Legislature(2023 - 2024)BELTZ 105 (TSBldg)
04/24/2024 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB257 | |
| SB235 | |
| HB97 | |
| HB29 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 235 | TELECONFERENCED | |
| += | HB 97 | TELECONFERENCED | |
| *+ | HB 29 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 257 | TELECONFERENCED | |
HB 97-SELF-STORAGE UNITS: LIENS; SALES
1:43:28 PM
CHAIR BJORKMAN reconvened the meeting and announced the
consideration of CS FOR HOUSE BILL NO. 97(JUD) "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."
1:44:10 PM
ERICK CORDERO-GIORGAN, Staff, Representative Mike Prax, Alaska
State Legislature, Juneau, Alaska, presented a recap of HB 97.
He said HB 97 establishes self-storage lien law in Alaska, the
only state without self-storage lien laws. He said lien laws
protect both the renter and the [lessor]. The main purpose for
these laws is to recognize a voluntary agreement to store items
in the property, which automatically creates a lien on the
property. He said in the rare case that a renter fails to pay
and goes into default, HB 97 provides for a notification process
and in the case that the debt is not remedied, the lessor may
foreclose or sell the items stored. He said this is a rare
occurrence and when it does happen, it is because the [lessor]
wants to be able to rent [the storage space] again. He asserted
that even when the lessor sells [abandoned items], they do not
make enough money to capture lost revenue. He said HB 97
provides protection similar to that for landlords and tenants in
the landlord/tenant act.
1:46:09 PM
CHAIR BJORKMAN announced invited testimony for HB 97.
1:46:33 PM
DANIEL BRYANT, Legal and Legislative Counsel, National Self
Storage Association, Alexandria, Virginia, said HB 97 would
bring much needed certainty to businesses in Alaska to know the
precise legal process and steps to follow to lawfully enforce
their lien rights in the event of a default. He said the bill
further provides significant consumer protections in that it
would require every storage facility in the state to precisely
follow all the mandatory requirements outlined in the bill.
Additionally, the various requirements and elements contained in
HB 97 are consistent with the overwhelming majority of the 49
other states' self-storage laws. He acknowledged concerns raised
regarding HB 97, but respectfully disagreed with them. He
asserted that HB 97 would establish a floor or a minimum set of
requirements that every owner [lessor] must follow and no such
minimum requirements exist presently [in Alaska]. He said HB 97
would not establish a statutory ceiling and if an owner [lessor]
wishes to go above and beyond the minimum mandates established
by the bill, they may. Any owner that can afford to provide
their unit renters with a much longer enforcement timeline or
provide significantly more notice may do so. He said HB 97
establishes a minimum framework that every owner [lessor] must
comply with and creates a new baseline and rules of the road for
storage owners to enforce their lien rights in the event of
default. It would also set minimum guard rails to protect
consumers and let them know what to expect should a default
occur.
MR. Brant concluded that policy making is a balancing act
blending various viewpoints to reach a reasonable and fair
middle ground compromise; and HB 97 achieves that objective.
1:48:41 PM
CHAIR BJORKMAN opened public testimony on HB 97.
1:49:26 PM
WILLIAM BREWER, representing self, Fairbanks, Alaska, testified
in support of HB 97. He said it was scary, as a self-storage
business owner in Alaska, to operate his business with no
governed framework or set of laws to follow when the customer is
paying him to protect their personal items. He said he found it
very strange that any storage facility owner operating in Alaska
is comfortable with the current Alaska lien laws. He said,
without HB 97, there are no set of laws regarding self-storage
liens. Owners are instead using their own interpretation of
governing laws, or, he said, in his case copying the framework
from another state. He said HB 97 lien laws are no different
than the Alaska landlord-tenant act regarding non-paying tenants
or individuals who stop paying their car, phone or house
payments. As a business owner in Alaska, he found it ridiculous
that he would have to copy the self-storage laws from another
state to try to protect his family and business from lawsuits.
He urged the committee to support HB 97.
1:50:45 PM
ELIZABETH MANN, Alaska Mini Storage, Fairbanks, Alaska,
testified in support of HB 97. She referred to letters written
by Daniel Bryant representing the Self Storage Association. Mr.
Bryant's letters were in response to letters of concern from
Spirit of Alaska Federal Credit Union and Global Federal Credit
Union. She applauded his letters and explained that the
financial institutions were requiring tenants and lessors to
create lists of stored items when there is a lien owed to the
institutions. She said there is wide consensus among self-
storage owners that they are not willing to take on that
responsibility. She noted similar situations in which owners or
landlords are not responsible to care for or retain abandoned
items, for example vehicles left at airports in long-term
parking that are subject to impounding; motorcycles left to long
for repair and abandoned items left in a rented apartment. She
pointed out that these situations do not require landlords to
contact former tenants who have defaulted.
1:52:56 PM
ARTY FONOV, Eagle Eye Secure Storage, Wasilla, Alaska, testified
in support of HB 97. He said he was concerned about the
provision to provide adequate notice for customers who are
entering auction status. He noted that, as a lessor he tries
very hard to reach a customer prior to a unit entering auction
status. He said auction status is a last resort because lessors
receive pennies on the dollar for abandoned property. He said it
is best when a customer pays for their unit and moves out. He
said the lack of self-storage lien laws makes it difficult to
know how to protect his business and his customers' property.
1:54:37 PM
JAMES MACNAUGHTON, representing self, Blue Moose Storage,
Fairbanks, Alaska, testified in support of HB 97. He said, with
no laws in the State of Alaska to provide guidance, he worked
with national trade associations to use other states' laws as
models to develop his businesses policies. He said this created
an element of risk when trying to guess what will hold up in the
State of Alaska courts should there be a need to defend their
business practices. He said clear and transparent guidelines are
key to mitigating that risk and protecting the business. He
described Blue Moose Storage as being run by good local Alaskans
running a small business to support their families and not a
massive corporation looking to take advantage of neighbors. He
said the last thing he would want to do is foreclose on a tenant
and that foreclosure is a lot of work and not profitable. He
said over his twenty years in this business nearly one hundred
percent of foreclosures have resulted in loss for his business.
He urged passage of HB 97 for clear and transparent guidelines
for the protection of businesses and for tenants, and said the
bill was a win-win.
1:55:56 PM
TIM SULLIVAN, President, Alaska Credit Union League, Anchorage,
Alaska, testified with concerns on HB 97. He said the league
appreciates the introduction of HB 97 and noted that the bill
grants lien superiority already available in the 49 other
states. He highlighted several main concerns:
• the need for timely notice to other lien holders,
particularly those with publicly noticed liens
• the need for a limit on fees to prevent increasing
encumbered collateral and adding to consumers' compounding
debt
• the liability limitations for self-storage facilities,
which could conflict with their duty of care as
warehousemen under federal law
• the absence of consequences for violating the legislation's
provisions
1:57:28 PM
TYLER SCOTT, Owner, Publix Self Storage, Anchorage, Alaska,
testified in support of HB 97. He said the bill would give a
level playing field to the storage operators and the customers.
He said it would allow [both parties] to know what to expect
from the terms of the rental and what would happen if it doesn't
end successfully. He said the current situation is a crap shoot
and creates an unfair playing field for both operators and
renters. He said he would willingly return stored and abandoned
items without charge to the customers, had the customers made
the effort [to recover them] and when they do, he said his
business does simply give the items back. He said selling things
at auction is not worth the liability for the storage business
or for the renter when there is no legislation in place to
protect either party. He noted the irony that the credit unions
were objecting to fees.
1:59:38 PM
CHAIR BJORKMAN closed public testimony HB 97.
1:59:56 PM
CHAIR BJORKMAN solicited a motion.
2:00:00 PM
SENATOR GRAY-JACKSON moved to adopt the Senate committee
substitute (SCS) for CSHB 97, work order 33-LS0392\R, as the
working document.
2:00:13 PM
SENATOR BJORKMAN objected for purposes of explanation.
2:00:31 PM
KONRAD JACKSON, Staff, Senator Jesse Bjorkman, Alaska State
Legislature, Juneau, Alaska, provided a summary of changes for
HB 97, version U.A to R. He stated that on April 23, 2024
committee members received four proposed amendments that were
put into HB 97 to create the committee substitute HB 97, version
R. He reviewed the four amendments:
[Original punctuation included.]
33-LS0392\U.A.1
Dunmire
4/11/24
AMENDMENT 1
OFFERED IN THE SENATE
TO: CSHB 97(JUD) a
1 Page 3, lines 7 - 8:
2 Delete "certified mail"
3 Insert "by the United States Postal Service with
a certificate of mailing"
2:01:39 PM
MR. JACKSON continued to present the summary of changes for HB
97, version U.A to R.
[Original punctuation included.]
33-LS0392\U.A.2
Dunmire
4/17/24
AMENDMENT 2
OFFERED IN THE SENATE
TO: CSHB 97(JUD) am
1 Page 2, line 8:
2 Delete "Notwithstanding AS 28.10.371, if"
3 Insert "If"
4
5 Page 2, line 9:
6 Delete "superior"
7 Insert "junior"
8
9 Page 2, line 11:
10 Delete "A storage lien is superior to a
security interest perfected under AS 45.29."
11
12 Page 2, line 12, following "tax lien":
13 Insert "or security interest that was perfected
before the date the rental agreement was
14 entered into"
2:02:12 PM
MR. JACKSON continued to present the summary of changes for HB
97, version U.A to R.
[Original punctuation included.]
33-LS0392\U.A.3
Dunmire
4/17/24
AMENDMENT 3
OFFERED IN THE SENATE
TO: CSHB 97(JUD) am
1 Page 3, following line 28:
2 Insert a new subsection to read:
3 "(c) In addition to the notice required
under (a) of this section, a facility owner
4 shall, after a unit renter has been in default
for 20 days, notify a lienholder identified
5 in the rental agreement that the unit renter is
in default."
2:02:27 PM
MR. JACKSON continued to present the summary of changes for HB
97, version U.A to R.
[Original punctuation included.]
33-LS0392\U.A.4
Dunmire
4/22/24
AMENDMENT 4
OFFERED IN THE SENATE
TO: CSHB 97(JUD) am
1 Page 2, line 2, following "law":
2 Insert "not to exceed an amount equal to 60
days of accrued charges permitted under
3 the rental agreement, including rent, labor, and
other fees"
4
5 Page 3, line 10, following "days":
6 Insert ", but not more than 20 days,"
2:03:22 PM
SENATOR BJORKMAN removed his objection. He found no further
objection and SCS for CSHB 97 was adopted as the working
document.
2:03:43 PM
CHAIR BJORKMAN held HB 97 in committee.