Relating to certificates of number and certificates of title issued by and records kept by the Parks and Wildlife Department; creating a criminal offense.

89(R) HB 4895 - House Committee Report version - Bill Text

89R4440 AB-F

By: Vasut

H.B. No. 4895

A BILL TO BE ENTITLED

AN ACT

relating to certificates of number and certificates of title issued

by and records kept by the Parks and Wildlife Department; creating a

criminal offense.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 31.003, Parks and Wildlife Code, is

amended by amending Subdivisions (2), (8), and (11) and adding

Subdivisions (19), (20), (21), (22), (23), (24), (25), (26), and

(27) to read as follows:

(2) "Vessel" means any watercraft[
, other than a

seaplane on water,
] used or capable of being used for

transportation on water
, except:

(A) a watercraft exempted by commission rule;

(B)

a watercraft that operates only on a

permanently fixed, manufactured course, the movement of which is

restricted to or guided by means of a mechanical device to which the

watercraft is attached or by which the watercraft is controlled;

(C) a seaplane; and

(D) a stationary floating structure that:

(i)

does not have and is not designed to

have a mode of propulsion of its own;

(ii)

is dependent for utilities upon a

continuous utility hookup to a source originating on shore; and

(iii)

has a permanent, continuous hookup to

a shoreside sewage system
.

(8) "Vessel livery" means a
person
[
business

establishment
] engaged in
advertising,
renting
,
or hiring out

vessels for
consideration
[
profit
].
The term includes a

recreational equipment timeshare business that leases or rents

vessels for consideration.

(11) "Manufacturer" means a person engaged in the

business of manufacturing
or importing
new and unused vessels and

outboard motors for the purpose of sale or trade.

(19)

"Cancel" means, with respect to a certificate of

title, to make the certificate ineffective.

(20)

"Certificate of title" means, with respect to a

vessel or outboard motor, a record, created by the department under

this chapter or by a governmental agency of another jurisdiction

under the law of that jurisdiction, that is designated as a

certificate of title by the department or agency and is evidence of

ownership of a vessel or outboard motor.

(21)

"Electronic" means relating to technology having

electrical, digital, magnetic, wireless, optical, electromagnetic,

or similar capabilities.

(22)

"Hull identification number" means the

alphanumeric designation assigned to a vessel under 33 C.F.R. Part

181.

(23)

"Owner of record" or "recorded owner" means an

owner indicated in the files of the department.

(24)

"Purchase" means, with respect to a vessel or

outboard motor, to take by any voluntary transaction that creates

an interest in the vessel or outboard motor.

(25) "Purchaser" means a person who takes by purchase.

(26)

"Record" means information inscribed on a

tangible medium or stored in an electronic or other medium and

retrievable in perceivable form.

(27)

"Security interest" means, with respect to a

vessel or outboard motor, an interest in the vessel or outboard

motor that secures payment or performance of an obligation if the

interest is created by contract or arises under Section 2.401,

2.505, 2.711(c), or 2A.508(e), Business & Commerce Code, except

that the retention or reservation of title by a seller of a vessel

or outboard motor notwithstanding shipment or delivery to the buyer

under Section 2.401 of that code is limited in effect to a

reservation of a security interest. The term:

(A)

includes any interest of a consignor in a

vessel or outboard motor in a transaction that is subject to Chapter

9, Business & Commerce Code; and

(B) does not include:

(i)

the special property interest of a

buyer of a vessel or outboard motor on identification of that vessel

or outboard motor to a contract for sale under Section 2.501,

Business & Commerce Code, unless a buyer acquires a security

interest by complying with Chapter 9 of that code;

(ii)

the right of a seller or lessor of a

vessel or outboard motor under Chapter 2 or 2A, Business & Commerce

Code, to retain or acquire possession of the vessel or outboard

motor:

(a)

except as otherwise provided by

Section 2.505, Business & Commerce Code; or

(b)

unless a seller or lessor acquires

a security interest by complying with Chapter 9, Business &

Commerce Code; or

(iii)

an interest created by a transaction

in the form of a lease, unless the transaction created a security

interest under Section 1.203, Business & Commerce Code.

SECTION 2. Section 31.022(a), Parks and Wildlife Code, is

amended to read as follows:

(a) A vessel is not required to be numbered under the

provisions of this chapter if it is:

(1) operated within this state for a period not

exceeding 90 consecutive days and is covered by a number in full

force and effect which has been awarded under federal law or a

federally approved numbering system of another state;

(2) from a country other than the United States

temporarily using the water of this state;

(3) owned by the United States, a state, or a

subdivision of a state; [
or
]

(4) a ship's lifeboat
; or

(5)

an amphibious vehicle for which a certificate of

title is issued under Chapter 501, Transportation Code, or a

similar law of another state
.

SECTION 3. Section 31.028, Parks and Wildlife Code, is

amended to read as follows:

Sec. 31.028. CERTIFICATE OF NUMBER. The certificate of

number shall be pocket-size. The certificate
,
[
or
] a facsimile of

the certificate, or an electronic version of the certificate

provided by the department
[
it
] shall be carried on board the vessel

at all times. It does not have to be on the person of the operator

if prior to trial the operator can produce for examination a valid

certificate of number.

SECTION 4. Section 31.037(c), Parks and Wildlife Code, is

amended to read as follows:

(c) The new owner of a vessel shall, not later than the
20th

[
45th
] day after the date ownership was transferred, submit an

application to the department with:

(1) evidence of ownership;

(2) the new owner's name and address;

(3) the number of the vessel; and

(4) a fee of $2 or an amount set by the commission,

whichever amount is more.

SECTION 5. Sections 31.039(a) and (b), Parks and Wildlife

Code, are amended to read as follows:

(a)
Ownership
[
Except as provided by Subsection (c), all

ownership
] records of the department made or kept under this

chapter are public records
, including the information required

under Section 31.049, except the following information is not a

public record:

(1)

an owner identifier as prescribed by 33 C.F.R.

Section 174.17;

(2)

the phone number, e-mail address, social security

number, or taxpayer identification number of an owner of a vessel or

outboard motor; and

(3)

any other information contained in an ownership

record that is not subject to public disclosure under Chapter 552,

Government Code, or other law
.

(b) The commission may by rule charge a fee for access to

ownership records and other records made or kept under this

chapter.
The department may provide a record in any medium. If

requested, the department shall provide a record in a format that is

self-authenticating under Rule 902, Texas Rules of Evidence.

SECTION 6. Sections 31.041(h) and (i), Parks and Wildlife

Code, are amended to read as follows:

(h) Not later than the
20th
[
45th
] day after a dealer,

distributor, or manufacturer holding a dealer's, distributor's, or

manufacturer's license sells at the first or a subsequent sale a

vessel or outboard motor, the dealer, distributor, or manufacturer

shall apply, in the name of the purchaser of the vessel or outboard

motor, for a certificate of number or a certificate of title for the

vessel or outboard motor, as applicable, and file with the

department each document necessary to transfer the certificate of

number or certificate of title.

(i) A person purchasing a vessel may use the temporary

facsimile number issued under Subsection (f) for a period not to

exceed
20
[
45
] days from the date the dealer, distributor, or

manufacturer applies for a certificate of number or a certificate

of title under Subsection (h). The person shall retain the

facsimile number on the vessel for the period described by this

subsection.

SECTION 7. Sections 31.043(b) and (d), Parks and Wildlife

Code, are amended to read as follows:

(b) The owner of a vessel that does not have a

manufacturer's hull identification number may file an application

for a hull identification number with the department on forms

approved by it. The application must include a sworn statement

describing the vessel, proving legal ownership, and, if known,

stating the reason for the lack of hull identification number. The

application must be signed by the owner of the vessel and must be

accompanied by a fee of $25
, or an amount set by the commission,

whichever is greater,
and a certificate from a game warden

commissioned by the department stating that the vessel has been

inspected by the officer and appears to be as applied for. On

receipt of the application in approved form, the department shall

enter the information on the records of its office and shall issue

to the applicant a hull identification number.

(d) A person who has a vessel with an altered, defaced,

mutilated, or removed hull identification number or an outboard

motor with an altered, defaced, mutilated, or removed serial number

shall file a sworn statement with the department describing the

vessel or outboard motor, proving legal ownership, and, if known,

stating the reason for the destruction, removal, or defacement of

the number. The statement must be accompanied by a fee of $25
, or an

amount set by the commission, whichever is greater,
and a

certificate from a game warden commissioned by the department that

the vessel or outboard motor has been inspected by the officer and

appears to be as applied for. On receipt of the statement in

approved form, the department shall enter the information on

records of its office and shall issue to the applicant a hull

identification number or outboard motor serial number.

SECTION 8. Subchapter B-1, Chapter 31, Parks and Wildlife

Code, is amended by adding Section 31.0445 to read as follows:

Sec. 31.0445. DEFINITIONS. In this subchapter:

(1)

"Barge" means a vessel that is not self-propelled

or fitted for propulsion by sail, paddle, oar, or similar device.

(2)

"Builder's certificate" means a certificate of the

facts of build of a vessel described in 46 C.F.R. Section 67.99.

(3)

"Buyer"

includes, with respect to a vessel or

outboard motor, a person who contracts to buy the vessel or outboard

motor.

(4)

"Certificate of origin" means a record created by

a manufacturer or importer as proof of identity of a vessel or

outboard motor. The term includes a manufacturer's certificate or

statement of origin and an importer's certificate or statement of

origin. The term does not include a builder's certificate.

(5)

"Debtor" has the meaning assigned by Section

9.102, Business & Commerce Code.

(6)

"Documented vessel" means a vessel covered by a

certificate of documentation issued under 46 U.S.C. Section 12105.

The term does not include a foreign-documented vessel.

(7)

"Electronic certificate of title" means a

certificate of title consisting of information that is stored

solely in an electronic medium and is retrievable in perceivable

form.

(8)

"Foreign-documented vessel" means a vessel the

ownership of which is recorded in a registry maintained by a country

other than the United States that identifies each person that has an

ownership interest in the vessel and includes a unique alphanumeric

designation for the vessel.

(9) "Hull damaged" means, with respect to a vessel:

(A)

the integrity of the vessel's hull is

compromised by a collision, allision, lightning strike, fire,

explosion, running aground, or similar occurrence; or

(B)

the sinking of the vessel in a manner that

creates a significant risk to the integrity of the vessel's hull.

(10)

"Lease" and "lessor" have the meanings assigned

by Section 2A.103, Business & Commerce Code.

(11)

"Lien creditor" has the meaning assigned by

Section 9.102, Business & Commerce Code.

(12)

"Notice" has the meaning assigned by Section

1.202, Business & Commerce Code.

(13)

"Secured party" means, with respect to a vessel

or outboard motor, a person:

(A)

in whose favor a security interest is created

or provided for under a security agreement, regardless of whether

any obligation to be secured is outstanding;

(B)

who is a consignor under Chapter 9, Business &

Commerce Code; or

(C)

who holds a security interest arising under

Section 2.401, 2.505, 2.711(c), or 2A.508(e), Business & Commerce

Code.

(14)

"Secured party of record" means the secured party

whose name is indicated as the name of the secured party in the

files of the department or, if the files indicate more than one

secured party, the one first indicated.

(15)

"Title brand" means a designation of previous

damage, use, or condition that must be indicated on a certificate of

title.

(16)

"Transfer of ownership" means a voluntary or

involuntary conveyance of an interest in a vessel or an outboard

motor.

(17)

"Written certificate of title" means a

certificate of title consisting of information inscribed on a

tangible medium.

SECTION 9. Sections 31.045(b) and (d), Parks and Wildlife

Code, are amended to read as follows:

(b) The ownership of a new vessel or a new outboard motor is

evidenced by a manufacturer's or [
an
] importer's certificate
of

origin
executed on a form prescribed by the department.

(d) The ownership of a vessel [
exempted from numbering under

Section 31.022(c) of this code
] is not required to be evidenced by a

certificate of title issued by the department
for:

(1)

a vessel exempted from numbering under Section

31.022(c);

(2)

a watercraft owned by the United States, a state, a

foreign government, or a political subdivision of the United

States, a state, or a foreign government;

(3)

a watercraft used solely as a lifeboat on another

watercraft; or

(4)

an amphibious vehicle for which a certificate of

title is issued under Chapter 501, Transportation Code, or a

similar law of another state
.

SECTION 10. Section 31.046, Parks and Wildlife Code, is

amended by amending Subsections (a) and (b) and adding Subsection

(a-1) to read as follows:

(a) Except as provided
by
[
in
] Subsections (b) and (c) [
of

this section
], the
owner of a vessel or outboard motor for which

this state is the state of principal use shall deliver to the

department or to a county tax assessor-collector an application for

a certificate of title for the vessel or outboard motor, with the

applicable fee, not later than the 20th day after the later of:

(1) the date of purchase or transfer of ownership; or

(2)

the date that this state becomes the state of

principal use
[
purchaser of a vessel or an outboard motor shall

apply to the department or to a county tax assessor-collector for a

certificate of title not later than the 45th day after the date of

the sale of the vessel or outboard motor
].

(a-1)

For purposes of Subsection (a), the state of principal

use of a vessel or outboard motor is the state on whose waters a

vessel or outboard motor is or will be used, operated, navigated, or

employed more than on the waters of any other state during a

calendar year.

(b) A manufacturer or a dealer who sells a vessel or an

outboard motor to a person other than a manufacturer or a dealer

shall apply to the department or to a county tax assessor-collector

for a certificate of title for the vessel or outboard motor in the

name of the purchaser not later than the
20th
[
45th
] day after the

date of the sale.

SECTION 11. Sections 31.047(b), (c), and (f), Parks and

Wildlife Code, are amended to read as follows:

(b) The form must contain:

(1) the owner's name,
principal residence address,

mailing
address, and owner identifier as prescribed by 33 C.F.R.

Section 174.17;

(2) a description of the vessel or outboard motor,

including, as appropriate, the manufacturer, make, model, year,

length, construction material, manufacturer's or builder's number,

hull identification number [
(HIN)
], motor number, outdrive number,

primary operation purpose, vessel type, propulsion type, engine

drive type, fuel
type
, and horsepower;

(3) name and address of purchaser;

(4) date of purchase;

(5) name and address of any security interest owner;

(6) the appropriate affidavit as required by Section

160.042, Tax Code;

(7) if the application is for a vessel:

(A)

a statement that the vessel is not a

documented vessel or a foreign-documented vessel; and

(B)

a statement that the vessel is hull damaged,

if the applicant knows that the vessel is hull damaged;

(8) if previously titled or registered:

(A) transferor's name and address;

(B)

when applicable, name of the state in which

the vessel or outboard motor was previously titled or registered;

and

(C)

any title brand known to the applicant and,

if known, the jurisdiction under whose law the title brand was

designated;
and

(9)
[
(7)
] other information required by the

department to show the ownership of the vessel or outboard motor, a

security interest in the vessel or outboard motor, or a further

description of items listed in the subdivision.

(c) The application must be accompanied by other evidence

reasonably required by the department to establish that the

applicant or other person is entitled to a certificate of title or a

noted security interest. The evidence may include:

(1) a certificate of title issued by another state or

jurisdiction;

(2) a manufacturer's or importer's certificate
of

origin
;

(3) a bill of sale, assignment, or contract;

(4) a promissory note;

(5) a security agreement;

(6) an invoice;

(7) a bill of lading;

(8) an affidavit;

(9) a probate or heirship proceeding or information;

(10) a judgment of a court of competent jurisdiction;

(11) evidence of an involuntary transfer
,
as defined

by
[
in Subdivision (5) of Subsection (a) of
] Section
31.053(b)

[
31.053, as amended
], which may be in affidavit form attaching

copies of any pertinent underlying documents;

(12)

if the vessel was a documented vessel, a record

issued by the Coast Guard that shows the vessel is no longer

documented and identifies the applicant as the owner, or is

accompanied by a record that identifies the applicant as the owner;

(13)

if the vessel was a foreign-documented vessel, a

record issued by the foreign country that shows the vessel is no

longer a foreign-documented vessel and identifies the applicant as

the owner, or is accompanied by a record that identifies the

applicant as the owner;
or

(14)
[
(12)
] other documents.

(f) An application for a certificate of title on a homemade

vessel, the origin of which is based on the affidavit of the person

building the vessel, proof of materials incorporated into the

vessel, and the like, must be accompanied by a certificate from a

game warden commissioned by the department that the vessel has been

inspected by such officer and appears to be as applied for. The

applicant shall pay a fee of $25
, or an amount set by the

commission, whichever is greater,
to the department for this

inspection.

SECTION 12. Subchapter B-1, Chapter 31, Parks and Wildlife

Code, is amended by adding Section 31.0485 to read as follows:

Sec.

31.0485.

ISSUANCE, REJECTION, AND CANCELLATION OF

CERTIFICATE OF TITLE. (a) Unless an application for a certificate

of title is rejected under Subsection (c) or (d), the department

shall issue a certificate of title for the vessel or outboard motor

in accordance with Subsection (b) not later than the 20th day after

the date the department receives an application that complies with

this chapter.

(b)

If the department issues electronic certificates of

title, the department shall issue an electronic certificate of

title unless in the application the secured party of record or, if

none, the owner of record, requests that the department issue a

written certificate of title.

(c)

Except as provided by Subsection (d), the department may

reject an application for a certificate of title only if:

(1)

the application does not comply with this chapter

or other applicable law;

(2)

the application does not contain documentation

sufficient for the department to determine whether the applicant is

entitled to a certificate of title; or

(3)

the department finds a reasonable basis for

concluding that the application is fraudulent or issuance of a

certificate of title to the applicant would facilitate a fraudulent

or illegal act.

(d)

The department shall reject an application for a

certificate of title for a vessel that is a documented vessel or a

foreign-documented vessel.

(e)

On issuance of a written certificate of title, the

department promptly shall send the certificate of title to the

secured party of record or, if none, to the owner of record, at the

address indicated for that person in the files of the department.

On issuance of an electronic certificate of title, the department

promptly shall send a record evidencing the certificate of title to

the owner of record and, if there is one, to the secured party of

record, at the address indicated for that person in the files of the

department. The department may send the record to the person's

mailing address or, if indicated in the files of the department, an

electronic address.

(f)

If the department issues a written certificate of title

for a vessel or outboard motor, any electronic certificate of title

for the vessel or outboard motor is canceled and replaced by the

written certificate of title. The department shall maintain in the

files of the department the date and time of cancellation.

(g)

Before the department issues an electronic certificate

of title, any written certificate of title for the vessel or

outboard motor must be surrendered to the department. If the

department issues an electronic certificate of title, the

department shall destroy or otherwise cancel the written

certificate of title for the vessel or outboard motor that has been

surrendered to the department and maintain in the files of the

department the date and time of destruction or other cancellation.

If a written certificate of title being canceled is not destroyed,

the department shall indicate on the face of the certificate that it

has been canceled.

(h)

The department may cancel a certificate of title issued

by the department only if the department:

(1)

could have rejected the application for the

certificate under Subsection (c);

(2)

is required to cancel the certificate under this

section or another provision of this chapter; or

(3)

receives satisfactory evidence that the vessel is

a documented vessel or a foreign-documented vessel.

SECTION 13. Section 31.049, Parks and Wildlife Code, is

amended by amending Subsection (a) and adding Subsections (f), (g),

and (h) to read as follows:

(a) A certificate of title must be on a form prescribed by

the department and must contain:

(1) the name and
mailing
address of the owner of the

vessel or outboard motor
and, if not all owners are listed, an

indication that there are additional owners indicated in the files

of the department
;

(2) the name
and mailing address
of the owner of a

security interest in the vessel or outboard motor
and, if not all

security interests are listed, an indication that there are

additional security interests indicated in the files of the

department
; [
and
]

(3) a description of the vessel or outboard motor
,

including, as appropriate, the hull identification number, motor

number, outdrive number, make, year, length, vessel type, hull

material, propulsion type, engine drive type, fuel type, and

horsepower;

(4) the date the certificate was issued;

(5)

all title brands indicated in the files of the

department covering the vessel, including brands indicated on a

certificate issued by a governmental agency of another jurisdiction

and delivered to the department; and

(6)

a form for the owner of record to indicate, in

connection with a transfer of ownership interest, that the vessel

is hull damaged
.

(f)

This chapter does not preclude the department from

noting on a certificate of title the name and mailing address of a

secured party that is not a secured party of record.

(g)

For each title brand indicated on a certificate of

title, the certificate must identify the jurisdiction under whose

law the title brand was designated or the jurisdiction that issued

the certificate on which the title brand was designated. If the

meaning of a title brand is not easily ascertainable or cannot be

accommodated on the certificate, the certificate may state:

"Previously branded in (insert the jurisdiction under whose law the

title brand was designated or that issued the certificate of title

on which the title brand was designated)."

(h)

If the files of the department indicate that a vessel

was previously registered or titled in a foreign country, the

department shall indicate on the certificate of title that the

vessel was registered or titled in that country.

SECTION 14. The heading to Section 31.050, Parks and

Wildlife Code, is amended to read as follows:

Sec. 31.050. FORM OF MANUFACTURER'S AND IMPORTER'S

CERTIFICATE
OF ORIGIN
.

SECTION 15. Sections 31.050(a) and (b), Parks and Wildlife

Code, are amended to read as follows:

(a) A manufacturer's [
certificate
] or [
an
] importer's

certificate
of origin
must include:

(1) a description of the vessel or outboard motor as

required by [
Subdivision (2) of Subsection (b) of
] Section

31.047(b)(2)
[
31.047 of this code
];

(2) the name and place of construction or other

origin;

(3) the signature of the manufacturer or an equivalent

of the signature of the manufacturer; and

(4) the endorsement of the original and each

subsequent transferee, including the applicant for the original

certificate of title.

(b) A lien, security interest, or other encumbrance may not

be shown on a manufacturer's or importer's certificate
of origin
.

SECTION 16. Subchapter B-1, Chapter 31, Parks and Wildlife

Code, is amended by adding Section 31.0505 to read as follows:

Sec.

31.0505.

HULL DAMAGED TITLE BRAND. (a) Unless

Subsection (b) applies, at or before the time the owner of record

transfers an ownership interest in a hull-damaged vessel that is

covered by a certificate of title issued by the department, if the

damage occurred while that person was an owner of the vessel and the

person has notice of the damage at the time of the transfer, the

owner shall:

(1)

deliver to the department an application for a new

certificate of title that complies with Section 31.046 and includes

the title brand "Hull Damaged"; or

(2)

indicate on the certificate of title in the place

designated for that purpose that the vessel is hull damaged and

deliver the certificate to the transferee.

(b)

Before an insurer transfers an ownership interest in a

hull-damaged vessel that is covered by a certificate of title

issued by the department, the insurer shall deliver to the

department an application for a new certificate of title that

complies with Section 31.046 and includes the title brand "Hull

Damaged".

(c)

Not later than the 20th day after the date of delivery to

the department of an application under Subsection (a)(1) or (b) or a

certificate of title under Subsection (a)(2), the department shall

issue a new certificate of title that indicates that the vessel is

title branded "Hull Damaged".

(d) A person commits an offense if the person:

(1) intentionally or knowingly:

(A)

fails to comply with Subsection (a) or (b);

or

(B)

solicits or colludes in a failure by an owner

of record to comply with Subsection (a); or

(2)

negligently fails to comply with Subsection (a) or

(b).

(e)

An offense under Subsection (d)(1) is a Class B Parks

and Wildlife Code misdemeanor. An offense under Subsection (d)(2)

is a Class C Parks and Wildlife Code misdemeanor.

SECTION 17. Section 31.051, Parks and Wildlife Code, is

amended to read as follows:

Sec. 31.051. REPLACEMENT CERTIFICATES
OF TITLE
. The

department shall provide by regulation for the replacement of

[
lost, mutilated, or stolen
] certificates
of title
.

SECTION 18. Sections 31.052(a), (c), and (d), Parks and

Wildlife Code, are amended to read as follows:

(a) Except as provided by this section and Section

31.050(c), and except for statutory liens, security interests in a

vessel or outboard motor shall be noted on the certificate of title

of the vessel or outboard motor to which the security interest

applies. On recordation of a security interest on the certificate

of title, the recorded security interest owner and assignees under

Subsection (c) obtain priority over the rights of a lien creditor[
,

as defined by Section 9.102, Business & Commerce Code,
] for so long

as the security interest is recorded on the certificate of title.

(c) A security interest owner may assign a security interest

recorded under this chapter without making any filing or giving any

notice under this chapter. The security interest assigned remains

valid and perfected and retains its priority, securing the

obligation assigned to the assignee, against transferees from and

creditors of the debtor, including lien creditors[
, as defined by

Section 9.102, Business & Commerce Code
].

(d) An assignee or assignor may, but need not to retain the

validity, perfection, and priority of the security interest

assigned, as evidence of the assignment of the security interest

recorded under this chapter, apply to the department or a county

assessor-collector for the assignee to be named as security

interest owner on the certificate of title and notify the debtor of

the assignment. Failure to make application under this subsection

or notify a debtor of an assignment does not create a cause of

action against the recorded security interest owner, the assignor,

or the assignee or affect the continuation of the perfected status

of the assigned security interest in favor of the assignee against

transferees from and creditors of the debtor, including lien

creditors[
, as defined by Section 9.102, Business & Commerce Code
].

SECTION 19. Section 31.053, Parks and Wildlife Code, is

amended by amending Subsections (a) and (c) and adding Subsections

(a-1), (g), and (h) to read as follows:

(a) No person may sell, assign, transfer, or otherwise

dispose of an interest in a vessel or an outboard motor without:

(1) if the transferee is not a manufacturer or a dealer

and the vessel or outboard motor is new, delivering to the

department a manufacturer's or importer's certificate
of origin

showing the endorsement of the manufacturer and all intervening

owners;

(2) if the transferee is a manufacturer or a dealer and

the vessel or outboard motor is new, delivering to the transferee a

manufacturer's or importer's certificate
of origin
showing the

endorsement of the manufacturer and all intervening owners;

(3) if the vessel or outboard motor is not covered by a

certificate of title or a manufacturer's or importer's certificate

of origin
and if the transferor is a manufacturer or dealer,

delivering to the department sufficient evidence of title or other

information to permit the issuance of a certificate of title for the

vessel or outboard motor in the name of the transferee;

(4) if the vessel or outboard motor is not covered by a

certificate of title or a manufacturer's or importer's certificate

of origin
and if the transferor is not a manufacturer or dealer,

delivering to the transferee sufficient evidence of title or other

information to permit the transferee to apply for and receive a

certificate of title for the vessel or outboard motor in the name of

the transferee; or

(5) delivering to the transferee a certificate of

title for the vessel or outboard motor in the name of the transferor

and properly endorsed to show the transfer or evidence of an

involuntary transfer.

(a-1)

For a voluntary transfer, if the transferor does not

have possession of the certificate of title, the person in

possession of the certificate of title shall facilitate the

transferor's compliance with this section, except that a secured

party does not have a duty to facilitate the transferor's

compliance with this section if the proposed transfer is prohibited

by the security agreement.

(c) The transferor shall provide the documents or evidence

required by Subsection (a) [
of this section
] to the department or

the transferee, as appropriate, in sufficient time to allow the

transferee to register and obtain a certificate of title for the

vessel or outboard motor not later than the
20th
[
45th
] day after

the date of the sale.

(g)

If the certificate of title is an electronic certificate

of title, the transferor shall promptly sign and deliver to the

transferee a record evidencing the transfer of ownership to the

transferee.

(h)

The transferee has a right enforceable by specific

performance to require the transferor comply with Subsection

(a)(5), (a-1), or (g).

SECTION 20. Section 31.055, Parks and Wildlife Code, is

amended to read as follows:

Sec. 31.055. EXCEPTIONS. This subchapter does not apply

to
:

(1) a vessel
[
vessels
] with a valid marine document

issued by the United States Coast Guard's National Vessel

Documentation Center or a federal agency that is a successor to the

National Vessel Documentation Center
;

(2) a foreign-documented vessel;

(3) a barge; or

(4)

a vessel before delivery if the vessel is under

construction or completed under contract
.

SECTION 21. Subchapter B-1, Chapter 31, Parks and Wildlife

Code, is amended by adding Sections 31.0563, 31.0565, 31.0567,

31.0569, 31.057, 31.0573, 31.0575, 31.0577, 31.0579, 31.058, and

31.0582 to read as follows:

Sec.

31.0563.

RECORDS. (a)

For each record relating to a

certificate of title submitted to the department, the department

shall maintain a file that includes:

(1)

the hull identification number of the vessel or

the serial number of the outboard motor;

(2)

all the information submitted with the application

under Section 31.046, including the date and time the application

was submitted to the department;

(3)

the name of each secured party to the vessel or

outboard motor; and

(4)

the name of each person known to the department to

be claiming an ownership interest in the vessel or outboard motor.

(b)

In addition to the information described by Subsection

(a), the department shall maintain a list of all title brands known

to the department and stolen-property reports relating to vessels

or outboard motors made known to the department.

(c)

The department shall maintain the information described

in this section in a manner that is searchable by hull

identification number of the vessel, the motor number, the vessel

number, and the name of the owner of record. The department may

maintain the information described in this section in a manner that

is searchable by other methods.

(d)

The department shall provide to federal, state, and

local governmental entities the information described by this

section, on request of the governmental entities and for the

purposes of safety, security, or law enforcement.

(e)

The department shall retain the evidence used to

establish the accuracy of the information in its files relating to

the ownership of a vessel or outboard motor and the information on

the certificate of title in accordance with the record retention

schedule established under the department's records management

program.

(f)

The department shall retain in its files all information

regarding a security interest in a vessel or outboard motor for at

least 10 years after the department receives a termination

statement regarding the security interest. The information must be

accessible by the hull identification number of the vessel or

serial number of the outboard motor and any other methods provided

by the department.

(g)

If a person submits a record to the department, or

submits information that is accepted by the department, and

requests an acknowledgment of the filing or submission, the

department shall send to the person an acknowledgment showing the

hull identification number of the vessel or serial number of the

outboard motor to which the record or submission relates, the

information in the filed record or submission, and the date and time

the record was received or the submission accepted. A request

described by this subsection must contain the hull identification

number of the vessel and serial number of the outboard motor and be

delivered by means authorized by the department.

Sec.

31.0565.

EFFECT OF CERTIFICATE OF TITLE ON INFORMATION

IN CERTIFICATE. A certificate of title is prima facie evidence of

the accuracy of the information in the record that constitutes the

certificate.

Sec.

31.0567.

EFFECT OF POSSESSION OF CERTIFICATE OF TITLE;

JUDICIAL PROCESS. Possession of a certificate of title does not

provide a right to obtain possession of a vessel or outboard motor.

Garnishment, attachment, levy, replevin, or other judicial process

against the certificate is not effective to determine possessory

rights to the vessel or outboard motor. This chapter does not

prohibit enforcement under the laws of this state of a security

interest in, levy on, or foreclosure of a statutory or common-law

lien on a vessel or outboard motor. Absence of an indication of a

statutory or common-law lien on a certificate of title does not

invalidate the lien.

Sec.

31.0569.

PERFECTION OF SECURITY INTEREST. (a) A

security interest in a vessel or outboard motor may be perfected

only by delivery to the department of an application for a

certificate of title that identifies the secured party and

otherwise complies with Section 31.049. The security interest is

perfected on the later of delivery to the department of the

application and the applicable fee or attachment of the security

interest under Section 9.203, Business & Commerce Code.

(b)

If the interest of a person named as owner, lessor,

consignor, or bailor in an application for a certificate of title

delivered to the department is a security interest, the application

sufficiently identifies the person as a secured party.

Identification on the application for a certificate of title of a

person as owner, lessor, consignor, or bailor is not by itself a

factor in determining whether the person's interest is a security

interest.

(c)

If the department has issued a certificate of title for

a vessel or outboard motor, a security interest in the vessel or

outboard motor may be perfected by delivery to the department of an

application, on a form prescribed by the department, to have the

security interest added to the certificate of title. The

application must be signed by an owner of the vessel or outboard

motor or by the secured party and must include:

(1) the name of the owner of record;

(2) the name and mailing address of the secured party;

(3)

the hull identification number of the vessel and

serial number of the outboard motor, as applicable; and

(4)

the certificate of title, if the department has

issued a written certificate of title for the vessel or outboard

motor.

(d)

A security interest perfected under Subsection (c) is

perfected on the later of:

(1)

delivery to the department of the application and

all applicable fees; or

(2)

attachment of the security interest under Section

9.203, Business & Commerce Code.

(e)

On delivery of an application that complies with

Subsection (c) and payment of all applicable fees, the department

shall issue a new certificate of title under Section 31.0485 and

deliver the new certificate of title or a record evidencing an

electronic certificate of title as required by Subsection (e) of

that section. The department shall maintain in the files of the

department the date and time of delivery of the application to the

department.

(f)

If a secured party assigns a perfected security interest

in a vessel or outboard motor, the receipt by the department of a

statement providing the name of the assignee as secured party is not

required to continue the perfected status of the security interest

against creditors of and transferees from the original debtor. A

purchaser of a vessel or outboard motor subject to a security

interest who obtains a release from the secured party indicated in

the files of the department or on the certificate of title takes

free of the security interest and of the rights of a transferee

unless the transfer is indicated in the files of the department or

on the certificate of title.

(g) This section does not apply to a security interest:

(1)

issued for a vessel or outboard motor by a person

during any period in which the vessel or outboard motor is inventory

held for sale or lease by the person or is leased by the person as

lessor if the person is in the business of selling vessels or

outboard motors;

(2)

in a barge for which no application for a

certificate of title has been delivered to the department; or

(3)

in a vessel or outboard motor before delivery if

the vessel or outboard motor is under construction or completed

under contract and for which no application for a certificate of

title has been delivered to the department.

(h)

If a certificate of documentation for a documented

vessel is deleted or canceled, a security interest in the vessel

that was valid immediately before deletion or cancellation against

a third party as a result of compliance with 46 U.S.C. Section 31321

is and remains perfected until the earlier of:

(1)

four months after deletion or cancellation of the

certificate of documentation; or

(2)

the perfection of the security interest under this

section.

(i)

A security interest in a vessel or outboard motor

arising under Section 2.401, 2.505, 2.711(c), or 2A.508(e),

Business & Commerce Code, is perfected when it attaches but becomes

unperfected when the debtor obtains possession of the vessel or

outboard motor, unless before the debtor obtains possession the

security interest is perfected under Subsection (a) or (c).

(j)

A security interest in a vessel or outboard motor as

proceeds of other collateral is perfected to the extent provided in

Section 9.315, Business & Commerce Code.

(k)

A security interest in a vessel or outboard motor

perfected under the law of another jurisdiction is perfected to the

extent provided in Section 9.316(d), Business & Commerce Code.

Sec.

31.057.

TERMINATION STATEMENT. (a) A secured party

indicated in the files of the department as having a security

interest in a vessel or outboard motor shall deliver a termination

statement to the department and, on the debtor's request, to the

debtor, not later than the earlier of:

(1)

the 20th day after the date the secured party

receives a signed demand from an owner for a termination statement

and there is no obligation secured by the vessel or outboard motor

subject to the security interest and no commitment to make an

advance, incur an obligation, or otherwise give value secured by

the vessel or outboard motor; or

(2)

if the vessel or outboard motor is used or bought

for use primarily for personal, family, or household purposes, the

30th day after the date that no obligation is secured by the vessel

or outboard motor and no commitment exists to make an advance, incur

an obligation, or otherwise give value secured by the vessel or

outboard motor.

(b)

If a written certificate of title has been issued and

delivered to a secured party and a termination statement is

required under Subsection (a), the secured party, not later than

the date required by Subsection (a), shall deliver the certificate

of title to the debtor or to the department with the statement. If

the certificate of title is lost, stolen, mutilated, destroyed, or

is otherwise unavailable or illegible, the secured party shall

deliver with the statement, not later than the date required by

Subsection (a), an application for a replacement certificate of

title meeting the requirements prescribed in the regulations

adopted under Section 31.051.

(c)

On delivery to the department of a termination statement

authorized by the secured party, and, if applicable, an application

for a replacement certificate of title meeting the requirements

prescribed in the regulations adopted under Section 31.051, the

security interest to which the statement relates ceases to be

perfected. If the security interest to which the statement relates

was indicated on the certificate of title, the department shall

issue a new certificate of title and deliver the new certificate of

title or a record evidencing an electronic certificate of title.

The department shall maintain in its files the date and time of

delivery to the department of the termination statement.

(d)

A secured party that fails to comply with this section

is liable for:

(1)

any loss that the secured party had reason to know

might result from the secure party's failure to comply and which

could not reasonably have been prevented; and

(2)

the cost of an application for a certificate of

title under Section 31.047 or a replacement certificate of title

under the regulations adopted under Section 31.051.

Sec.

31.0573.

EFFECT OF MISSING OR INCORRECT INFORMATION.

Except as otherwise provided by Section 9.337, Business & Commerce

Code, a certificate of title or other record required or authorized

by this chapter is effective, regardless of whether it contains

incorrect information or does not contain required information.

Sec.

31.0575.

TRANSFER OF OWNERSHIP BY SECURED PARTY'S

TRANSFER STATEMENT.

(a) In this section, "secured party's

transfer statement" means a record signed by the secured party of

record stating:

(1)

there has been a default on an obligation secured

by the vessel or outboard motor;

(2)

the secured party of record is exercising or has

exercised post-default remedies with respect to the vessel or

outboard motor;

(3)

by reason of the exercise, the secured party of

record has the right to transfer the ownership interest of an owner,

and the name of the owner;

(4)

the name and last known mailing address of the

owner of record and the secured party of record;

(5) the name of the transferee;

(6)

other information required by Section 31.047(b);

and

(7) one of the following:

(A)

that the certificate of title is an

electronic certificate of title;

(B)

that the secured party does not have

possession of the written certificate of title issued in the name of

the owner of record; or

(C)

that the secured party is delivering the

written certificate of title to the department with the secured

party's transfer statement.

(b)

Unless the department rejects a secured party's

transfer statement for a reason stated in Section 31.0485(c), not

later than the 20th day after the date of delivery to the department

of the statement and payment of fees due under this chapter and

taxes payable under Chapter 160, Tax Code, in connection with the

statement or the acquisition or use of the vessel or outboard motor,

the department shall:

(1) accept the statement;

(2)

amend the files of the department to reflect the

transfer; and

(3)

if the name of the owner whose ownership interest

is being transferred is indicated on the certificate of title:

(A)

cancel the certificate of title, regardless

of whether the certificate of title has been delivered to the

department;

(B)

issue a new certificate of title indicating

the transferee as owner; and

(C)

deliver the new certificate of title or a

record evidencing an electronic certificate of title.

(c)

The submission to the department of a secured party's

transfer statement, or the issuance of a certificate of title under

Subsection (b), is not a disposition of the vessel or outboard motor

and does not relieve the secured party of the secured party's duties

under Chapter 9, Business & Commerce Code.

Sec.

31.0577.

TRANSFER BY OPERATION OF LAW. (a) In this

section:

(1)

"By operation of law" means, with respect to a

vessel or outboard motor, in accordance with a law or judicial order

affecting ownership of the vessel or outboard motor:

(A)

because of death, divorce or other family law

proceeding, merger, consolidation, dissolution, or bankruptcy;

(B)

through the exercise of the rights of a lien

creditor or a person having a lien created by statute or rule of

law; or

(C) through other legal process.

(2)

"Transfer-by-law statement" means a record signed

by a transferee stating that by operation of law the transferee has

acquired or has the right to acquire an ownership interest in a

vessel or outboard motor.

(b) A transfer-by-law statement must contain:

(1)

the name and last known mailing address of the

owner of record and the transferee and the other information

required by Section 31.047(b);

(2)

documentation sufficient to establish the

transferee's ownership interest or right to acquire the ownership

interest;

(3) a statement that:

(A)

the certificate of title is an electronic

certificate of title;

(B)

the transferee does not have possession of

the written certificate of title issued in the name of the owner of

record; or

(C)

the transferee is delivering the written

certificate of title to the department with the transfer-by-law

statement; and

(4)

except for a transfer described in Subsection

(a)(1)(A), evidence that notification of the transfer and the

intent to file the transfer-by-law statement has been sent to all

persons indicated in the files of the department as having an

interest, including a security interest, in the vessel or outboard

motor.

(c)

Unless the department rejects a transfer-by-law

statement for a reason stated in Section 31.0485(c) or because the

statement does not include documentation satisfactory to the

department as to the transferee's ownership interest or right to

acquire the ownership interest, not later than the 20th day after

the date of delivery to the department of the statement and payment

of fees due under this chapter and taxes payable under Chapter 160,

Tax Code, in connection with the statement or with the acquisition

or use of the vessel or outboard motor, the department shall:

(1) accept the statement;

(2)

amend the files of the department to reflect the

transfer; and

(3)

if the name of the owner whose ownership interest

is being transferred is indicated on the certificate of title:

(A)

cancel the certificate of title, regardless

of whether the certificate of title has been delivered to the

department;

(B)

issue a new certificate of title indicating

the transferee as owner;

(C)

indicate on the new certificate of title any

security interest indicated on the canceled certificate of title,

unless a court order provides otherwise; and

(D)

deliver the new certificate of title or a

record evidencing an electronic certificate of title.

(d)

This section does not apply to a transfer of an interest

in a vessel or outboard motor by a secured party under Subchapter F,

Chapter 9, Business & Commerce Code.

Sec.

31.0579.

APPLICATION FOR TERMINATION OF SECURITY

INTEREST WITHOUT CERTIFICATE OF TITLE. (a) Except as provided by

Sections 31.0575 and 31.0577, if the department receives,

unaccompanied by a signed certificate of title, an application for

a new certificate of title that includes an indication of a

termination statement, the department may issue a new certificate

of title under this section only if:

(1)

all other requirements under Sections 31.047 and

31.0485 are met;

(2)

the applicant provides an affidavit stating facts

showing the applicant is entitled to a termination statement;

(3)

the applicant provides the department with

satisfactory evidence that notification of the application has been

sent to all persons indicated in the files of the department as

having a security interest in the vessel or outboard motor, not

earlier than the 45th day after the date the notification was sent,

and the department has not received an objection from any of those

persons; and

(4)

the applicant submits any other information

required by the department as evidence of the applicant's right to

terminate the security interest, and the department has no credible

information indicating theft, fraud, or an undisclosed or

unsatisfied security interest, lien, or other claim to an interest

in the vessel or outboard motor.

(b)

The department may indicate in a certificate of title

issued under Subsection (a) that the certificate of title was

issued without submission of a termination statement. Unless

credible information indicating theft, fraud, or an undisclosed or

unsatisfied security interest, lien, or other claim to an interest

in the vessel or outboard motor is delivered to the department not

later than the first anniversary of the date of the issuance of the

certificate of title under Subsection (a), on request in a form and

manner required by the department, the department shall remove the

indication from the certificate of title.

(c)

Unless the department determines that the value of a

vessel or outboard motor is less than $5,000, the department may

require the applicant to post a bond or provide an equivalent source

of indemnity or security before the department issues a certificate

of title under Subsection (a). The bond, indemnity, or other

security may not exceed twice the value of the vessel or outboard

motor as determined by the department. The bond, indemnity, or

other security must be in a form required by the department and

provide for indemnification of any owner, purchaser, or other

claimant for any expense, loss, delay, or damage, including

reasonable attorney's fees and costs, but not including incidental

or consequential damages, resulting from issuance or amendment of

the certificate of title.

(d)

Unless the department receives a claim for indemnity not

later than the first anniversary of the date of the issuance of a

certificate of title under Subsection (a), on request in a form and

manner required by the department, the department shall release any

bond, indemnity, or other security.

Sec.

31.058.

RIGHTS OF PURCHASER OTHER THAN SECURED PARTY.

(a) In this section, "buyer in ordinary course of business" has the

meaning assigned by Section 1.201, Business & Commerce Code.

(b)

A buyer in ordinary course of business has the

protections afforded by Sections 2.403(b) and 9.320(a), Business &

Commerce Code, regardless of whether:

(1)

an existing certificate of title was signed and

delivered to the buyer; or

(2)

a new certificate of title listing the buyer as

owner of record was issued.

(c)

Except as provided by Sections 31.053 and 31.0582, the

rights of a purchaser of a vessel or outboard motor that is not a

buyer in ordinary course of business or a lien creditor are governed

by the Business & Commerce Code.

Sec.

31.0582.

RIGHTS OF SECURED PARTY.

(a)

In this

section, "good faith" means honesty in fact and the observance of

reasonable commercial standards of fair dealing.

(b)

Subject to Subsection (c), the effect of perfection and

nonperfection of a security interest and the priority of a

perfected or unperfected security interest with respect to the

rights of a purchaser or creditor, including a lien creditor, is

governed by the Business & Commerce Code.

(c)

If, while a security interest in a vessel or outboard

motor is perfected by any method under this chapter, the department

issues a certificate of title that does not indicate that the vessel

or outboard motor is subject to the security interest or contain a

statement that it may be subject to security interests not

indicated on the certificate of title:

(1)

a buyer of the vessel or outboard motor, other than

a person in the business of selling or leasing vessels or outboard

motors of that kind, takes free of the security interest if the

buyer, acting in good faith and without knowledge of the security

interest, gives value and receives possession of the vessel or

outboard motor; and

(2)

the security interest is subordinate to a

conflicting security interest in the vessel or outboard motor that

is perfected under Section 31.0569, after creation of the

certificate and without the conflicting secured party's knowledge

of the security interest.

SECTION 22. The following provisions of the Parks and

Wildlife Code are repealed:

(1) Section 31.039(c); and

(2) Sections 31.049(b) and (c).

SECTION 23. (a) The rights, duties, and interests flowing

from a transaction, certificate of title, or record relating to a

vessel or outboard motor which was validly entered into or issued

before the effective date of this Act and would be subject to

Chapter 31, Parks and Wildlife Code, as amended by this Act, if it

had been entered into or issued on or after the effective date of

this Act, remain valid on and after the effective date of this Act.

(b) This Act does not affect an action or proceeding

commenced before the effective date of this Act.

(c) Except as provided by Subsection (d) of this section, a

security interest that is enforceable immediately before the

effective date of this Act and would have priority over the rights

of a person that becomes a lien creditor at that time is a perfected

security interest under this Act.

(d) A security interest perfected immediately before the

effective date of this Act remains perfected until the earlier of:

(1) the time perfection would have ceased under the

law under which the security interest was perfected; or

(2) three years after the effective date of this Act.

(e) This Act does not affect the priority of a security

interest in a vessel or outboard motor if immediately before the

effective date of this Act the security interest is enforceable and

perfected, and that priority is established.

SECTION 24. This Act takes effect January 1, 2028.