A BILL TO BE ENTITLED
AN ACT to allow the department of cultural resources, office of archives and history, to use the net proceeds of the sale of ARTIFACTs for MAINTENANCE or conservation of other ARTIFACTS and to clarify the process for transferring title of unclaimed or undocumented property loaned to museums and historical repositories to those museums and historical repositories.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 121‑7 reads as rewritten:
"§ 121‑7.  Historical museums.
(a)	The Department of Cultural Resources shall maintain and administer State historic attractions under the management of the Office of Archives and History for the collection, preservation, study, and exhibition of authentic artifacts and other historical materials relating to the history and heritage of North Carolina. The Department, with the approval of the Historical Commission, may acquire, either by purchase, gift, or loan such artifacts and materials, and, having acquired them, shall according to accepted museum practices classify, accession, preserve, and where feasible exhibit such materials and make them available for study. Within available funds, one or more branch museums of history or specialized regional history museums may be established and administered by the Department. The Department of Cultural Resources, subject to the availability of staff and funds, may give financial, technical, and professional assistance to nonstate historical museums sponsored by governmental agencies and nonprofit organizations according to regulations adopted by the North Carolina Historical Commission.
The Department of Cultural Resources may, with the explicit approval of the North Carolina Historical Commission sell, trade, or place on permanent loan any artifact owned by the State of North Carolina and in the custody of and curated by the Office of Archives and History, unless the sale, trade, or loan would be contrary to the terms of acquisition. The net proceeds of any sale, after deduction of the expenses attributable to that sale, shall be deposited to the State treasury to the credit of the Office of Archives and History Artifact Fund and shall be used only for the expenses associated with the purchase, maintenance, or conservation of other artifacts. No artifact curated by any agency of the Department of Cultural Resources may be pledged or mortgaged.
(b)	Insofar as practicable, the Office of Archives and History shall accession and maintain records showing provenance, value, location, and other pertinent information on such furniture, furnishings, decorative items, and other objects as have historical or cultural importance and which are owned by or to be acquired by the State for use in the State Capitol and the Executive Mansion, and, upon request of the Department of Administration, any other state‑owned building. When any such item or object has been entered in the accession records of the Office of Archives and History, the custodian of such item or object shall, upon its removal from the premises upon which it was located or when it is otherwise disposed of, submit to the Office of Archives and History sufficient details concerning its removal or disposition to permit an adequate entry in the accession records to the end that its location or disposition, and authority for such change, shall be shown therein.
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SECTION 2.  Chapter 121 of the General Statutes is amended by adding a new Article to read:
"Article 5.
"Museum and Archives Repository Property.
"§ 121‑50.  Legislative findings and declaration.
The General Assembly finds and declares that the growth and maintenance of collections in museums and archives repositories, both public and private, is a matter of general public interest to the citizens of North Carolina. Museums and archives repositories of all kinds depend upon loans of various articles of property to promote and encourage the teaching of North Carolina and local history, and to preserve and care for historical manuscripts, materials, and artifacts. The uncertainty regarding title to and responsibility for loaned property is a hindrance to museums and archives repositories in their efforts to maintain, repair, and dispose of property in their possession. The purpose of this Article is to terminate stale claims and to fairly and reasonably allocate responsibilities for the determination of title and financial responsibilities in certain cases.
"§ 121‑51.  Definitions.
The following definitions apply in this Article:
(1)	Address. – A description of the location of the lender as shown on a museum or archives repository's records that is sufficient for delivery by mail.
(2)	Archives repository. – A nonprofit organization or a public agency that is open to the public on a regular basis and whose primary functions include selecting, preserving, and making available records of historical or enduring value. As used in this Article, the term "archives repository" includes libraries.
(3)	Loan. – The placement of property with a museum or archives repository that is not accompanied by a transfer of title of the property to the museum or archives repository and for which there is some record that the owner intended to retain title to the property. The term "loan" does not include transfers between museums, between archives repositories, or between museums and archives repositories unless the transferring institution specifically provides in writing that the transfer is a loan under this Article.
(4)	Museum. – A nonprofit organization or a public agency that is open to the public on a regular basis and is operated primarily for the purpose of collecting, cataloging, preserving, or exhibiting property of educational, scientific, historic, cultural, or aesthetic interest. As used in this Article, the term "museum" includes historical societies and historic sites.
(5)	Property. – A tangible object under the care of a museum or archives repository that has intrinsic historic, artistic, scientific, educational, or cultural value.
(6)	Valid claim. – A written notice of intent to preserve an interest in property on loan to a museum or archives repository, including:
a.	A description of the property adequate to enable the museum or archives repository to identify the property.
b.	Documentation sufficient to establish the claimant as owner of the property.
c.	A statement attesting to the truth, to the best of the signer's knowledge, of all information included in or with the notice.
d.	The signature, under penalty of perjury, of the claimant or a person authorized to act on behalf of the claimant.
"§ 121‑52.  Acquisition of title to loaned property.
(a)	A museum or archives repository may acquire the title to documented property loaned to the museum or archives repository if (i) the term of the loan has expired and at least seven years have passed without written or other contact between the lender and the museum or archives repository or (ii) the term of the loan does not have an expiration date but at least seven years have passed without written or other contact between the lender and the museum or archives repository since the loan was made.
(b)	To acquire title to property under this section, the museum or archives repository shall first send a notice by certified mail to the lender's last known address. The notice must include all of the following:
(1)	The lender's name and last known address.
(2)	A brief and general description of the property.
(3)	A statement that the term of the loan has been terminated.
(4)	The date or approximate date, if known, when the owner loaned the property to the museum or archives repository.
(5)	The name, address, and telephone number of the museum or archives repository representative to contact for more information or to claim ownership.
(6)	A statement that outlines the schedule and requirements for the museum or archives repository to acquire title under this section.
(c)	If a valid claim to the property is not received by the museum or archives repository within 30 days from the date the notice was mailed, the museum or archives repository shall do either of the following:
(1)	If the museum or archives repository knows the last known address of the lender, the museum or archives repository shall publish a notice at least once a week for two consecutive weeks in a newspaper of general circulation in either (i) the county in this State where the lender's last known address is located or (ii) the county, borough, or other geographical organizational entity of the jurisdiction in which the lender's last known address is located in another State. The notice shall contain the following information:
a.	The information required for the notice under subdivisions (b)(1) through (b)(5) of this section.
b.	The date of the last publication of the notice under subsection (c) of this section.
c.	A statement that the museum or archives repository will acquire title to the loaned property if a valid claim to the property is not received by the museum or archives repository within 45 days from the date of the last publication of the notice under subsection (c) of this section.
(2)	If the museum or archives repository does not have an address for the lender, the museum or archives repository shall publish a notice at least once a week for two consecutive weeks in a newspaper of general circulation in the county where the museum or archives repository is located. The notice shall contain the information set out in sub‑subdivisions (c)(1)a. through c. of this section.
(d)	If the requirements of subsections (a) through (c) of this section are satisfied and if a valid claim to the loaned property is not received by the museum or archives repository within 45 days after the date of the last publication of the notice required by subsection (c) of this section, the museum or archives repository acquires the title to the property on the 46th day after the date of the last publication of the notice under subsection (c) of this section. Upon acquiring title, the museum or archives repository shall own the property free and clear from all claims.
(e)	If the museum or archives repository is satisfied that the claim is valid and that the claimant is the legal owner of the artifact, the museum or archives repository shall return the artifact to the owner at the owner's expense.
(f)	Nothing in this Article shall be construed to convert a loan into a bailment. All equitable and legal defenses shall be available to museums and archives repositories in the event of a dispute over ownership.
"§ 121‑53.  Responsibilities of owners of loaned property; representation of ownership; disputed ownership.
(a)	Lender's Responsibilities. – In all cases, it shall be the responsibility of the owner of loaned property to notify the museum or archives repository in writing of the owner's identity and current address. It shall be the responsibility of any new owner acquiring loaned property to notify the museum or archives repository within 60 days of his or her name and address. Any owner of loaned property shall, upon request from a museum or archives repository holding loaned property, promptly provide evidence of ownership satisfactory to the museum or archives repository. This section shall apply to all changes in ownership, whether by sale, gift, devise, operation of law, or any other means. So long as a museum or archives repository deals honestly and in good faith, no museum or archives repository shall be prejudiced by reason of any failure to deal with the true owner of any loaned property if the owner has failed to comply with the requirements of this section.
(b)	Representation of Ownership. – A museum or archives repository shall not be liable for actions taken in reasonable reliance upon the representations of the person who first transfers an item of property to the museum or archives repository that he or she is the true owner of the loaned property.
(c)	Disputed Ownership. – In cases of disputed ownership of loaned property, a museum or archives repository may maintain possession of loaned property during the dispute and shall not be held liable for its refusal to surrender loaned property in its possession except in reliance upon a court order or judgment.
"§ 121‑54.  Museum or archives repository's lien for expenses.
(a)	When the lender of loaned property is known, a museum or archives repository may charge the lender expenses for the reasonable care of loaned property unclaimed after the expiration date of the loan.
(b)	When the lender of loaned property is unknown, a museum or archives repository may place a lien against the value of specific loaned property for expenses reasonably necessary to protect the loaned property from ordinary decay and deterioration due to natural causes, theft, or vandalism.
"§ 121‑55.  Acquisition of undocumented property.
(a)	Property in the possession of a museum or archives repository which the museum or archives repository has reason to believe may be on loan and for which the museum or archives repository does not know the owner or have any reasonable means of determining the owner becomes the property of the museum or archives repository if no person has claimed the property within seven years after the museum or archives repository or a predecessor or assignor of the museum or archives repository took possession of the property. After following the notification process outlined in subsection (b) of this section, the museum or archives repository shall become the owner of the property on the day after the seven‑year period ends and shall be free and clear from all claims.
(b)	The museum or archives repository that wishes to acquire title to undocumented property described in subsection (a) of this section shall provide public notice in the manner described in G.S. 121‑52."
SECTION 3.  This act is effective when it becomes law.