[Federal Register Volume 73, Number 43 (Tuesday, March 4, 2008)]
[Proposed Rules]
[Pages 11577-11580]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-4065]


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NATIONAL FOUNDATION ON THE ARTS AND THE HUMANITIES

45 CFR Part 1160

RIN 3134-AA01


Technical Amendments To Reflect the New Authorization for a 
Domestic Indemnity Program

AGENCY: Federal Council on the Arts and the Humanities.

ACTION: Proposed rule.

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SUMMARY: The Federal Council on the Arts and the Humanities proposes to 
amend its regulations to reflect Congress' authorization of a Domestic 
Indemnity Program under Section 426 of The Consolidated Appropriations 
Act of 2008, Public Law 110-161 (December 26, 2007). The proposed rule 
includes examples of exhibitions eligible for indemnification which are 
intended to provide further guidance to applicants considering applying 
for indemnification of exhibitions with domestic or foreign-owned 
objects.

DATES: Comments are invited and must be received by no later than April 
3, 2008.

ADDRESSES: You may submit comments, identified by RIN number ``3134-
AA01,'' using any of the following methods:
    Federal eRulemaking Portal: http://www.regulations.gov. Follow the 
instructions for submitting comments.
    E-mail: [email protected]. Include ``RIN 3134-AA01, Domestic 
Indemnity'' in the subject line of the message.
    Fax: (202) 606-8600.
    Mail: Heather C. Gottry, Counsel to the Federal Council on Arts and 
the Humanities, 1100 Pennsylvania Avenue, NW., Room 529, Washington, DC 
20506.
    Hand Delivery/Courier: Heather C. Gottry, Counsel to the Federal 
Council on the Arts and the Humanities, 1100 Pennsylvania Avenue, NW., 
Room 529, Washington, DC 20506
    Instructions: All comments received are a part of the public record 
and will generally be posted to http://www.regulations.gov without 
change. All Personal Identifying Information (for example, name, 
address, etc.) voluntarily submitted by the commenter may be publicly 
accessible. Do not submit Confidential Business Information or 
otherwise sensitive or protected information.
    The Federal Council on the Arts and the Humanities will accept 
anonymous comments. Attachments to electronic comments will be accepted 
in Microsoft Word, Excel, or Adobe PDF file formats only.

FOR FURTHER INFORMATION CONTACT: Heather C. Gottry, Counsel to the 
Federal Council on the Arts and the Humanities, 1100 Pennsylvania 
Avenue, NW., Room 529, Washington, DC 20506. (Phone: (202) 606-8322, 
facsimile (202) 606-8600, or e-mail to [email protected]). Hearing-
impaired individuals are advised that information on this matter may be 
obtained by contacting the Endowment's TDD terminal on (202) 606-8282.

SUPPLEMENTARY INFORMATION: 

I. Background on Domestic Indemnity Program Technical Amendments

    In 1975, the United States Congress enacted the Arts and Artifacts 
Indemnity Act, 20 U.S.C. Sections 971-977, as amended, which 
established the Arts and Artifacts Indemnity Program administered by 
the Federal Council on the Arts and the Humanities (Federal Council). 
The Federal Council is comprised of the heads of nineteen agencies and 
was created by Congress, among other things, to coordinate the policies 
and operations of the National Endowments for the Arts and the 
Humanities, and the Institute of Museum Services, including the joint 
support of activities (20 U.S.C. 971).
    Under the Arts and Artifacts Indemnity Program, the United States 
Government guarantees to pay claims for loss or damage, subject to 
certain limitations, arising from exhibitions of foreign and domestic-
owned objects determined by the Federal Council to be of educational, 
cultural, historical or scientific value. The Arts and Artifacts 
Indemnity Program is administered by the Museum Program at the National 
Endowment for the Arts, on behalf of the Federal Council, per 
``Indemnities Under the Arts and Artifacts Act'' regulations 
(hereinafter ``the Regulations''), which are set forth at 45 CFR part 
1160.
    Since 1975, the Regulations have been promulgated and amended 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 authorities to establish 
the terms and conditions of indemnity agreements; to set application 
procedures; and to establish claims' adjustment procedures. (20 U.S.C. 
971(a)(2), 973(a), 975(a). In 1995, the Federal Council amended the 
Regulations to permit the indemnification of domestic-owned objects on 
exhibition in the United States when they are part of international 
exhibitions, so long as the foreign loans were integral to the 
exhibition as a whole.
    On December 26, 2007, through Section 426 of The Consolidated 
Appropriations Act of 2008, Public Law 110-161, the Arts and Artifacts 
Indemnity Act was amended in part to expand coverage of the Arts and 
Artifacts Indemnity program to up to $5,000,000,000 at any one time for 
domestic exhibitions. (20 U.S.C. 974(b)). The Federal Council proposes 
to make

[[Page 11578]]

technical amendments to the Regulations to reflect this authorization 
of a Domestic Indemnity Program. These technical amendments will 
fulfill the Federal Council's responsibility to its applicants by 
ensuring that all regulations are up-to-date and consistent with 
Congress' authorization of a Domestic Indemnity Program under Section 
426 of The Consolidated Appropriations Act of 2008, Public Law 110-161 
(December 26, 2007).

II. Public Comment Procedures

    The technical amendments proposed in this rulemaking reflect 
Congress' authorization of a Domestic Indemnity Program under Section 
426 of The Consolidated Appropriations Act of 2008, Public Law 110-161 
(December 26, 2007). The public is invited to make comments on any of 
the proposed changes.
    Comments should be submitted as set forth in the ADDRESSES section 
of this document. Comments, including names, street addresses, and 
other contact information of respondents, will be available upon 
request for public review at National Endowment for the Humanities, 
1100 Pennsylvania Avenue, NW., Room 529, Washington, DC 20506, during 
regular business hours (8:30 a.m. to 5 p.m.), Monday through Friday, 
except Federal holidays. Before including your address, telephone 
number, e-mail address, or other personal identifying information in 
your comment, please is advised that your entire comment--including 
your personal identifying information--may be made publicly available 
at any time. While you can ask in your comment to withhold from public 
review your personal identifying information, we cannot guarantee that 
we will be able to do so.
    All written comments received by the date indicated in the DATES 
section of this document and all other relevant information in the 
record will be carefully assessed and fully considered prior to 
publication of the final rule. Written comments on the proposed rule 
should be specific, confined to issues pertinent to the proposed 
technical amendments, and should explain the reason for any recommended 
change. Where possible, comments should reference the specific section 
or paragraph of the proposal that the comment addresses. The Federal 
Council may not necessarily consider or include in the Administrative 
Record comments that the Federal Council receives after the close of 
the comment period (see DATES), unless they are postmarked or 
electronically dated before the deadline, or comments delivered to an 
address other than those listed above (See ADDRESSES).

III. Matters of Regulatory Procedure

Regulatory Planning and Review (E.O. 12866)

    Under Executive Order 12866, the Federal Council on the Arts and 
the Humanities must determine whether the regulatory action is 
``significant'' and therefore subject to OMB review and the 
requirements of the Executive Order. The Order defines a ``significant 
regulatory action'' as one that is likely to result in a rule that may: 
(1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities; (2) create a serious inconsistency or otherwise interfere 
with an action taken or planned by another agency; (3) materially alter 
the budgetary impact of entitlements, grants, user fees, or loan 
programs or the rights and obligations of recipients thereof; or (4) 
raise novel legal or policy issues arising out of legal mandates, the 
President's priorities, or the principles set forth in the Executive 
Order.
    The Proposed rule makes technical amendments to reflect Congress' 
authorization of a Domestic Indemnity Program under Section 426 of The 
Consolidated Appropriations Act of 2008, Public Law 110-161 (December 
26, 2007)). As such, it does not impose a compliance burden on the 
economy generally or on any person or entity. Accordingly, this rule is 
not a ``significant regulatory action'' from an economic standpoint, 
and it does not otherwise create any inconsistencies or budgetary 
impacts to any other agency or Federal Program.

Regulatory Flexibility Act

    Because this proposed rule would make certain technical amendments, 
the Federal Council has determined in Regulatory Flexibility Act (5 
U.S.C. 601 et seq.) review that this proposed rule will not have a 
significant economic impact on a substantial number of small entities.

Paperwork Reduction Act

    This rule is exempt from the requirements of the Paperwork 
Reduction Act, since it makes only minor technical amendments to 
reflect Congress' authorization of a Domestic Indemnity Program under 
Section 426 of The Consolidated Appropriations Act of 2008, Public Law 
110-161 (December 26, 2007). An OMB form 83-1 is not required.

Unfunded Mandates Reform Act

    For purposes of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 
chapter 25, subchapter II), this proposed rule will not significantly 
or uniquely affect small governments and will not result in increased 
expenditures by State, local, and tribal governments, or by the private 
sector, of $100 million or more as adjusted for inflation in any one 
year.

Small Business Regulatory Enforcement Fairness Act (SBREFA)

    This proposed rule is not a major rule under 5 U.S.C. 804(2), the 
Small Business Regulatory Enforcement Fairness Act. This proposed rule:
    a. Does not have an annual effect on the economy of $100 million or 
more.
    b. Will not cause a major increase in costs or prices for 
consumers, individual industries, Federal, State, or local government 
agencies, or geographic regions.
    c. Does not have significant adverse effects on competition, 
employment, investment, productivity, innovation, or the ability of 
U.S.-based enterprises to compete with foreign-based enterprises.

Takings (E.O. 12630)

    In accordance with Executive Order 12630, the proposed rule does 
not have significant takings implications. No rights, property or 
compensation has been, or will be, taken. A takings implication 
assessment is not required.

Federalism (E.O. 13132)

    In accordance with Executive Order 13132, this proposed rule does 
not have federalism implications that warrant the preparation of a 
federalism assessment.

Civil Justice Reform (E.O. 12988)

    In accordance with Executive Order 12988, the Federal Council has 
determined that this proposed rule does not unduly burden the judicial 
system and meets the requirements of sections 3(a) and 3(b)(2) of the 
Order.

Consultation With Indian Tribes (E.O. 13175)

    In accordance with Executive Order 13175, the Federal Council has 
evaluated this proposed rule and determined that it has no potential 
negative effects on federally recognized Indian tribes.

National Environmental Policy Act

    This proposed rule does not constitute a major Federal action 
significantly affecting the quality of the human environment.

[[Page 11579]]

List of Subjects in 45 CFR Part 1160

    Administrative practice and procedure, Art, Indemnity payments, 
Museums, Nonprofit organizations.

    Dated: February 27, 2008.
Heather C. Gottry,
Counsel to the Federal Council on the Arts and the Humanities.

    For the reasons stated in the preamble and under the authority of 
Section 426 of The Consolidated Appropriations Act of 2008, Public Law 
110-161 (December 26, 2007), the Federal Council on the Arts and the 
Humanities proposes to amend 45 CFR part 1160 as follows:

PART 1160--INDEMNITIES UNDER THE ARTS AND ARTIFACTS INDEMNITY ACT

    1. The authority citation for 45 CFR part 1160 continues to read as 
follows:

    Authority: 20 U.S.C. 971-977.

    2. Revise Section 1160.4 to read as follows:


Sec.  1160.4  Eligibility for international exhibitions.

    An indemnity agreement for an international exhibition made under 
these regulations shall cover:
    (a) Eligible items from outside the United States while on 
exhibition in the United States;
    (b) Eligible items from the United States while on exhibition 
outside this country, preferably when they are part of an exchange of 
exhibitions; and
    (c) Eligible items from the United States while on exhibition in 
the United States, in connection with other eligible items from outside 
the United States which are integral to the exhibition as a whole.
    (d)(1) Example. An American art museum is organizing a 
retrospective exhibition which will include more than 150 works of art 
by Impressionist painter Auguste Renoir. Museums in Paris and London 
have agreed to lend 125 works of art, covering every aspect of his 
career, many of which have not been seen together since the artist's 
death in 1919. The organizer is planning to include 25 masterpieces by 
Renoir from American public and private collections. The show will open 
in Chicago and travel to San Francisco and Washington.
    (2) Discussion. This example is a common application for coverage 
of both foreign and domestic-owned objects in an international 
exhibition. The foreign-owned objects are eligible for indemnity 
coverage under paragraph (a) of this section, and the domestic-owned 
objects may be eligible for indemnity coverage under paragraph (c) of 
this section if the foreign-owned objects are integral to the purposes 
of the exhibition as a whole. In reviewing this application, the 
Federal Council would evaluate the exhibition as a whole and determine 
whether the loans of 125 foreign-owned objects are integral to the 
educational, cultural, historical or scientific significance of the 
exhibition on Renoir. It would also be necessary for the U.S. 
Department of State to determine whether or not the exhibition was in 
the national interest.


Sec. Sec.  1160.6 through 1160.12  [Redesignated as Sec. Sec.  1160.7 
through 1160.13]

    3. Sections 1160.76 through 1160.12 are redesignated as Sec. Sec.  
1160.7 through 1160.13.


Sec.  1160.5  [Redesignated as Sec.  1160.6]

    4. Section 1160.5 is redesignated as Sec.  1160.6 and a new Sec.  
1160.5 is added to read as follows:


Sec.  1160.5  Eligibility for domestic exhibitions.

    An indemnity agreement for a domestic exhibition made under these 
regulations shall cover eligible items from the United States while on 
Exhibition in the United States.

    (a)(1) Example 1. An American museum is undergoing renovation and 
will be closed to the public for one year. During that time, 
masterpieces from the collection will go on tour to three other museums 
in the United States. Many of these works have never been lent for 
travel, and this will be a unique and the last opportunity for museum 
visitors in other parts of the country to see them exhibited together. 
Once the new building opens, they will be permanently installed and 
dispersed throughout the museum's galleries.

    (2) Discussion. (i) This is a straightforward example of a domestic 
exhibition which would be eligible for consideration for indemnity 
coverage. Under the previous regulations, eligibility was limited to:
    (A) Exhibitions in the United States of entirely foreign-owned 
objects;
    (B) Exhibitions outside of the United States of domestic-owned 
objects; or
    (C) Exhibitions in the United States of both foreign and domestic-
owned objects, with the foreign-owned objects having integral 
importance to the exhibition.
    (ii) In this example, the Federal Council will consider the 
educational, cultural, historical, or scientific significance of the 
proposed domestic exhibition of the domestic-owned objects. It would 
not be necessary for the U.S. Department of State to determine whether 
or not the exhibition was in the national interest.

    (b)(1) Example 2. An American museum is organizing an exhibition of 
works by 20th century American artists, which will travel to one other 
U.S. museum. There are more than 100 objects in the exhibition. The 
majority of the paintings, drawings and sculpture, valued at more than 
$500,000,000, are from galleries, museums and private collections in 
the United States. The organizing curator has selected ten works of 
art, mostly drawings and preparatory sketches relating to paintings in 
the exhibition, valued at less than $5,000,000, which will be borrowed 
from foreign lenders.

    (2) Discussion. (i) This example raises the question of whether 
this applicant should submit an application for indemnity coverage for 
a domestic exhibition or an international exhibition. If the applicant 
submitted an application for an international exhibition requesting 
coverage for only the foreign-owned objects eligible under Section 
1160.4(a), the Federal Council would evaluate whether the ten foreign-
owned objects further the exhibition's educational, cultural, 
historical, or scientific purposes. It would also be necessary for the 
U.S. Department of State to determine whether or not the exhibition was 
in the national interest. In this case, the applicant would have to 
insure the loans of the domestic-owned objects by other means.
    (ii) In the case of an application for an international exhibition 
requesting coverage for both domestic-owned and foreign-owned objects 
eligible under Section 1160.4(a) and (c), the Federal Council would 
evaluate the exhibition as a whole to determine if the ten foreign-
owned objects are integral to achieving the exhibition's educational, 
cultural, historical, or scientific purposes. It would also be 
necessary for the U.S. Department of State to determine whether or not 
the exhibition was in the national interest.
    (iii) If the applicant submitted an application for a domestic 
exhibition, however, only the loans of domestic-owned objects, the 
highest valued part of the exhibition, would be eligible for coverage. 
The Federal Council would consider if the U.S. loans were of 
educational, cultural or historic interest. It would not be necessary 
for the U.S. Department of State to determine whether or not the 
exhibition was in the national interest. In this case, the applicant 
would have to insure the loans of the foreign-owned objects by other 
means.

[[Page 11580]]

Sec.  1160.6  [Amended]

    5. Amend paragraph (j)(2) of newly redesignated Sec.  1160.6 by 
removing ``Director of the United States Information Agency that the 
exhibition'' and adding in its place ``Secretary of State or his 
designee that the international exhibition with eligible items under 
Sec.  1160.4''.


Sec.  1160.7  [Amended]

    6. Amend newly redesignated Sec.  1160.7 by removing ``the 
application will be submitted to the Director of the United States 
Information Agency'' and adding in its place ``applications for 
international exhibitions with eligible items under Sec.  1160.4 will 
be submitted to the Secretary of State or his designee''.

 [FR Doc. E8-4065 Filed 3-3-08; 8:45 am]
BILLING CODE 7036-01-P