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

BILL ANALYSIS

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

S.B. 1267 seeks to modernize and streamline the regulations governing boat titling and numbering in Texas. The bill addresses inconsistencies in current law by updating the definitions and procedures related to boat titles, numbering, and records maintained by the Texas Parks and Wildlife Department (TPWD).

S.B. 1267 enhances administrative efficiency by transitioning to electronic titling and documentation to ensure better tracking of boat ownership and security interests. S.B. 1267 also strengthens regulations surrounding hull identification numbers and provides clear guidelines for title branding in cases of boat damage. The bill also implements measures to prevent fraud and ensure the security of boat-related transactions.

As proposed, S.B. 1267 amends current law relating to certificates of number and certificates of title issued by and records kept by the Parks and Wildlife Department and creates a criminal offense.

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 31.003, Parks and Wildlife Code, by amending Subdivisions (2), (8), and (11) and adding Subdivisions (19), (20), (21), (22), (23), (24), (25), (26), and (27) to redefine "vessel," "vessel livery," and "manufacturer" and to define "cancel," "certificate of title," "electronic," "hull identification number," "owner of record" or "recorded owner," "purchase," "purchaser," "record," and "security interest."

SECTION 2. Amends Section 31.022(a), Parks and Wildlife Code, to provide that a vessel is not required to be numbered under the provisions of Chapter 31 (Water Safety) if it meets certain requirements, including if it is an amphibious vehicle for which a certificate title is issued under Chapter 501 (Certificate of Title), Transportation Code, or a similar law of another state and to make nonsubstantive changes.

SECTION 3. Amends Section 31.028, Parks and Wildlife Code, to require that the certificate of number, a facsimile of the certificate, or an electronic version of the certificate provided by the Texas Parks and Wildlife Department (TPWD) be carried on board the vessel at all times and to make nonsubstantive changes.

SECTION 4. Amends Section 31.037(c), Parks and Wildlife Code, to require the new owner of a vessel, not later than the 20th day, rather than the 45th day, after the ownership was transferred to submit an application to TPWD with certain components.

SECTION 5. Amends Section 31.039(a) and (b), Parks and Wildlife Code, as follows:

(a) Provides that ownership records of TPWD made or kept under this chapter are public records, including the information required under Section 31.049 (Form of Certificate of Title), except certain information is not a public record. Deletes existing text providing that, except as provided by Subsection (c) (providing that an owner as identified by 33 C.F.R. Section 174.17 is not a public record), all ownership records of TPWD made or kept under this chapter are public records.

(b) Authorizes TPWD to provide a record in any medium. Requires TPWD, if requested, to provide a record in a format that is self-authenticating under Rule 902, Texas Rules of Evidence.

SECTION 6. Amends Sections 31.041(h) and (i), Parks and Wildlife Code, to make conforming changes.

SECTION 7. Amends Sections 31.043(b) and (d), Parks and Wildlife Code, as follows:

(b) Requires that an application for a hull identification number be signed by the owner of the vessel and accompanied by a fee of $25, or an amount set by the Texas Parks and Wildlife Commission, whichever is greater, and a certificate from a game warden commissioned by TPWD stating that the vessel has been inspected by the officer and appears to be as applied for.

(d) Makes a conforming change to this subsection.

SECTION 8. Amends Subchapter B-1, Chapter 31, Parks and Wildlife Code, by adding Section 31.0445, as follows:

Sec. 31.0445. DEFINITIONS. Defines "barge," "builder's certificate," "buyer," "certificate of origin," "debtor," "documented vessel," "electronic verification of title," "foreign-documented vessel," "hull damaged," "lease," "lessor," "lien creditor," "notice," "secured party," "secured party of record," "title brand," "transfer of ownership," and "written certificate of title."

SECTION 9. Amends Sections 31.045(b) and (d), Parks and Wildlife Code, as follows:

(b) Provides that the ownership of a new vessel or a new outboard motor is evidenced by a manufacturer's or importer's certificate of origin executed on a form prescribed by TPWD. Makes a nonsubstantive change.

(d) Provides that the ownership of a vessel, rather than the ownership of a vessel exempted from numbering under Section 31.022(c) (relating to providing that all canoes, kayaks, punts, rowboats, rubber rafts, or other vessels under 14 feet in length when paddled, poled, oared, or windblown are exempt from the number provisions of this chapter), is not required to be evidenced by a certificate of title issued by TPWD for certain vessels.

SECTION 10. Amends Section 31.046, Parks and Wildlife Code, by amending Subsections (a) and (b) and adding Subsection (a-1), as follows:

(a) Requires the owner of a vessel or outboard motor for which this state is the state of principal use, except as provided by Subsections (b) (relating to requiring a manufacturer or a dealer who sells a vessel or an outboard motor to a person other than a manufacturer or a dealer to apply to TPWD or to a county tax assessor-collector for a certificate of title in the name of the purchaser not later than the 45th day after the sale) and (c) (relating to providing that a dealer who acquires a vessel or outboard motor is not required to apply for a certificate of title), to deliver to TPWD 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 the date of purchase or transfer of ownership or the date that this state become the state of principal use. Deletes existing text requiring the purchaser of a vessel or outboard motor, except as provided in Subsections (b) and (c) of Section 31.046 (Application for Certificate of Title), to apply to TPWD 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) Provides that, 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) Makes a conforming change to this subsection.

SECTION 11. Amends Section 31.047(b), (c), and (f), Parks and Wildlife Code, as follows:

(b) Requires that an application form for a certificate for title 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) makes nonsubstantive changes to this subdivision;

(3)-(6) makes no changes to these subdivisions;

(7) if the application is for a vessel: a statement that the vessel is not a documented vessel or a foreign-documented vessel and a statement that the vessel is hull damaged, if the applicant knows that the vessel is hull damaged;

(8) if previously titled or registered: the transferor's name and address; when applicable, name of the state in which the vessel or outboard motor was previously titled or registered; and any title brand known to the applicant and, if known, the jurisdiction under whose law the title brand was designated; and

(9) redesignates existing Subdivision (7) as Subdivision (9).

(c) Authorizes the evidence required by TPWD to include:

(1) makes no change to this subdivision;

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

(3)-(10) makes no changes to these subdivisions.

(11) evidence of an involuntary transfer, as defined by Section 31.053(b) (relating to requiring that an involuntary transfer means the transfer of ownership pursuant to a contractual or statutory lien which confers the power or right to the transfer), rather than in Subdivision (5) (relating to providing that delivering to the transferee a certificate of title for the vessel in the name of the transferor and properly endorsed to show the transfer or evidence of involuntary transfer) of Subsection (a) (relating to prohibiting a person from selling, assigning, transferring, or otherwise disposing of an interest in a vessel or outboard motor without) of Section 31.053 as amended, which is authorized to 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) redesignates existing Subdivision (12) as Subdivision (14).

(f) Makes a conforming change to this subsection.

SECTION 12. Amends Subchapter B-1, Chapter 31, Parks and Wildlife Code, by adding Section 31.0485, as follows:

Sec. 31.0485. ISSUANCE, REJECTION, AND CANCELLATION OF CERTIFICATE OF TITLE. (a) Requires TPWD, unless an application for a certificate of title is rejected under Subsection (c) or (d), to 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 TPWD receives an application that complies with this chapter.

(b) Requires TPWD, if TPWD issues electronic certificates of title, to issue an electronic certificate of title unless in the application the secured party of record or, if none, the owner of record, requests that TPWD issue a written certificate of title.

(c) Provides that TPWD, except as provided by Subsection (d), is authorized to reject an application for certificate of title only in certain circumstances.

(d) Requires TPWD to reject an application for a certificate of title for a vessel that is a documented vessel or a foreign-documented vessel.

(e) Requires TPWD, on issuance of a written certificate of title, to promptly 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 TPWD. Requires TPWD, on issuance of an electronic certificate of title, to promptly 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 TPWD. Authorizes TPWD to send the record to the person's mailing address or, if indicated in the files of TPWD, an electronic address.

(f) Provides that if TPWD 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. Requires TPWD to maintain in the files of TPWD the date and time of cancellation.

(g) Requires that any written certificate of title for the vessel or outboard motor, before TPWD issues an electronic certificate of title, be surrendered to TPWD. Requires TPWD, if TPWD issues an electronic certificate of title, to destroy or otherwise cancel the written certificate of title for the vessel or outboard motor that has been surrendered to TPWD and maintain in the files of TPWD the date and time of destruction or other cancellation. Requires TPWD, if a written certificate of title being canceled is not destroyed, to indicate on the face of the certificate that it has been canceled.

(h) Provides that TPWD is authorized to cancel a certificate of title issued by TPWD only if TPWD could have rejected the application for the certificate under Subsection (c), is required to cancel the certificate under this section or another provision of this chapter, or receives satisfactory evidence that the vessel is a documented vessel or a foreign-documented vessel.

SECTION 13. Amends Section 31.049, Parks and Wildlife Code, by amending Subsection (a) and adding Subsections (f), (g), and (h), as follows:

(a) Requires that a certificate of title be on a form prescribed by TPWD and is required to 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 TPWD;

(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 TPWD;

(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 TPWD; 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) Provides that this chapter does not preclude TPWD 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) Requires that a certificate of title, for each title brand indicated on the certificate, 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. Sets forth the language authorized to be included in a certificate if the meaning of a title brand is not easily ascertainable or cannot be accommodated on the certificate.

(h) Requires TPWD, if TPWD files indicate that a vessel was previously registered or titled in a foreign country, to indicate on the certificate of title that the vessel was registered or title in that country.

SECTION 14. Amends the heading to Section 31.050, Parks and Wildlife Code, to read as follows:

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

SECTION 15. Amends Sections 31.050(a) and (b), Parks and Wildlife Code, as follows:

(a) Requires that a manufacturer's or importer's certificate of origin include certain information. Makes nonsubstantive changes.

(b) Makes a conforming change to this subsection.

SECTION 16. Amends Subchapter B-1, Parks and Wildlife Code, by adding Section 31.0505, as follows:

Sec. 31.0505. HULL DAMAGED TITLE BRAND. (a) Requires the owner of record, unless Subsection (b) applies, at or before the time the owner transfers an ownership interest in a hull-damaged vessel that is covered by a certificate of title issued by TPWD, 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, to:

(1) deliver to TPWD 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) Requires an insurer, before an insurer transfers an ownership interest in a hull-damaged vessel that is covered by a certificate of title issued by TPWD, to deliver to TPWD an application for a new certificate of title that complies with Section 31.046 and includes the title brand of "Hull Damaged".

(c) Requires TPWD, not later than the 20th day after the date of delivery to TPWD of an application under Subsection (a)(1) or (b) or a certificate of title under Subsection (a)(2), to issue a new certificate of title that indicated that the vessel is title branded "Hull Damaged".

(d) Provides that 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) Provides that an offense under Subsection (d)(1) is a Class B Parks and Wildlife Code misdemeanor. Provides that an offense under Subsection (d)(2) is a Class C Parks and Wildlife Code misdemeanor.

SECTION 17. Amends Section 31.051, Parks and Wildlife Code, as follows:

Sec. 31.051. New heading: REPLACEMENT CERTIFICATES OF TITLE. Requires TPWD to provide by regulation for the replacement of certificates of title, rather than for the replacement of lost, mutilated, or stolen certificates.

SECTION 18. Amends Sections 31.052(a), (c), and (d), Parks and Wildlife Code, as follows:

(a) Provides that, on recordation of a security interest on the certificate of title, certain entities obtain priority over the rights of a lien creditor, rather than a lien creditor, as defined by Section 9.102 (Definitions and Index of Definitions), Business and Commerce Code, for so long as the security interest is recorded on the certificate of title.

(c)-(d) Makes conforming changes to these subsections.

SECTION 19. Amends Section 31.053, Parks and Wildlife Code, by amending Subsections (a) and (c) and adding Subsections (a-1), (g), and (h), as follows:

(a) Makes conforming changes to this subsection.

(a-1) Requires the person in possession of the certificate of title, for a voluntary transfer, if the transferor does not have possession of the certificate of title, to facilitate the transferor's compliance with Section 31.053 (Transfer of Vessels and Outboard Motors), 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) Makes conforming and nonsubstantive changes to this subsection.

(g) Requires the transferor, if the certificate of title is an electronic certificate of title, to promptly sign and deliver to the transferee a record evidencing the transfer of ownership to the transferee.

(h) Provides that the transferee has a right enforceable by specific performance to require the transferor to comply with Subsection (a)(5) (relating to prohibiting a person from selling, assigning, transferring, or otherwise disposing of an interest without delivering to the transferee a certificate of title properly endorsed to show the transfer or evidence of an involuntary transfer), (a-1), or (g).

SECTION 20. Amends Section 31.055, Parks and Wildlife Code, to provide that Subchapter B-1 (Certificate of Title for Vessels and Outboard Motors) does not apply to certain vessels, including a foreign-documented vessel, barge, or vessel before delivery if the vessel is under construction or completed under construction and to make nonsubstantive changes.

SECTION 21. Amends Subchapter B-1, Parks and Wildlife Code, 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, as follows:

Sec. 31.0563. RECORDS. (a) Requires TPWD, for each record relating to a certificate of title submitted to TPWD, to maintain a file that includes certain information.

(b) Requires TPWD, in addition to the information described by Subsection (a), to maintain a list of all title brands known to TPWD and stolen-property reports relating to vessels or outboard motors made known to TPWD.

(c) Requires TPWD to 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. Authorizes TPWD to maintain the information described in this section in a manner that is searchable by other methods.

(d) Requires TPWD to 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) Requires TPWD to 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 TPWD's records management program.

(f) Requires TPWD to retain in its files all information regarding a security interest in a vessel or outboard motor for at least 10 years after TPWD receives a termination statement regarding the security interest. Requires that the information be accessible by the hull identification number of the vessel or serial number of the outboard motor and any other methods provided by TPWD.

(g) Requires TPWD, if a person submits a record to TPWD, or submits information that is accepted by TPWD, and requests an acknowledgment of the filing or submission, to 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, and the information in the filed record or submission, and the date and time the record was received or the submission accepted. Requires that a request described by this subsection contain the hull identification number of the vessel and serial number of the outboard motor and be delivered by means authorized by TPWD.

Sec. 31.0565. EFFECT OF CERTIFICATE OF TITLE ON INFORMATION IN CERTIFICATE. Provides that 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. Provides that possession of a certificate of title does not provide a right to obtain possession of a vessel or outboard motor. Provides that garnishment, attachment, levy, replevin, or other judicial process against the certificate is not effective to determine possessory rights to the vessel or outboard motor. Provides that 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. Provides that an 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) Provides that a security interest in a vessel or outboard motor is authorized to be perfected only by delivery to TPWD of an application for certificate of title that identifies the secured party and otherwise complies with Section 31.049. Provides that the security interest is perfected on the later of delivery to TPWD of the application and the applicable fee or attachment of the security interest under Section 9.203 (Attachment and Enforceability of Security Interest; Proceeds; Supporting Obligations; Formal Requisites), Business and Commerce Code.

(b) Provides that, if the interest of a person named as owner, lessor, consignor, or bailor in an application for a certificate of title delivered to TPWD is a security interest, the application sufficiently identifies the person as a secured party. Provides that 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) Authorizes a security interest in a vessel or outboard motor, if TPWD has issued a certificate of title for the vessel or outboard motor, to be perfected by delivery to TPWD of an application, on a form prescribed by TPWD, to have the security interest added to the certificate of title. Requires that the application be signed by an owner of the vessel or outboard motor or by the secured party and include certain information.

(d) Provides that a security interest perfected under Subsection (c) is perfected on the later of delivery to TPWD of the application and all applicable fees or attachment of the security interest under Section 9.203, Business and Commerce Code.

(e) Requires TPWD, on delivery of an application that complies with Subsection (c) and payment of all applicable fees, to 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. Requires TPWD to maintain in the files of TPWD the date and time of delivery of the application to TPWD.

(f) Provides that, if a secured party assigns a perfected security interest in a vessel or outboard motor, the receipt by TPWD 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. Provides that 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 TPWD 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 TPWD or on the certificate of title.

(g) Provides that this section does not apply to certain security interests.

(h) Provides that, 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 four months after deletion or cancellation of the certificate of documentation or the perfection of the security interest under this section.

(i) Provides that a security interest in a vessel or outboard motor arising under certain provisions of the Business and 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) Provides that a security interest in a vessel or outboard motor as proceeds of other collateral is perfected to the extent provided in Section 9.315 (Secured Party's Rights on Disposition of Collateral and in Proceeds), Business and Commerce Code.

(k) Provides that 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) (relating to providing that a security interest that is perfected by any method under the law of another jurisdiction remains perfected until the interest would have become unperfected), Business and Commerce Code.

Sec. 31.057. TERMINATION STATEMENT. (a) Requires a secured party indicated in the files of TPWD as having a security interest in a vessel or outboard motor to deliver a termination statement to TPWD 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) Requires a secured party, not later than the date required by Subsection (a), if a written certificate of title has been issued and delivered to the secured party and a termination statement is required under Subsection (a), to deliver the certificate of title to the debtor or to TPWD with the statement. Requires the secured party, if the certificate of title is lost, stolen, mutilated, destroyed, or is otherwise unavailable or illegible, to 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) Provides that, on delivery to TPWD 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. Requires TPWD, if the security interest to which the statement relates was indicated on the certificate of title, to issue a new certificate of title and deliver the new certificate of title or a record evidencing an electronic certificate of title. Requires TPWD to maintain in its files the date and time of delivery to TPWD of the termination statement.

(d) Provides that a secured party that fails to comply with this section is liable for 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 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. Provides that, except as otherwise provided by Section 9.337 (Priority of Security Interest in Goods Covered by Certificate of Title), Business and 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) Defines "secured party's transfer statement."

(b) Requires TPWD, unless TPWD 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 TPWD of the statement and payment of fees due under this chapter and taxes payable under Chapter 160 (Taxes on Sales and Use of Boats and Boat Motors), Tax Code, in connection with the statement or the acquisition or the use of the vessel or outboard motor, to:

(1) accept the statement;

(2) amend the files of TPWD 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 TPWD;

(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) Provides that the submission to TPWD 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 (Secured Transactions), Business and Commerce Code.

Sec. 31.0577. TRANSFER BY OPERATION OF LAW. (a) Defines "by operation of law" and "transfer-by-law statement."

(b) Requires that a transfer-by-law statement contain certain information.

(c) Requires TPWD, unless TPWD 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 TPWD 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 TPWD of the statement and payment of fees dues 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, to take certain actions.

(d) Provides that this section does not apply to a transfer of interest in a vessel or outboard motor by a secured party under Subchapter F (Default), Chapter 9, Business and Commerce Code.

Sec. 31.0579. APPLICATION FOR TERMINATION OF SECURITY INTEREST WITHOUT CERTIFICATE OF TITLE. (a) Provides that TPWD, except as provided by Sections 31.0575 and 31.0577, if TPWD receives, unaccompanied by a signed certificate of title, an application for a new certificate of title that includes an indication of a termination statement, is authorized to issue a 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 TPWD with satisfactory evidence that notification of the application has been sent to all persons indicated in the files of TPWD 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 TPWD has not received an objection from any of those persons; and

(4) the applicant submits any other information required by TPWD as evidence of the applicant's right to terminate the security interest, and TPWD 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) Authorizes TPWD to indicate in a certificate of title issued under Subsection (a) that the certificate of title was issued without submission of a termination statement. Requires TPWD, 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 TPWD 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 TPWD, to remove the indication from the certificate of title.

(c) Authorizes TPWD, unless TPWD determines that the value of a vessel or outboard motor is less than $5,000, to require the applicant to post a bond or provide an equivalent source of indemnity or security before TPWD issues a certificate of title under Subsection (a). Prohibits the bond, indemnity, or other security from exceeding twice the value of the vessel or outboard motor as determined by TPWD. Requires that the bond, indemnity, or other security be in a form required by TPWD 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) Requires TPWD, unless TPWD 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 TPWD, to release any bond, indemnity, or other security.

Sec. 31.058. RIGHTS OF PURCHASER OTHER THAN SECURED PARTY. (a) Defines "buyer in ordinary course of business."

(b) Provides that a buyer in ordinary course of business has the protections afforded by certain provisions of the Business and Commerce Code, regardless of whether an existing certificate of title was signed and delivered to the buyer or a new certificate of title listing the buyer as the owner of record was issued.

(c) Provides that, 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 and Commerce Code.

Sec. 31.0582. RIGHTS OF SECURED PARTY. (a) Defines "good faith."

(b) Provides that, 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 purchase or creditor, including a lien creditor, is governed by the Business and Commerce Code.

(c) Provides that if, while a security interest in a vessel or outboard motor is perfected by any method under this chapter, TPWD 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. Repealer: Section 31.039(c) (relating to providing that an owner identifier as prescribed by 33 C.F.R. Section 174.17 is not public record), Parks and Wildlife Code.

Repealers: Sections 31.049(b) (relating to requiring that the original certificate of title be delivered to the owner and a copy retained by TPWD if there is no lien on the vessel or outboard motor) and (c) (relating to requiring that the original certificate of title be sent first to the lienholder if there is a lien on the vessel or outboard motor and requiring TPWD to retain a copy), Parks and Wildlife Code.

SECTION 23. (a) Provides that 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) Provides that this Act does not affect an action or proceeding commenced before the effective date of this Act.

(c) Provides that, 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) Provides that a security interest perfected immediately before the effective date of this Act remains perfected until the earlier of the time perfection would have ceased under the law under which the security interest was perfected or three years after the effective date of this Act.

(e) Provides that 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. Effective date: January 1, 2028.