Legislature(2023 - 2024)BELTZ 105 (TSBldg)
04/08/2024 01:30 PM Senate LABOR & COMMERCE
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| SB102 | |
| SB219 | |
| HB97 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 102 | TELECONFERENCED | |
| += | SB 219 | TELECONFERENCED | |
| *+ | HB 97 | TELECONFERENCED | |
HB 97-SELF-STORAGE UNITS: LIENS; SALES
2:40:42 PM
CHAIR BJORKMAN 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."
2:41:11 PM
REPRESENTATIVE MIKE PRAX, District 33, Alaska State Legislature,
Juneau, Alaska, Sponsor of HB 97 said HB 97 is about storage
liens for self-storage units. He made the following statements
regarding HB 97:
• Storage lien laws are the national standard for settling
disputes between facility owners and unit renters.
• These laws provide protections for both the unit renters
and the storage facility owners in the event that rent is
not paid and that contents of a storage unit are abandoned.
• Alaska is the last remaining state without a self-storage
lien law, consequently we have no consistent process for
resolving these liens, creating confusion for facility
owners and tenants and there is relatively little consumer
protection for self-storage renters.
• In states with self-storage lien laws there are clear
statutory guidelines and procedures for handling delinquent
tenants. The absence of such laws in Alaska makes it harder
for such customers to understand their rights and
responsibilities.
• Self-storage facility owners in Alaska face legal
challenges dealing with delinquent tenants because it
follows the warehouse lien laws, a court-driven process.
• The absence of clear regulatory guidelines in how to handle
non-payment in abandoned storage units makes it difficult
to recover unpaid rent, evict delinquent tenants or
properly dispose of abandoned items.
• Self-storage facility owners rely on rental income to cover
their costs and generate income. Without a stream-lined
legal process, these facility owners face financial losses
due to unpaid rent and delays in recovering abandoned
units. This results in higher rental rates for customers
when facility owners must account for potential losses when
setting rental prices.
• HB 97 provides a process for addressing these situations in
which self-storage unit renter fails to pay their rent or
otherwise abandons their unit. The facility owner needs to
access the unit to sell the unit owners' property to
recover the debt or simply to clean debris out of the unit
to make it available for the next renter.
• National data from the self-storage association indicates
that facility owners only sell approximately one to three
percent of spaces annually. It's an infrequently used
procedure but it is necessary for the successful operation
of the facility, because they must deal with the other 90
percent which are abandoned with no commercially valuable
property in the storage unit.
• HB 97 would require facility owners to include specific
information regarding their facility owners' lien rights
and the lease that governs the relationship between the
parties.
• HB 97 would also require the facility owner to send a
default notice to the unit rental before lien enforcement
can begin. 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 at least ten days
after the first note. The second notice must provide an
additional 20-day window for the unit renter to cure the
default and pay the rent owed. After all this, if the rent
is not paid, then HB 97 would allow the facility owner to
proceed with the sale of the abandoned items and recover
the rental unit.
• HB 97 details the process and how proceeds from a sale must
be applied in a fair and equitable manner.
2:45:37 PM
SENATOR BISHOP sought to clarify whether one to three percent of
the storage units were sold.
2:45:56 PM
REPRESENTATIVE PRAX corrected his statement, explaining that one
to three percent of the lien enforcements involved commercially
valuable property stored inside. He said the other 90 percent of
the liens enforcement enable the facility owner to access the
unit simply to clean it out. He said, ideally they find an empty
unit that doesn't require cleaning, otherwise they find packing
material and basically junk with no commercial value.
2:46:36 PM
SENATOR BISHOP clarified that 3 percent of stuff they deal with
on nonpayment has some value and can be sold; the other 90
percent goes to the dumpster.
2:47:02 PM
ERICK CORDERO-GIORGANA, Staff, Mike Prax, Alaska State
Legislature, Juneau, Alaska presented the sectional analysis for
HB 97.
[Original punctuation included.]
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.
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.
2:49:06 PM
MR. CORDERO-GIORGANA continued the sectional analysis for HB 97.
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.
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.
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.
2:51:47 PM
MR. CORDERO-GIORGANA continued the sectional analysis for HB 97.
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.
2:53:24 PM
SENATOR BISHOP referred to Sec. 34.35.655 in the sectional
analysis and asked whether this would be further defined in
regulation. He asked whether the proceeds from a sale would be
held in an escrow account in this person's name. He asked
whether it would be an interest-bearing account, checking
account, cash box etc.
2:54:16 PM
REPRESENTATIVE PRAX answered that it would be up to the facility
owner. As HB 97 is currently written, the facility owner is
entitled to past due rent and expenses dealing with cleaning up
the unit and selling the property. He said, if there is extra
money the facility owner has to keep it for three years and
return it to the renter if the renter shows up or to the
lienholder in the case of a vehicle. He said the facility owner
is not making a profit on the sale. He suggested that if a
painting or some item that was of considerable value were sold,
he said there is no lien on the painting. If the item sells at
auction, the facility owner would keep what is due him for the
past due rent and the cost of selling the painting and then he
holds on to the rest of the money and the renter can claim the
difference when and if they return. He said, if the renter never
shows up, then the money goes to the state as unclaimed
property. He suggested the next question would be regarding
protection for the unit owner. He explained HB 97 requires
notification before they can start the sale process and it takes
about a month to get through that.
2:56:05 PM
SENATOR DUNBAR referred to a letter from Global Credit Union
with concerns and asked whether there were any proposed
amendments to address those concerns, for example: the priority
of the lien, title issues, proceeds of sale, etc. In particular,
he wondered about the priority of lien and suggested a scenario
involving child custody that resulted in a lien for unpaid child
support. He asked whether HB 97 would supersede child support.
2:57:21 PM
REPRESENTATIVE PRAX said he had not considered child support. He
noted you can't get ahead of the IRS; he didn't know if you
could get ahead of child support.
2:58:05 PM
CHAIR BJORKMAN opened public testimony on HB 97.
2:58:13 PM
GARY JENKINS, Owner, Space Unlimited Inc., Juneau, Alaska, said
he had several specific concerns about HB 97. He suggested that
there were assumptions in HB 97 that are not correct and
provisions that are extremely egregious from a public fairness
perspective. He said there is a lien law in Alaska which HB 97
referred to as though it were not effective. He said Alaska has
been operating under that lien law for 50 years and he said the
law is short, but effective. He said HB 97 takes all the
provisions of the warehouseman's law, embellishes it and puts it
in HB 97. He acknowledged that time was short and said he would
like an opportunity to speak in more depth about some of the
provisions that would be extremely unfair to the committee's
constituents who would be the renters and perhaps themselves if
any of the committee rent space.
3:00:09 PM
SENATOR DUNBAR asked whether Mr. Jenkins could submit his
comments in writing.
3:00:25 PM
MR. JENKINS said he could, but he said the details of the
business can be difficult to explain in an email. He said he
would comply with the wishes of the committee.
3:00:44 PM
SENATOR DUNBAR said that he would not speak for the chair, but
that he always finds written comments to be helpful.
3:00:54 PM
SENATOR MERRICK asked whether Mr. Jenkins had found others in
the storage space industry who reached the same conclusions he
had.
3:01:01 PM
MR. JENKINS said he spoke with a gentleman who is the largest
self-storage operator in Alaska. He said they stated they would
operate as they always had and they would prefer not to get into
a hassle over the language of HB 97. He said that is what he
would do as well. He said he found HB 97 to be skewed too far in
favor of the owners of storage facilities. He said his own
policies were more fair than what he considered to be very bad
public policies set forth by HB 97.
3:01:54 PM
CHAIR BJORKMAN asked Mr. Jenkins to highlight provisions of HB
97 that he found problematic with explanations for his
objections.
3:02:09 PM
MR. JENKINS concurred.
3:02:15 PM
CHAIR BJORKMAN held public testimony for HB 97 open.
3:02:20 PM
CHAIR BJORKMAN held HB 97 in committee.