Legislature(2021 - 2022)GRUENBERG 120
04/20/2022 01:00 PM House JUDICIARY
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| Audio | Topic |
|---|---|
| Start | |
| HB331 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 331 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 331-SELF-STORAGE UNITS: LIENS; SALES
1:07:39 PM
CHAIR CLAMAN announced that the only order of business would be
HOUSE BILL NO. 331, "An Act relating to self-storage facilities
for personal property, including vehicles and watercraft;
relating to the treatment of firearms, ammunition, and
controlled substances found in self-storage units;
distinguishing self-storage facility liens from another type of
storage lien; and excluding self-storage liens from the
treatment of certain unclaimed property."
1:08:28 PM
DANIEL BRYANT, Legal and Legislative Counsel, Self Storage
Association, testified in support of HB 331. He noted that
Alaska is the only state without a self-storage statute
addressing liens. He voiced the opinion that the proposed
legislation would protect businesses and consumers. Businesses
would be able to rely on a process established by law, as
opposed to terms in a contract. Consumers would have guaranteed
protections, such as a direct notification of default. He
expressed the opinion that a statutory structure should exist to
control fundamental elements of the process and requested that
the committee support HB 331.
1:10:10 PM
REPRESENTATIVE TUCK, Alaska State Legislature, as prime sponsor,
spoke to HB 331. He reiterated that Alaska is the only state
which does not have a self-storage lien law. He said that the
proposed legislation would create an agreement between the
renter and the storage facility. He expressed the opinion that
the agreement would be similar to the agreement laid out in the
[Alaska] Landlord and Tenant Act.
1:10:47 PM
MIKE MASON, Staff, Representative Chris Tuck, Alaska State
Legislature, answered questions on HB 331 on behalf of
Representative Tuck, prime sponsor. He explained that currently
the proposed legislation would require any restricted property,
such as firearms, to be turned over to a law enforcement agency,
and the renter would apply to the law enforcement agency for the
return of the property. Based on the concerns voiced during the
previous meeting, he said, the sponsor's office sent a request
to Legislative Legal Services for an amendment to be drafted.
The amendment would change the process and allow a self-storage
facility to check the serial number with a law enforcement
agency to ensure the gun is not stolen. If the gun is not
stolen, it would become subject to the lien on the storage unit.
He expressed the understanding that this would be in line with
the Self Storage Association and the operations of self-storage
businesses.
1:12:27 PM
VICE CHAIR SNYDER stated that she had contacted Legislative
Legal Services concerning the value-limit provision. She
expressed concern that the provision would have an inadvertent
impact on the proceeds of items sold from a storage unit [in
arrears]. She explained that a self-storage facility may have a
value limit on items kept in the storage unit, and this could
prevent a renter from collecting some of the proceeds after
items are sold. She acknowledged that Legislative Legal
Services had responded that the value-limit provision would not
have an impact.
1:14:13 PM
CHAIR CLAMAN clarified that a self-storage facility contract
could limit the value of a storage unit's contents; however, the
facility could possibly sell these contents for more. If the
renter returns to collect the proceeds, he expressed the
understanding that the value the renter could collect would not
be capped.
VICE CHAIR SNYDER responded in the affirmative.
1:14:50 PM
MR. MASON responded that this would also be the sponsor's
understanding.
1:15:09 PM
VICE CHAIR SNYDER questioned the motivations for the
legislation.
REPRESENTATIVE TUCK responded that self-storage lien legislation
had first been introduced [during the Twenty-Seventh Alaska
State Legislature]. At that time, he had heard of a storage
unit renter who had artwork sold. The renter asserted there was
not proper notification, and the courts had become involved.
From this example, he stated that he had had the realization
that the process should be defined in law. He described the
first bill introduced as "heavy on doing appraisals for property
before it was disposed of." He stated that since then
legislation has been introduced several times over the years,
with 2018 being the latest. He expressed the opinion that the
current proposed legislation has more clarity than bills in the
past.
1:17:50 PM
REPRESENTATIVE VANCE, referencing notification and mailing
requirements in the proposed legislation, questioned whether
texting or calling was considered as a concrete, but flexible
way of communicating.
1:18:38 PM
REPRESENTATIVE TUCK responded that the notification element of
the legislation had been reviewed with the industry. He
expressed the understanding that phone calls would not be
trackable; thus, this section had been removed. He stated that
it had not been discussed, but "text messaging is a good idea."
He cautioned that individuals in rural Alaska could be out of
phone range. He recommended that self-storage facility owners
should have as much flexibility as possible.
1:20:46 PM
ELIZABETH MANN, Property and Marketing Manager, Alaska Mini
Storage, provided invited testimony on HB 331. In response to
Mr. Mason, she said that [before items are sold] the renter
would be emailed, called, texted, and mailed notices. She
stated that a certified letter would be mailed after 90 days.
She advised that there is software available which tracks calls
and texts. She argued that customers do not always update their
personal information.
1:22:11 PM
SHARON BEAMAN, Manager, Forbes Storage, provided invited
testimony on HB 331. In response to Mr. Mason, she stated that
[Forbes Storage] follows the same process described by the
previous testifier. A call would be made around six days after
the rent is past due, and then after three more weeks, two
notices would be sent, one by regular mail and one by certified
mail. A month after that, she said, the contents of storage
units would go up for auction. She expressed concern about the
language in the proposed bill. She directed the committee's
attention to [Section 34.35.670] on page 7. She said this
section would require a phone call be made every time a notice
is sent. She argued that because multiple notices are sent
before storage units are auctioned, making a call for every
notice would be a "waste of time," because "they're not going to
answer in the first place." She said that leases would
stipulate that a renter must contact the self-storage facility
when fees are going to be late. She questioned the personal
responsibility of renters.
1:24:24 PM
MS. MANN, in response to Chair Claman, expressed her concern
that renters should have the responsibility to update personal
information. She directed the committee's attention to the
limit on monthly late fees described in Section 34.35.600 of the
proposed bill. She argued that limiting late fees to [the
greater of] $20 or 20 percent of the monthly rental fee would
not cover the hourly wages of staff. She stated that some staff
live on site, and, when the rent is late, staff must take
multiple steps, including contacting the customer, cutting the
lock, and preparing the storage unit for auction. She stated
that an auction could take up to three hours. She argued that
it would be better to pay staff for their regular duties, which
include promoting the business, cleaning the facility,
patrolling the facility, addressing maintenance issues, and
conducting "move in and move outs." She expressed the opinion
that if late fees are not high enough there would be nothing to
deter renters from going into lien status more often. She
stated that the [late] fees in the proposed bill would not match
the current [late] fees.
1:27:05 PM
MS. MANN voiced disagreement with Section 34.35.645 on page 5 of
the proposed bill. Concerning vehicles stored onsite, she
argued that, after a renter is 120 days past due, self-storage
facility staff should not have the responsibility to explore the
title holder or lienholder of a vehicle. She also argued that
surveying the storage unit should not be the responsibility of
the facility's staff; however, if it is obvious that items, such
as firearms, are stolen, a police agency would be notified.
Concerning vehicles, she stated that [when rent is past due
Alaska Mini Storage's] practice is to impound the vehicle using
a third-party company. If the owner of the vehicle can be
identified, the tow company would report to the owner. She
maintained that the language in the legislation should be
clarified so this practice can be continued; otherwise, the
staff time to address the situation would not be covered. In
its current practice, she said [Alaska Mini Storage] does not
auction vehicles because the tow company would be the
responsible party thereafter. She maintained that "we do not
want our tenants to go late" because at no point does [Alaska
Mini Storage] profit from late fees or auctions, and self-
storage businesses should be protected because they are not
profiting when customers do not pay. She offered the opinion
that the value in [HB 331] would be the protection of tenants
and businesses.
1:29:23 PM
CHAIR CLAMAN commented that a bill like this typically would be
brought by consumers asking for regulations, not by business
owners. He suggested that consumers "seem" happy with storage-
rental services. He questioned why self-storage businesses
would want to be regulated.
1:30:59 PM
MS. MANN, in response, referred to the guidelines in the
[Alaska] Landlord and Tenant Act. Comparing the act to the
proposed bill, she voiced the need for guidelines for staff.
When a customer is not pleased with a contract, and there is a
threat of a lawsuit, she said some backing other than the
contract would be helpful.
1:32:14 PM
REPRESENTATIVE KURKA, concurring with Chair Claman, expressed
surprise that a business would want government involvement.
Comparing self-storage lien legislation introduced in the past,
he stated that the new language in HB 331 is extensive. He
expressed the opinion that the proposed legislation is
"overkill," and a small addition to contract law or to the
[Alaska] Landlord and Tenant Act could fulfill legislative gaps
for the self-storage industry. He noted that no storage unit
renters have come forward with complaints.
1:33:35 PM
MS. BEAMAN, comparing the proposed bill with the law in North
Dakota, offered the opinion that [HB 331] is too long. She
expressed agreement with Ms. Mann's concern regarding stored
vehicles. She stated that [Forbes Storage] allows vehicles to
be kept inside units, and the [proposed legislation] would allow
lienholders to retain vehicles by paying only part of the fees
due. She said the fee would be based only on part of the square
footage of the unit. She argued that paying fees in this way is
"convoluted, unrealistic, and unenforceable." She expressed the
opinion that some pieces of the proposed bill would create
difficulties for self-storage businesses, and it should be
simplified.
1:36:12 PM
REPRESENTATIVE TUCK stated that a balance had been attempted
with the proposed legislation, and it was written to include
information on a vehicle's title so lienholders would be able to
capture their money. Having access to the title would allow
lienholders to have priority over the property, and they would
be able to monetize the property. Referencing third-party
towing of vehicles, he questioned how the money would be
retained from the process.
1:37:31 PM
MS. BEAMAN, in response to Chair Claman, stated that [Forbes
Storage] has never taken a renter to court. She said, "We just
generally swallow our losses." In response to a follow up from
Chair Claman, she agreed with the comment that it is difficult
"to get blood from a stone." She continued that attorney's fees
run around $300 per hour, so foregoing collection is cheaper.
If the storage fee for a vehicle is late, and fees are up to
$500, she said the facility's policy is to begin the auction
process. She added that a copy of the vehicle registration is
required when a vehicle is parked on the property, and an
attempt would be made to find the owner and lienholder.
1:39:25 PM
MS. MANN, in response to Chair Claman, said that [Alaska Mini
Storage] has never taken a renter to court. She added that
balances would be sent to collection agencies; however, the
business would not get all of its money back. She stated that
if paperwork on the vehicle is provided, storage is allowed, and
if the storage is past due the vehicle will be towed. In this
instance, the balance remaining on the account would be sent to
collections.
1:40:48 PM
REPRESENTATIVE KURKA pointed out that Section 34.35.660(c) on
page 6 of the proposed legislation conveys that in case [the
renter] returns to claim the proceeds, the self-storage facility
would be responsible for holding any leftover value of the
contents for up to a year after disposal. He questioned whether
this process is reasonable.
1:41:47 PM
REPRESENTATIVE TUCK responded that this would allow any
incapacitated renters to obtain the excess from the sale of
their property.
1:42:18 PM
The committee took an at-ease from 1:42 p.m. to 1:45 p.m.
1:45:32 PM
CHAIR CLAMAN explained that the legislation would be held
pending a committee substitute reflecting committee preferences
and invited testifiers' comments.
1:46:50 PM
CHAIR CLAMAN announced that HB 331 was held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 331 v. A 2.16.2022.PDF |
HJUD 3/16/2022 1:00:00 PM HJUD 4/20/2022 1:00:00 PM |
HB 331 |
| HB 331 Sponsor Statement v. A 3.16.2022.pdf |
HJUD 3/16/2022 1:00:00 PM HJUD 4/20/2022 1:00:00 PM |
HB 331 |
| HB 331 Sectional Analysis v. A 3.16.2022.pdf |
HJUD 3/16/2022 1:00:00 PM HJUD 4/20/2022 1:00:00 PM |
HB 331 |
| HB 331 Statement of Zero Fiscal Impact 3.12.2022.pdf |
HJUD 3/16/2022 1:00:00 PM HJUD 4/20/2022 1:00:00 PM |
HB 331 |
| HB 331 Additional Document - Self Storage Association PowerPoint Presentation 3.16.2022.pdf |
HJUD 3/16/2022 1:00:00 PM HJUD 4/20/2022 1:00:00 PM |
HB 331 |