATION  THEREFOR  IN ACCORDANCE WITH SUCH

S. 3078                             3

PROCEDURES, IN SUCH FORM, AND IN SUCH MANNER AS THE  COUNCIL  SHALL,  BY
REGULATION, PRESCRIBE.
  2. CONTENTS. AN APPLICATION UNDER THIS SECTION SHALL:
  A.  DESCRIBE  EACH  ITEM  TO BE COVERED BY THE AGREEMENT (INCLUDING AN
ESTIMATED VALUE OF SUCH ITEM);
  B. SHOW EVIDENCE THAT THE ITEMS ARE ELIGIBLE UNDER SUBDIVISION ONE  OF
SECTION 62.03 OF THIS ARTICLE;
  C.  SET  FORTH  POLICIES,  PROCEDURES,  TECHNIQUES,  AND  METHODS WITH
RESPECT TO PREPARATION FOR, AND CONDUCT OF, EXHIBITION OF THE ITEMS, AND
ANY TRANSPORTATION RELATED TO SUCH ITEMS; AND
  D. ANY SIGNED AND AUTHORIZED AGREEMENT FOR INDEMNITY HELD BETWEEN  THE
EXHIBITOR AND THE GOVERNMENT OF THE UNITED STATES.
  3.  APPROVAL.  UPON  RECEIPT OF AN APPLICATION UNDER THIS SECTION, THE
COUNCIL SHALL, IF SUCH APPLICATION CONFORMS  WITH  THE  REQUIREMENTS  OF
THIS TITLE, APPROVE THE APPLICATION AND MAKE AN INDEMNITY AGREEMENT WITH
THE  APPLICANT.  UPON  SUCH  APPROVAL,  THE AGREEMENT SHALL CONSTITUTE A
CONTRACT BETWEEN THE COUNCIL AND THE APPLICANT PLEDGING THE  FULL  FAITH
AND  CREDIT  OF  NEW  YORK STATE TO PAY ANY AMOUNT FOR WHICH THE COUNCIL
BECOMES LIABLE UNDER SUCH AGREEMENT. THE COUNCIL, FOR SUCH  PURPOSE,  IS
HEREBY AUTHORIZED TO PLEDGE THE FULL FAITH AND CREDIT OF NEW YORK STATE.
  S  62.05.  INDEMNITY  LIMITS.  1.  APPROVAL  OF ESTIMATED VALUES. UPON
RECEIPT OF AN APPLICATION MEETING THE REQUIREMENTS OF SECTION  62.04  OF
THIS  ARTICLE, THE COUNCIL SHALL REVIEW THE ESTIMATED VALUE OF THE ITEMS
FOR WHICH COVERAGE BY AN INDEMNITY AGREEMENT IS SOUGHT. IF  THE  COUNCIL
AGREES  WITH  SUCH  ESTIMATED VALUE, FOR THE PURPOSES OF THIS TITLE, THE
COUNCIL SHALL, AFTER APPROVAL OF THE APPLICATION IS PROVIDED IN SUBDIVI-
SION THREE OF SECTION 62.04 OF THIS ARTICLE, MAKE  AN  INDEMNITY  AGREE-
MENT.
  2. MAXIMUM LIMITS OF ORIGINAL AND SUPPLEMENTAL COVERAGE. THE AGGREGATE
OF  LOSS OR DAMAGE COVERED BY ORIGINAL AND SUPPLEMENTAL INDEMNITY AGREE-
MENTS MADE UNDER THIS  TITLE  SHALL  NOT  EXCEED  FIVE  HUNDRED  MILLION
DOLLARS AT ANY ONE TIME.
  3.  LIMIT  FOR  ORIGINAL  INDEMNITY  AGREEMENT.  NO ORIGINAL INDEMNITY
AGREEMENT FOR A SINGLE EXHIBITION SHALL COVER LOSS OR DAMAGE  IN  EXCESS
OF TEN MILLION DOLLARS, AND THE FOLLOWING DEDUCTIBLE LIMITS SHALL APPLY.
IF  THE  ESTIMATED  VALUE  OF THE ITEMS COVERED BY AN ORIGINAL INDEMNITY
AGREEMENT FOR A SINGLE EXHIBITION IS:
  A. TWO MILLION DOLLARS OR LESS, THEN COVERAGE UNDER THIS  TITLE  SHALL
EXTEND  ONLY  TO  LOSS  OR DAMAGE IN EXCESS OF THE FIRST THIRTY THOUSAND
DOLLARS OF LOSS OR DAMAGE TO ITEMS COVERED; AND
  B. MORE THAN TWO MILLION DOLLARS BUT LESS THAN OR EQUAL TO TEN MILLION
DOLLARS THEN COVERAGE UNDER THIS TITLE SHALL  EXTEND  ONLY  TO  LOSS  OR
DAMAGE  IN  EXCESS OF THE FIRST SEVENTY-FIVE THOUSAND DOLLARS OF LOSS OR
DAMAGE TO ITEMS COVERED.
  4. PERCENTAGE OF THE AGGREGATE. THE TOTAL AMOUNT  INDEMNIFIED  BY  THE
STATE  UNDER  ALL  ORIGINAL  INDEMNITY  AGREEMENTS SHALL NOT EVER EXCEED
TWENTY-FIVE PERCENT OF THE MAXIMUM LIMITS OF COVERAGE PURSUANT TO SUBDI-
VISION TWO OF THIS SECTION.
  5. LIMIT FOR SUPPLEMENTAL INDEMNITY AGREEMENT. NO SUPPLEMENTAL  INDEM-
NITY  AGREEMENT  FOR  A  SINGLE EXHIBITION SHALL COVER LOSS OR DAMAGE IN
EXCESS OF FIFTY MILLION DOLLARS, AND  THE  FOLLOWING  DEDUCTIBLE  LIMITS
SHALL APPLY.  IF THE ESTIMATED VALUE OF THE ITEMS COVERED BY AN ORIGINAL
INDEMNITY AGREEMENT FOR A SINGLE EXHIBITION IS:
  A.  TWO  MILLION DOLLARS OR LESS, THEN COVERAGE UNDER THIS TITLE SHALL
EXTEND ONLY TO LOSS OR DAMAGE IN EXCESS OF  THE  FIRST  THIRTY  THOUSAND
DOLLARS OF LOSS OR DAMAGE TO ITEMS COVERED; AND

S. 3078                             4

  B. MORE THAN TWO MILLION DOLLARS BUT LESS THAN OR EQUAL TO TEN MILLION
DOLLARS  THEN  COVERAGE  UNDER  THIS  TITLE SHALL EXTEND ONLY TO LOSS OR
DAMAGE IN EXCESS OF THE FIRST SEVENTY-FIVE THOUSAND DOLLARS OF  LOSS  OR
DAMAGE TO ITEMS COVERED; AND
  C.  MORE  THAN  TEN  MILLION  DOLLARS BUT LESS THAN OR EQUAL TO TWENTY
MILLION DOLLARS THEN COVERAGE UNDER THIS TITLE SHALL EXTEND ONLY TO LOSS
OR DAMAGE IN EXCESS OF THE FIRST ONE HUNDRED FIFTY THOUSAND  DOLLARS  OF
LOSS OR DAMAGE TO ITEMS COVERED; AND
  D.  MORE  THAN TWENTY MILLION DOLLARS BUT LESS THAN OR EQUAL TO THIRTY
MILLION DOLLARS THEN COVERAGE UNDER THIS TITLE SHALL EXTEND ONLY TO LOSS
OR DAMAGE IN EXCESS OF THE FIRST THREE HUNDRED THOUSAND DOLLARS OF  LOSS
OR DAMAGE TO ITEMS COVERED; AND
  E.  MORE  THAN  THIRTY MILLION DOLLARS BUT LESS THAN OR EQUAL TO FORTY
MILLION DOLLARS THEN COVERAGE UNDER THIS TITLE SHALL EXTEND ONLY TO LOSS
OR DAMAGE IN EXCESS OF THE FIRST FIVE HUNDRED THOUSAND DOLLARS  OF  LOSS
OR DAMAGE TO ITEMS COVERED; AND
  F.  MORE  THAN FORTY   MILLION DOLLARS BUT LESS THAN OR EQUAL TO FIFTY
MILLION DOLLARS THEN COVERAGE UNDER THIS TITLE SHALL EXTEND ONLY TO LOSS
OR DAMAGE IN EXCESS OF THE FIRST SEVEN HUNDRED FIFTY THOUSAND DOLLARS OF
LOSS OR DAMAGE TO ITEMS COVERED.
  6. LIMITS ON STATE PAYMENTS. NO PAYMENTS FOR ANY CLAIM  MADE  PURSUANT
TO  A  SUPPLEMENTAL  INDEMNITY  AGREEMENT  SHALL  BE GRANTED UNTIL AFTER
APPLICABLE CLAIMS HAVE BEEN PAID UNDER THE FEDERAL  INDEMNITY  AGREEMENT
HELD BETWEEN THE EXHIBITOR AND THE GOVERNMENT OF THE UNITED STATES.
  7.  MAXIMUM LIMITS OF COVERAGE FOR TERRORISM INDEMNITY AGREEMENTS. THE
AGGREGATE OF LOSS OR DAMAGE COVERED BY  TERRORISM  INDEMNITY  AGREEMENTS
MADE  UNDER  THIS  TITLE SHALL NOT EXCEED ONE HUNDRED MILLION DOLLARS AT
ANY ONE TIME.
  8. LIMIT FOR TERRORISM INDEMNITY  AGREEMENT.  NO  TERRORISM  INDEMNITY
AGREEMENT  FOR  A SINGLE EXHIBITION SHALL COVER LOSS OR DAMAGE IN EXCESS
OF TEN MILLION DOLLARS, AND THE FOLLOWING DEDUCTIBLE LIMITS SHALL APPLY.
IF THE ESTIMATED VALUE OF THE ITEMS COVERED  BY  AN  ORIGINAL  INDEMNITY
AGREEMENT FOR A SINGLE EXHIBITION IS:
  A.  TWO  MILLION DOLLARS OR LESS, THEN COVERAGE UNDER THIS TITLE SHALL
EXTEND ONLY TO LOSS OR DAMAGE IN EXCESS OF  THE  FIRST  THIRTY  THOUSAND
DOLLARS OF LOSS OR DAMAGE TO ITEMS COVERED; AND
  B. MORE THAN TWO MILLION DOLLARS BUT LESS THAN OR EQUAL TO TEN MILLION
DOLLARS  THEN  COVERAGE  UNDER  THIS  TITLE SHALL EXTEND ONLY TO LOSS OR
DAMAGE IN EXCESS OF THE FIRST SEVENTY-FIVE THOUSAND DOLLARS OF  LOSS  OR
DAMAGE TO ITEMS COVERED.
  S 62.06. PREMIUMS. APPLICANTS APPROVED FOR COVERAGE SHALL REMIT PREMI-
UMS  TO  THE  COUNCIL,  WHICH SHALL DEPOSIT THEM INTO THE NEW YORK STATE
ARTS AND ARTIFACTS INDEMNITY FUND CREATED BY SECTION NINETY-SIX-A OF THE
STATE FINANCE LAW. THE PREMIUMS COLLECTED SHALL BE EQUAL TO ONE-HALF  OF
ONE  PERCENT  OF  THE  TOTAL  COVERAGE  SOUGHT,  OR TWENTY-FIVE THOUSAND
DOLLARS, WHICHEVER IS LESS.
  S 62.07. CLAIMS FOR LOSSES. 1. REGULATIONS FOR PROMPT ADJUSTMENT.  THE
COUNCIL  SHALL  PRESCRIBE REGULATIONS PROVIDING FOR PROMPT ADJUSTMENT OF
VALID CLAIMS FOR LOSSES WHICH ARE COVERED BY AN AGREEMENT MADE  PURSUANT
TO SECTION 62.05 OF THIS ARTICLE, INCLUDING PROVISION FOR ARBITRATION OF
ISSUES RELATING TO THE DOLLAR VALUE OF DAMAGES INVOLVING LESS THAN TOTAL
LOSS OR DESTRUCTION OF SUCH COVERED OBJECTS.
  2.  CERTIFICATION.  IN  THE CASE OF A CLAIM OF LOSS WITH RESPECT TO AN
ITEM WHICH IS COVERED BY AN AGREEMENT MADE PURSUANT TO SECTION 62.05  OF
THIS  ARTICLE,  THE  COUNCIL SHALL CERTIFY THE VALIDITY OF THE CLAIM AND

S. 3078                             5

THE AMOUNT OF THE LOSS TO THE SPEAKER OF THE ASSEMBLY AND  THE  MAJORITY
LEADER OF THE SENATE.
  S  62.08. AUTHORIZATION OF APPROPRIATIONS. THERE ARE HEREBY AUTHORIZED
TO BE APPROPRIATED SUCH SUMS AS MAY BE NECESSARY:
  1. TO ENABLE THE COUNCIL TO CARRY OUT ITS FUNCTIONS UNDER THIS  TITLE,
AND
  2.  TO  PAY  CLAIMS  CERTIFIED  PURSUANT TO SUBDIVISION TWO OF SECTION
62.07 OF THIS ARTICLE.
  S 2. The state finance law is amended by adding a new section 96-a  to
read as follows:
  S 96-A. NEW YORK STATE ARTS AND ARTIFACTS INDEMNITY FUND. 1.  THERE IS
HEREBY  CREATED  IN THE JOINT CUSTODY OF THE COMPTROLLER AND THE COMMIS-
SIONER OF TAXATION AND FINANCE A FUND TO BE KNOWN AS THE "NEW YORK STATE
ARTS AND ARTIFACTS INDEMNITY FUND".
  2. THE MONIES OF THE FUND SHALL CONSIST OF ALL PREMIUMS  COLLECTED  BY
THE  COUNCIL  ON  THE  ARTS  PURSUANT  TO  SECTION 62.06 OF THE ARTS AND
CULTURAL AFFAIRS LAW, PLUS ANY MONEYS APPROPRIATED TO THE FUND FROM  THE
LEGISLATURE  FOR  WHATEVER  PURPOSE. NOTHING SHALL PREVENT ANY PERSON OR
ENTITY FROM GIFTING OR BEQUEATHING ANY MONEY OR PROPERTY TO THE FUND.
  3. TWENTY-FIVE PERCENT OF THE TOTAL FUND BALANCE AT THE  END  OF  EACH
FISCAL YEAR MAY BE USED BY THE COUNCIL FOR THE PURPOSES OF MARKETING AND
PROMOTING  ANY EXHIBITION INDEMNIFIED BY THE COUNCIL PURSUANT TO TITLE X
OF THE ARTS AND CULTURAL AFFAIRS LAW. NOTHING SHALL PREVENT THE  COUNCIL
FROM GRANTING THE AVAILABLE FUNDS FOR PROMOTION TO INDEMNIFIED ORGANIZA-
TIONS,  OR  TO ANY OTHER ENTITY DEEMED APPROPRIATE TO MARKET THE EXHIBI-
TIONS OF THE INDEMNIFIED ITEMS.
  4. MONEYS SHALL BE PAID OUT OF THE FUND ON THE AUDIT  AND  WARRANT  OF
THE  STATE  COMPTROLLER ON VOUCHERS CERTIFIED OR APPROVED BY THE COMMIS-
SIONER OF TAXATION AND FINANCE OR HIS OR  HER  DESIGNEE  IN  THE  MANNER
PRESCRIBED BY LAW.
  S  3. This act shall take effect on the first of April next succeeding
the date on which it shall have become a law.