Legislature(1999 - 2000)

02/28/2000 01:48 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
HOUSE BILL NO. 218                                                                                                              
                                                                                                                                
"An Act relating to property loaned to or held by                                                                               
museums."                                                                                                                       
                                                                                                                                
Co-Chair Therriault provided members with a proposed                                                                            
committee substitute, work draft 1-LS0786\D, 2/28/00 (copy                                                                      
on file).                                                                                                                       
                                                                                                                                
Mr. Hand testified in support of the legislation on behalf                                                                      
of the sponsor. He acknowledged the good job that Alaska's                                                                      
many museums do in preserving the state's rich cultural                                                                         
heritage. Unfortunately, there are numerous artifacts in                                                                        
Alaska's museums that are currently in a quandary because                                                                       
the owners or lender of the property have lost contact with                                                                     
the museum. Lenders pass away or move without maintaining                                                                       
notice with the museum.  Sometimes, there is little or no                                                                       
documentation as to the origins of items. This leaves                                                                           
museums in a difficult position since without contact with                                                                      
the lender or defined ownership by the museum, it is very                                                                       
difficult to properly care for these artifacts. Artifacts                                                                       
require care and maintenance over time. Some artifacts                                                                          
require maintenance/upkeep that could be potentially                                                                            
damaging to the property.  It is even possible that an item                                                                     
has degenerated to a point where the best thing to do, is to                                                                    
dispose of the property. Without contact with the lender,                                                                       
museums are put in the unenviable position of having to care                                                                    
for these items without authority to do so. He maintained                                                                       
that museums cannot reasonably be expected to properly care                                                                     
for an item while simultaneously incurring liability for                                                                        
doing so. House Bill 218 establishes a process through which                                                                    
museums may clarify title on unclaimed objects.                                                                                 
                                                                                                                                
Mr. Hand outlined the process through which museums may                                                                         
clarify title on unclaimed objects. At least 7 years must                                                                       
have passed after the expiration date of the loan without                                                                       
any contact between the lender and museum. The museum must                                                                      
first send a notice by certified mail, return receipt                                                                           
requested, to the lender's last known address. If, after 30                                                                     
days, no notice of delivery has been received, the museum                                                                       
then publishes notices for a period of 4 weeks in a general                                                                     
circulation newspaper in the area of the museum and in the                                                                      
area of the lender's last known address:                                                                                        
                                                                                                                                
- The notice states that the museum intends to take                                                                             
title to the property.                                                                                                          
- The bill specifically stipulates the information                                                                              
that must be included in the notices.                                                                                           
                                                                                                                                
Mr. Hand explained that if no response is received within a                                                                     
period of 65 days, the museum then sends another certified                                                                      
mailing to the last known address of the lender. If again                                                                       
there is no response, the museum then undertakes another                                                                        
round of newspaper notices for a period of two weeks. A                                                                         
lender still has legal recourse through a reclamation period                                                                    
of 2 years after the museum has taken title to the property.                                                                    
                                                                                                                                
The bill also stipulates that a museum must take responsible                                                                    
steps in order to keep proper written records regarding                                                                         
loaned property, including notifying any lenders about a                                                                        
change of location of the museum. Also, under this act,                                                                         
museums must notify all new lenders of this statute.                                                                            
                                                                                                                                
Mr. Hand concluded that the legislation provides for a                                                                          
course of action museums can follow in order to alleviate                                                                       
very serious problems that seemingly every museum in the                                                                        
state is encountering. There is strong support from those in                                                                    
the museum community who are working very hard to preserve                                                                      
Alaska's cultural heritage.                                                                                                     
                                                                                                                                
Vice Chair Bunde questioned if notification costs could be                                                                      
absorbed with a zero fiscal note. He questioned how many                                                                        
certified letters would be sent to artifact owners. Mr. Hand                                                                    
observed that the department felt that the cost of newspaper                                                                    
notification would be minimal and could be included in the                                                                      
cost of doing business. He did not know how many letters                                                                        
would have to be sent.                                                                                                          
                                                                                                                                
Vice Chair Bunde asked if loan contract agreements have                                                                         
provisions for forfeiture. Mr. Hand did not know. He added                                                                      
that the legislation would address undocumented items.                                                                          
MIKE TIBBLES, STAFF, REPRESENTATIVE THERRIAULT provided                                                                         
information regarding the proposed committee substitute. He                                                                     
noted that the first change occurred in section 2 of the                                                                        
bill. Section 2(a)(1) and (2) differentiate between loans                                                                       
with and without expiration dates. Redundant language was                                                                       
taken out of section 2(a)(2); the museum can take possession                                                                    
if there is no expiration date and seven years have passed.                                                                     
The telephone number of the museum representative was added                                                                     
in subsection (b) on line 11, page 2.                                                                                           
Mr. Tibble continued to explain changed made in the proposed                                                                    
committee substitute. The third change occurred on line 21,                                                                     
page 2: "or" was added to clarify that notice would be                                                                          
provided by newspaper in the judicial district the museum is                                                                    
located and in the judicial district in which the lender's                                                                      
last known address or the county, borough or geographical                                                                       
organization of their last known address. The final change                                                                      
was on page 3, line 9: "at least" before "once a week" was                                                                      
added to provide consistency.                                                                                                   
                                                                                                                                
Mr. Hand observed that the requirement for a telephone                                                                          
number was also added on page 4, line 5; and "at least" was                                                                     
also added page 4 and line 10. The sponsor agreed with the                                                                      
changes made in the proposed committee substitute.                                                                              
                                                                                                                                
Vice Chair Bunde MOVED to ADOPT work draft 1-LS0786\D,                                                                          
2/28/00. There being NO OBJECTION, it was so ordered.                                                                           
                                                                                                                                
Representative Austerman questioned how estates would be                                                                        
handled. Mr. Hand clarified in the case of an estate that                                                                       
the heirs would be the titleholder of the property.                                                                             
                                                                                                                                
Representative Phillips questioned why seven years was                                                                          
chosen and asked if it would be retroactive. Mr. Hand                                                                           
explained that the provision would be in affect for items                                                                       
that have been in the museum's custody for the previous                                                                         
seven years without contact from the lender. They would not                                                                     
have to begin another 7-year period. The seven-year period                                                                      
was chosen arbitrarily based on provisions in other states.                                                                     
                                                                                                                                
KAREN CRANE, DIRECTOR, DIVISION OF LIBRARIES, ARCHIVES AND                                                                      
MUSEUMS spoke in support of HB 218. She observed that out of                                                                    
25,000 objects that there are 85 objects that would be                                                                          
affected; 24 are unclaimed; the rest are undocumented.                                                                          
                                                                                                                                
(TAPE CHANGE, HFC 00 - 42, SIDE 2)                                                                                              
                                                                                                                                
Ms. Crane explained that the cost of contacting owners would                                                                    
occur over a number of years. She did not anticipate that                                                                       
all 85 objects would be addressed in the first year. She                                                                        
observed that old airplane parts are among the unclaimed                                                                        
objects. These could be transferred or sold. It is expensive                                                                    
to maintain objects that the state does not hold title to.                                                                      
The legislation would cleanup problems encountered by the                                                                       
department.                                                                                                                     
                                                                                                                                
Representative J. Davies asked if there is a problem with                                                                       
the affective date of the bill. Ms. Crane indicated that                                                                        
effective date is not a problem.                                                                                                
                                                                                                                                
Vice Chair Bunde asked about forfeiture provisions. Ms.                                                                         
Crane responded that there is a forfeiture provision                                                                            
containing the same seven-year period. The timeline chosen                                                                      
for the legislation was modeled after the American                                                                              
Association of Museums.                                                                                                         
                                                                                                                                
DONNA MATHEWS, EXECUTIVE DIRECTOR, MUSEUMS ALASKA, ANCHORAGE                                                                    
testified via teleconference in support of the legislation.                                                                     
She noted that the legislation would affect private museums                                                                     
around the state. All museums have some items that cannot be                                                                    
cared for, disposed of or transferred to other interested                                                                       
parties. The legislation provides strong guidelines for                                                                         
future practices and is clear and specific.                                                                                     
                                                                                                                                
DIANE BRENNER, ARCHIVIST, ANCHORAGE MUSEUM OF HISTORY AND                                                                       
ART, ANCHORAGE testified via teleconference in support of                                                                       
the legislation. She noted that in 1969 an old organ was                                                                        
brought to the museum for a temporary display. The owners                                                                       
disappeared. The museum wishes to dispose of the organ. The                                                                     
legislation would allow for disposal.                                                                                           
                                                                                                                                
BEA SHEPPARD, BOARD MEMBER, MUSEUMS ALASKA, JUNEAU testified                                                                    
in support of the legislation. She noted that Museums Alaska                                                                    
has supported the change for many years. She observed that                                                                      
abandoned property must be handled by an auction. In many                                                                       
cases museums wish to retain the property or turn them over                                                                     
to other museums.                                                                                                               
                                                                                                                                
Representative Austerman questioned if there is a policy of                                                                     
trying to contact heirs. Ms. Sheppard responded that in many                                                                    
cases the museum does not know whom to contact.                                                                                 
                                                                                                                                
Co-Chair Therriault asked if the current practice is to                                                                         
enter into a written agreement. Ms. Crane explained that the                                                                    
current practice is to accept loans for a period of a year;                                                                     
if the museum desires to keep the object longer the loan is                                                                     
renegotiated. It is easier to find the heirs to the estate                                                                      
or the legal owners after only a year.                                                                                          
                                                                                                                                
Co-Chair Therriault provided members with a timeline showing                                                                    
the proposed schedule for acquisition (copy on file). He                                                                        
questioned if the process could be streamlined. Ms. Crane                                                                       
stressed the relationship of trust with owners and donors.                                                                      
Ms. Sheppard observed that the legislation is based on                                                                          
similar legislation in other states. She felt that the                                                                          
legislation is a good compromise and emphasized the need for                                                                    
private institutions.                                                                                                           
                                                                                                                                
Vice Chair Bunde asked if the contract requires owners to be                                                                    
contacted at the end of a year. Ms. Crane noted that the                                                                        
obligation is on the museum to contact donors. Notification                                                                     
occurs before the year has ended.                                                                                               
                                                                                                                                
Vice Chair Bunde observed that museums would obtain title to                                                                    
objects that are in need of care and that there would be                                                                        
additional costs associated with the assumption of these                                                                        
objects.                                                                                                                        
                                                                                                                                
Co-Chair Therriault asked if the museum could take                                                                              
possession prior to seven years. Ms. Crane interpreted the                                                                      
legislation to require the museum to wait for seven years                                                                       
before taking possession. Ms. Crane felt that seven years is                                                                    
a reasonable period and reiterated the need to maintain                                                                         
trust with owners. She did not feel that the problem would                                                                      
occur in the future. Ms. Sheppard noted that the one-year                                                                       
period only pertained to the state museum and that there are                                                                    
up to 70 other museums in the state.                                                                                            
                                                                                                                                
Representative J. Davies asked if the legislation would                                                                         
preclude museums from entering into different contract                                                                          
arrangements. Ms. Crane responded that the museum would                                                                         
follow state guidelines.                                                                                                        
                                                                                                                                
Co-Chair Therriault did not know if passage of the                                                                              
legislation would preclude other contractual provisions.                                                                        
                                                                                                                                
Co-Chair Therriault observed that the museum would take                                                                         
possession before the requirement for the second notice                                                                         
expired. Ms. Crane thought that the legislation would                                                                           
provide for possession after the 65th day.                                                                                      
                                                                                                                                
Co-Chair Therriault questioned if the Committee would prefer                                                                    
a timeline that would be shorter and less expensive.                                                                            
                                                                                                                                
Vice Chair Bunde spoke in support of a compromise between 60                                                                    
days and seven years. Co-Chair Therriault clarified that it                                                                     
was not his intent for the museum to take possession as soon                                                                    
as the expiration of the contract occurred. Vice Chair Bunde                                                                    
noted that the Department of Public Safety has a one-year                                                                       
time period for dealing with property that comes into their                                                                     
possession.                                                                                                                     
                                                                                                                                
Vice Chair Bunde asked how many items the state museum has                                                                      
acquired in the last seven years without a contract. Ms.                                                                        
Crane stated that there have not been any acquisitions                                                                          
without a contract in the last seven years.                                                                                     
                                                                                                                                
Representative G. Davis pointed out that the statute would                                                                      
be unnecessary after the backlogs of past acquisitions have                                                                     
been addressed.                                                                                                                 
                                                                                                                                
Representative J. Davies expressed concern that museums not                                                                     
be precluded from entering into shorter contracts. Page 5,                                                                      
line 11 states that the provisions in the legislation would                                                                     
govern over conflicts in other state law.                                                                                       
                                                                                                                                
Co-Chair Therriault did not expect that the museum would                                                                        
hear from anyone that has not contacted them over the past                                                                      
seven years. He questioned if the expense of two newspaper                                                                      
notifications was warranted. He stressed that the intent is                                                                     
to take care of the backlog of items and felt that the                                                                          
legislation could be streamlined to shorten the time period                                                                     
and reduce the costs of notification.                                                                                           
                                                                                                                                
Ms. Crane acknowledged that the intent of the legislation is                                                                    
to address old objects. Ms. Sheppard agreed that the concern                                                                    
is to take care of the backlog.                                                                                                 
                                                                                                                                
Co-Chair Therriault acknowledged that the intent is to                                                                          
address backlog but pointed out that the legislation would                                                                      
pertain to future purchases as well.                                                                                            
                                                                                                                                
HB 218 was heard and HELD in Committee for further                                                                              
consideration.                                                                                                                  

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