(a) A state agency or municipality may impound a derelict vessel by

(1) securing the vessel in place;

(2) towing or sailing the vessel to a secure mooring in a location that is authorized by the state agency or municipality; or

(3) removing the vessel from the water and placing it in storage.

(b) The state agency or municipality that impounds a vessel may sell, donate, or destroy the vessel if the vessel is not repossessed by the owner or a person with a financial or security interest in the vessel within 20 days after the postmark date of the notice mailed under AS 30.30.045(a). The sale of a vessel may be by public auction or by sealed bids or, if no bids are received, by negotiated sale.

(c) A state agency or municipality may, by regulation or ordinance, adopt sale or disposal methods that are consistent with the provisions of this chapter.

(d) A state agency or municipality shall apply the proceeds from the sale of a vessel under this chapter in the following order:

(1) to the administrative costs associated with impounding the vessel;

(2) to the costs of towing, handling, and storing the vessel;

(3) to the administrative costs of conducting the sale;

(4) to a lienholder to the extent of the lien;

(5) to the owner of the vessel if the owner can be found; if the owner cannot be found, the balance shall be deposited into the derelict vessel prevention program fund under AS 30.30.096.

(e) A state agency or municipality shall disperse the proceeds of the sale of a vessel at a public auction under federal law in accordance with federal law.

(f) The state agency or municipality or its designees, employees, or agents are not liable for the disposition of a vessel to the owner, operator, or any lienholder of the vessel.

(g) The transfer of title and interest by sale under this section is a transfer by operation of law. However, a bill of sale executed by an authorized seller is satisfactory evidence authorizing the transfer of the title or interest.