Legislature(2023 - 2024)BUTROVICH 205
05/03/2024 01:30 PM Senate JUDICIARY
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| Audio | Topic |
|---|---|
| Start | |
| HB29 | |
| HB97 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 29 | TELECONFERENCED | |
| + | HB 97 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
HB 97-SELF-STORAGE UNITS: LIENS; SALES
[SCS CSHB 97(L&C) was before the committee.]
2:38:14 PM
CHAIR CLAMAN announced the consideration of CS FOR HOUSE BILL
NO. 97(JUD) am "An Act relating to self-storage facilities for
personal property, including vehicles and watercraft;
distinguishing self-storage facility liens from another type of
storage lien; and excluding self-storage liens from the
treatment of certain unclaimed property."
2:38:42 PM
REPRESENTATIVE MIKE PRAX, District 33, Alaska State Legislature,
Juneau, Alaska, said that self-storage liens are the national
standard for settling disputes between facility owners and unit
renters. These laws offer protection for both unit renters and
storage facility owners in the event rent is not paid and
contents of a storage unit are abandoned. He paraphrased the
following sponsor statement:
[Original punctuation provided.]
Sponsor Statement for House Bill 97
Version U.A
49 states and the District of Columbia have self-
storage lien statutes. Alaska is the last remaining
state without a self-storage lien statute. These laws
provide for a non-judicial foreclosure process to
address and remedy nonpayment issues between the
facility owner and the unit renter. Storage liens are
the national standard for settling disputes between
facility owners and unit renters.
Self-storage lien laws provide protections for unit
renters. HB 97 would require facility owners to
include specific information regarding the facility
owner's lien rights in the rental agreement. HB 97
would also require the facility owner to wait at least
ten (10) days after the unit renter's default to begin
lien enforcement. After ten (10) days, the facility
owner would be required to send a default notice to
the unit renter.
If the unit renter does not cure the default, the
facility owner would then be required to send a second
notice of default to the unit renter that provides an
additional 20-day window for the unit renter to cure
the default. If the payment issue is not remedied,
then HB 97 would permit the facility owner to proceed
with a sale. The bill details that process and how
proceeds from that sale must be applied.
HB 97 also provides certainty and protection for
storage facility owners. The bill would provide a
specific statutory process for facility owners to
follow to enforce their lien rights in the state.
2:43:17 PM
MAGGIE ELLIOT, Staff, Representative Mike Prax, Alaska State
Legislature, Juneau, Alaska, paraphrased the sectional analysis
for HB 97, version U:
[Original punctuation provided.]
House Bill 97
Sectional Analysis Version U
Section 1 (Page 1, lines 5-7) Amends AS 28.11.025
relating to abandoned vehicles by stipulating that it
does not apply to a vehicle in a self-storage facility
under the sections of this bill.
Section 2 (Page 1, lines 8-10) Amends AS 34.35 by
adding a new section stipulating that AS 34.35.220 and
225 do not apply to a self-storage facility.
Section 3 (Page 1, line 11 - Page 6, line 14) -
Amends 34.35 to add a new section titled Article 13A.
Self-Storage Facilities.
Sec. 34.35.600. Self-storage facility liens; fees.
(Page 1, line 12 - Page 2, line 7) This section
details that a facility owner has a storage lien on
unit property if the unit renter fails to abide by a
written rental agreement, including paying the rental
charges and reasonable late fees.
Sec. 34.35.605. Priority of storage lien. (Page 2,
lines 8-12) (a) This section notes that if a vehicle
is an item of the unit property, a storage lien is
superior to a lien or encumbrance established under AS
28.10.371 401.
(b) Stipulates that a storage lien is superior to a
security interest perfected under AS 45.29. A storage
lien is also superior to another lien or security
lien, except a tax lien.
2:44:30 PM
MS ELLIOT continued to paraphrase the sectional analysis for HB
97:
[Original punctuation provided.]
Sec. 34.35.610. Attachment of storage lien; rental
agreements. (Page 2, lines 13-20) Stipulates that a
storage lien attaches on the date property is placed
in storage. A rental agreement must contain a
statement notifying the unit renter of the existence
of the storage lien and the method by which the
facility owner may enforce the lien. This section also
requires the unit renter to disclose any lienholders
with an interest in the stored property.
Sec. 34.35.615. Enforcement. (Page 2, lines 21-22)
Gives facility owners the right to enforce a storage
lien after a unit renter has been continuously in
default for at least 10 days.
Sec. 34.35.620. Denial of access; removal of unit
property. (Page 2, line 23 - Page 3, line 3)
Stipulates that after a default, the facility owner
may deny the unit renter access to the storage unit
and move property to another place for storage. The
section also allows the facility owner to tow or
otherwise remove a vehicle or watercraft from the
storage facility.
Sec. 34.35.625. Default notice (Page 3, lines 4-27)
Requires a facility owner to notify the unit renter
and any lienholders identified in the rental agreement
that a unit renter is in default before enforcing a
storage lien.
Sec. 34.35.630. Authority to dispose of unit property.
(Page 3, lines 28-31) Allows the facility owner to
dispose of the unit property if a unit renter does not
cure a default and pay the amount due by the deadline
stated in the lien notice.
Sec. 34.35.635. Sale and disposal of unit property.
(Page 4, lines 1-7) Section (a) allows a facility
owner to sell unit property at the storage facility or
nearest suitable location, or on the internet.
2:45:35 PM
MS. ELLIOT continued to paraphrase the sectional analysis for HB
87:
[Original punctuation provided.]
Section (b) Allows the facility owner to privately
sell, give away, donate, or throw away unit property
that is not commercially viable to dispose of by a
public sale.
Sec. 34.35.640. Redemption by unit renter, vehicle
owner, or vehicle lien holder. (Page 4, lines 8-18)
Section (a) notes that, before the sale of the
property, the unit renter may redeem the unit property
by paying the amount due, in which case, the facility
owner shall immediately return the unit property to
the unit renter.
Section (b) states that if a vehicle owner of record
or a lienholder pays the amount due before the
facility owner disposes of the vehicle under AS
34.35.635, the facility owner shall transfer
possession of the vehicle to the vehicle owner or
lienholder who pays the amount due.
Section (c) states that a facility owner is no longer
liable for property after it is returned under (a) or
(b) of this section.
2:46:27 PM
MS. ELLIOT concluded her summary of the sectional analysis. The
remainder of the sectional analysis follows:
[Original punctuation provided.]
Sec. 34.35.645. Good faith purchasers. (Page 4, lines
19-23) A person who purchases unit property in good
faith takes possession of the property free of any
rights of the unit renter, the facility owner, or any
lienholders.
Sec. 34.35.650. Vehicle title. (Page 4, lines 24-27)
Stipulates that if a vehicle is sold at a public sale
and is titled, the Department of Administration shall
transfer the vehicle title to the purchaser.
Sec. 34.35.655. Proceeds of sale. (Page 4, line 28 -
Page 5, line 2) This section details how the storage
facility owner is to apply the proceeds from the
disposal of private property to satisfy a storage
lien.
Sec. 34.35.660. Limit on value of property stored.
(Page 5, lines 3-6) This section details that if a
rental agreement specifies a limit on the value of
stored property, that limit is the maximum value.
Sec. 34.35.665. Additional rights and obligations.
(Page 5, lines 7-11) Specifies that a rental agreement
may contain other rights, duties, and obligations not
required in the provisions of this bill.
Sec. 34.35.670. Definitions. (Page 5, line 12 - Page
6, line 14) This section defines terms used in the
Act.
Section 4 (Page 6, lines 15-17) This section
clarifies that AS 34.45.010 34.45.085 do not apply
to a self-storage facility.
Section 5 (Page 6, lines 18-22) Amends the uncodified
law stating this Act only applies to rental agreements
entered on or after the effective date.
2:46:42 PM
CHAIR CLAMAN directed attention to AS 34.35.665, Additional
rights and obligations. He asked how existing contracts would be
impacted by HB 97.
2:47:18 PM
REPRESENTATIVE PRAX repeated the question for clarification.
2:47:28 PM
CHAIR CLAMAN replied that this is correct.
2:47:34 PM
REPRESENTATIVE PRAX shared his understanding that existing
contracts would not be affected, and the new contractual
requirements would go into effect only when a new contract is
signed.
2:47:44 PM
CHAIR CLAMAN directed attention to line 18 of HB 97 and surmised
that this indicates that in cases where existing contracts are
in conflict with the new provisions, the law would supersede
existing contracts.
2:48:11 PM
REPRESENTATIVE PRAX asked Chair Claman to repeat the associated
section numbers.
2:48:15 PM
CHAIR CLAMAN replied that this can be found on page 5, lines 16-
20, (AS 34.35.655).
2:49:31 PM
REPRESENTATIVE PRAX replied that he does not share this
interpretation. He indicated that he would give this further
consideration.
2:49:37 PM
CHAIR CLAMAN asked how HB 97 would apply to a motor vehicle with
a bank lien. He asked whether the bank or the storage facility
would be first in line for payment in this case.
REPRESENTATIVE PRAX said that the original concept gave the
storage facility owner the superior lien. He explained the model
used for this concept. He said that HB 97 requires lienholder
notification before any sale occurs. He surmised that this is
still the case but indicated further discussion and evaluation
may be needed.
2:51:42 PM
CHAIR CLAMAN asked for clarification that Representative Prax
believes this is what HB 97 does currently.
2:51:46 PM
REPRESENTATIVE PRAX replied that he would have to confirm this.
2:51:52 PM
CHAIR CLAMAN requested further information.
REPRESENTATIVE PRAX agreed.
2:51:58 PM
SENATOR TOBIN directed attention to page 2, lines 10 to 15,
which addresses property storage liens.
2:52:17 PM
CHAIR CLAMAN clarified that he was asking about page 4, lines
21-24, which applies to vehicle owners. He surmised that Senator
Tobin was indicating that the section on page 2 puts the bank in
first place, rather than the storage facility owner.
2:52:46 PM
SENATOR KIEHL directed attention to Section 3 and asked if the
60-day limit would cause some storage facility owner to open a
storage unit sooner than they might otherwise.
2:53:53 PM
REPRESENTATIVE PRAX replied that this sets a maximum amount that
they can charge. He explained that other sections of HB 97 give
the facility owner permission to cut the lock and determine what
is inside. Oftentimes, there is nothing of value to recoup; this
change enables the owner to cut the lock and prepare the unit
for the next renter. He indicated that the 60-day limit is there
to prevent excessive charges against the renter.
2:55:30 PM
CHAIR CLAMAN announced invited testimony on HB 97.
2:55:59 PM
NATHANIEL DYE, Juneau Self Storage and American Mini Storage,
Palmer, Alaska, said that he has been operating self-storage
facilities for over ten years. He pointed out that Alaska is the
only state that does not regulate the self-storage industry. He
said he is looking forward to a time when the industry is
regulated. He directed attention to testimony given by Daniel
Bryant, Attorney for the Self-Storage Association.
2:56:50 PM
CHAIR CLAMAN asked if Mr. Dye operates Juneau Self Storage.
MR. DYE replied yes.
CHAIR CLAMAN asked if he is interested in having a state law
that supersedes the storage facility's contract - and if so, why
this would be preferrable to allowing the storage facility
contract to determine how to proceed with its tenants.
MR. DYE replied that, in a perfect world, the storage facility
would be self-managing. However, there is always a potential for
risk; therefore, this statute would set a minimum requirement.
Each storage facility could set their standards above the
minimum. He opined that this gives storage facility operators
the ability to determine what works best for them in a given
situation. He added that the minimum would protect both storage
facility operators and renters.
2:58:02 PM
CHAIR CLAMAN asked if HB 97 would require him to modify rental
agreements.
MR. DYE replied that this is a possibility. He said that rental
agreements may require an addendum.
2:59:04 PM
WENDIE MACNAUGHTON, Co-Owner, Blue Moose Storage, Fairbanks,
Alaska, expressed support for a legal frame with clear
guidelines for lien enforcement in situations where a renter
goes into default. She stated that there are currently no
guidelines. She said that clear guidelines would mitigate risk.
She stated that, as a small business, they do not want to
foreclose on a tenant. She added that foreclosure is labor
intensive and not profitable. (All foreclosures result in a
financial loss.) She expressed concerns with the 60-day limit on
fees and foreclosures. She explained that currently, Blue Moose
Storage forecloses when units are 101 days past due. Final
notices are sent out at 90 days past due. While HB 97 sets a
minimum and provides structure, 60 days does not provide the
flexibility necessary to work with customers. She said that a
60-day limit could require them change their foreclosure date
from 100 days to 60 days. She stated that she would support HB
97 if this limit was removed.
3:01:16 PM
CHAIR CLAMAN opened public testimony on HB 97.
3:01:47 PM
ELIZABETH MANN, General Manager, Alaska Mini Storage, Fairbanks,
Alaska, testified with concerns on HB 97. She said that, with
the exception of the incoming request from [Global Credit
Union], this legislation does not challenge any of Alaska Mini
Storage's policies or regulations. She indicated that industry
regulation is needed.
3:02:47 PM
CHAIR CLAMAN asked for her perspective on the 60-day provision
on page 2 of HB 97.
3:02:58 PM
MS. MANN said that she concurs with Ms. Macnaughton. She opined
that the limit should be determined by the storage facility
owner. She indicated that foreclosures are a financial loss. She
said that if storage facilities are limited to a 60-day
timeframe, they would foreclose at 60 days rather than allowing
renters to remain in unpaid units without accruing additional
fees.
3:03:35 PM
CHAIR CLAMAN asked what a reasonable timeline would be, if the
60-day limit is too short.
MS. MANN replied that currently, auctions are held at 120 days;
however, they are considering cutting this back to 90 days. She
offered examples to illustrate the difficulty of these
situations. She expressed frustration that credit unions have a
voice in these decisions.
3:04:49 PM
TIM SULLIVAN, President, Alaska Credit Union League (ACUL),
Anchorage, Alaska, testified with concerns on HB 97. He said
ACUL has worked with the sponsor of HB 97 to create changes that
would benefit ACUL and its members. He clarified an earlier
question related to vehicle loans, explaining that the vehicle
loan would be superior to the self-storage unit fees. He
expressed appreciation that HB 97 requires that both the storage
facility owner and credit union be notified in a timely manner.
He expressed concern with AS 34.35.640(b), which requires the
vehicle lien holder to pay the entire debt owed on the self-
storage unit in order to get the vehicle out of storage. He
stated that this conflicts with the lien superiority in AS
34.35.605(a).
3:06:48 PM
SHARON BEEMAN, Manager, Forbes Storage, North Pole, Alaska,
testified with concerns on HB 97. She directed attention to the
question about vehicle auctions and explained that the
Department of Motor Vehicles (DMV) has rules around how vehicles
can be auctioned. She stated that some of the language in HB 97
conflicts with DMV's rules. She briefly explained the process of
contacting vehicle owners to recoup late fees and return the
vehicle. She opined that DMV regulations should be considered.
She turned her attention to the 60-day limit and expressed
concern. She said that this would shorten the auction process
timeline. She stated that it is rare to recoup the monthly fees
and expressed hope that HB 97 would eliminate some of the fees
the storage unit incurs as a result of delinquent accounts. She
indicated that email is a helpful tool and expressed concern
about advertising fees.
3:09:45 PM
DANIEL FONOV, Site Manager, Eagle Eye Secure Storage, Wasilla,
Alaska, testified in support of HB 97. Indicated his agreement
with earlier testimony from storage facility representatives. He
expressed support of industry regulation by statutory guidelines
that can be incorporated into rental agreements. He explained
that currently, rental agreement disputes are taken before a
judge who makes the determination.
3:10:59 PM
CHAIR CLAMAN closed public testimony on HB 97.
3:11:08 PM
CHAIR CLAMAN held HB 97 in committee.