[Federal Register Volume 60, Number 79 (Tuesday, April 25, 1995)]
[Rules and Regulations]
[Pages 20310-20319]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-10067]




[[Page 20309]]

_______________________________________________________________________

Part II





Department of Transportation





_______________________________________________________________________



Coast Guard



_______________________________________________________________________



33 CFR Part 187



Establishment of Vessel Identification System; Final Rule

Federal Register / Vol. 60, No. 79 / Tuesday, April 25, 1995 / Rules 
and Regulations 
[[Page 20310]] 

DEPARTMENT OF TRANSPORTATION

Coast Guard

33 CFR Part 187

[CGD 89-050]
RIN 2115-AD35


Vessel Identification System

AGENCY: Coast Guard, DOT.

ACTION: Interim final rule with request for comments.

-----------------------------------------------------------------------

SUMMARY: The Coast Guard is establishing a vessel identification system 
(VIS), as required by statute, which includes guidelines for State 
vessel titling systems, procedures for certifying compliance with those 
guidelines, and rules for participation in this system for undocumented 
vessels. VIS, in conjunction with current Coast Guard vessel 
documentation information, will provide a nationwide pool of vessel and 
vessel owner information that will help in identification and recovery 
of stolen vessels and deter vessel theft. A mortgage that covers the 
whole of an undocumented vessel and is perfected in a State that both 
participates in VIS and holds certification of compliance with 
guidelines for State vessel titling systems will be deemed to have 
preferred mortgage status.

DATES: This rule is effective on April 24, 1996. Comments must be 
received on or before July 24, 1995.

ADDRESSES: Comments may be mailed to the Executive Secretary, Marine 
Safety Council (G-LRA/3406), (CGD 89-050), U.S. Coast Guard 
Headquarters, 2100 Second Street SW., Washington, DC 20593-0001, or may 
be delivered to room 3406 at the same address between 8 a.m. and 3 
p.m., Monday through Friday, except Federal holidays. The telephone 
number is (202) 267-1477.
    The Executive Secretary maintains the public docket for this 
rulemaking. Comments will become part of this docket and will be 
available for inspection or copying at room 3406, U.S. Coast Guard 
Headquarters, between 8 a.m. and 3 p.m., Monday through Friday, except 
Federal holidays.

FOR FURTHER INFORMATION CONTACT: CDR Keith Cameron, Office of Marine 
Safety, Security and Environmental Protection, Information Management 
Division (G-MIM), (202) 267-0385.

SUPPLEMENTARY INFORMATION:

Request for Comments

    The Coast Guard encourages interested persons to participate in 
this rulemaking by submitting written data, views, or arguments. 
Persons submitting comments should include their names and addresses, 
identify this rulemaking (CGD 89-050) and the specific section of this 
rule to which each comment applies, and give the reason for each 
comment. Please submit two copies of all comments and attachments in an 
unbound format, no larger than 8\1/2\ by 11 inches, suitable for 
copying and electronic filing. Persons wanting acknowledgment of 
receipt of comments should enclose stamped, self-addressed postcards or 
envelopes.
    The Coast Guard will consider all comments received during the 
comment period. It may change this rule in view of the comments.
    The Coast Guard plans no public hearing. Persons may request a 
public hearing by writing to the Marine Safety Council at the address 
under ADDRESSES. The request should include the reasons why a hearing 
would be beneficial. If it determines that the opportunity for oral 
presentations will aid this rulemaking, the Coast Guard will hold a 
public hearing at a time and place announced by a later notice in the 
Federal Register.

Drafting Information

    The principal persons involved in drafting this document are CDR 
Keith Cameron, Project Manager, Office of Marine Safety, Security and 
Environmental Protection and Helen Boutrous, Project Counsel, Office of 
Chief Counsel.

Regulatory History

    On October 5, 1993, the Coast Guard published a notice of proposed 
rulemaking (NPRM) entitled Vessel Identification System in the Federal 
Register (58 FR 51920). The Coast Guard received 27 letters commenting 
on the NPRM. No public hearing was requested, and none was held.

Background and Purpose

    The Secretary of Transportation is required to establish VIS; to 
prescribe the manner and form for participating States to make 
information available to VIS; to establish guidelines for State vessel 
titling systems; and to establish procedures for certifying compliance 
with those guidelines (46 U.S.C. chapters 125, 131 & 313). The 
Secretary has delegated to the Commandant, U.S. Coast Guard, the 
authority to implement VIS. State participation in VIS is entirely 
voluntary, however, in order to participate, States must comply with 
certain requirements to ensure the integrity and uniformity of the 
information provided to VIS.
    This interim final rule establishes the minimum requirements for 
States electing to participate in VIS. VIS will comprise a nationwide 
information system for identifying recreational vessels that are either 
numbered in accordance with 46 U.S.C. 123 or titled under the laws of a 
State. VIS will include information identifying vessels and vessel 
owners, and information to assist law enforcement officials in the 
investigation of stolen vessels. Most of the information to be included 
in VIS is already collected by States that number vessels in accordance 
with 33 CFR 174.17. This and other information collected by the States 
will be automatically accessed by VIS, resulting in a central, 
nationwide pool of vessel information, while minimizing the burden of 
participating States. Once the VIS requirements are effective, the 
Coast Guard will begin to work with participating States to coordinate 
VIS access.
    This interim final rule also prescribes guidelines for State vessel 
titling systems and the procedures for obtaining certification of 
compliance with those guidelines. Under 46 U.S.C. 31322(d), perfected 
mortgages covering the whole of a vessel titled in a State that both 
participates in VIS and has a vessel titling system that has been 
certified as meeting the titling guidelines issued by this interim 
final rule will be deemed to have preferred mortgage status. Compliance 
with the State titling guidelines and requests for certification of 
that compliance is entirely voluntary. However, preferred mortgage 
status under 46 U.S.C. 31321(d) is conditioned upon both participation 
in VIS and certification of compliance with the State titling 
guidelines issued by this interim final rule.
    This action is being published as an interim final rule to allow 
for public comment on a provision, Sec. 187.315, that has been added to 
the State vessel titling requirements since publication of the NPRM. 
Also, this action is being published with an effective date of one year 
from today's date. This effective date will allow States affected by a 
statutory amendment to 46 U.S.C. chapter 121, which becomes effective 
one year from the effective date of the State titling guidelines issued 
as a part of this interim final rule, time to review, and if necessary, 
amend their vessel titling requirements. These issues are addressed in 
greater detail in the discussion of Sec. 187.315 later in this 
preamble.
    It is not anticipated that VIS will be operational before the 
effective date of this interim final rule. Publishing the 
[[Page 20311]] VIS requirements now, however, will provide States with 
the information necessary to prepare for participation in the voluntary 
VIS system.

Discussion of Comments and Changes

    All of the comments received were considered in the development of 
this interim final rule. The issues raised by the comments received, 
and the sections which have been revised or added since publication of 
the NPRM, are discussed below. Some sections were revised or 
reorganized for clarity.

Subpart A--General


Sec. 187.1  Applicability.

    VIS will cover vessels that are numbered or titled under the laws 
of a State. Information pertaining to vessels which are documented by 
the Coast Guard will continue to be collected under the current 
regulations. Many of the comments suggested that documented vessels be 
covered by the VIS requirements. After analyzing the merits of applying 
the VIS requirements to documented vessels, the Coast Guard determined 
that it will be more efficient to maintain the current Coast Guard data 
base on documented vessels, and allow increased access to that 
information through VIS. Therefore, documented vessels will not be 
covered by the vessel identification system requirements of this 
interim final rule. Users of VIS will, however, have access to a 
nationwide pool of information on recreational vessels, whether 
documented or undocumented, because the planned enhancement of the 
documentation data base will allow access to the Coast Guard's data 
base on documented vessels through VIS. The Coast Guard currently 
maintains an information system on over 200,000 vessels documented 
under 46 U.S.C. chapter 121. Maintaining this documentation system, 
while allowing access to the data base through VIS, satisfies the 
statutory goal of establishing a nationwide vessel data base and is 
more efficient than discontinuing the existing documentation record 
keeping system.
    One comment suggested that the VIS final rule specifically exempt 
barges from VIS. The comment noted that the Abandoned Barge Act of 1992 
amended 46 U.S.C. 12301 to require the numbering of undocumented barges 
greater than 100 gross tons. The Coast Guard published a notice on 
October 18, 1994, seeking comments on the development of a numbering 
system for barges (59 FR 52646). Currently, barges are not numbered, 
and the Coast Guard is in the early stages of developing a mandatory 
numbering system. Because this interim final rule applies only to 
vessels that are numbered or titled under the laws of a State, barges 
are not currently covered by VIS. As the Coast Guard's efforts to 
establish a barge numbering system continue, the Coast Guard will 
examine whether a specific exclusion of barges from VIS is appropriate. 
The Coast Guard will propose future amendments to VIS, if necessary.


Sec. 187.3  Definitions.

    One comment suggested that the Coast Guard add the definition of 
``titled vessel'' to Sec. 187.3 and another comment suggested adding 
the definition of ``perfection''. Under Sec. 187.303, the Coast Guard 
requires that participating States define most of the terms included in 
Sec. 187.3 in their titling systems substantially as those terms are 
defined by the Coast Guard. Therefore, in order to allow the States the 
most flexibility possible in establishing approved titling systems, the 
Coast Guard has attempted to minimize the number of required 
definitions. The Coast Guard agrees that a definition of the term 
``titled vessel'' would be helpful, and a definition of that term has 
been added. However, the term ``perfection'' will be left to the States 
to define in accordance with their own titling systems. The definition 
of the term ``person'' has been revised to be consistent with the 
definition provided in the regulations regarding State numbering system 
requirements at 33 CFR 173.3(e). This revision is intended to result in 
no substantive change.


Sec. 187.5  Vessel identifier.

    Many comments objected to the use of ``VIN'' as an acronym for 
``Vessel Identification Number.'' The comments suggested that this 
acronym would confuse law enforcement personnel who are far more 
familiar with VIN meaning Vehicle Identification Number. The Coast 
Guard agrees with these comments and will not use the acronym VIN in 
the VIS regulations. The title of the section has been revised 
accordingly.
    Some of the comments revealed a misunderstanding of this provision 
by objecting to the establishment of a new number. VIS will not 
establish a new numbering system for vessels. For purposes of 
identifying a vessel within VIS, the number to be used will be the hull 
identification number (HIN) assigned to an undocumented vessel in 
accordance with Subpart C of part 181. Several comments suggested that 
documented vessels be identified within VIS by their HIN. However, as 
discussed above, the Coast Guard is maintaining its existing data base 
on documented vessels which uses the Coast Guard Official Number to 
identify vessels within the current documentation system. Therefore, it 
will be necessary to keep the Coast Guard Official Number as the 
primary identifier for documented vessels. Information on documented 
vessels, such as owner name, Official Number, HIN if one has been 
assigned, length, and hailing port, will be available through VIS.
    Several comments suggested that Sec. 187.5(c), which requires 
States to assign an HIN to vessels under certain circumstances, will be 
problematic for States. The comments stated that the requirement leaves 
no room for discretion by the States to refuse to assign an HIN to a 
vessel which the State may believe to be stolen. These comments 
suggested replacing the word ``shall'' with ``may'' in paragraph (c). 
The Coast Guard disagrees with these comments. The HIN will be the 
primary identifier for all State registered or numbered vessels in the 
United States. Section 187.5(b) allows for the use of other 
identifiers, such as the number issued on a certificate of number by 
the issuing authority of a State, only where a vessel does not have an 
HIN (e.g., a vessel built prior to 1972). However, under Sec. 187.5(c), 
if the ownership or State of principle use of the vessel changes, the 
State is required to assign an HIN to that vessel, just as States 
currently do under the authority of 33 CFR 181.31(c) for ``backyard 
boat builders''. The HIN must meet the format requirements of 33 CFR 
181.25. States may impose any controls necessary to ensure HINs are 
assigned appropriately. Section 187.5(c) has been revised to clarify 
this issue for the States. The Coast Guard specifically invites 
comments on this revised provision from States that anticipate 
participating in VIS.
    One comment suggested that VIS require mandatory inspection of a 
vessel prior to a State assigning an HIN. While the Coast Guard agrees 
that inspections could lessen the probability of illegal action by 
those attempting to obtain an HIN, it is the Coast Guard's position 
that the decision to implement such procedures should be left to the 
individual States.
    Several comments suggested requiring that all documented vessels be 
assigned an HIN. Vessels manufactured or used primarily for 
noncommercial use (33 CFR 181.3), the only vessels included in VIS, are 
currently required to have an HIN, whether they are documented or not. 
However, as discussed above, to utilize the existing database of 
information on documented vessels, it [[Page 20312]] will be necessary 
to use the Coast Guard Official Number as the primary identifier for a 
documented vessel.

Subpart B--Information to be Collected by Participating States


Sec. 187.101  Information to identify a vessel owner.

    Many comments objected to the provision that would have required 
participating States to collect information on the percentage of 
ownership interest of each owner for each vessel. Many comments also 
objected to the proposed requirement to obtain the address of each 
owner. These comments contended that collecting this amount of 
information would be overly burdensome. The Coast Guard agrees with the 
comments on this matter, and Sec. 187.101 has been revised to lessen 
the information burden. This interim final rule requires the State to 
obtain the name of each owner of a vessel, but does not require States 
to collect any information regarding the percentages of ownership 
interest. Further, States are required to obtain the address of only 
one owner.
    Several comments objected to the collection of an individual 
owner's Social Security Number or, where not available, date of birth 
and driver's license number. The comments indicated that some States do 
not allow the required collection of an individual's social security 
number, and not all individuals have a driver's license. For an 
effective information and identification system, there must be a method 
of identifying the owner of a vessel beyond the individual's name. The 
Coast Guard included collection of date of birth and driver's license 
number to assist those States that may have problems collecting Social 
Security Numbers. To alleviate the situation that may arise for a State 
where no Social Security Number or driver's license number is 
available, the Coast Guard will accept, in such situations only, the 
individual's date of birth and alternative information identifying the 
individual vessel owner as specified by the regulations of the State or 
issuing authority.


Sec. 187.103  Information to identify a vessel.

    Most of the comments agreed with the NPRM regarding the information 
to be collected to identify a vessel.
    One comment suggested that information regarding a vessel's type of 
propulsion is too detailed for inclusion in VIS. However, it is the 
Coast Guard's position that a vessel's type of propulsion is an 
excellent means, in combination with other information, to identify a 
vessel. Propulsion type greatly influences the value of a vessel, and 
this information is currently required to be collected by States with 
authorized numbering systems under 33 CFR 174. Therefore, inclusion of 
this information in VIS will cause no additional information collection 
requirement for these States. However, the term ``jet drive'' has been 
removed from the list of propulsion types to be consistent with the 
list of propulsion types provided in the regulations regarding State 
numbering system requirements at 33 CFR 174.19.
    One comment argued that the final rule should not require the 
collection of the vessel number previously issued by an issuing 
authority. It is the Coast Guard's position that this is valuable 
information in assisting in the identification of a vessel. Also, like 
propulsion type, this information is required to be collected by States 
with authorized numbering systems under 33 CFR part 174 and represents 
no increased burden for these States that choose to participate.


Sec. 187.105  Information on titled vessels.

    There was general agreement among those commenting regarding the 
information to be collected on titled vessels by a participating State.
    One comment however, disagreed with the requirement to collect 
information regarding evidence of a lien or other security interest. 
The comment argued that the information would not be helpful. Also, the 
comment argued that it would be difficult to collect information 
regarding evidence of a lien kept in another State. Under 46 U.S.C. 
12501(b)(5), VIS must include information on titled vessels indicating 
where evidence of a lien or other security interest may be found 
against the vessel in that State. Therefore, the requirement to collect 
information indicating where evidence of a lien may be found is 
retained in this interim final rule. Section 187.105(a)(3) has been 
revised, however, to clarify that a State must collect information 
regarding evidence of a lien or other security interest found in that 
State only.


Sec. 187.107  Information to assist law enforcement officials.

    Several of the comments agreed with the requirements of 
Sec. 187.107 as proposed. The information listed in paragraph (a) of 
Sec. 187.107 (report of loss or theft, point of contact) is required to 
be collected, while collection of the more detailed information listed 
in paragraph (b) is optional. One comment suggested that the Coast 
Guard require the collection of the information listed in both 
paragraphs (a) and (b). The Coast Guard encourages participating States 
to collect the detailed information listed in paragraph (b). However, 
in the interest of putting the least possible burden on participating 
States while still meeting the needs of the VIS system, the Coast Guard 
has determined that, for now, collection of the information listed in 
paragraph (b) will remain optional. The Coast Guard has been working 
with the Criminal Justice Information Service, Department of Justice, 
regarding the mutual supporting roles of the National Crime Information 
Center (NCIC) and VIS. Because much of the information listed in 
paragraph (b) is contained in NCIC's Boat File, collection of that 
information will not be required in this rulemaking.

Subpart C--Vessel Identification System Participation Requirements


Sec. 187.201  Participating State requirements.

    Paragraph (b) was reserved in proposed Sec. 187.201. It has been 
determined that additional requirments are not necessary in that 
section and the paragraphs of Sec. 187.201 have been redesignated 
accordingly. Also, a printing error in the wording of proposed 
Sec. 187.201(a)(6) (now Sec. 187.201(f)) has been corrected in this 
interim final rule.
    One comment stated that the retention of previously issued 
certificates of number or titles would be overly burdensome. This 
section requires a State to collect old, no longer valid, certificates 
of number and title when issuing new certificates of number or titles. 
The State may retain or dispose of the old documents as it sees fit. 
Because a State is free to dispose of these invalid records, the Coast 
Guard does not agree that the provision is overly burdensome and the 
provision is retained.
    Two comments suggested that compliance with the participation 
requirements would be easier if States are allowed to use microfiche 
technology. States are free to use such technology or other methods of 
electronic storage where appropriate. This rulemaking does not address 
how that information is to be stored by the States. As discussed 
earlier, and in Sec. 187.201(a), Coast Guard-State Cooperative 
Agreements will be developed to specify the manner and form that 
information will be accessed by VIS.
    Several comments suggested that participation in VIS be made 
mandatory for States. There is no statutory authority to require 
participation in VIS. Under 46 U.S.C. chapter 125, participation in VIS 
by the States is to be voluntary. [[Page 20313]] 
    One comment suggested that the Coast Guard utilize an existing 
system, the American Association of Motor Vehicles Administrator's 
network (AAMVANET) rather than develop VIS. It was further suggested 
that a ``pointer system'' such as used in AAMVANET, would eliminate the 
need for a participating State to maintain two systems. VIS, which the 
Coast Guard is required by statute to create, will automatically access 
information collected by participating States from their databases. 
There will be no need for participating States to maintain two systems. 
The purpose of VIS is to create a national vessel database that 
consists of the information collected by States during numbering and 
titling procedures. There will be no need for a participating State to 
enter any vessel data twice. VIS will contain data that has been 
electronically copied.
    One comment suggested that the project was redundant, would place a 
paperwork burden on the States, and would be funded by a boat tax. VIS 
will be the first nationwide pool of information containing the vessel 
and vessel owner information prescribed by this interim final rule. The 
framework of the system has been designed to minimize any additional 
burden on participating States. Almost all of the information required 
is currently collected by States with numbering or titling systems. 
There will be no need for these States to collect the information a 
second time. As discussed, the information will be automatically 
accessed or accepted by VIS. Therefore, the Coast Guard estimates that 
participation will not be burdensome for participating States. Finally, 
there is no ``boat tax'' associated with this rulemaking or the 
enabling legislation. Funding for the establishment of VIS is provided 
through the Coast Guard appropriations process.

Subpart D--Guidelines for State Vessel Titling Systems


Sec. 187.301  Eligibility for preferred mortgage status.

    One comment suggested that preferred mortgage status would not be 
available as described in the NPRM. The comment questioned the 
``legality of assigning `preferred mortgage status' to instruments 
recorded within'' VIS. No ``instruments'' will be ``recorded'' within 
VIS. VIS is an information data base only. As for preferred mortgage 
status, 46 U.S.C. 31322(d)(1)(A) and (B) state that a mortgage 
perfected under State law, covering the whole of a vessel, is deemed to 
be a preferred mortgage if the State's titling system is certified to 
be in compliance with the titling guidelines issued by the Secretary, 
and if information on the vessel covered by the mortgage is made 
available to VIS. Therefore, Sec. 187.301 remains unchanged.


Sec. 187.305  Application for title.

    In the NPRM, Sec. 187.305(a) proposed that States require 
application for a title within a specified period of time, not to 
exceed 90 days, after a change in ownership. Many of the comments 
suggested that the period of time required to apply for a title be 
changed to within 60 days of a change in ownership. The Coast Guard 
agrees with this suggestion and the provision is revised accordingly.
    One comment suggested that the phrase ``first purchased'' be 
removed from paragraph (a). However, the Coast Guard has decided to 
retain this phrase in the provision to distinguish between an act 
requiring an initial application for title and other acts transferring 
the title.
    Many comments disagreed with the requirement in paragraph (b) to 
include the amount of indebtedness covered by any security agreement 
pertaining to the vessel in its titling application form. The comments 
indicated that this requirement constituted unnecessary detail in the 
application process. The Coast Guard agrees that including the amount 
of indebtedness on a vessel in the titling application form does not 
serve a sufficiently useful purpose to outweigh the burden of 
collection of that information. Consequently, this interim final rule 
requires that the titling application form include an entry indicating 
whether there is indebtedness covered by any security agreement 
pertaining to the vessel, but does not require disclosure of the actual 
amount.


Sec. 187.307  Dealer and manufacturer provisions.

    Many of the comments disagreed with paragraphs (a) and (b) of 
proposed Sec. 187.307. Paragraph (a) proposed to require States to 
require dealers to report acquisition of a used numbered vessel for 
resale, and allow them to apply for a certificate of title. Paragraph 
(b) proposed to require States to require dealers to apply for a 
certificate of title for a used unnumbered vessel acquired for resale 
if the vessel is required to be titled. The comments contended that 
these provisions are unclear. One comment stated that paragraphs (a) 
and (b) are unnecessary because paragraph (a) merely allows something 
that States could do without such a provision, and very few vessels fit 
the description in paragraph (b). A different comment argued that 
requiring dealers to apply for title as described in paragraph (b) 
would cause procedural burden. The Coast Guard has revised paragraph 
(a) to clarify that States must require dealers to either report 
acquisition of used vessels for resale, or, title these vessels if 
State law requires such vessels to be titled. Paragraph (b) is deleted.
    One comment suggested that the Coast Guard increase the length of 
time that dealers and manufacturers must maintain records from 3 to 10 
years. Another suggested that the 3 year requirement be decreased. The 
Coast Guard's position is that 3 years is a sufficient amount of time 
to retain such records without placing an undue burden on dealers and 
manufacturers.
    Paragraph (d) requires dealers and manufacturers to provide to the 
vessel owner a certificate of origin (COO), or other document, at the 
time of delivery of a new vessel. Several comments suggested requiring 
that manufacturers supply a COO only and delete the words ``or other 
documents''. Other comments suggested specific contents to be required 
in a COO. The Coast Guard, in another rulemaking, is considering 
requirements for COOs (Expanded Hull Identification Number and New 
Requirements for Certificates of Origin [CGD 92-065]; May 6, 1994; 59 
FR 23651). Such requirements have not been considered as a part of this 
rulemaking. If future requirements for COOs are established, the VIS 
requirements can be amended if necessary. At the present time, there is 
no requirement that manufacturers issue COOs. Therefore, the language 
allowing for other documents such as a Builder's Certificate (CG 1261), 
is necessary.


Sec. 187.311  Transfer by operation of law.

    Many comments suggested that the time limits set for accomplishing 
various requirements, such as applying for a certificate of title if a 
vessel is transferred by operation of law, as required in Sec. 187.311, 
and after a transfer in ownership, as required in Sec. 187.305(a), be 
consistent throughout the titling guidelines. Most comments preferred a 
60 day time limit. Consequently, this interim final rule changes the 
time limit proposed in Sec. 187.311 from ``not to exceed 90 days'' to 
``not to exceed 60 days.''


Sec. 187.315  Surrender of title for purposes of documentation.

    Under Federal law, a vessel must be documented by the Coast Guard 
if it engages in coastwise trade, foreign trade, or fisheries. A 
recreational vessel is not required to be documented, but 
[[Page 20314]] may be if it meets eligibility requirements. In the 
past, some lending institutions have required recreational vessel 
owners to obtain Coast Guard documentation so that preferred mortgages 
may be recorded to protect security interests. After implementation of 
VIS, a mortgage may acquire preferred status under 46 U.S.C. 31322(d) 
if it is perfected under State law for a vessel titled in a State that 
both participates in VIS and has a titling system certified by the 
Coast Guard. However, some States may not choose to participate in VIS. 
Therefore, the Coast Guard will continue to provide documentation 
services for eligible vessels, whether or not required to be 
documented, in order to extend the opportunity to record a preferred 
mortgage to those vessels.
    Although it was not specifically addressed in the NPRM, a comment 
noted that a 1989 amendment to 46 U.S.C. 12102 would render a vessel 
titled in a State ineligible for documentation by the Coast Guard. This 
amendment will become effective on April 25, 1997, one year after the 
effective date of these vessel titling guidelines.
    The Coast Guard wishes to emphasize that the statutory prohibition 
applies to all State-titled vessels, whether or not the State that 
issued the title participates in VIS or follows these titling 
guidelines. If a vessel owner has obtained a State title for purposes 
of convenience, the owner must choose to surrender either the State 
title or the Certificate of Documentation. For a vessel engaged in a 
trade for which documentation is required under Federal law, the owner 
could not choose to relinquish the Certificate of Documentation and 
continue to employ the vessel in trade. Three States (Iowa, New Jersey, 
and Vermont) currently require that a vessel receive a State title if 
the owner resides in the State or the vessel is principally used in the 
State, whether or not the vessel is documented by the Coast Guard. The 
Coast Guard's position is that, for vessels required to be documented 
under Federal law, the Federal documentation requirement preempts the 
State titling requirement. The vessel's Certificate of Documentation 
will remain valid and the State title will be void, even if a title is 
required by State law.
    However, this preemption does not extend to recreational vessels 
not required to be documented by Federal law. As of the effective date 
of the amendment, a recreational vessel titled by a State is ineligible 
for documentation, and any existing Certificate of Documentation will 
be invalid. The vessel owner will have to either surrender the title to 
the issuing State authority before April 25, 1997 or surrender the 
Certificate of Documentation to the Coast Guard. However, an owner will 
be unable to surrender the title if the vessel is required to be titled 
under State law.
    To address this issue, a new provision, entitled ``Surrender of 
title for purposes of documentation'', has been added to the State 
titling guidelines. To obtain certification of compliance with the 
guidelines, a State would have to deem a State-issued title invalid if 
a vessel owner surrenders the title to the Coast Guard for the purpose 
of obtaining Coast Guard documentation. The Coast Guard would return 
the title to the issuing State. This is intended to prevent an owner 
from establishing dual chains of ownership, and is consistent with 
current practice in most States. States generally accept surrender of 
title when a vessel is purchased by an out-of-State owner or an owner 
moves to a different State and applies for a new title and 
registration. A similar process is used for automobile titles.
    This provision was not included in the NPRM. Therefore, the Coast 
Guard is promulgating this action as an interim rule to allow 
interested parties the opportunity to comment. The Coast Guard 
specifically requests comments from States on the impact of the 
statutory amendment and the surrender guidelines. Additionally, the 
Coast Guard has delayed the effective date of this rule until April 25, 
1996 to allow States time to review their titling requirements and make 
any necessary changes.


Sec. 187.317  Information on a certificate of title.

    Many comments argued against including the percentage of ownership 
interest and the address of every owner on certificates of title. These 
comments came from State officials who explained that often many people 
may own a boat and including the percentage of ownership and each 
address on certificates of title would be burdensome and unhelpful. 
Also, many married couples own boats jointly and it would serve no 
purpose to indicate the percentage of ownership between them. None of 
those States commenting on this issue currently collect this 
information. The Coast Guard agrees with these comments and has revised 
Sec. 187.317 to require the name(s) of all current owner(s) and the 
address of one of the owners.
    Only one comment argued against the recording of liens on 
certificates of title. Lien information is specifically required to be 
included in VIS under 46 U.S.C. 12501(b)(5). Lien information is very 
important in the development of the integrated boat information and 
titling system envisioned by Congress. Therefore, the requirement to 
include lien information on the certificate of title is retained in 
this interim final rule.


Sec. 187.319  Duplicate title.

    Several comments suggested revisions to Sec. 187.319. The NPRM 
required that the word ``duplicate'' be ``stamped'' across the face of 
a duplicate certificate of title. The comments noted that other means 
of marking the document besides ``stamping'' it should be allowed, and 
the marking should not be required to be ``across'' the face of the 
document. The Coast Guard agrees with these comments and has revised 
this provision to require that the word ``duplicate'' be ``clearly and 
permanently marked on'' the face of the document.
    One comment argued that duplicate certificates of title should not 
be allowed. The Coast Guard does not agree with this comment. 
Circumstances such as loss, theft, or destruction of the document can 
arise and after the State has inquired into those circumstances as 
required by this section, a duplicate certificate of title should be 
available to the owner.
    Another comment suggested specifying a period of time in which an 
owner must apply for a duplicate certificate of title. In the interest 
of allowing States wishing to comply with these titling guidelines as 
much flexibility as possible in designing titling programs for their 
States, the Coast Guard has decided to leave to the States the 
determination of the appropriate amount of time within which an owner 
must apply for a duplicate certificate of title.


Sec. 187.321  Hull identification number provisions.

    Several comments suggested that the provisions of Sec. 187.321 be 
optional for States complying with the guidelines. The Coast Guard does 
not agree with this suggestion. Section 187.321 requires States that 
seek certification of compliance with the guidelines to: assign an HIN 
to an undocumented vessel without an HIN at the time of registration 
upon transfer of ownership or change in State of principal operation; 
assign an HIN to an undocumented vessel without an HIN at the time of 
title application and record the HIN on the certificate of title; and 
prohibit the removal or alteration of an HIN without the authorization 
of the [[Page 20315]] Commandant. The proper assignment of an HIN to a 
vessel that previously did not have one, whether because of its age or 
because the manufacturer failed to permanently affix one, will protect 
the new owner and assist law enforcement efforts. Proper identification 
of vessels is vital to the success of the VIS and law enforcement 
efforts.
    One of these comments also suggested that States be allowed to 
authorize the removal of an HIN. However, the Coast Guard has 
determined that this authority should remain with the Coast Guard 
consistent with the HIN requirements at 33 CFR 181.35.

Regulatory Evaluation

    This action is not a significant regulatory action under section 
3(f) of Executive Order 12866 and does not require an assessment of 
potential costs and benefits under 6(a)(3) of that order. It has not 
been reviewed by the Office of Management and Budget under that order. 
It is not significant under the regulatory policies and procedures of 
the Department of Transportation (44 FR 11040; February 26, 1979). The 
Coast Guard expects the economic impact of this interim final rule to 
be so minimal that a full Regulatory Evaluation under paragraph 10(e) 
of the regulatory policies and procedures of DOT is unnecessary. This 
interim final rule implements the provisions of the Act requiring the 
establishment of VIS, and establishes requirements for States that 
elect to participate in VIS, guidelines for State vessel titling 
systems, and procedures for certifying compliance with those 
guidelines. Participation in VIS and compliance with the guidelines for 
State vessel titling systems is entirely voluntary. Most of the 
information to be included in VIS is already collected by States when 
registering vessels within the State. Preliminary review of titling 
laws, regulations and administrative procedures of 28 States revealed 
that 21 of the State vessel titling systems would comply with most or 
all of the titling guidelines issued by this interim final rule. The 
overall impact of this rule will be the improvement of vessel and owner 
identification, and a potential decrease in the amount of information 
that is collected, other than for vessel registration, to identify a 
vessel or owner by State and Federal officials.

Small Entities

    It is anticipated that the VIS computer system will facilitate the 
collection of information directly from State computer files. The 
impact of the rulemaking will be on States electing to participate in 
VIS, rather than on small entities. Most of the information to be 
included in VIS is already collected by States when registering vessels 
within the State and by States that title vessels.
    Therefore, the Coast Guard certifies under 605(b) of the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.) that this interim final rule 
will not have a significant economic impact on a substantial number of 
small entities.

Collection of Information

    This rule contains collection of information requirements. The 
Coast Guard has submitted the requirements to the Office of Management 
and Budget (OMB) for review under section 3504(h) of the Paperwork 
Reduction Act (44 U.S.C. 3501 et seq.), and OMB has approved them. The 
section numbers are: 187.7, 187.9, 187.101, 187.103, 187.105, 187.107, 
187.201, and 187.301. The corresponding OMB control number is 2115-
0607.

Federalism

    The Coast Guard has analyzed this rule in accordance with the 
principles and criteria contained in Executive Order 12612 and has 
determined that this rule does not have sufficient federalism 
implications to warrant the preparation of a Federalism Assessment.
    This rule is not expected to infringe upon the rights of States to 
regulate, or preempt existing State regulations. State participation is 
entirely voluntary. However, once electing to participate, a State must 
comply with the requirements to ensure integrity and uniformity of 
information in VIS. Likewise, requesting certification that a State 
vessel titling system complies with the guidelines is also voluntary. 
Such certification, for participating States, confers preferred status 
on mortgages covering the whole of vessels titled in that State.
    However, an amendment to 46 U.S.C. 12102 prohibits vessels from 
being both documented and titled beginning one year after the effective 
date of the vessel titling guidelines. The statutory amendment applies 
to all vessel owners whether or not the State chooses to participate in 
VIS or follow the State titling guidelines. For vessels required to be 
documented under Federal law, the Federal documentation requirement 
preempts State titling requirements. This preemption does not extend to 
recreational vessels, for which documentation is not required by 
Federal law. States that require documented vessels to be titled may 
desire to amend their requirements regarding vessels that are required 
by Federal law to be documented.

Environment

    The Coast Guard considered the environmental impact of this rule 
and concluded that, under paragraph 2.B.2 of Commandant Instruction 
M16475.1B, this rule is categorically excluded from further 
environmental documentation. This rule establishes a nationwide 
information system for identifying vessels and vessel owners, and 
guidelines for State vessel titling systems. This action clearly would 
have no environmental consequences. A Categorical Exclusion 
Determination is available in the docket for inspection or copying 
where indicated under ADDRESSES.

List of Subjects in 33 CFR Part 187

    Marine safety, Reporting and recordkeeping requirements, 
Administrative practice and procedure.

    For the reasons set out in the preamble, the Coast Guard amends 
chapter I of title 33, Code of Federal Regulations, by adding part 187 
to read as follows:

PART 187--VESSEL IDENTIFICATION SYSTEM

Subpart A--General

Sec.
187.1  Applicability.
187.3  Definitions.
187.5  Vessel identifier.
187.7  Participation procedures.
187.9  Procedures for certification of compliance with guidelines 
for State vessel titling systems.

Subpart B--Information To Be Collected by Participating States

Sec.
187.101  Information to identify a vessel owner.
187.103  Information to identify a vessel.
187.105  Information on titled vessels.
187.107  Information to assist law enforcement officials.

Subpart C--Vessel Identification System Participation Requirements

Sec.
187.201  Participating State requirements.
187.203  Voluntary provisions for participating States.

Subpart D--Guidelines for State Vessel Titling Systems

Sec.
187.301  Eligibility for preferred mortgage status.
187.303  Definitions.
187.305  Application for title.
187.307  Dealer and manufacturer provisions.
187.309  Transfer of title.
187.311  Transfer by operation of law. [[Page 20316]] 
187.313  Title of another State.
187.315  Surrender of title for purposes of documentation.
187.317  Information on a certificate of title.
187.319  Duplicate title.
187.321  Hull identification number (HIN) provisions.
187.323  Perfection of security interests.
187.325  Assignments.
187.327  Satisfaction of a security interest.
187.329  Forms.
187.331  Retaining information.

Appendix A to Part 187--Participating Authorities

Appendix B to Part 187--Participating And Certified Titling 
Authorities

    Authority: 46 U.S.C. 2103; 49 CFR 1.46.

Subpart A--General


Sec. 187.1  Applicability.

    (a) This part establishes minimum requirements for States electing 
to participate in the vessel identification system (VIS) established 
under 46 U.S.C. chapter 125. This part also prescribes guidelines for 
State vessel titling systems and the procedures for obtaining 
certification of compliance with those guidelines for those States 
electing to establish titling systems to support preferred mortgages.
    (b) This part applies only to vessels numbered or titled under the 
laws of a State. It does not apply to vessels documented under 46 
U.S.C. chapter 121 and the regulations in 46 CFR parts 67 and 68.


Sec. 187.3  Definitions.

    The following definitions apply to terms used in this part.
    Certificate of Origin (COO) means a document establishing the 
initial chain of ownership, such as manufacturer's certificate of 
origin (MCO) or statement of origin (MSO), importer's certificate of 
origin (ICO) or statement of origin (ISO), and builder's certification 
(Form CG-1261; see 46 CFR part 67).
    Commandant means the Commandant of the United States Coast Guard.
    Dealer means any person who engages wholly or in part in the 
business of buying, selling, or exchanging new or used vessels, or 
both, either outright or on conditional sale, bailment, lease, chattel 
mortgage or otherwise, and who has an established place of business for 
the sale, trade, and display of such vessels.
    Department or division means the State agency designated to issue 
certificates of number or title, or both for vessels, and its duly 
authorized representatives.
    Documented vessel means a vessel documented under 46 U.S.C. chapter 
121.
    HIN means the hull identification number assigned to an 
undocumented vessel in accordance with subpart C of part 181 of this 
subchapter.
    Issuing authority means a State that has a numbering system 
approved by the Coast Guard or the Coast Guard where a State numbering 
system has not been approved.
    Lienholder means a person holding a security interest.
    Manufacturer means any person engaged in the business of 
manufacturing or importing new vessels for the purpose of sale or 
trade.
    Owner means a person who claims lawful possession of a vessel by 
virtue of legal title or equitable interest in it that entitles that 
person to such possession.
    Participating State means a State that has elected to participate 
in VIS and has been certified as complying with the participation 
requirements in subpart C of this part. Certified States participating 
in VIS are listed in Appendix A of this part.
    Person means an individual, firm, partnership, corporation, 
company, association, joint-stock association, or governmental entity 
and includes a trustee, receiver, assignee, or similar representative 
of any of them.
    Security interest means an interest that is reserved or created by 
an agreement and that secures payment or performance of an obligation 
and is valid against third parties generally.
    State means a State of the United States, Guam, Puerto Rico, the 
Virgin Islands, American Samoa, the District of Columbia, the Northern 
Mariana Islands, and any other territory or possession of the United 
States.
    Titled vessel means a vessel titled in accordance with the laws of 
a State.
    Titling authority means a State whose vessel titling system has 
been certified by the Coast Guard as complying with the guidelines for 
State vessel titling systems listed in this part. Titling authorities 
participating in VIS are listed in Appendix B of this part.
    Vessel includes every description of watercraft other than a 
seaplane on the water, used or capable of being used, as a means of 
transportation on water.


Sec. 187.5  Vessel identifier.

    (a) The vessel identifier is the hull identification number (HIN) 
assigned to an undocumented vessel in accordance with subpart C of part 
181 of this subchapter. The vessel identifier for a documented vessel 
is the official number assigned by the Coast Guard in accordance with 
46 U.S.C. chapter 121.
    (b) If the vessel does not have an HIN, the vessel identifier for 
vessels subject to the numbering requirements of parts 173 and 174 of 
this subchapter is the number issued on a certificate of number by the 
issuing authority for the State in which the vessel is principally 
operated.
    (c) If a vessel subject to the numbering requirements of parts 173 
and 174 of this subchapter is transferred to a new owner, or the vessel 
is required to be numbered in a new State of principal operation, or 
application for a title is made, a hull identification number meeting 
the format requirements of Sec. 181.25 shall be assigned by the issuing 
authority for the State in which the vessel is principally operated in 
accordance with the State's established procedures if the vessel does 
not have a valid HIN.


Sec. 187.7  Participation procedures.

    (a) To participate in VIS, a State official within the department 
must submit a written request to the Commandant (G-NAB) and certify 
that the State will comply with the VIS participation requirements in 
subpart C of this part.
    (b) Appendix A of this part lists those States that have elected to 
participate in VIS and comply with the participation requirements 
prescribed in this part. A State will remain listed in Appendix A of 
this part as long as it continues to comply with the participation 
requirements in subpart C of this part.


Sec. 187.9  Procedures for certification of compliance with guidelines 
for State vessel titling systems.

    (a) Under 46 U.S.C. 31322(d), a mortgage or instrument perfected 
under State law for a vessel titled under the law of a participating 
State is deemed to be a preferred mortgage if the State has been 
certified as complying with the guidelines in subpart D of this part.
    (b) To obtain certification of compliance with the State titling 
guidelines, a State official within the department must submit a 
written request along with a copy of the State's titling laws, 
regulations and administrative procedures, to the Commandant (G-NAB), 
and certify that the State will comply with the participation 
requirements in subpart C of this part.
    (c) The Commandant will review the material, and, if the State 
complies with the guidelines provided in subpart D of this part, 
certify compliance.
    (d) Appendix B of this part indicates those States that participate 
in VIS and, have been certified by the Commandant as complying with the 
guidelines prescribed in subpart D of this part and the date of that 
certification. A State [[Page 20317]] with a vessel titling system that 
complies with the guidelines of subpart D of this part will remain 
listed, in Appendix B of this part.

Subpart B--Information To Be Collected by Participating States


Sec. 187.101  Information to identify a vessel owner.

    A participating State must collect the following information 
regarding the ownership of vessels numbered or titled under the laws of 
that State:
    (a) Name of each owner.
    (b) The address of the principal place of residence of at least one 
individual owner, or the address of the principal place of business of 
an owner that is not an individual, including zip code.
    (c) Mailing address of at least one owner, if different from the 
address required by paragraph (b) of this section.
    (d) If the owner is an individual, the owner's social security 
number, or, if that number is not available, the individual's birth 
date and driver's license number or, if the individual does not have a 
driver's license, the individual's birth date and other information to 
identify that individual as prescribed by the State or titling 
authority.
    (e) If the owner is other than an individual, the owner's--
    (1) Taxpayer identification number; or
    (2) If the owner does not have a taxpayer identification number, 
the social security number, or if the social security number is not 
available, birth date and driver's license number, or if no driver's 
license number is available, the birth date and other identifying 
information prescribed by State regulation, of an individual who is a 
corporate officer, general partner, or individual trustee of the owner 
and who signed the application for numbering the vessel.


Sec. 187.103  Information to identify a vessel.

    A participating State must collect the following information 
regarding the identity of a vessel numbered or titled under the laws of 
that State:
    (a) Make of vessel or name of vessel builder, if known.
    (b) Manufacture year, year vessel built, or vessel model year, if 
known.
    (c) Vessel identifier required by Sec. 187.5 of this part.
    (d) Official number assigned by U.S. Coast Guard or predecessor 
agency, if applicable.
    (e) Number currently assigned by the State issuing authority, as 
printed on the certificate of number.
    (f) Length of vessel.
    (g) Type of vessel (open, cabin, house, or other).
    (h) Whether the hull is wood, fiberglass, metal, plastic, or other.
    (i) Whether the propulsion is inboard, outboard, inboard-outdrive, 
sail, or other.
    (j) Whether the fuel is gasoline, diesel, or other.
    (k) Whether the vessel is operated for pleasure, rent or lease, 
dealer or manufacturer demonstration, commercial passenger carrying, 
commercial fishing, or other commercial operation.
    (l) Number previously issued to the vessel by an issuing authority.
    (m) Expiration date of certificate of number issued by the State 
vessel numbering authority.


Sec. 187.105  Information on titled vessels.

    (a) In addition to the information required under Sec. 187.103, a 
participating State must collect the following information on a vessel 
titled in that State:
    (1) Title number issued by the State.
    (2) Where evidence of a lien or other security interest may be 
found against a vessel titled in that State.
    (3) Name(s) of the lienholder(s).
    (4) Address of principal place of residence of each individual 
lienholder and the address of the principal place of business of each 
lienholder that is not an individual, including zip code.
    (b) Participating States may collect the following information on 
titled vessels:
    (1) Mailing address of any lienholder that is different from the 
addresses required by paragraph (a)(4) of this section.
    (2) Telephone number of each lienholder.


Sec. 187.107  Information to assist law enforcement officials.

    (a) Participating States must make the following information 
available to assist law enforcement officials:
    (1) Notice that a vessel, identified by its vessel identifier, has 
been reported lost, stolen, destroyed, abandoned, or recovered.
    (2) Name and telephone number of organization to contact for 
additional information or to notify regarding the recovery of a vessel.
    (b) Participating States may make the following information 
available to assist law enforcement officials:
    (1) Reported date that the vessel was stolen.
    (2) Reported location of vessel when stolen.
    (3) Vessel insurance policy number, if insured.
    (4) Name of the insurance company.
    (5) Address of insurance company, including zip code.
    (6) Mailing address of the insurance company for notification, if 
different from the address provided under paragraph (b)(5) of this 
section.
    (7) Telephone number of insurance company.
    (8) Date that the vessel was recovered.
    (9) Location of vessel when recovered.
    (10) Name(s) and telephone number(s) of organization(s), in 
addition to the one provided under paragraph (a) of this section, 
public or private, to contact for additional information on sighting 
and recovery of vessels.
    (11) Request to be notified if vessel is sighted.
    (12) Purpose of sighting notification request.
    (13) Date and time when vessel last sighted.
    (14) Location of vessel when last sighted.
    (15) Organization to contact for additional information on 
sighting.

Subpart C--Vessel Identification System Participation Requirements


Sec. 187.201  Participating State requirements.

    A participating State must comply with the following requirements:
    (a) Collect the required information listed in subpart B of this 
part and provide that information to the vessel identification system 
in the manner and form specified in the applicable Coast Guard-State 
Cooperative Agreement.
    (b) Obtain specific evidence of ownership, such as certificate of 
origin or current certificate of title or number, to identify a 
vessel's owner.
    (c) Return any surrendered Certificate of Documentation to the 
issuing Coast Guard Vessel Documentation Office.
    (d) Retain previously issued certificate of number or title and 
notify issuing authority by mail or electronic message.
    (e) Retain information identifying the type of evidence used to 
establish the accuracy of the information required to be made available 
to VIS, and make it available to the Coast Guard upon request.
    (f) Update the information required to be made available to VIS on 
a vessel that has not been re-registered by labeling the vessel file 
``inactive'' or, if notified that a vessel has been moved to a 
nonparticipating State, by indicating the new State and notifying the 
Coast Guard.


Sec. 187.203  Voluntary provisions for participating States.

    A participating State may--
    (a) Provide VIS with the optional information listed in subpart B 
of this part; [[Page 20318]] 
    (b) Make updated information provided by the vessel owner, 
government agency or lienholder, available to VIS regarding a vessel 
that has been moved to a nonparticipating State; and
    (c) Interact with nonparticipating States to make information 
available to, or request information from, VIS concerning a vessel or 
nationwide statistics.

Subpart D--Guidelines for State Vessel Titling Systems


Sec. 187.301  Eligibility for preferred mortgage status.

    A State vessel titling system that meets the requirements of this 
subpart may be certified by the Commandant under 46 U.S.C. 31322 
(d)(1)(A), in accordance with the procedures of Sec. 187.9, as 
complying with the guidelines for vessel titling systems for the 
purpose of conveying preferred mortgage status on mortgages perfected 
after the date of certification, covering the whole of a vessel titled 
in that State, provided that the State also complies with the vessel 
identification system participation requirements of Sec. 187.7 and 
subpart C of this part.


Sec. 187.303  Definitions.

    A State must define the terms, ``certificate of origin'', 
``dealer'', ``department'' or ``division'', ``documented vessel'', 
``issuing authority'', ``lienholder'', ``manufacturer'', ``owner'', 
``person'', ``security interest'', ``titling authority'', and 
``vessel'', substantially as those terms are defined in Sec. 187.3.


Sec. 187.305  Application for title.

    (a) Except as provided in Sec. 187.307, a State must require 
application for a title within a specified period of time, not to 
exceed 60 days, after a vessel is first purchased, ownership is 
transferred, or there is a change in vessel data listed on the 
certificate of title.
    (b) A State must require disclosure of the existence of 
indebtedness covered by any security agreement pertaining to the vessel 
in its titling application form.
    (c) The title application must include an entry for identification 
of the State or country in which the vessel was last numbered or 
titled, if applicable.
    (d) A State must require that the title application include a 
signed certification that statements made are true and correct to the 
best of the applicant's knowledge, information and belief, under 
penalty of perjury.


Sec. 187.307  Dealer and manufacturer provisions.

    A State must include the following provisions for dealers or 
manufacturers, building, buying, acquiring, or transferring vessels, in 
that State.
    (a) Dealers must be required to either report acquisition of a used 
numbered vessel for resale, or, apply for certificate of title if such 
vessel is required to be titled.
    (b) Dealers must be allowed to apply for a certificate of title for 
a new vessel acquired for resale.
    (c) Dealers and manufacturers must be required to provide to the 
vessel owner a certificate of origin, or other document, at the time of 
delivery of a new vessel to initiate the chain of ownership.
    (d) Dealers and manufacturers must be required to maintain for at 
least 3 years a record of any vessel bought, sold, exchanged, or 
received for sale or exchange, and have such records open for 
inspection by the State.


Sec. 187.309  Transfer of title.

    Except for transfers by operation of law such as inheritance, order 
in bankruptcy, replevin, default judgment or execution sale, a State 
must require that to complete the sale, assignment or transfer of a 
titled vessel, a manufacturer, dealer or individual, must deliver the 
vessel's certificate of title to the new owner.


Sec. 187.311  Transfer by operation of law.

    A State must require a new owner to apply for a certificate of 
title within a specified period of time, not to exceed 60 days, if 
ownership of a vessel is transferred by operation of law, such as 
inheritance, order in bankruptcy, replevin, default judgment or 
execution sale, and to include an original or certified copy of the 
legal transfer document along with the application.


Sec. 187.313  Title of another State.

    A State must provide for honoring a current and valid title issued 
by another State, or a Certificate of Ownership issued by the Coast 
Guard, as proof of ownership for transfer or sale of a vessel, and for 
applying for certificates of number or title in a new State of 
principal operation.


Sec. 187.315  Surrender of title for purposes of documentation.

    A State must deem a title issued by that State as invalid when a 
vessel owner surrenders it to the U.S. Coast Guard for vessel 
documentation purposes. Upon receipt of a title from the U.S. Coast 
Guard, a State must accept the returned title for administrative 
processing and cancellation.


Sec. 187.317  Information on a certificate of title.

    (a) A State must specify the following information on a certificate 
of title:
    (1) Current owner(s) name(s).
    (2) The address of the principal place of residence of an 
individual owner, and the address of the principal place of business of 
an owner that is not an individual, including zip code.
    (3) Date of title issuance.
    (4) Vessel description, including the vessel identification number 
required by Sec. 187.05 of this part, name of manufacturer or model, 
year built or the model year, vessel length, vessel type, drive or 
propulsion type, vessel use, hull material and fuel type.
    (5) Each lienholder's name and address.
    (6) Recording or perfection date of new liens and original 
recording date of any liens outstanding.
    (b) Space must be provided on the certificate of title form for 
assignment of interests in the vessel, with a certification that 
statements provided on the title assignment are true and correct to the 
best of the owner's knowledge, under penalty of perjury.


Sec. 187.319  Duplicate title.

    (a) The term ``DUPLICATE'' must be clearly and permanently marked 
on the face of a duplicate certificate.
    (b) A State must require the holder of an original title, whether 
the owner or lienholder, to apply for a duplicate title within a 
specified period of time after, or after the discovery of, the loss, 
theft, mutilation, or destruction of an original certificate of title; 
provide information concerning the original certificate and the 
circumstances of its loss, theft, mutilation, or destruction; and 
surrender to the department any recovered original title or remains.


Sec. 187.321  Hull identification number (HIN) provisions.

    A State must--
    (a) Assign an HIN and require that it be affixed to an undocumented 
vessel that does not have an HIN at the time of registration or 
application for title after transfer of ownership or change of State of 
principal operation;
    (b) Assign an HIN to an undocumented vessel without an HIN at time 
of title application and record the HIN on the certificate of title; 
and
    (c) Prohibit removal or alteration of an HIN without authorization 
from the Commandant. [[Page 20319]] 


Sec. 187.323  Perfection of security interests.

    (a) A State must provide that a security interest is not valid 
under State law unless perfected under procedures specified by the 
State. If a vessel is already subject to a security interest when it is 
brought into a State, the validity of the security interest is to be 
determined by the law of the jurisdiction where the vessel was titled 
when the security interest attached. The State must specify at least 
the following procedures.
    (1) The procedures by which a security interest is perfected, 
including a requirement for the delivery of an application for new or 
amended certificate of title.
    (2) The procedures by which the date of perfection is determined.
    (b) The perfection provisions required to be established under 
paragraphs (a) and (b) of this section must not apply to--
    (1) A lien given by statute or rule of law to a supplier of 
services or materials for the vessel;
    (2) A lien given by statute to the United States, a State, or a 
political subdivision thereof; or
    (3) Any lien arising out of an attachment of a vessel.


Sec. 187.325  Assignments.

    A State must specify whether a security interest in a vessel titled 
under the State titling system may be assigned and the procedures for 
perfecting assignments.


Sec. 187.327  Satisfaction of security interests.

    A State must specify evidence and information that lienholders are 
required to submit to the State regarding satisfaction of a security 
interest, and establish procedures and time limits for its submission.


Sec. 187.329  Forms.

    A State must prescribe and provide the application, certificate of 
title, notice of security interests, and other forms needed to comply 
with the titling system provisions.


Sec. 187.331  Retaining information.

    A State must retain information identifying the evidence used to 
establish the accuracy of the information required for vessel titling 
purposes for 3 years and make the information available to the Coast 
Guard on request.

Appendix A to Part 187--Participating Authorities

    The following States comply with the requirements for participating 
in VIS:
    [No States currently comply with the requirements for participating 
in VIS.]

Appendix B to Part 187--Participating and Certified Titling Authorities

    The following States both comply with the requirements for 
participating in VIS and have a titling system certified to be in 
compliance with the guidelines for State vessel titling systems:
    [No States currently have a certified titling system and 
participate in VIS.]

    Dated: April 17, 1995.
J.C. Card,
Rear Admiral, U.S. Coast Guard, Chief, Office of Marine Safety, 
Security and Environmental Protection.
[FR Doc. 95-10067 Filed 4-24-95; 8:45 am]
BILLING CODE 4910-14-P