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

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S4988B-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

S4988B-2011 Calendars

Active List: Jun 20, 2012 , Floor Calendar: Jun 11, 2012 , Floor Calendar: Jun 12, 2012 , Floor Calendar: Jun 13, 2012 , Floor Calendar: Jun 14, 2012 , Floor Calendar: Jun 18, 2012 , Floor Calendar: Jun 19, 2012 , Floor Calendar: Jun 20, 2012

S4988B-2011 Votes

S4988B-2011 Memo

BILL NUMBER:S4988B

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 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
subdivision 20 is added.

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.

Section 3 sets forth 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 any 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 a 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 artists and not
properly compensating 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 and shall apply to all contracts or arrangements entered
into, extended or renewed after such effective date.

S4988B-2011 Text

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

                                   4988--B
      Cal. No. 1018

                         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 -- reported
    favorably from said committee, ordered to  first  report,  amended  on
    first  report,  ordered  to  a  second  report  and ordered reprinted,
    retaining its place in the order of second report

  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:


   EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                        [ ] is old law to be omitted.
                                                             LBD09750-03-2

 S. 4988--B                          2

    (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
  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, 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

 S. 4988--B                          3

  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.
    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.