S4988A-2011 Actions

• Jun 20, 2012: SUBSTITUTED BY A8604B
• Jun 11, 2012: ADVANCED TO THIRD READING
• Jun 6, 2012: 2ND REPORT CAL.
• Jun 6, 2012: AMENDED 4988B
• Jun 6, 2012: AMENDED 4988A
• Jun 5, 2012: 1ST REPORT CAL.1018
• May 25, 2012: PRINT NUMBER 4988A
• May 25, 2012: AMEND (T) AND RECOMMIT TO CULTURAL AFFAIRS, TOURISM, PARKS AND RECREATION
• Jan 4, 2012: REFERRED TO CULTURAL AFFAIRS, TOURISM, PARKS AND RECREATION
• Jun 24, 2011: COMMITTED TO RULES
• Jun 13, 2011: ADVANCED TO THIRD READING
• Jun 7, 2011: 2ND REPORT CAL.
• Jun 6, 2011: 1ST REPORT CAL.1008
• May 2, 2011: REFERRED TO CULTURAL AFFAIRS, TOURISM, PARKS AND RECREATION

S4988A-2011 Meetings

S4988A-2011 Calendars

S4988A-2011 Votes

S4988A-2011 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.

S4988A-2011 Text

 S T A T E   O F   N E W   Y O R K
 
 4988--A
 2011-2012 Regular Sessions
 I N  SENATE
 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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