July 22, 2010
Arizona
Arizona's "Protected Property" bill was signed into law by Governor Jan Brewer on April 19th. The law offers an email notification option during the lien process and will limit the liability of self storage operators in the event that private information or other "Protected Property," including alcohol and firearms, is abandoned. The SSA contributed $16,000 (already provided).
California
The Senate Judiciary committee held a hearing on the Declaration of Opposition provision on June 22nd and the matter was continued until June 29th after some discussion. Previous developments suggested that lawmakers might support keeping a declaration of opposition measure; however the declaration would only buy time for the customer who would then be required to file the suit. This would be an improvement over the current law, requiring the storage operator to sue. Industry leaders suggest that a requirement to file on the part of the customer would dramatically
reduce the number of declarations filed.
This week however, the committee chair suggested different terms, wherein adjudication of such matters would be handled at a small claims court level, instead of the current municipal court process. Although this would not eliminate the declaration of opposition, it would be considered a positive step for the industry because it would be a much less expensive process. Due to time limitations the issue was tabled for another week. The CA-SSA lobbyist will be meeting with representatives and staff in the interim. The SSA committed $10,000 for the 2010 session
(already provided).
Florida
April’s effort to attach lien law improvement language to S.606 appeared to be on track until on legislator argued that the issue was “not germane.” Florida SSA and its lobbyist were frustrated at this vague argument that did not come up in committee and does not appear to be compelling. The Florida legislature adjourned April 30th, so these efforts will have to be picked up during the next session. The SSA already supported the initial efforts with $15,000 and has committed another $10,000 to match state association contributions. Another $15,000 was
offered if the measure passed one of the houses of the legislature.
Illinois
HB174 currently sits in the Rules Committee and the expectation is that it will not be passed before the November elections. It would apply state sales tax to a number of services, with self storage included. The legislation began as a bill to fund education and included a service tax. When it did not move on the Senate side, a bill from the House side (HB174) was amended by Sen. James Meeks (D-15) to include the sales "service" tax. This amended bill passed the Illinois Senate and went back to the House for concurrence -- where it sits at the present time.
The Senate sponsor, Sen. Meeks, does not expect any movement on the bill until after the November, 2010, elections. Also, if this sales "service" tax bill falters, he would expect that the legislature will move to increase the income tax instead. The SSA has contributed $2,500 to the IL-Mini-Storage Association to help battle the proposed tax.
Illinois, Municipalities
Oakbrook Terrace – The City of Oakbrook Terrace has decided to table its self storage “accommodations tax” plan indefinitely. We feel this is the best potential outcome because the City will always reserve the right to readdress the measure. The positive result followed the threat of legal action by the affected parties (particularly Public Storage) and outcry from the SSA and IL-Mini-Storage Association. In May SSA VP of Government Relations Tim Dietz traveled to the Chicago suburb to testify against the tax alongside the affected parties and the
Illinois-Mini-Storage Association.
Village of Harwood Heights – on March 11, 2010 the Village of Harwood Heights, Illinois (near Chicago) enacted a self storage ”accommodations tax” - 3% of the gross rent, imposed on tenants, to be collected and remitted by the owner or operator. The only business affected is one self storage facility operated by Public Storage. The company was not informed about the potential for this tax before the Board of Trustees implemented it. PS is looking at their legal options. The most compelling argument focuses on the unconstitutional nature of the
measure. State law requires that new taxes be levied uniformly and not arbitrarily, yet no other tenants of real property rents are targeted.
The SSA has written a letter to the Village Trustees in support of the industry and developed a fact sheet with PS to address the problems with this tax. Also a script was developed for calls to PS tenants, encouraging them to oppose the tax. The SSA is also working with PS and its attorneys and the Association’s role was referenced in a letter from the firm to the Village.
Maine
The Self Storage Association worked with the Maine SSA to fight what was considered to be a burdensome abandoned records law initially proposed in 2009. At first proponents of the measure placed the responsibility and liability of abandoned records with the self storage operator. The SSA contacted the officials involved, noting that the operators simply rent the space and cannot be accountable for sensitive items left in the rented space. The SSA drafted testimony and helped the Maine SSA find a local lobbyist. After winning a delay of one year, the SSA and Maine SSA
were invited to propose more appropriate language.
Pro-business legislators voiced their support for the self storage community, including one member who called the entire concept “nothing more than regulatory creep.” Ultimately a positive bill was adopted and became effective in April which significantly limits the liability of self storage operators. The law reads in-part that in the case of abandoned records the operator “may destroy the personal information without liability to any person.” The law references the Maine Fair Trade Practices Act, which is violated “if an occupant fails
to protect personal information, an operators sells such personal information if there is reasonable knowledge that it exists, or a purchaser of such personal information fails to turn it in to the operator. The SSA contributed $4,000 to help establish a reasonable law in this case.
Michigan
Several bills have been introduced that could ultimately wind up as a tax on self storage. Most legislators will be up for reelection in November however, so the association and the lobbyist believe the tax will not get done soon. But eventually this will have to be debated. The SSA has committed $10,000 to help battle the issue and as much as $20,000 if it progresses even further. ($10,000 provided).
New York
SSA VP of Government Relations Tim Dietz and General Counsel Carlos Kaslow traveled Albany the week of June 14th to meet with Michael Barrett, the New York lobbyist and NY-SSA President Chris McGrath. The hope is to reinforce our desire to see this bill through during the last weeks of the 2010 session. After Senate bill 7118 was introduced in April, the Assembly version was introduced (4/30) and now both bills await a vote. The law would clarify the right of operators to offer point-of-rent tenant insurance. The bill was vetoed last year after passing both the
House and Senate. The current law includes revisions addressing the issues noted within the Governor’s veto report. The SSA is paying $7,500 to a lobbyist to support this effort.
New York 4313B
This bill is not related to self storage, however it does affect the auctioneer industry and could have negatively influenced certain lien situations. NY-SSA President Christ McGrath was successful in offering an amendment to the bill that exempts lien activities. It reads:
Notwithstanding any other provision of law, this section shall not apply to auction sales conducted pursuant to an order of a court of competent jurisdiction, including an order of a bankruptcy judge or trustee, or a sale of secured property pursuant to the uniform commercial code, or the sale of property which is subject to a lien or assignment pursuant to the laws of the state of New York. The bill passed both the House and Senate during the week of June 21st, and awaits the Governor’s signature.
North Carolina
The state faces an $800 million shortfall for the fiscal year beginning July 1, and many legislators are backing a plan that would tax private services. As has been the case previously in other states, revenue administrators have included self storage among the list of services they plan to target with a tax. The Self Storage Association has provided $5,000 to the NC-SSA to help with lobbying efforts to fight the plan.
Wisconsin
The states lien improvement bill AB707 was signed by Governor Jim Doyle on May 18th after having passed the Senate April 22 and Assembly on March 16th. SSA Board member Lisa Chiappetta and SSA VP of Government Relations Tim Dietz testified in front of a Senate committee in favor of the bill in March. The primary stipulations of the bill, supporting facility operators with a value limitation measure and limiting exposure to litigation involving non-tenants, remain in the law. The measure also redefines what constitutes a reasonable auction sale: 3 or more
bidders. The Internet notification provision in the bill was taken out this session after the newspaper lobby protested.
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