[Federal Register Volume 59, Number 66 (Wednesday, April 6, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-8238]
[[Page Unknown]]
[Federal Register: April 6, 1994]
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NATIONAL FOUNDATION ON THE ARTS AND THE HUMANITIES
45 CFR Part 1160
RIN 3154 - AAoo
Indemnities Under the Arts and Artifacts Indemnity Act
AGENCY: Federal Council on the Arts and the Humanities, National
Foundation on the Arts and the Humanities.
ACTION: Advance notice of proposed rulemaking.
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SUMMARY: This Advance Notice of Proposed Rulemaking advises the public
that the Federal Council on the Arts and the Humanities is considering
an amendment to the regulations implementing the Arts and Artifacts
Indemnity Act, as amended (the ``Act''). The proposed amendment would
permit the indemnification of eligible items from the United States
while on exhibition in this country in connection with an exhibition of
eligible items from outside of the United States. The proposed
amendment is not intended to bring about a major shift in emphasis of
the current policy or practice of the indemnity program. Specifically,
exhibitions consisting solely of domestic items would continue to be
ineligible for indemnification.
This notice invites comments that will assist the Federal Council
in more fully understanding the issues involved in such a change. The
Federal Council particularly invites comments from groups, individuals,
and other governmental agencies involved in the international
exhibition process, including museums, private insurers, and
professional and scholarly organizations. The revised rules will be
published in the Federal Register and will be included in guideline
packages for prospective applicants and in Certificates of Indemnity.
The Catalogue of Federal Domestic Assistance number for the Arts and
Artifacts Indemnity Program is 45-201.
DATES: Comments should be received by May 16, 1994.
ADDRESSES: Interested persons should submit ten copies of their written
comments to the Federal Council on the Arts and the Humanities, c/o
Alice M. Whelihan, Indemnity Administrator, National Endowment for the
Arts, 1100 Pennsylvania Avenue, NW., Washington, DC 20506.
FOR FURTHER INFORMATION CONTACT: Alice M. Whelihan, (202) 682-5442.
SUPPLEMENTARY INFORMATION:
I. Background
A. Statutory Background
In 1975, the United States Congress enacted the Arts and Artifacts
Indemnity Act which established an indemnity program administered by
the Federal Council on the Arts and the Humanities (the ``Federal
Council''). 20 U.S.C. section 273(c). The Federal Council is composed
of the heads of nineteen federal agencies and was established by
Congress, among other things, to coordinate the policies and operations
of the National Endowment for the Arts, the National Endowment for the
Humanities, and the Institute of Museum Services, including the joint
support of activities. 20 U.S.C. 972(a).
Under the indemnification program, the United States Government
guarantees to pay loss or damage claims, subject to certain
limitations, arising out of exhibitions containing items determined by
the Federal Council to be of educational, cultural, historical or
scientific value the exhibition of which must be certified by the
Director of the United States Information Agency as being in the
national interest. In order to be eligible for indemnification, the
objects must be on exhibition in the United States, or if outside this
country preferably as part of an exchange of exhibitions.
B. Regulatory Background
The Federal Council is the agency charged by Congress with the
responsibility to administer the Arts and Artifacts Indemnity Act. In
practice, the Indemnity Program is administered for the Federal Council
by the Museum Program of the National Endowment for the Arts under the
``Indemnities Under the Arts and Artifacts Indemnity Act'' regulations
(the ``Regulations''), which are set forth at 45 CFR part 1160.
These Regulations have been promulgated, and amended from time to
time, by the Federal Council pursuant to the express and implied
rulemaking authorities granted by Congress to make and amend rules
needed for the effective administration of the indemnity program. Among
other things, Congress expressly granted the Federal Council the
authorities to establish the terms and conditions of indemnity
agreements; to set application procedures; and to establish claim
adjustment procedures. 20 U.S.C. sections 971(a)(2), 973(a), 975(a).
For a number of years, the Federal Council has considered the
desirability of amending the Regulations to permit the indemnification
of U.S.-owned loans on exhibition in the United States in connection
with certified international exhibitions. As currently drafted, the
Regulations do not cover domestic objects on loan to an international
exhibition in the United States. The Regulations provide, in pertinent
part:
An indemnity agreement made under these regulations shall cover:
(1) Eligible items from outside the United States while on
exhibition in the United States or
(2) Eligible items from the United States while on exhibition
outside this country, preferably when they are part of an exchange
of exhibitions. 45 CFR section 1160.1
On February 25, 1993, during a lengthy discussion of the
application of the National Gallery of Art for the indemnification of
the exhibition ``Great French Paintings from the Barnes Foundation:
Impressionist, Post-Impressionist and Early Modern,'' the Federal
Council extensively considered the question of whether the eligibility
criteria set forth in the Regulations were more narrowly drawn than
required under the Act. On a preliminary basis, the Federal Council
concluded that they were. While the Council approved the
indemnification of the Barnes exhibition, a Certificate of Indemnity
ultimately did not issue because of legal uncertainities related to the
Council's action under its current Regulations. To clarify eligibility
issues for future actions, the Federal Council also voted to ``move
with dispatch to amend its regulations.''
On June 16, 1993, the Federal Council reaffirmed its vote of
February 25, 1993 to amend the Regulations to permit the coverage of
domestic items in connection with international exhibitions in the
United States. Specifically, the Federal Council approved a motion to
promulgate regulations revising 45 CFR part 1160.1 (``Purpose and
Scope'') by adding the following language immediately following section
1160.1(a)(2):
(3) eligible items from the United States while on exhibition in
the United States if the exhibition includes other eligible items
from outside the United States.
II. Statement of Views of the Federal Council
Since 1975, the Federal Council has approved indemnification for
more than 500 exhibitions which have been viewed by millions of
Americans in towns, cities and college campuses across the nation.
Indemnification has facilitated both major international exhibitions
and shows of more limited scale. More than 175 American museums have
participated in the program, saving the organizers of the exhibitions
nearly $70 million in commercial premiums. To date, the costs to the
Federal government have been limited to the administrative costs of the
program and the payment of two loss or damage claims totalling
$104,700.
The Federal Council believes that the proposed amendment to the
Regulations will significantly enhance its ability to provide the
American public with the benefits of a high quality program of
international exhibitions while not significantly increasing the
exposure of the Federal government to pay loss or damage claims nor
significantly adding to the administrative burdens or costs of the
program.
The Federal Council believes that widening the eligibility criteria
under the Indemnity Program to include coverage of U.S.-owned objects
in exhibitions that also include foreign-owned loans would provide an
important benefit to U.S. cultural institutions and to the American
public. Under the current guidelines, U.S.-owned loans may be
indemnified only when exhibited abroad. The Federal Council believes
that if an exhibition of eligible items from abroad meets the criteria
of having educational, cultural, historical or scientific value, and is
certified by the Director of the United States Information Agency as
being in the national interest, the U.S.-owned loans to the exhibition
also should be eligible for indemnification.
The Federal Council wishes to stress that the proposed amendment is
not intended to bring about a major shift in the emphasis of the
current policy or practice of the indemnity program. Under the proposed
amended regulations, indemnity coverage would continue to be available
primarily for the exhibition of items coming from outside the United
States. It is anticipated that any U.S. loans to such international
exhibitions would be a small but important component of the exhibition.
Exhibitions consisting solely of domestic items would continue to be
ineligible for indemnification. The Director of the United States
Information Agency would continue to certify that the exhibition of
items otherwise determined by the Council to be eligible for
indemnification is in the national interest.
The Federal Council believes that the proposed modification would
not significantly increase the exposure of the Federal government to
claims for loss or damage while providing important additional relief
for U.S. borrowing institutions. This is because coverage during
international transit, the time of greatest risk, would not be required
for loans from U.S. lending institutions. Nor does the Federal Council
anticipate a significant increase in either the number of applications
to the program or the administrative burdens associated with applying
or reviewing indemnification applications. Under current practice,
applicants already are required to include information on domestic
loans in their applications, and indemnity panels consider the
educational, cultural, historical or scientific value of both the
domestic and foreign items in determining whether to indemnify an
exhibition.
List of Subjects in 45 CFR Part 1160
Indemnity payments.
For the Federal Council on the Arts and the Humanities.
Michael S. Shapiro,
Counsel to the Federal Council on the Arts and the Humanities.
Accordingly, for the reasons set out in the preamble, the Federal
Council proposes to amend 45 CFR part 1160 as follows:
1. The authority citation for part 1160 continues to read as
follows:
Authority: 20 U.S.C. 971-977.
PART 1160--INDEMNITIES UNDER THE ARTS AND ARTIFACTS INDEMNITY ACT
Sec. 1160.1 [Amended]
2. Section 1160.1, is amended by revising paragraph (a) to read as
follows:
Sec. 1160.1 Purpose and scope.
(a) This part sets forth the exhibition indemnity procedures of the
Federal Council on the Arts and Humanities under the Arts and Artifacts
Indemnity Act (Pub. L. 94-158) as required by section 2(a)(2) of the
Act. An indemnity agreement made under the regulations in this part
shall cover:
(1) Eligible items from outside the United States while on
exhibition in the United States;
(2) Eligible items from the United States while on exhibition
outside this country, preferably when they are part of an exchange of
exhibitions; or
(3) Eligible items from the United States while on exhibition in
the United States if the exhibition includes other eligible items from
outside the United States.
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[FR Doc. 94-8238 Filed 4-5-94; 8:45 am]
BILLING CODE 7536-01-P
