52792 Federal Register / Vol. 86, No. 181 / Wednesday, September 22, 2021 / Proposed Rules 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 187 

[Docket No. USCG–2018–0160] 

RIN 1625–AC28 

Uniform Certificate of Title Act for 

Vessels 

AGENCY: Coast Guard, DHS. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Coast Guard proposes 

changes to its regulations for certifying 

a State’s titling system for 

undocumented vessels to increase 

States’ participation in the Vessel 

Identification System (VIS). The 

proposed changes would allow States 

that have adopted the recommendations 

of the model Uniform Certificate of Title 

Act for Vessels to certify their titling 

provisions with the Coast Guard. Once 

certified and participating in the VIS, a 

State is able to confer preferred 

mortgage status on financial instruments 

that apply to undocumented vessels, 

which benefits the owners of those 

vessels. While many of the proposed 

changes to the certification guidelines 

relate to the technical requirements of 

recording and maintaining titling 

documentation, the most significant 

change would be to implement a system 

of ‘‘branding’’ (permanently marking) 

titles for vessels that have sustained 

structural damage. This would help 

prevent a process known as ‘‘title 

washing,’’ where severe vessel damage 

is concealed by transferring the title to 

a different State. 

DATES: Comments and related material 

must be received by the Coast Guard on 

or before November 22, 2021. Comments 

sent to the Office of Management and 

Budget (OMB) on collection of 

information must reach OMB on or 

before November 22, 2021. 

ADDRESSES: You may submit comments 

identified by docket number USCG– 

2018–0160 using the Federal 

eRulemaking Portal at https://

www.regulations.gov. See the ‘‘Public 

Participation and Request for 

Comments’’ portion of the 

SUPPLEMENTARY INFORMATION section for 

further instructions on submitting 

comments. 

Collection of information. Submit 

comments on the collection of 

information discussed in section VI.D of 

this preamble both to the Coast Guard’s 

online docket and to the Office of 

Information and Regulatory Affairs 

(OIRA) in the White House Office of 

Management and Budget (OMB) using 

their website www.reginfo.gov/public/ 

do/PRAMain. Comments sent to OIRA 

on collection of information must reach 

OMB on or before the comment due date 

listed on their website. 

FOR FURTHER INFORMATION CONTACT: For 

information about this document call or 

email W. Vann Burgess, Boating Safety 

Division, Program Management and 

Operations Branch (CG–BSX–21), Coast 

Guard; telephone 202–372–1071, email 

william.v.burgess@uscg.mil. 

SUPPLEMENTARY INFORMATION: 

Table of Contents for Preamble 

I. Public Participation and Request for 

Comments 

II. Abbreviations 

III. Basis and Purpose 

IV. Background 

A. Current 33 CFR part 187, subpart D 

B. UCOTA–V 

V. Discussion of Proposed Rule 

VI. Regulatory Analyses 

A. Regulatory Planning and Review 

B. Small Entities 

C. Assistance for Small Entities 

D. Collection of Information 

E. Federalism 

F. Unfunded Mandates Reform Act 

G. Taking of Private Property 

H. Civil Justice Reform 

I. Protection of Children 

J. Tribal Governments 

K. Energy Effects 

L. Technical Standards 

M. Environment 

I. Public Participation and Request for 

Comments 

The Coast Guard views public 

participation as essential to effective 

rulemaking, and will consider all 

comments and material received during 

the comment period. Your comment can 

help shape the outcome of this 

rulemaking. If you submit a comment, 

please include the docket number for 

this rulemaking, indicate the specific 

section of this document to which each 

comment applies, and provide a reason 

for each suggestion or recommendation. 

We encourage you to submit 

comments through the Federal 

eRulemaking Portal at https://

www.regulations.gov. If you cannot 

submit your material by using https://

www.regulations.gov, contact the person 

in the FOR FURTHER INFORMATION

CONTACT section of this proposed rule 

for alternate instructions. Documents 

mentioned in this proposed rule, and all 

public comments, will be available in 

our online docket at https://

www.regulations.gov, and can be viewed 

by following that website’s instructions. 

Additionally, if you visit the online 

docket and sign up for email alerts, you 

will be notified when comments are 

posted or a final rule is published. 

We accept anonymous comments. All 

comments received will be posted 

without change to https://

www.regulations.gov and will include 

any personal information you have 

provided. For more about privacy and 

submissions in response to this 

document, see the Department of 

Homeland Security’s eRulemaking 

System of Records notice (85 FR 14226, 

March 11, 2020). 

We do not plan to hold a public 

meeting, but will consider doing so if 

public comments indicate a meeting 

would be helpful. We would issue a 

separate Federal Register notice to 

announce the date, time, and location of 

such a meeting. 

II. Abbreviations 

BLA Boating Law Administrator 

BSX U.S. Coast Guard’s Office of Auxiliary 

and Boating Safety 

CFR Code of Federal Regulations 

DHS Department of Homeland Security 

DOT Department of Transportation 

FR Federal Register 

MOA Memorandum of Agreements 

NCCUSL National Conference of 

Commissioners on Uniform State Laws 

NBSAC National Boating Safety Advisory 

Council 

NASBLA National Association of State 

Boating Law Administrators 

NPRM Notice of proposed rulemaking 

OMB Office of Management and Budget 

PRA Paperwork Reduction Act of 1995 

RA Regulatory Analysis 

RFA Regulatory Flexibility Act of 1980 

§ Section 

UCC Uniform Commercial Code 

UCOTA–V Uniform Certificate of Title Act 

for Vessels 

U.S.C. United States Code 

VIS Vessel Identification System 

III. Basis and Purpose 

The purpose of this rulemaking is to 

revise Coast Guard guidelines for State 

vessel titling systems so that they align 

with the Uniform Certificate of Title Act 

for Vessels (UCOTA–V). As discussed in 

more detail below, we expect that 

aligning Coast Guard guidelines with 

UCOTA–V would increase States’ 

participation in the Vessel Identification 

System (VIS), thereby benefitting the 

owners of undocumented vessels by 

providing them access to preferred 

mortgages. 

The legal basis for this rulemaking is 

Title 46 of the United States Code 

(U.S.C.), sections 2103, 12501(a), and 

31322(d). Section 2103 authorizes the 

Secretary of the department in which 

the Coast Guard is operating to issue 

regulations to carry out the provisions of 

Subtitle II, Vessels and Seamen, of Title 

46 of the U.S.C., in which Section 

12501(a) appears. Section 12501(a) 

requires the Secretary to establish a VIS 

Federal Register / Vol. 86, No. 181 / Wednesday, September 22, 2021 / Proposed Rules 52793 

1As used throughout this notice of proposed 

rulemaking (NPRM), ‘‘State’’ means any of the 56 

jurisdictions (50 States, the District of Columbia, 

American Samoa, Guam, the Northern Mariana 

Islands, Puerto Rico, and the U.S. Virgin Islands) 

that administer Coast Guard-approved recreational 

vessel numbering systems. 

2See 46 U.S.C. 12501. 

3A perfected lien is generally a lien that has been 

filed with the appropriate filing agent in order to 

make the securing interest in a collateral asset 

binding. See 46 U.S.C. 31321. 4See 46 U.S.C. 31322(d). 5See 33 CFR 187.301 and 33 CFR 187.201. 

6A copy of UCOTA–V is located in the docket at 

https://www.regulations.gov, as indicated in the 

Public Participation and Request for Comments 

portion of this preamble. 

7See 46 U.S.C. 12503, Information available to 

the system. In addition to the vessel identification 

Continued 

relating to, among other things, the 

ownership of vessels titled under the 

law of a State. Finally, section 31322(d) 

allows a mortgage that is filed, or 

‘‘perfected’’ under State law, to be 

deemed ‘‘a preferred mortgage’’ if the 

Secretary certifies that the State titling 

system complies with the guidelines set 

forth in 46 U.S.C. 13107. The Secretary’s 

authority under these statutes has been 

delegated to the Coast Guard in 

Department of Homeland Security 

(DHS) Delegation No. 0170.1(II) (92.a) 

and (92.h). Pursuant to that authority, 

the Coast Guard has promulgated 

regulations governing the certification of 

State laws to determine eligibility for 

preferred mortgages. 

IV. Background 

A. Current 33 CFR Part 187, Subpart D 

A mixture of both Federal and State 

laws govern the titling of vessels in the 

United States.1 ‘‘Documented’’ vessels 

are typically larger commercial vessels 

documented with the Coast Guard 

National Vessel Documentation Center. 

Over 99 percent of vessels in the United 

States are not required to be 

documented and are considered 

‘‘undocumented,’’ which the Coast 

Guard is not required to document. The 

registration and titling of these vessels 

falls under State law. State law 

governing the titling of vessels varies 

considerably from State to State, and 

many States do not have a certificate of 

title law for vessels. 

While the Federal Government does 

not title undocumented vessels, it does 

have an interest in certain aspects of 

policy that would ordinarily be covered 

by State titling requirements. 

Specifically, the Coast Guard has an 

interest in information about vessels 

and their owners for both law 

enforcement and maritime domain 

awareness purposes. For these reasons, 

pursuant to statute, the Coast Guard 

created the VIS, which is a centralized 

database of information relating to these 

subjects.2 However, the VIS relies on 

information generated by States through 

their titling and other recordation 

processes for information about 

undocumented vessels. Currently, only 

38 States participate in the information 

exchange aspects of the VIS. Because 

participation in the VIS is voluntary and 

entirely at the States’ discretion, 

Congress created an incentive for States 

to provide the requisite information, in 

the form of eligibility for preferred 

mortgages. 

Under maritime law, a preferred 

mortgage is a mortgage that is filed—or 

perfected—in compliance with certain 

statutory requirements that are set forth 

in 46 U.S.C. 31321. A preferred 

mortgage creates a lien against the 

mortgaged vessel in the amount of the 

mortgage indebtedness (46 U.S.C. 31322 

and 31325). A preferred mortgage is a 

perfected lien that has priority over 

certain other maritime liens and all nonmaritime liens in an in rem admiralty 

foreclosure (46 U.S.C. 31326).3

Acquiring a preferred mortgage is 

beneficial to the owners of vessels, 

because a preferred mortgage generally 

has a substantially lower interest rate 

than a mortgage secured by a nonperfected lien. While documented 

vessels are eligible for a preferred 

mortgage, undocumented vessels can 

receive such a mortgage only if the State 

in which it is titled satisfies the 

applicable Federal requirements and 

receives approval from the Coast 

Guard.4

To encourage States to participate in 

and share information with the VIS, the 

Coast Guard requires certification before 

maritime liens can be perfected. The 

guidelines that cover what a State must 

do to have its titling laws certified by 

the Coast Guard are located in Title 33 

of the Code of Federal Regulations 

(CFR), part 187, and specifically in 

subpart D—State Vessel Titling Systems. 

In addition to the specific titling 

requirements, subpart D contains a 

requirement that the State must 

‘‘comply with the VIS participation 

requirements of § 187.11 and subpart C 

of this part and make vessel information 

it collects available to VIS.’’ 5

Despite the incentive of being able to 

provide owners of undocumented 

vessels access to preferred mortgages, 

currently no States have titling laws that 

comply with the Coast Guard guidelines 

in subpart D. This is because of a 

conflict between the guidelines in 

subpart D and provisions of the Uniform 

Commercial Code (UCC), specifically 

Articles 2 and 9, which govern the 

titling of property. Because most States 

rely on compliance with the UCC to 

facilitate an array of commercial 

transactions, they have been unable to 

modify their laws to comply with the 

Coast Guard’s certification guidelines in 

subpart D. 

B. UCOTA–V 

The National Conference of 

Commissioners on Uniform State Laws 

(NCCUSL) drafted UCOTA–V 6 with 

input from members of the National 

Association of State Boating Law 

Administrators (NASBLA), boat 

manufacturers and dealers, banking 

interests, and the Coast Guard, which 

continues to be supportive of it. 

Unanimously approved by the NCCUSL 

in July 2011, UCOTA–V provides a 

consistent consumer protection measure 

that allows the identification of vessels 

that have been deemed unsafe, 

preventing them from being sold 

without disclosure. 

The NASBLA membership adopted 

UCOTA–V as a model act of the 

association at its annual business 

meeting in September 2011. Through 

one of its policy committees, NASBLA 

has continued to work with NCCUSL in 

promoting and supporting UCOTA–V 

adoption by the States. Currently, five 

States have adopted the act and five 

other States are at various stages of 

preparation to do so. The NCCUSL set 

forth several ‘‘principal objectives’’ 

when writing UCOTA–V. The objectives 

for UCOTA–V are to: 

(1) Qualify as a State titling law that 

the Coast Guard will approve; 

(2) Facilitate transfers of ownership of 

a vessel; 

(3) Deter and impede the theft of 

vessels by making information about the 

ownership of vessels available to both 

government officials and those 

interested in acquiring an interest in a 

vessel; 

(4) Accommodate existing financing 

arrangements for vessels; 

(5) Work seamlessly with the UCC; 

(6) Manage, to the extent possible, the 

complications that can arise from a 

vessel’s transition in or out of Federal 

documentation; 

(7) Provide clear rules on the 

consequences of compliance or 

noncompliance; 

(8) Impose minimal or no new 

burdens or costs on State titling offices; 

and 

(9) Protect buyers and others 

acquiring an interest in an 

undocumented vessel by requiring that 

the title for the vessel be branded if a 

casualty or sinking has caused 

significant damage to the vessel’s hull 

integrity.7

52794 Federal Register / Vol. 86, No. 181 / Wednesday, September 22, 2021 / Proposed Rules 

information made available by States. See NBSAC 

Resolution 2014–92–01 https://homeport.uscg.mil/ 

Lists/Content/DispForm.aspx?ID=483&Source=/ 

Lists/Content/DispForm.aspx?ID=483. 

8See 46 U.S.C. chapter 125, (Vessel Identification 

System). Subsection (a) of section 12501 requires 

the Secretary of DHS to establish a system of 

information concerning vessels of the United States 

for law enforcement and other purposes. The 

Secretary is required to make available information 

from the system relating to the ownership of vessels 

documented under chapter 121 of title 46, 

numbered under chapter 123 of that title, and titled 

under the law of a State. See https://cgmix.uscg.mil/ 

VISInformation.aspx?VISOption for more 

information regarding VIS. 

9Executive Order 13777 was revoked by 

Executive Order 13992 (Volume 86 of the Federal 

Register (FR) at Page 7049 (Jan. 25, 2021)). 

10Comment from NASBLA, available at https://

www.regulations.gov, docket number USCG–2017– 

0480–0149. 

11See the explanation contained in the table on 

page 57 of UCOTA–V which says: ‘‘States will 

decide under existing state law how they will treat 

vessels that were previously titled under state law 

prior to adoption of UCOTA–V.’’ Thus, previously 

existing state requirements do not bear on the titling 

issues that this proposal seeks to address. 

12UCOTA–V, Section 8, Legislative Note, page 

25. 

13See Federal Plain Language Guidelines, Rev. 1, 

(May 2011) on p. 25. These can be accessed at 

https://www.plainlanguage.gov/guidelines.) 

Various maritime interests 

recommended that the Coast Guard 

update its certification guidelines so 

that States that have adopted laws 

compliant with UCOTA–V can meet the 

certification guidelines. In 2014, the 

National Boating Safety Advisory 

Council (NBSAC), a group established 

under the Federal Advisory Committee 

Act to advise the Coast Guard, passed 

Resolution No. 2014–92–01 

recommending that the Coast Guard 

initiate a rulemaking to revise subpart D 

based on UCOTA–V, for the following 

reasons: 

(1) The well-conceived and welldrafted nature of UCOTA–V; 

(2) The lack of State support for 

current subpart D; 

(3) The interest in complying with a 

revised subpart D to obtain the benefits 

of preferred mortgages; 

(4) Theft deterrence by facilitating 

interstate recovery of stolen vessels; and 

(5) Facilitation of greater participation 

in the VIS.8

In addition, NASBLA recommended 

the incorporation of UCOTA–V 

provisions as well. In response to an 

agency solicitation for regulatory reform 

proposals pursuant to Executive Order 

13777 (Enforcing the Regulatory Reform 

Agenda),9 NASBLA recommended that 

the Coast Guard revise subpart D to 

align Coast Guard certification 

requirements with the requirements of 

UCOTA–V. NASBLA noted that the 

current subpart D regulations ‘‘have 

become obsolete, fostered inefficiencies, 

and/or have become increasingly 

difficult to consistently apply.’’ 10

Based on the recommendations of 

these two organizations, as well as our 

desire to increase State participation in 

the VIS, the Coast Guard is proposing 

revisions to subpart D to allow for any 

State adopting titling laws in 

accordance with the guidelines in 

UCOTA–V to meet Coast Guard 

certification requirements. We discuss 

the specific proposed requirements for 

subpart D below. 

V. Discussion of Proposed Rule 

For the reasons described above, this 

proposed rulemaking would revise 

subpart D of 33 CFR part 187 so that 

State titling laws modeled on UCOTA– 

V would meet the certification 

requirements of subpart D. We propose 

to replace the entire text of the existing 

subpart D with new guidelines that 

would accommodate States that adopt 

variants of the model code appropriate 

for their State commercial legal regimes. 

The Coast Guard is not proposing to 

incorporate UCOTA–V in its entirety 

because some sections of UCOTA–V are 

not applicable to the Federal 

Government. For example, included in 

UCOTA–V is a ‘‘savings clause’’ 

provision (see section 28 of UCOTA–V). 

Because the execution of the savings 

clause would be governed by State law 

applicable to vessel titling that existed 

prior to the adoption of UCOTA–V,11

there is no Federal interest or need to 

apply Federal oversight of the 

application of a savings clause. 

In short, so long as vessels have been 

properly registered through the State, 

the savings clause provision found in 

section 28 of UCOTA–V has no bearing 

on the Coast Guard’s regulatory regime. 

Therefore, we are not including 

UCOTA–V’s savings clause provision 

within this proposal. Instead, we are 

proposing certification guidelines that 

incorporate UCOTA–V, but with a 

number of policy or stylistic changes, 

such that the guidelines are flexible 

enough to allow for the variations in 

State law permitted by UCOTA–V. 

In addition to the savings clause 

provision in section 28, the Coast Guard 

is proposing to omit the following 

sections of UCOTA–V that do not bear 

specifically on titling concerns. 

Section 1, Short title. We are 

integrating the requirements of UCOTA– 

V into Coast Guard regulations, so we 

do not need to adopt the act’s title. 

Section 4, Supplemental principles of 

law and equity. This provision concerns 

the interpretation principles of UCOTA– 

V and, while this is a general principle 

of the UCC, it is not needed for Coast 

Guard certification of a State’s titling 

law. 

Section 8, Creation and cancellation 

of certificate of title, subsection (f). We 

are not incorporating subsection (f) of 

section 8 because it is an optional 

provision for the States that ‘‘provides a 

procedure for the office to follow before 

canceling a certificate of title. It is 

intended for those states whose public 

records or other law does not already 

provide a procedure that ensures all 

interested parties are notified in 

advance and given an opportunity to be 

heard.’’ 12

Section 26, Uniformity of application 

and construction. This provision also 

concerns interpretation principles and 

is not needed for Coast Guard 

certification. 

Section 27, Relation to electronic 

signatures in global and national 

commerce act. This section describes 

the relation of a State’s law to certain 

Federal statutes concerning electronic 

signature, which is not relevant in the 

certification of State titling law. 

Section 28, Savings clause. For the 

reasons discussed above, the Coast 

Guard is not incorporating section 28. 

The Coast Guard also proposes a 

variety of stylistic changes. First, we 

propose keeping the general numbering 

scheme of the text of UCOTA–V in 

regulatory text, replacing references to 

‘‘Section X’’ with the appropriate 

citation to the equivalent regulatory 

section, subsection, or paragraph. We 

would also replace certain words such 

as ‘‘shall’’ with ‘‘must,’’ as provided by 

the Federal Plain Language 

Guidelines.13 Additionally, we would 

replace references to ‘‘the UCC’’ or 

specific sections of the UCC with 

references to ‘‘State law.’’ 

We provide a section-by-section 

discussion of the proposed certification 

guidelines below. 

Section 187.7, What are the 

definitions of terms used in this part? 

We propose to rename this section 

Definitions. We propose to use most of 

the existing definitions within Section 

187.7 and add new definitions from 

section 2 of UCOTA–V. If a definition 

from UCOTA–V differs from an existing 

regulatory definition (for example, the 

term ‘‘documented vessel’’ in UCOTA– 

V differs from the current definition in 

§ 187.7), we would use the definition 

from UCOTA–V. 

The definitions from UCOTA–V that 

we propose adding are as follows: 

• Barge; 

• Builder’s certificate; 

• Buyer; 

• Cancel; 

• Certificate of title; 

Federal Register / Vol. 86, No. 181 / Wednesday, September 22, 2021 / Proposed Rules 52795 

14 In UCOTA–V, this term is ‘‘State of principle 

[sic] use.’’ 

• Electronic; 

• Electronic certificate of title; 

• Foreign-documented vessel; 

• Good faith; 

• Hull damaged; 

• Lien creditor; 

• Office; 

• Owner of record; 

• Purchase; 

• Purchaser; 

• Record; 

• Secured party of record; 

• Sign; 

• State of principal operation; 14

• Title brand; 

• Transfer of ownership; 

• Vessel number; and 

• Written certificate of title. 

Subpart D heading and section titles. 

For clarification, we propose to revise 

the heading for subpart D from 

‘‘Guidelines for State Vessel Titling 

Systems’’ to the more general ‘‘State 

Vessel Titling Systems.’’ We would also 

change the section titles in revised 

subpart D to better align with the 

section titles of UCOTA–V. 

Section 187.301. We propose to 

clarify this section by replacing the 

language that says the Coast Guard 

‘‘may certify’’ a State vessel titling 

system if it complies with the 

requirements of the subpart with ‘‘will 

certify.’’ We propose this change 

because, if the State’s titling system 

meets the requirements of this 

regulation, the state has met the Coast 

Guard’s requirements. Thus, the Coast 

Guard will certify the State’s titling 

system, thereby fulfilling the 

requirements set forth in 46 U.S.C. 

31322(d)(1) for preferred mortgage 

status. The purpose of this regulation is 

for States to take advantages of sharing 

validated vessel information that meets 

the minimum requirements listed in 

regulations. 

Section 187.302 (new). We propose 

moving the list of terms States must 

define from § 187.303 to this new 

section to keep the structure consistent 

with the rest of UCOTA–V. The new 

§ 187.302(a) would incorporate the 

current requirement of § 187.303 that 

States define listed terms substantially 

as they are defined in § 187.7. The terms 

already listed in § 187.7 would not be 

removed or substantively changed, but 

some definitions would be rephrased, 

and several new terms would be added 

as recommended by UCOTA–V, section 

2(a), which includes a list of definitions 

for States to adopt directly. In addition, 

the new § 187.302(b) would require 

States to define the terms listed in 

UCOTA–V section 2(b). These are 

general terms derived from the UCC, 

which all States have adopted, or 

adopted in modified form. Finally, we 

would add a new § 187.302(c), 

incorporating UCOTA–V section 2(c), 

stating that subpart D definitions do not 

apply to any State or Federal law 

governing licensing, numbering, or 

registration if the same term is used in 

that law. 

Section 187.303. We would revise 

§ 187.303 to incorporate UCOTA–V 

section 3 applicability provisions. As 

described above, the current list of 

terms States must define would be 

moved to the new § 187.302. 

Section 187.304. We would retain this 

section, without change, but would 

rename it to better match the rest of the 

subpart. 

Section 187.305. This section 

currently specifies requirements for title 

applications. We would move the 

material on this topic to the revised 

§ 187.307. The revised § 187.305 would 

incorporate UCOTA–V section 5, 

defining which State’s law governs 

vessels covered by title certificates. 

Section 187.306 (new). This new 

section would incorporate the UCOTA– 

V section 6 discussion of when a title 

certificate is and is not required. 

Section 187.307. The revised 

§ 187.307 would incorporate UCOTA–V 

section 7 specifications for title 

application contents. Currently, this 

section mandates certain provisions that 

States must impose on vessel dealers 

and manufacturers. We would no longer 

require these dealer- or manufacturerspecific conditions because they are 

covered by the UCOTA–V provisions 

that we propose adopting. 

Section 187.308 (new). This new 

section would incorporate the UCOTA– 

V section 8 provisions for creating and 

canceling title certificates, with the 

exception of optional paragraph (f), as 

detailed above in the discussion of 

UCOTA–V section 8. 

Section 187.309. Section 187.309 

currently covers requirements for 

voluntary title transfers (transfers other 

than by operation of law). Section 

187.317 currently covers title certificate 

contents. Under our proposal, we would 

exchange these, so the revised § 187.309 

would cover title certificate contents (an 

adaptation of UCOTA–V section 9) and 

the revised § 187.317 would cover 

requirements for voluntary title transfers 

(an adaptation of UCOTA–V section 17). 

We propose this change to better align 

with the structure of UCOTA–V. 

Section 187.310 (new). This new 

section would incorporate UCOTA–V 

section 10 title brand provisions. We 

would incorporate these provisions to 

deter title washing and protect buyers 

and others acquiring an interest in an 

undocumented vessel. 

Section 187.311. This section 

currently requires new title certificates 

after vessel ownership transfers by 

operation of law. We propose moving 

this discussion to the new § 187.320. 

The revised § 187.311 would 

incorporate UCOTA–V section 11 

requirements for maintenance of and 

access to State title certificate files. 

Section 187.312 (new). This new 

section would incorporate UCOTA–V 

section 12, concerning the duties of the 

State and title holder upon creation of 

a title certificate. 

Section 187.313. This section 

currently requires a State to honor 

evidence of vessel ownership from 

another State, country, or the Coast 

Guard. Under this proposal, we would 

move this discussion to § 187.328. The 

revised § 187.313 would incorporate 

UCOTA–V section 13, declaring the 

prima facie evidential value of title 

certificate contents. 

Section 187.314 (new). This new 

section would incorporate UCOTA–V 

section 14, concerning the possession of 

a title certificate and judicial process 

against a certificate. 

Section 187.315. This section 

currently provides that a State title is 

invalidated when exchanged for a 

certificate of documentation. The 

revised § 187.315 would incorporate 

UCOTA–V section 15 provisions for 

perfecting vessel security interests, 

which is currently addressed in 

§ 187.323. 

Section 187.316 (new). This new 

section would incorporate UCOTA–V 

section 16, concerning the termination 

of a security interest in a vessel. 

Currently, § 187.327 requires States to 

establish their own termination 

procedures. We propose removing and 

reserving § 187.327. 

Section 187.317. To better align with 

UCOTA–V’s structure, we would 

exchange the provisions on the topics 

covered by § 187.309 with the topics 

covered by § 187.317, as discussed 

above at Section 187.309. 

Section 187.318 (new). This new 

section would incorporate UCOTA–V 

section 18, concerning the effect of 

missing or incorrect title certificate 

information. 

Section 187.319. This section 

currently covers applying for 

replacement or ‘‘redundant’’ title 

certificates. We propose moving this 

topic to the new § 187.322. The revised 

§ 187.319 would incorporate UCOTA–V 

section 19, concerning the transfer of a 

vessel ownership interest by a secured 

party’s transfer statement. 

52796 Federal Register / Vol. 86, No. 181 / Wednesday, September 22, 2021 / Proposed Rules 

Section 187.320 (new). This new 

section would incorporate UCOTA–V 

section 20, concerning ownership 

interest transfers by operation of law, 

which § 187.311 currently contains. 

Section 187.321. This section 

currently requires a hull identification 

number to be assigned and affixed to a 

vessel upon proof of its ownership. We 

propose replacing the existing language 

with a substantively identical 

adaptation of UCOTA–V section 21, 

concerning applications for transferring 

ownership or for canceling a security 

interest that is not accompanied by a 

certificate of title. UCOTA–V 

recommends more specific requirements 

for recording hull identification 

numbers, which we would include in 

revised §§ 187.307, 187.309, 187.311, 

187.315, and 187.325. For example, 

UCOTA–V requires the State to issue a 

hull identification number in cases 

where the State did not issue one to the 

vessel owner or operator upon original 

construction, such as an antique vessel 

built prior to November 1972. 

Section 187.322 (new). This new 

section would incorporate UCOTA–V 

section 22, concerning replacement title 

certificates, which is currently 

addressed in § 187.319. 

Section 187.323. This section 

currently specifies procedures for 

perfecting vessel security interests, 

which would be addressed in § 187.315. 

The revised § 187.323 would 

incorporate UCOTA–V section 23, 

concerning the rights of a vessel 

purchaser who is not a secured party. 

Section 187.324 (new). This new 

section would incorporate UCOTA–V 

section 24, concerning the rights of 

secured parties. 

Section 187.325. This section 

currently requires States to specify the 

procedure for assigning vessel security 

interests, which would be addressed in 

the revised § 187.315(f). The revised 

§ 187.325 would incorporate UCOTA–V 

section 25, specifying certain 

requirements for the administrative 

operation of a State certificating 

authority, such as length of record 

retention and allowable fees. 

Section 187.327. We would remove 

this section, which covers the discharge 

of a vessel security interest. This topic 

would be covered in the new § 187.316. 

Sections 187.329. We would remove 

this section. It is not necessary to retain 

the requirement in § 187.329 for States 

to specify titling system forms, as 

UCOTA–V requirements for specific 

records would appear throughout 

revised subpart D. An example of this is 

in the title application and certificate 

provisions of §§ 187.306 through 

187.310. 

Section 187.331. We would remove 

this section. Section 187.331 requires 

States to retain title system information 

and make it available to government 

authorities. In the revised subpart D, 

similar requirements would appear in 

§§ 187.311(d) and 187.325(a). 

VI. Regulatory Analyses 

The Coast Guard developed this 

NPRM after considering numerous 

statutes and Executive orders related to 

rulemaking. Below, we summarize our 

analyses based on these statutes or 

Executive orders. 

A. Regulatory Planning and Review 

Executive Orders 12866 (Regulatory 

Planning and Review) and 13563 

(Improving Regulation and Regulatory 

Review) direct agencies to assess the 

costs and benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). Executive Order 13563 

emphasizes the importance of 

quantifying both costs and benefits, 

reducing costs, harmonizing rules, and 

promoting flexibility. 

The Office of Management and Budget 

(OMB) has not designated this rule a 

significant regulatory action under 

section 3(f) of Executive Order 12866. 

Accordingly, OMB has not reviewed it. 

We developed an analysis of the costs 

and benefits of the proposed rule to 

ascertain its probable impacts. A 

regulatory analysis (RA) follows. 

This RA provides an evaluation of the 

economic impacts associated with this 

proposed rule. Table 1 provides a 

summary of the proposed rule’s costs 

and benefits. The Coast Guard requests 

public comments on all aspects of the 

following analysis. In particular, the 

Coast Guard requests comments on the 

categories of unquantified costs and 

benefits and potential costs listed in 

Table 1 below. 

TABLE 1—SUMMARY OF THE PROPOSED RULE’S IMPACTS 1

Category Summary 

Affected Population ......................... 56 States of which 18 are not currently in compliance with VIS requirements and 47 have not adopted 

UCOTA–V (subpart D) or started the process. 

Costs (7-percent discount rate) ...... $138,490 (10-year discounted cost). 

$19,718 (annualized cost). 

Unquantified Costs 2 ........................ • 2 States currently have legislative conflicts that may impact VIS participation. While the cost to negotiate 

and amend the legislation is estimated, the cost of labor to put forward and vote on the privacy legislation is difficult to quantify. 

• 47 States currently have legislative conflicts that may impact adopting UCOTA–V. While the cost to negotiate and amend the legislation is estimated, the cost of labor to put forward and vote on the privacy 

legislation is difficult to quantify. 

Potential Costs 3 .............................. • Costs to vessel owners, imposed by States without titling programs (7 States), who require vessel owners to obtain a title. Estimated potential cost of obtaining title is $50 (not in cost analysis); 

• Costs to vessel owners, imposed by States without titling programs (7 States), who may experience opportunity costs for labor expended to obtain a title ( not in cost analysis); 

• Costs to vessel owners, imposed by States with titling programs (47 States), who may impose additional 

costs or fees on vessel owners (not in cost analysis); 

• Cost to States to update website after reviewing rule (not in cost analysis); 

• Cost to States seeking to become VIS compliant to transfer data to the Coast Guard (included in cost 

analysis). 

Unquantified Benefits ...................... Ability to obtain preferred mortgage status; lower transaction costs; deterrence to ‘‘title washing;’’ recovery 

of stolen vessels; identification of abandoned vessels; consumer protection; and security measures for financial entities; lower administrative burden and costs to the buyer. 

1Figures are rounded to the nearest one dollar. 

2 Unquantified costs are defined as costs that are incurred as a direct or indirect result of the rulemaking, which are not quantified. 3Potential costs are defined as costs that may potentially be incurred as a direct or indirect result of the rulemaking. 

Federal Register / Vol. 86, No. 181 / Wednesday, September 22, 2021 / Proposed Rules 52797 

15https://cgmix.uscg.mil/VISInformation.

aspx?VISOption. This page was last viewed on 

January 22, 2020. On that date the last update was 

January 21, 2020. 

16 VIS participation is defined by the existence of 

a signed MOA. 

17The five States that have adopted UCOTA–V 

are Connecticut, the District of Colombia, Florida, 

Hawaii, and Virginia. The four States in the process 

of adopting UCOTA–V are Alabama, Georgia, 

Tennessee and Texas. This data is current as of 

January 21, 2020. 

18According to BSX, recreational vehicle owners 

for the 10 compliant and semi-compliant States did 

not incur a cost increase. 

19This statement is based on the Coast Guard’s 

review of website information for 52 States (March 

2020). For Virginia state fees, see https://

dwr.virginia.gov/boating/registration/procedure/. 

For Florida state fees, see https://www.flhsmv.gov/ 

motor-vehicles-tags-titles/vessels/vessel-titlingregistrations/. 

20The use of leisure time to obtain the title. The 

cost of this task may be calculated by the formula: 

Continued 

This proposed rule has several goals. 

The Coast Guard intends to establish 

minimum requirements for States 

electing to become subpart D-compliant 

and to prescribe guidelines for State 

vessel titling systems. We also intend to 

provide guidance on how to obtain 

certification of compliance with State 

guidelines for vessel titling systems for 

the purpose of conferring preferred 

status on mortgages, instruments, or 

agreements under 46 U.S.C. 31322(d). 

The proposed revisions would affect 

States that voluntarily seek to certify 

their State titling laws with the Coast 

Guard, pursuant to regulations under 33 

CFR part 187, and to participate in the 

VIS. As such, the affected population for 

this proposed rule would include the 56 

U.S. States. 

The Coast Guard has been 

encouraging States to participate in the 

VIS since it has been in place in 2007, 

but some have chosen not to participate, 

primarily because of privacy laws 

regarding the sharing of personally 

identifiable information. The VIS 

comprises a nationwide information 

system for identifying recreational, 

commercial, and public vessels that are 

numbered. As of January 21, 2020, 38 

States were participating in the VIS.15

To encourage further participation, 

participating States have access to all 

VIS data. 

As described later, the benefits of this 

proposed rule would include increased 

uniformity across States in their titling 

laws. In turn, this would lead to a 

reduction in transaction costs, increased 

fraud prevention (insurance fraud and 

fraud from illegitimately owned 

vessels), increased consumer protection, 

a decrease in risk to lenders, the 

recovery and identification of 

abandoned vessels, and increased 

efficiencies for interstate commerce. 

Even through there is no new 

requirement in the proposed rule for 

vessel owners to report vessel damage to 

the VIS directly, the insurance company 

would be required to provide the 

information to the State if the owners 

make claims to repair the vessels. Once 

the States provide the vessel 

information to the VIS, the system can 

track the vessel information and share 

with other States if the repaired boats 

are sold as boats with no damage 

outside the State. 

More specifically, transaction costs 

would be lower because consumers may 

be able to get preferred loans which 

have lower interest rates. Also, a buyer’s 

administrative burden and costs when 

buying a vessel from a private party may 

be lessened because the buyer would 

not have to do extensive research to 

assure the vessel is being sold by the 

legitimate owner. In addition, some 

non-titling States require bonds when 

vessels are sold; this transaction cost 

may be eliminated with the adoption of 

UCOTA–V. 

Affected Population 

This proposed rule would potentially 

affect all 56 States. The affected 

population of the regulated public may 

be parsed by VIS participation and also 

by UCOTA–V adoption. As of January 

21, 2020, 38 States were participating in 

the VIS,16 16 States were interested in 

joining the VIS, but had not signed a 

Memorandum of Agreements (MOA) on 

VIS participation, and two States were 

not able to comply with VIS 

requirements due to conflicts with their 

own state’s privacy laws. Regarding 

UCOTA–V adoption, 47 of 56 States 

have not adopted UCOTA–V.17

Costs 

The proposed rule would result in 

costs to the regulated public (State and 

territorial governments) and to the Coast 

Guard. Costs to the States may be 

divided between VIS compliance costs 

and UCOTA–V adoption (proposed 

subpart D compliance) costs. The 

proposed rule would not impose direct 

costs on vessel owners, as it would deter 

fraud by introducing penalties for 

providing false information. However, 

there is potential for indirect costs, as 

noted later. 

Vessel owners are not required to take 

action as a result of the proposal. For 

example, this proposed rule does not 

require additional documentation from 

vessel owners. Transfer of title always 

requires a new title to be issued, which 

is common practice. There is no 

requirement other than a statement from 

the current owner declaring the vessel 

is, or has been, damaged. There is no 

other documentation required for proof 

of damage. There is no requirement for 

a statement from an insurer. This merely 

provides disclosure to a buyer. 

The proposed changes of the NPRM 

would lead to changes in some States, 

which may have cost implications for 

vessel owners and the States. Below 

describes the potential costs to vessel 

owners as a direct or indirect result of 

this proposed rule. 

Potential Costs to Vessel Owners 

The proposed rule would affect 56 

States, all of which have vessel owners. 

In States that currently have a titling 

program for vessels, and that participate 

in the VIS, vessel owners would 

experience no incremental impact. In 

States with an existing titling program, 

vessel owners would be affected if the 

State changes or imposes additional fees 

through their legislative or regulatory 

process. States that are compliant with 

UCOTA–V (proposed subpart D) report 

that they did not impose any additional 

fees after the adoption of UCOTA–V 

provisions, and, according to the Coast 

Guard’s Office of Auxiliary and Boating 

Safety (BSX), no State has signaled the 

intent to increase titling fees if their 

system becomes certified as UCOTA–V 

compliant. However, the Coast Guard 

cannot definitively conclude that 

recreational vessel owners would not 

face a cost increase as an indirect effect 

of these proposed changes. Nonetheless, 

we have not computed a cost due to the 

proposal to vessel owners in States with 

a titling system, due to the uncertainty 

of a potential cost increase.18 The Coast 

Guard will revisit this evaluation further 

after reviewing the public comments it 

receives during the comment period of 

this proposed rule. 

In States without a vessel titling 

program, recreational vessel owners 

may experience a cost increase because 

of this proposed rule. These States have 

not indicated to the Coast Guard how 

they would handle existing vessels once 

they have established a titling system. 

Existing vessels may be grandfathered in 

and permitted to be titled voluntarily by 

the owner, or States may require all 

vessel owners to obtain a title. A review 

of websites for States with a titling 

program demonstrated that the cost of 

vessel titles are generally $50 or less.19

Because the Coast Guard does not have 

information on how future titling 

programs would be operated, we have 

not computed the potential costs to 

obtain titles in these States as a cost in 

this rulemaking. We acknowledge that 

there may be some opportunity costs 20

52798 Federal Register / Vol. 86, No. 181 / Wednesday, September 22, 2021 / Proposed Rules 

One-half of the median household income. The 

Coast Guard followed the Department of 

Transportation’s (DOT) guidance for valuing the 

opportunity cost of leisure time. Readers should 

consult the DOT Memorandum ‘‘Revised 

Departmental Guidance on the Valuation of a 

Statistical Life,’’ which may be found at https://

www.transportation.gov/sites/dot.gov/files/docs/ 

2016%20Revised%20Value%20of%20Travel

%20Time%20Guidance.pdf. 

21Readers may consult Coast Guard data at 

https://cgmix.uscg.mil/VISInformation.aspx. This 

web page was last viewed on January 21, 2020. 

Sixteen States have initiated VIS participation, but 

have not completed an MOA. Two States do not 

participate. 

for labor expended to obtain the title 

and actual fees for the title. 

No further action would be required 

by vessel owners. Vessel owners do not 

need to renumber their vessels as a 

result of the proposed rule, since 

existing hull numbers are unrelated to 

titling. No equipment is required by 

vessel owners for compliance. 

Table 2 below summarizes this 

section detailing potential costs of the 

proposed rule. All are considered 

indirect costs, as they are costs that may 

be imposed by the State on vessel 

owners as a result of the proposed rule, 

but not mandated by the rule itself. 

There are other potential costs of the 

rule detailed in future section. For a 

comprehensive list of all potential costs, 

please refer to Table 1. 

TABLE 2—SUMMARY OF POTENTIAL COSTS

Task Description Party bearing cost Potential direct or indirect cost 

of proposed rule 

Obtaining a vessel title (Cost of 

title).

Costs to vessel owners, imposed by States 

without titling programs (7 States), that require vessel owners to obtain a title. Potential cost of obtaining title is $50.

Vessel owners in 7 States ..... Potential indirect cost of proposed rulemaking. 

Obtaining a vessel title (opportunity cost of obtaining title).Costs to vessel owners, imposed by States 

without titling programs (7 States), who 

may experience opportunity costs for labor 

expended to obtain a title.

Vessel owners in 7 States ..... Potential indirect cost of proposed rulemaking. 

N/A ........................................... Costs to vessel owners, imposed by States 

with titling programs (47 States) that may 

impose additional costs or fees on vessel 

owners.

Vessel owners in 47 States ... Potential indirect cost of proposed rulemaking. 

Costs to the Coast Guard 

We estimate that the Government 

costs associated with this regulatory 

action would be labor costs for the Coast 

Guard to: (1) Process MOAs from the 

States; (2) coordinate with States; and 

(3) update the Coast Guard website. No 

additional equipment would be needed 

to perform these tasks under the 

proposed rule. 

In order to process an MOA, it is first 

transmitted from the States to a Coast 

Guard compliance officer in BSX and 

then to the Commandant (or designee) 

for approval. To coordinate with the 

States, a Coast Guard compliance officer 

would engage with and respond to 

inquiries from the States. The Coast 

Guard estimates that a Coast Guard 

compliance officer would spend 0.25 

hour to process an MOA from a State 

and another 0.25 hour to transmit it to 

the Commandant (or designee) for 

approval. The Commandant or designee 

would spend 0.2 hour to approve an 

MOA (Cost = Count of MOAs × [(0.5 

hour × Compliance officer’s wage rate) 

+ (0.2 hour × Commandant’s wage 

rate)]). 

As a result of this proposal, we 

estimate that the Coast Guard would 

need to engage with, respond to 

inquiries, and coordinate with States 

regarding VIS participation and 

UCOTA–V compliance. Eighteen States 

are not in the VIS We estimate that a 

Coast Guard compliance officer would 

need to coordinate with each of these 

States for VIS participation.21 To engage 

with and respond to inquiries from 

States, we estimate that the compliance 

officer would spend 0.5 hour per State’s 

inquiry to coordinate a response (Cost = 

18 States × (0.5 hour × Compliance 

officer’s wage rate)). For the 47 States 

needing to adopt UCOTA–V, we 

estimate that a Coast Guard compliance 

officer would spend 0.5 hour per State 

to assist (Cost = 47 States × (0.5 hour × 

Compliance officer’s wage rate)). 

Lastly, the Coast Guard would need to 

update its website with information on 

this proposed rule. We estimate that 1 

hour would be needed by a computer 

technician and an additional 0.25 hour 

for a compliance officer to supervise 

and approve the update. This is a onetime task that is expected to occur in the 

first year of the final rule’s enactment 

(Cost = [(0.25 hour × Coast Guard 

compliance officer’s wage rate) + (1 

hour × Federal computer technician’s 

wage rate)]). 

TABLE 3—SUMMARY OF COSTS TO THE COAST GUARD

Task Time burden and 

responsible party Cost Applicable population 

Direct or 

indirect cost 

of proposed rule 

Process MOA from States ... 0.25 hours to process MOA 

(USCG Compliance officer).

0.25 hours to transmit for 

approval (USCG Compliance officer).

(0.5 hours × USCG Compliance officer’s wage rate) + 

(0.2 hour × Commandant 

or designee’s wage rate) × 

56 States.

One-time cost to the Coast 

Guard for all 56 States.

Direct. 

0.2 hours for approval (Commandant or designee).

Federal Register / Vol. 86, No. 181 / Wednesday, September 22, 2021 / Proposed Rules 52799 

22This estimate is based on a previous Coast 

Guard rulemaking. In the 2014 final rule for 

Personal Flotation Devices Labeling and Standards 

(79 FR 56491), the Coast Guard estimated that the 

task would take 0.5 hour (https://www.federal

register.gov/documents/2014/09/22/2014-22373/ 

personal-flotation-devices-labeling-and-standards). 

Time estimate can be found under Table 2, ‘‘State 

Regulatory Review’’. No public comments were 

received on this estimate. This page was last viewed 

on May 21, 2021. 23The Coast Guard estimates a manager would 

spend 0.25 hour to provide direction and supervise 

and approve the work of a computer technician. 24This estimate is based on the Coast Guard’s rule 

for Tankers Automatic Pilot Systems (83 FR 55272). 

Please see https://www.federalregister.gov/ 

documents/2018/11/05/2018-24127/tankersautomatic-pilot-systems, Table 3, ‘‘Write 

Notification of Regulatory Change’’, 4th Entry (0.5 

hours). This estimate is defined as ‘‘Communicate 

regulatory change’’, which is an identical task 

undertaken by the State manager. This page was last 

viewed on May 21, 2021). 

TABLE 3—SUMMARY OF COSTS TO THE COAST GUARD—Continued 

Task Time burden and 

responsible party Cost Applicable population 

Direct or 

indirect cost 

of proposed rule 

Coordinate with States ......... 0.5 hours for 18 States without VIS (USCG Compliance officer).

0.5 hours for 47 States 

needing to adopt UCOTA– 

V (USCG Compliance officer).

18 States × (0.5 hour × 

USCG Compliance officer’s wage rate).

47 States × (0.5 hour × 

USCG Compliance officer’s wage rate).

One-time cost to the Coast 

Guard for 18 States.

One-time cost to the Coast 

Guard for 47 States.

Direct. 

Update Coast Guard 

Website.

1 hour to update (Federal 

computer technician).

0.25 hours to approve 

(USCG Compliance officer).

0.25 hour × USCG compliance officer’s wage rate) + 

(1 hour × Federal computer technician’s wage 

rate.

One-time cost to the Coast 

Guard.

Direct. 

Costs to the Regulated Public (States) 

Compliance with the proposed rule 

would require a variety of tasks by the 

regulated public. This section 

documents the Coast Guard’s 

assessment of the proposed rule’s 

changes and the steps States would 

need to take as a result. Not all tasks 

would need to be carried out by all the 

States. In this section, the Coast Guard 

notes first the tasks that apply to all 

States. Next are the tasks that result 

from the proposed rule. We split these 

tasks into categories to better calculate 

the costs, since some tasks apply to 

some States and others apply to other 

States, depending on their current level 

of compliance with existing rules. 

Below is a list of all costs to the 

regulated public: 

Costs to the Regulated Public—States 

All 56 States would need to be 

familiarized with the proposed rule and 

complete the task of reviewing the 

State’s website. Upon review of the 

State’s procedures and websites, some 

States may need to make updates. These 

are discussed in more detail below. 

The Coast Guard estimates that States 

would spend 0.5 hour to become 

familiarized with the proposed rule.22 A 

manager would perform this task. A 

manager would spend another 0.5 hour 

to review the State’s procedures and 

website to make a determination if 

anything would need to change in 

response to the proposed rule (Cost = 56 

States × 0.5 hour × State manager’s wage 

rate). All 56 States may potentially need 

to update their websites, which would 

be accomplished by a computer 

technician. The Coast Guard estimates 

that this task would take 1 hour and 

would be performed by a computer 

technician at the direction of a 

manager.23 However, as the Coast Guard 

does not have an estimate on how many 

States would need to update their 

website, the cost is considered only a 

potential cost and is not factored into 

the cost analysis. 

Although not explicitly required, 

some States may send email 

notifications or a press release to 

interested parties (e.g., such as the 

media, recreational boaters, boating 

associations, the Coast Guard Auxiliary, 

etc.) Another 0.5 hour is estimated for 

a State manager to write a notification 

of regulatory change for the public.24

We estimate these as one-time costs to 

the State. 

TABLE 4—SUMMARY OF COSTS TO STATES

Task Time burden and 

responsible party Cost Applicable population 

Direct or indirect 

cost of proposed 

rule 

Become familiarized with 

rule.

0.5 hours State manager ..... Cost = (56 States × 0.5 hour 

× State manager’s wage 

rate) + (56 States × 0.5 

hour × State manager’s 

wage rate).

One-time cost to all 56 

States.

Direct. 

Review website .................... 0.5 hours State manager ..... Direct. 

Update website (Not included in cost analysis).1 hour Computer technician Cost = 1 hour × 56 States × 

Computer Technician’s 

wage rate.

Potential one-time cost to all 

56 States.

Potential direct 

cost. 

Notification of change .......... 0.5 hours State manager ..... Cost = 0.5 hour × 56 States 

× State manager’s wage 

rate.

One-time cost to all 56 

States.

Direct. 

52800 Federal Register / Vol. 86, No. 181 / Wednesday, September 22, 2021 / Proposed Rules 

25https://cgmix.uscg.mil/VISInformation.aspx. 

This web page was last viewed on January 8, 2020. 

26Email from Info-Link Technologies, Inc. to 

William Burgess, Compliance Officer, CG–BSX–1 

dated February 5, 2020 (available in the docket 

where indicated under the Public Participation and 

Request for Comments portion of this NPRM). 

27 During the renewal process for the collection of 

information request, no public comments were 

received on the estimate. In preparing this NPRM, 

the Coast Guard reviewed data and revised the 

estimate for the duration of labor to upload VIS 

data. The revision better reflects the amount of time 

needed to perform periodic uploads of automated 

data. 

Costs to the Regulated Public—States 

(VIS Compliance Costs) 

Based on BSX data,25 we estimate that 

there are two States currently not in 

compliance with any existing VIS 

requirements. Some States are in partial 

compliance with existing requirements 

for the VIS. Coast Guard data 

demonstrates that 16 States have 

initiated VIS participation, but are not 

in compliance because they do not have 

a signed MOA with the Coast Guard. 

The remaining 38 States have signed 

MOAs, which means they are 

participating in the VIS. 

The 16 States that have initiated VIS 

activity, but do not have a signed MOA 

with the Coast Guard, would need to 

complete the following steps for an 

MOA. In order to comply, States would 

incur costs to: (1) Coordinate with the 

Coast Guard for data transfer; (2) 

prepare and submit a completed MOA 

and participation form; and (3) engage 

in coordination activities to complete a 

new user request form. 

All the VIS-participating States would 

engage in activities to upload data to the 

VIS. However, according to Info-Link 

Technologies,26 the contractor 

responsible for VIS updates, VIS data 

uploads for each State are often an 

automated process, where software 

automatically prepares and uploads a 

data file each month. The economic 

impact of the data submission is zero as 

a result of Info-Link Technologies 

already bearing the cost for the data, 

which they receive from every State 

regardless of their participation in VIS. 

Thus, States that do not currently 

participate in VIS still engage in a 

virtual data submission with the 

contractor and will not incur an 

additional cost or time burden. As a 

result, we conclude that VIS data 

uploads would not produce costs to 

States new to VIS. 

New VIS participants would need to 

complete the new user request form. We 

estimate that it would take 0.1 hour to 

complete the form. These estimates are 

based on data provided by Info-Link 

Technologies and the Coast Guard’s 

Collection of Information entitled 

‘‘Vessel Identification System,’’ OMB 

Control Number: 1625–0070.27

Lastly, two States would have to 

address legislative conflicts with 

existing privacy laws that complicate or 

prevent VIS participation. We estimate 

that such a task would require that a 

manager to negotiate the changes with a 

State legislative committee. An attorney 

would draft the legislation. Unlike 

UCOTA–V, which has uniform 

legislation to follow for each State, 

privacy law amendments may take more 

time to develop. Therefore, we estimate 

that a manager would spend 40 hours to 

negotiate legislative changes. Another 

40 hours would be spent by an attorney 

to draft the legislative language. State 

laws are often voted in blocks and the 

labor to put the amended privacy 

legislation forward and to vote on it is 

considered to be unseverable. For that 

reason, we have not estimated a cost for 

this step. However, the Coast Guard 

would like to request comments from 

the public on any information regarding 

the estimated cost to draft and negotiate 

legislative changes. Presently, we use 

our current estimates for drafting and 

negotiating these changes but omit the 

cost of labor to put forward and vote on 

the legislation. 

We computed a cost to transmit VIS 

data to the Coast Guard for 18 States on 

the basis that States may correspond 

with the Coast Guard to initiate the data 

transfer or may have issues in their 

computer systems preventing automatic 

data transfer. In the event that this 

occurs, the State may send spreadsheets 

to the Coast Guard, and a technician 

contracted to the Coast Guard would 

upload the data. However, we 

acknowledge that this is already a task 

under existing regulations and, in most 

cases, data is automatically transmitted. 

TABLE 5—SUMMARY OF COSTS

[VIS compliance] 

Task Time burden and 

responsible party Cost Applicable population 

Direct or 

indirect cost 

of proposed 

rule 

Prepare and submit an 

MOA.

16 hours (State manager).18 States × (16 hours × 

State Manager wage 

rate).

One-time cost for 18 States ................................. Direct. 

Complete New User request form.0.1 Hour (State manager).18 States × (0.1 hour × 

State Manager wage 

rate).

One-time cost for 18 States ................................. Direct. 

Coordinate with Coast 

Guard for data transfer.

1 hour (State manager) 18 States × (1 hour × 

State Manager wage 

rate).

Potential one-time cost for States with issues 

with the automatic data transfer. (Even though 

considered potential, included in cost analysis 

due to potential correspondence to initiate 

data transfer or issues with automatic data 

transfer).

Direct (Potential). 

Draft legislative language to amend privacy laws.40 hours (State manager) 40 hours (State 

attorney).

2 States × [(40 hours × 

State Manager wage 

rate) + (40 hours × 

State attorney wage 

rate)].

One time cost for 2 States ................................... Direct. 

Federal Register / Vol. 86, No. 181 / Wednesday, September 22, 2021 / Proposed Rules 52801 

28Email from Uniform Law Commission to 

William Burgess, Compliance Officer, Coast Guard 

(January 16, 2020) (available in the docket where 

indicated under the Public Participation and 

Request for Comments portion of this NPRM). 

29For all uniform acts, the State’s legislative 

drafting office mainly formats the bill to conform 

to the State’s required format and fill in bracketed 

areas of the text. The Uniform Law Commission 

(ULC) (https://www.uniformlaws.org/home) also 

includes italicized legislative notes when they 

format the bill for the particular State. This allows 

the time to draft the bill to be relatively shorter than 

with other regulations. 

30Each State has its own legislative drafting 

agency responsible for drafting legislation. The bill 

drafters are attorneys who draft bills for all the state 

legislators. 

31As this is part of the State’s normal legislative 

process, we do not anticipate any additional fees 

beyond the normal process for these bills. 

32This estimate comports with previous 

estimated durations of making legislative changes at 

the State level. In the final rule for Personal 

Flotation Devices Labeling and Standards (79 FR 

56491, USCG–2013–0263, RIN 1625–AC02), Coast 

Guard estimated that a change by legislative would 

take 10 hours. No public comments were received 

on this estimate. Please see https://www.federal

register.gov/documents/2014/09/22/2014-22373/ 

personal-flotation-devices-labeling-and-standards). 

The Coast Guard adjusted this estimate to reflect the 

more complex nature of this change. 

33Some States may delegate the approval process 

of such changes to an administrative law committee 

rather than vote on it in the legislature. The process 

to develop the law and to put it forward for voting 

would be the same. 

34This estimate comports with previous 

estimated durations of reviewing and editing 

manuals and policy documents. The Coast Guard 

reviewed previously approved OMB collections for 

the final rule for Marine Vapor Control Systems 

(RIN 1625–AB37, USCG–1999–5150, 80 FR 7539), 

the proposed rule for Revision of Crane Regulation 

Standards (RIN 1625–AB78, USCG–2011–0992, 78 

FR 27913) and the final rule for Personal Flotation 

Devices Labeling and Standards (79 FR 56491, 

USCG–2013–0263, RIN 1625–AC02, 78 FR 27913). 

Previously approved collections of information may 

be found at Information Collection Review 

(reginfo.gov). No public comments were received on 

these estimates. The Coast Guard adjusted its 

estimate to reflect changes in complexity of the 

task. 

35According to BSX, most States use an ‘‘off the 

shelf’’ system, so changes are easy and menu 

driven. Some States have older systems which 

would take more time to adjust, but the older 

systems are the exception, not the rule. The Coast 

Guard estimates the average number of hours of 

labor for a computer technician by using the 

average time spent on design and coding from a 

University of South Carolina study on software 

developers. Readers can find the study at: https:// 

cse.sc.edu/job/how-software-developers-reallyspend-their-time. The study uses the average 

number of hours per week software developers 

spend designing and coding software. The Coast 

Guard considers this to be a reasonable rough proxy 

for the purpose of this analysis. 

36Email from NASBLA Vessel Registration, 

Identification, and Titling Committee (VIRT) to 

William Burgess, Compliance Officer, Coast Guard, 

February 10, 2010. Available in the docket where 

indicated under the Public Participation and 

Request for Comments portion of the preamble. 

Costs to the Regulated Public—States in 

UCOTA–V Adoption (Proposed Subpart 

D Compliance) 

We base our cost estimates on all 56 

States choosing to adopt UCOTA–V. As 

of January 16, 2020, five States have 

adopted UCOTA–V, and five States are 

developing legislation to become 

UCOTA–V-compliant.28 Many of the 

remaining States have reported that they 

are waiting for the Coast Guard to 

promulgate a rule on UCOTA–V before 

going through the legislative process. In 

addition, States often wait for their 

neighboring States to adopt legislation 

that potentially has effects across State 

borders. Insurers and manufacturers 

have lobbied for the changes. For these 

reasons, the Coast Guard estimates that 

all 56 States would adopt UCOTA–V. 

Currently, 47 States have not adopted 

UCOTA–V nor initiated legislation to 

adopt UCOTA–V. The cost analysis of 

UCOTA–V adoption focuses solely on 

these 47 States. In order to comply with 

the proposed rule, States would need to 

develop legislation and amend their 

computer systems to comport with 

UCOTA–V. As noted earlier, all States 

would post information on their website 

about this rulemaking; that task appears 

in a preceding section of this analysis. 

In order to develop UCOTA–V 

legislation,29 a State would require the 

labor of an attorney 30 to draft the 

legislation 31 for a State legislative 

committee to begin the legislative 

process. The Uniform Law Commission 

has developed legislative text for 

UCOTA–V which each State may use to 

develop its respective State law. For this 

reason, the labor for each State is 

relatively low. We estimate that an 

attorney would spend approximately 24 

hours 32 to draft the legislative language. 

Given that State laws 33 are often voted 

in blocks, the labor to put UCOTA–V 

legislation forward and to vote on it is 

considered to be unseverable and, for 

that reason, we have not estimated a 

further cost on developing legislation. 

States adopting UCOTA–V would 

need to update their procedures and 

websites to reflect the resulting changes. 

We estimate that 5 hours would be 

spent by a State manager to review and 

edit State procedures, manuals, policy 

documents and other information (Cost 

= (47 States × 5 hours × State manager’s 

wage rate).34

The remaining UCOTA–V compliance 

costs items would be: (1) Labor for a 

manager to coordinate with the Coast 

Guard to ensure the State’s program 

meets UCOTA–V certification 

requirements (Cost = 47 States × (0.5 

hour × State manager’s wage rate)); (2) 

labor for an administrative assistant and 

a manager to assist with the conversion 

or update to a subpart D-compliant 

system (Cost = 47 States × [(0.25 hour 

× administrative assistant’s wage rate) + 

(0.75 hour × State manager’s wage 

rate)]); (3) labor for a manager to oversee 

conversion to a subpart D-compliant 

system (Cost = 47 States × 0.25 hour × 

State manager’s wage rate); and (4) labor 

for a software developer to convert the 

system to a subpart D compliant system 

(Cost = 47 States × (12.6 hours × 

computer technician’s wage rate)). 

These tasks and their calculations are 

shown in table 6.35

For the 7 States that do not have an 

existing titling program, the labor tasks 

for amending State’s computers to 

comport with UCOTA–V would be 

greater. We estimate that 24 hours 

would be spent by a computer 

technician in these States to amend the 

State’s computers to comport with 

UCOTA–V, and that a manager would 

spend another 0.5 hour to review and 

approve the work. The Coast Guard 

requests comments from States on their 

assessment of tasks and costs that would 

result from the proposed rule. 

BSX routinely contacts States 

regarding their vessel titling systems. 

There are currently 45 States titling 

vessels and 1 State that makes titling 

optional.36 Provided that these States 

become compliant with the recent 

regulatory changes in the Standard 

Numbering System, Boating Accident 

Report Database, and VIS (33 CFR parts 

173, 174, 181, and 187) by the required 

date, any changes made to the current 

titling systems should be minimal. 

Coast Guard personnel attended the 

National Association of State Boating 

Law Administrators Workshop held in 

Lexington, KY from 23 to 28 February 

2020. Approximately 40 boating 

administrators from the States were in 

attendance, and 4 stated they were 

contemplating adopting UCOTA–V. The 

four states are Wisconsin, Minnesota, 

Alaska, and South Carolina. None of 

these 4 states have conducted a 

complete cost analysis, but the initial 

projected cost ranged from minimal to 

about $8,000. 

The primary changes required would 

include the ability to mark a title as 

‘‘branded,’’ and to add any numbered 

vessels that are not currently required to 

be titled. For example, Virginia adopted 

UCOTA–V and reprogrammed their 

system to accept the ‘‘branded’’ 

designation. According to the State of 

Virginia’s Boating Law Administrator 

52802 Federal Register / Vol. 86, No. 181 / Wednesday, September 22, 2021 / Proposed Rules 

37According to the Virginia BLA, updates to the 

system are included as a part of routine information 

technology maintenance. https://community.nasbla.

org/blogs/thomas-guess/2018/08/23/ucotva-invirginia. The website is dated August 23, 2018. This 

page was last viewed on February 5, 2020. 

38The governor of each State appoints a single 

agency to be the recipient and administrator of 

grant funds received from the State Recreational 

Boating Safety Grant Program, which is authorized 

under 46 U.S.C. Chapter 131. These State agencies 

in turn appoint a BLA to be the State’s single point 

of contact for the purposes of administering the 

grant program. Although duties can vary from State 

to State, their primary function is to administer the 

recreational boating safety program within the 

State. Every State and territory of the United States 

has an assigned BLA. The BLA for Virginia is an 

employee with the Virginia Department of Game 

and Inland Fisheries. 

39No changes would be required to any State’s 

systems to facilitate population of the VIS. Data 

received from the States for inclusion in the VIS 

would be handled by the Coast Guard contractor 

and reformatted as necessary to populate the VIS 

database. We do not expect States to incur 

additional costs as the cost is already captured 

under the existing Coast Guard long-term contract 

for management and maintenance of the VIS. 

40Conversation at the Boating Law 

Administrators Workshop (circa February 28, 2018 

to March 1, 2018) with Ms. Eleanor Mariani, 

Boating Law Administrator, Connecticut, and 

William Burgess, Compliance Officer, Coast Guard. 

(BLA),37 this was accomplished at no 

cost to the State.38

The remaining 11 States that do not 

currently title vessels do title vehicles, 

and their vehicle titling systems could 

add vessels. As an example, Connecticut 

(previously a non-titling State) adopted 

UCOTA–V and its Department of Motor 

Vehicles began issuing titles for 

vessels.39 This process is analogous to 

registering a motor vehicle. In other 

words, at the time a person buys a car, 

the owner must register and title the car 

with the cognizant state. Likewise, a 

vessel owner would now be able to 

register and title vessel at the same time 

and in the same place. Connecticut did 

not incur any new costs associated with 

this transition since it used the existing 

infrastructure, and the change was 

completed as a part of an information 

technology update as per the State 

BLA.40

The 10 States that have adopted or 

have begun adopting the UCOTA–V 

model have engaged in the tasks noted 

in this text as costs of compliance. For 

example, they have already collaborated 

with the Coast Guard regarding their 

vessel titling system updates. These 

States would not incur additional costs 

because they elected to adopt the 

UCOTA–V model prior to this 

regulation. These States would not 

require the use of a computer technician 

to upgrade the computer system because 

the conversion has taken place already. 

No further actions would be needed by 

States in this situation. As noted earlier, 

these States would already be familiar 

with and would have reviewed their 

existing procedures as a result of the 

rulemaking. The Coast Guard invites 

comments on any additional costs that 

would be incurred by States that are 

currently (pre-proposal) in the process 

of adopting UCOTA–V. 

TABLE 6—SUMMARY OF COSTS FOR SUBPART D COMPLIANCE

Task Time burden and responsible party Cost Applicable population Direct or indirect cost 

Draft UCOTA–V legislative 

language.

2 hours (State manager) 5 

hours (State attorney).

47 States × [(2 hours × 

State manager wage 

rate) + (5 hours × State 

attorney wage rate)].

One-time cost for 47 

States.

Direct. 

Coordinate with Coast 

Guard for compliance 

and certification.

0.5 hours (State manager) 47 States × (0.5 hour × 

State manager wage 

rate).

One-time cost for 47 

States.

Direct. 

Assist with update and 

convert to compliant 

computer system.

0.25 hours (admin assistant) 0.75 hours (State 

manager).

47 States × [(0.25 hour × 

admin assistant wage 

rate) + (0.75 hour × 

State manager wage 

rate)].

One-time cost for 47 

States.

Direct. 

Oversee update or conversion to compliant system.0.25 hours (State manager).47 States × (0.25 hour × 

State manager wage 

rate).

One-time cost for 47 

States.

Direct. 

Update or convert to a 

compliant system.

12.6 hours (computer technician).47 States × (12.6 hours × 

computer technician 

wage rate).

One-time cost for 47 

States.

Direct. 

Amend State’s computers 

to comport with UCOTA– 

V. (Applies to States 

without an existing titling 

program.).

2 hours (computer technician) 0.25 hours (State 

manager).

7 States × [(2 hours × 

computer technician 

wage rate) + (0.25 hour 

× State manager wage 

rate)].

One-time cost for 7 States Direct. 

Update State procedures 

or processes..

5 hours (State manager) ... 47 States × (5 hours × 

State manager wage 

rate).

One-time cost for 47 

States.

Direct. 

Post updated procedures 

on website..

0.25 hours (State manager) 1 hour (computer 

technician).

24 States × [(0.25 hour × 

State manager wage 

rate) + (1 hour × computer technician wage 

rate)].

One-time cost for 24 

States.

Direct. 

Cost Calculations for the Proposed Rule 

We discuss the derivation of cost data 

in the following paragraphs. We 

estimate the approximate loaded hourly 

labor rates of State employees as 

follows: Manager ($94.30); 

administrative assistant ($33.81); 

computer technician ($67.98); and 

lawyer ($124.57). The loaded wage 

factor is 1.74 for non-managerial State 

workers and 1.56 for managers at the 

State level, based on Bureau of Labor 

Statistics (BLS) data. See table 7 for 

details. 

Federal Register / Vol. 86, No. 181 / Wednesday, September 22, 2021 / Proposed Rules 52803 

41 General Schedule (Pay & Leave: Salaries & 

Wages—OPM.gov). Labor costs calculated by 1) 

finding hourly wage rate for GS-level under ‘‘2020 

General Schedule (Base)’’. Choose Step 5 value. 2) 

To calculate load factor, we go to https://

www.cbo.gov/system/files/115th-congress-2017- 

2018/reports/52637-federalprivatepay.pdf. Use 

tables 2 and 4. Divide the total compensation by the 

wages for a Federal employee. Multiply by hourly 

wage rate obtained from OPM. GS–13 falls under 

‘‘Master’s Degree’’ and GS–14 falls under 

‘‘Professional/Doctorate Degree’’. For the Master’s 

Degree we end up with a benefits to wage ratio, 

using this method, of $74.80/$45 = 1.66 and for the 

Professional/Doctoral Degree of $81.70/$51.90 = 

1.56. Using these to obtain a fully burdened rate, 

we end up, for the GS–13 labor, $42.73 × 1.66 = $ 

$71.03 and, for the GS–14 labor, $50.49 × 1.56 = 

$79.48. 

42The load factor for uniformed positions is 

based on the Coast Guard’s analysis of 

compensation and benefits of Coast Guard enlisted 

and commissioned personnel based on data found 

in https://www.dfas.mil/militarymembers/ 

payentitlements/Pay-Tables.html. This page was 

last viewed on December 20, 2019. 

TABLE 7—LOADED WAGE FACTOR CALCULATION (2020 DOLLARS) 

Personnel category Data source(s) 1 Total compensation 

Wage & 

salaries 

Loaded wage 

factor 

All Workers, State and Local Government ..... BLS Employer Costs for Employee Compensation, all workers in State and Local 

Government.

$51.54 $29.546 1.74 

Managers, State and Local Government ........ BLS Employer Costs for Employee Compensation, Managers in State and Local 

Government.

64.02 41.02 1.56 

Coast Guard Uniform Positions ...................... 2020 Military Active & Reserve Component 

Pay Tables 2.

........................ ........................ 1.85 

1A loaded wage rate is what a company pays per hour to employ a person, including the hourly wage and the cost of benefits (health insurance, vacation, etc.). To calculate the load factor, we used the series IDs CMU3019200000000D (for all workers) and CMU3010000100000D (for 

managers, professions and related occupations’’) using the multi-screen database. Visit Employer Cost for Employee Compensation: MultiScreen Data Search: U.S. Bureau of Labor Statistics (bls.gov)/and select ‘‘State and local government workers’’. Select ‘‘Total Compensation’’ 

and ‘‘Wages and salaries’’. Select ‘‘All workers’’ or ‘‘Managers, professional, and related occupations’’. Select ‘‘Public Administration’’. Select ‘‘All 

workers’’. Select ‘‘United States’’. Select ‘‘Cost of Compensation’’. Select ‘‘Not seasonally adjusted’’. Finally, use values for the 4th Quarter of 

2020 to calculate the load factor by dividing total compensation by wages and salaries. 2 https://www.dfas.mil/militarymembers/payentitlements/Pay-Tables.html. Data was posted on December 30, 2019 and web page was last updated January 27, 2020. This page was last viewed on February 20, 2020. 

For all provisions with costs to the 

Government, we use publicly available 

data found on OPM’s website under 

‘‘Policy, Data, and Oversight’’ and in the 

Congressional Budget Office’s report, 

‘‘Comparing the Compensation of 

Federal and Private-Sector Employees, 

2011 to 2015.’’ We estimate labor costs 

attributed to the Government Coast 

Guard compliance officers, GS–14 

managers, GS–13 computer technicians, 

and the Commandant. We estimate the 

fully loaded labor costs for a GS–13 and 

GS–14 compliance officer at $71.03 and 

$79.48 respectively.41 We use a 

weighted average of the wage rates 

($73.14) for calculations. We estimate 

the wage rate for a GS–14 manager at 

$79.48, the wage rate for a GS–13 

computer technician at $79.48, and the 

wage rate for the Commandant (O–10) at 

$163. This figure represents a loaded 

wage rate for uniformed Coast Guard 

positions.42

For positions outside the Coast Guard, 

we use publicly available data from the 

BLS Occupational Compensation 

Survey to estimate wage rates for State 

and local positions that would be 

impacted by the proposed rule. We 

present the estimated wage rates and a 

summary of the data for the proposed 

rule in table 8. 

TABLE 8—LOADED WAGE CALCULATION

[$2020] 

Personnel category Data source(s) 1 Mean hourly 

wage Load factor Loaded wage 

Computer Developer ............... Software Developers, Applications (OC 15–1256) 2 .............. $54.94 1.74 $95.60 

Administrative Support ............ Secretaries and Administrative Assistants, Except Legal, 

Medical, and Executive (OC 43–6014) 3.

19.43 1.74 33.81 

General Manager .................... General and Operations Managers (OC 11–1021) in Management Occupations 4.60.45 1.56 94.30 

Lawyer .................................... Lawyers, Judges, and Related Workers (OC 23–1011) in 

the Legal Occupations.5.

71.59 1.74 124.57 

Coast Guard Commandant 

(O–10).

Military Active & Reserve Component Pay Tables 6 .............. 88.11 1.85 163 

Civilian Computer Technician 

(GS–13).

OPM Salary Table (2020) ...................................................... 42.736 1.66 71.03 

Civilian Manager (GS–14) ...... OPM Salary Table (2020) ...................................................... 50.49 1.57 79.48 

Coast Guard Compliance Officer (GS–13).OPM Salary Table (2020) ...................................................... 42.73 1.66 71.03 

Coast Guard Compliance Officer (GS–14).OPM Salary Table (2020) ...................................................... 50.49 1.57 79.48 

Coast Guard Compliance Officer (average) 7.Weighted average by the formula: [(0.75 × $71.03 GS–13 

Compliance Officers’ wage rate) + (0.25 × $79.48 GS–14 

Compliance Officers’ wage rate)].

........................ ........................ 73.14 

1To calculate the loaded wages, we used Occupational Code 11–1021 (General and Operations Managers) for general managers, Occupational Code 43–6014 (Secretaries, Except Legal, Medical, and Executive) for clerical, and Occupational Code 15–1256 (Software Developers and 

Software Quality Assurance Analysts and Testers) for computer developer. Please see footnotes of Table 7 for instructions on calculating load 

factors. 

52804 Federal Register / Vol. 86, No. 181 / Wednesday, September 22, 2021 / Proposed Rules 

2Software Developers and Software Quality Assurance Analysts and Testers (bls.gov). 3Secretaries and Administrative Assistants, Except Legal, Medical, and Executive (bls.gov). 

4General and Operations Managers (bls.gov). 

5 Lawyers (bls.gov). 6 https://www.dfas.mil/militarymembers/payentitlements/Pay-Tables.html. 

7 Coast Guard compliance officers consist of GS–13s and GS–14s. There are four Coast Guard employees who would complete this requirement (three GS–13s and one GS–14). To calculate the in-government wage rate, we calculated three-fourths of the GS–13 in-government wage 

rate ($71.03) and one-fourth of the GS–14 in-government wage rate ($79.48) and added them together to estimate a more accurate wage rate 

for the team that would complete this process. 

We estimate the costs in this RA in 

2020 dollars based on BLS wage rates. 

We estimate the total cost for States to 

be $182,607, undiscounted (not 

including Government costs). We 

estimate the total Government costs 

associated with this proposed rule to be 

$14,537. We show the summary of 

compliance costs in Table 9. 

TABLE 9—ESTIMATED COST OF PROPOSED RULE 1

CFR citation Task 2 Cost calculation Total costs 

Costs to Regulated Public 

(States): 

General Compliance Costs 

(All States) (See Table 3) 

(One-time costs for States): 

33 CFR 187 .................... Become familiar with NPRM ......................... 56 States × (0.5 hour × $94.30/hour State 

manager).

$2,640 

33 CFR 187 .................... Review procedures and website ................... 56 States × (0.5 hour × 94.30/hour State 

manager).

2,640 

33 CFR 187 .................... Write press release or email ......................... 56 States × (0.5 hour × 94.30/hour State 

manager).

2,640 

33 CFR 187 .................... Update website. (Potential cost, not used in 

analysis).

56 States × (1 hour × 95.60/hour computer 

technician).

Not in cost 

calculations 

Subtotal—General 

Compliance Costs 

(States).

........................................................................ ........................................................................ $7,921 

VIS Compliance Costs 

(States) (See Table 5) 

(One-time costs for States): 

33 CFR 187.7 ................. Prepare and submit an MOA ........................ 18 States × (16 hours × 94.30/hour State 

manager).

27,158 

33 CFR 187.7 ................. Complete New User request form ................ 18 States × (0.1 hour × 94.30/hour State 

manager).

170 

33 CFR 187.7 ................. Coordinate with Coast Guard for data transfer. (Potential cost, but used in analysis).18 States × (1 hour × 94.30/hour State manager).1,697 

33 CFR 187.7 ................. Draft legislative language to amend privacy 

laws.

2 States × [(40 hours × 94.30/hour State 

manager) + (40 hours × 124.57/hour State 

attorney)].

17,510 

33 CFR 187.7 ................. Put forward and vote on the privacy legislation.Applies to 2 States ........................................ Unquantified 

Subtotal—VIS Compliance Costs 

(States).

........................................................................ ........................................................................ 46,535 

UCOTA–V Adoption (Proposed Subpart D) Compliance Costs (States) (See 

Table 6) (One-time costs for 

States): 

33 CFR 187.306 ............. Draft UCOTA–V legislative language ........... 47 States × [(2 hours × 94.30/hour State 

manager) + (5 hours × 124.57/hour State 

attorney)].

38,138 

33 CFR 187.306 ............. Put forward and vote on the privacy legislation.Applies to 47 States ...................................... Unquantified 

33 CFR 187.306 ............. Coordinate with Coast Guard for compliance 

and certification.

47 States × (0.5 hour × 94.30/hour State 

manager).

2,216 

33 CFR 187.312 ............. Assist with update and convert to compliant 

system.

47 States × [(0.25 hour × 33.81/hour admin 

assistant) + (0.75 hour × 94.30/hour State 

manager)].

3,721 

33 CFR 187.312 ............. Oversee update or conversion to compliant 

system.

47 States × (0.25 hour × 94.30/hour State 

manager).

1,108 

33 CFR 187.312 ............. Update or convert to a compliant system ..... 47 States × (12.6 hours × 95.60/hour computer technician).56,614 

33 CFR 187.312 ..................... Amend State’s computers to comport with 

UCOTA–V.

7 States × [(2 hours × 95.60/hour computer 

technician) + (0.25 hour × 94.30/hour 

State manager)].

1,503 

Federal Register / Vol. 86, No. 181 / Wednesday, September 22, 2021 / Proposed Rules 52805 

TABLE 9—ESTIMATED COST OF PROPOSED RULE 1—Continued 

CFR citation Task 2 Cost calculation Total costs 

33 CFR 187 ............................ Update procedures or processes .................. 47 States × (5 hours × 94.30/hour State 

manager).

22,161 

33 CFR 187 ............................ Post updated procedures on website ........... 24 States × [(0.25 hour × 94.30/hour State 

manager) + (1 hour × 95.60/hour computer technician)].

2,860 

Subtotal: UCOTA–V (Proposed Subpart D) 

Compliance Costs 

(States).

........................................................................ ........................................................................ 128,321 

Total Cost for Regulated Public 

(States).

........................................................................ ........................................................................ 182,607 

Federal Government Costs (Onetime cost to Government for 

States affected): 

33 CFR 187.306 ..................... Process New User request from States ....... 18 States × (0.5 hour × 73.14/hour Compliance Officer).658 

33 CFR 187.306 ..................... Process an MOA from States ....................... 18 States × [(0.2 hour × 163/hour Commandant) + (8.25 hours × 73.14/hour 

Compliance Officer)].

11,448 

33 CFR 187.306 ..................... Coordinate with 18 States for VIS ................ 18 States × (0.5 hour × 73.14/hour Compliance Officer).658 

33 CFR 187.312 ..................... Coordinate with 47 States on UCOTA–V 

certification.

47 States × (0.5 hour × 73.14/hour Compliance Officer).1,682 

33 CFR 187 ............................ Update Coast Guard’s website. (Initial year 

cost).

(1 hour × 71.03/hour computer technician) + 

(0.25 hour × 79.48/hour Federal manager).

91 

Total for Federal Government (Coast Guard)......................................................................... ........................................................................ 14,537 

Total for Regulated 

Public and Government.

........................................................................ ........................................................................ 197,148 

1Totals may not sum due to rounding. Undiscounted costs appear in the table. 

2 ‘‘Potential indirect costs’’ not included (See Table 2). Unquantified costs included but are not part of cost calculations. 

Total Costs 

Using a 7-percent discount rate, we 

estimate the total discounted cost of the 

proposed rule to be $138,490 (rounded). 

The total annualized cost at a 7-percent 

discount rate is $19,718 (rounded). See 

table 10. 

For the projected cost to the regulated 

public, the Coast Guard expects all 

States would comply within 10 years of 

this rule. However, we do not have 

specific information as to the rate of 

compliance. As such, we assume equal 

probability for each year; that is, we 

estimate 10 percent will comply each 

year for the next 10 years. Given this, 

the total cost to the regulated public, as 

shown in the table 9, is $182,607. This 

is $18,261 (rounded) when averaged 

across 10 years. 

For the cost to the Government, we 

assume that the $91 website update will 

occur in the first year. Subtracting that, 

we calculate the annual cost over the 

next 9 years by dividing the total by 10 

($1,445). The first year cost to 

Government will be $1,445 + $91, 

which is $1,536. 

TABLE 10—TOTAL ESTIMATED COST OF THE PROPOSED RULE

[10-year Period of analysis, 7 and 3 percent discount rates $2020] 1

Year 

Costs to the regulated public (states) Costs to the government Total estimated costs 

Undiscounted 7% 3% Undiscounted 7% 3% Undiscounted 7% 3% 

1 ................................. $18,261 $17,066.07 $17,728.83 $1,536 $1,435.51 $1,491.26 $19,797 $18,501.59 $19,220.10 

2 ................................. 18,261 15,949.60 17,212.46 1,445 1,262.12 1,362.05 19,706 17,211.72 18,574.51 

3 ................................. 18,261 14,906.17 16,711.13 1,445 1,179.55 1,322.38 19,706 16,085.72 18,033.51 

4 ................................. 18,261 13,931.00 16,224.40 1,445 1,102.38 1,283.86 19,706 15,033.38 17,508.26 

5 ................................. 18,261 13,019.63 15,751.84 1,445 1,030.27 1,246.47 19,706 14,049.89 16,998.31 

6 ................................. 18,261 12,167.88 15,293.05 1,445 962.86 1,210.16 19,706 13,130.74 16,503.21 

7 ................................. 18,261 11,371.85 14,847.62 1,445 899.87 1,174.92 19,706 12,271.72 16,022.54 

8 ................................. 18,261 10,627.89 14,415.17 1,445 841.00 1,140.70 19,706 11,468.90 15,555.86 

9 ................................. 18,261 9,932.61 13,995.31 1,445 785.98 1,107.47 19,706 10,718.60 15,102.78 

10 ............................... 18,261 9,282.81 13,587.68 1,445 734.56 1,075.22 19,706 10,017.38 14,662.89 

Total .................... 182,607.00 128,255.52 155,767.47 14,537.00 10,234.12 12,414.49 197,148.00 138,489.64 168,181.97 

Annualized ... ........................ 18,260.70 18,260.70 ........................ 1,457.11 1,455.36 ........................ 19,717.81 19,716.06 

1Totals may not sum due to independent rounding. 

52806 Federal Register / Vol. 86, No. 181 / Wednesday, September 22, 2021 / Proposed Rules 

43https://www.nmma.org/press/article/21678 

(‘‘U.S. Boat Sales Strong Heading into 2018, Poised 

for Another Year of Growth,’’ January 9, 2018). 

Accessed and last viewed on December 26, 2019. 44As of January 21, 2020. 

Benefits 

The proposed rule would amend the 

Coast Guard’s existing regulations (see 

33 CFR 187 subpart D, ‘‘Guidelines for 

State Vessel Titling Systems’’) to better 

align with UCOTA–V. The proposed 

rule would encourage uniformity 

amongst the States through the adoption 

of the UCOTA–V model, in its entirety 

or in part, and, as mentioned in the 

Background section of this NPRM, 

Section IV, it would follow 

recommendations by the NBSAC and 

NASBLA. Although the movement to 

harmonize State titling laws has existed 

for some time, not all States have 

pursued legislation. Some States have 

chosen to wait for the Coast Guard to 

pass the UCOTA–V regulation. 

The proposal would also promote 

consumer protection against fraud. A 

large number of recreational vessels are 

resold annually. In 2017, there were 

approximately 981,600 pre-owned 

vessels sold in the United States.43

Given this large number, the industry is 

vulnerable to the types of fraud 

UCOTA–V is designed to prevent. 

The proposed rule would facilitate the 

procurement of secured loans on 

vessels. If the Coast Guard does not 

certify a State titling system, then a 

State cannot confer preferred mortgage 

status on a mortgage or security interest 

for a vessel, which functions as a 

security measure for financial entities. 

Many financial institutions require 

eligible vessels to be documented and to 

have their preferred mortgages recorded. 

A preferred mortgage is considered 

more secure, with less risk to the lender. 

This places the lender in a position to 

provide lower interest rates over longer 

terms to the consumer. In turn, the 

lender earns more over the term of the 

loan with less risk. More specifically, 

the lender would have a lower risk of 

loans defaulting; therefore, the lender’s 

loan portfolio would provide better 

returns despite the lower interest rates 

offered to borrowers. 

The consumer would benefit as well. 

With preferred loans, the borrower 

would have a loan with better terms. 

Relative to non-preferred loan, the 

consumer would pay less per month 

due to the lower interest rate on 

preferred loans. 

In addition, consistent titling 

procedures across States would deter 

the practice of ‘‘title washing,’’ whereby 

after the sale of a damaged vessel for 

salvage, the buyer makes cosmetic 

repairs and resells the vessel without 

disclosing its previous damage. 

Recreational boaters may benefit from 

this proposed rule by being able to assist 

States and law enforcement in 

recovering their lost or stolen vessels. 

Additionally, we intend the proposed 

rule to promote maritime security by 

facilitating State participation in the 

VIS. After the September 2001 terrorist 

attacks, a Coast Guard gap analysis 

showed that law enforcement agencies, 

including the Coast Guard, lacked the 

ability to easily and verifiably identify 

recreational vessels and their owners 

and operators, especially when a vessel 

is registered in a State other than that in 

which the law enforcement agency 

operates. This inability deprives law 

enforcement agencies of critical tools for 

deterring crime and maritime-based 

terrorism. 

Since its inception in 2007, the VIS 

has remedied this inability by collecting 

and providing verifiable data for vessels 

in VIS-participating States. However, 16 

States still do not participate in the 

VIS.44 Facilitating full VIS participation 

by these States would enhance maritime 

security. Because of the high level of 

interest among the States in aligning 

their vessel titling systems with 

UCOTA–V, aligning our subpart D 

regulations with UCOTA–V would make 

it easier for States to obtain subpart D 

certification. 

Alternatives Considered 

Alternative 1—Take no action. This 

alternative would allow existing 

regulations to remain in conflict with 

State laws and UCOTA–V. For States 

complying with the existing regulations, 

this alternative would result in them not 

receiving the benefits of deterred ‘‘title 

washing,’’ recovery and identification of 

abandoned vessels, consumer fraud 

protection, and security measures for 

financial entities. Participation in the 

VIS would continue at its current low 

rate. This alternative would result in no 

additional costs, as no new regulations 

would be implemented, but would also 

result in no benefits, as there would be 

no changes to current practice. 

Therefore, we rejected this alternative. 

Alternative 2—This is the preferred 

alternative. This alternative would 

change the guidelines in subpart D so 

that any State that adopts UCOTA–V 

and participates in the VIS would be in 

compliance. This would encourage 

compliance and participation and 

provide benefits to States, lenders, and 

consumers. The cost implications 

associated with this alternative are 

specified in the Costs section of this RA 

and assume 100 percent participation 

from all 56 States. The total 7 percent 

discounted cost over 10 years would be 

$176,570. The qualitative benefits 

would be increased mitigation of 

fraudulent ownership, the creation of 

uniformity amongst the States, which 

will help facilitate transfers of vessel 

ownership, to deter theft of vessels and 

aid law enforcement agencies by making 

recovery of stolen vessels across State 

lines easier, promote consumer 

protection, and facilitate making 

secured loans on vessels. Therefore, this 

is the preferred alternative. 

Alternative 3—This alternative would 

repeal existing guidelines for 

certification of State titling requirements 

and allow States to regulate vessel 

titling with no coordination or 

oversight. This would remove the ability 

for States to establish separate programs 

to enable vessels to gain preferred 

mortgage status and discourage 

participation in the VIS. In this 

scenario, each State would have a 

unique vessel titling system; this 

alternative would produce varying costs 

and benefits, which may be beneficial to 

the States as they could customize a 

titling program to meet their specific 

needs. However, we are unable to 

estimate the costs due to the number of 

possibilities offered, and they would 

occur without coordination or oversight 

from the Coast Guard. Harmonization of 

regulations across States would be 

impossible. As this would not satisfy 

the goals of this potential regulatory 

action, we rejected this alternative. 

B. Small Entities 

The Regulatory Flexibility Act of 1980 

(5 U.S.C. 601–612) (RFA) and Executive 

Order 13272 (Consideration of Small 

Entities in Agency Rulemaking) require 

a review of proposed and final rules to 

assess their impacts on small entities. 

An agency must prepare an initial 

regulatory flexibility analysis unless it 

determines and certifies that a rule, if 

promulgated, would not have a 

significant impact on a substantial 

number of small entities. 

Under the RFA, we have considered 

whether this proposed rule would have 

a significant economic impact on a 

substantial number of small entities. 

The term ‘‘small entities’’ comprises 

small businesses, not-for-profit 

organizations that are independently 

owned and operated and are not 

dominant in their fields, and 

governmental jurisdictions with 

populations of less than 50,000. Based 

on the analysis above, this proposed 

rule would affect 56 States and U.S. 

Federal Register / Vol. 86, No. 181 / Wednesday, September 22, 2021 / Proposed Rules 52807 

45See 46 U.S.C. 123. The only issuing authorities 

are the 56 States. Tribal governments are excluded 

legally as authorities from numbering and titling 

vessels. 

46Small governmental jurisdictions are defined as 

governments of cities, counties, towns, townships, 

villages, school districts, or special districts with a 

population of less than 50,000. 

47Rounded from the actual 31.2 hours. 

48Rounded from the actual 0.2 hour. 

49Rounded from the actual 5,855.3 hours. 

territories.45 All governmental 

jurisdictions that would potentially be 

directly regulated by this rule have 

populations greater than 50,000. These 

entities are not considered to be small 

entities based on the Small Business 

Administration’s definition of what is a 

small governmental jurisdiction.46

Therefore, the Coast Guard certifies 

under 5 U.S.C. 605(b) that this proposed 

rule would not have a significant 

economic impact on a substantial 

number of small entities. 

If you think that your business, 

organization, or governmental 

jurisdiction qualifies as a small entity 

and that this rule would have a 

significant economic impact on it, 

please submit a comment to docket at 

the address in the ADDRESSES section of 

this preamble. In your comment, 

explain why you think it qualifies and 

how and to what degree this rule would 

economically affect it. 

C. Assistance for Small Entities 

Under section 213(a) of the Small 

Business Regulatory Enforcement 

Fairness Act of 1996, Public Law 104– 

121, we want to assist small entities in 

understanding this proposed rule so that 

they can better evaluate its effects on 

them and participate in the rulemaking. 

If the proposed rule would affect your 

small business, organization, or 

governmental jurisdiction and you have 

questions concerning its provisions or 

options for compliance, please contact 

the person in the FOR FURTHER

INFORMATION CONTACT section of this 

proposed rule. The Coast Guard will not 

retaliate against small entities that 

question or complain about this 

proposed rule or any policy or action of 

the Coast Guard. 

D. Collection of Information 

This proposed rule would require a 

modification of an existing collection of 

information under the Paperwork 

Reduction Act of 1995 (PRA), 44 U.S.C. 

3501–3520. As defined in 5 CFR 

1320.3(c), ‘‘collection of information’’ 

comprises reporting, recordkeeping, 

monitoring, posting, labeling, and other 

similar actions. The title and 

description of the information 

collection, a description of those who 

must collect the information, and an 

estimate of the total annual burden 

follow. The estimate covers the time for 

reviewing instructions, searching 

existing sources of data, gathering and 

maintaining the data needed, and 

completing and reviewing the 

collection. 

Title: Vessel Identification System. 

OMB Control Number: 1625–0070. 

Summary of the Collection of 

Information: Public Law 100–710 (46 

U.S.C. 12501) requires the establishment 

of a nationwide vessel identification 

system (VIS). The VIS provides 

participating States with access to data 

of vessels numbered by States. States 

voluntarily provide the VIS data. The 

States, boating public, and law 

enforcement would be the primary 

beneficiaries. To become part of the VIS, 

States must submit a Memorandum of 

Agreement (MOA) to the Coast Guard. 

Need for Information: The VIS 

collects State-numbered vessel 

identification and ownership data and 

provides that data to law enforcement 

agencies in the States that choose to 

participate in the VIS. Participation in 

the VIS is entirely voluntary. In order to 

participate, States must comply with 

certain requirements to ensure the 

integrity and uniformity of the 

information provided to the VIS. 

Proposed Use of Information: The 

Coast Guard would use this information 

to track vessel information and facilitate 

the recovery of stolen or missing 

vessels. 

Description of the Respondents: The 

50 States, District of Columbia, and 5 

territories. The Coast Guard describes 

these as ‘‘56 States.’’ 

Number of Respondents: As a result of 

the proposal, the Coast Guard 

anticipates that there would be two 

additional States joining the VIS 

annually until all States join. Over a 10 

year period, this proposed rule would 

increase the number of respondents 

from 38 States to 56 States. 

Frequency of Response: The number 

of responses per year of this proposed 

rule would vary by participating States. 

New MOA applications, VIS user 

requests, and VIS data uploads are 

required with the initial MOA 

application process. For existing 

participants, VIS user requests and VIS 

data uploads are required. Based on the 

current collection of VIS information 

data, the Coast Guard anticipates that 

each new participant will submit an 

MOA application once, a VIS user 

request once a year, and upload VIS 

data every 2 weeks. 

Burden of Response: The burden of 

response includes three components— 

MOA applications, VIS data uploads, 

and VIS user requests. The burden for 

an MOA application, VIS data upload 

and VIS new user request form are: 16 

hours, 0.6 hour, and 0.1 hour, 

respectively. An MOA application and a 

VIS new user request form would be 

prepared by a manager. A computer 

technician would handle the VIS data 

upload. 

Estimate of Total Annual Burden: 

This proposed rule would require 

additional hours for VIS data uploads 

(32 hours annually),47 MOAs (32 hours 

annually), and VIS user requests (1 hour 

annually).48 The proposed rule would 

increase the total burden by 64 hours 

(rounded from the actual 63.3 hours), 

from 5,792 hours to 5,856 hours.49

As required by 44 U.S.C. 3507(d), we 

will submit a copy of this proposed rule 

to OMB for its review of the collection 

of information. 

We ask for public comment on the 

proposed collection of information to 

help us determine, among other things: 

(1) How useful the information is; 

(2) Whether it can help us perform 

our functions better; 

(3) Whether it is readily available 

elsewhere; 

(4) How accurate our estimate of the 

burden of collection is; 

(5) How valid our methods for 

determining burden are; 

(6) How we can improve the quality, 

usefulness, and clarity of the 

information; and 

(7) How we can minimize the burden 

of collection. 

If you submit comments on the 

collection of information, submit them 

to both the OMB and to the docket 

where indicated under ADDRESSES. 

You need not respond to a collection 

of information unless it displays a 

currently valid control number from 

OMB. Before the Coast Guard could 

enforce the collection of information 

requirements in this proposed rule, 

OMB would need to approve the Coast 

Guard’s request to collect this 

information. 

E. Federalism 

A rule has implications for federalism 

under Executive Order 13132 

(Federalism) if it has a substantial direct 

effect on the States, on the relationship 

between the national government and 

the States, or on the distribution of 

power and responsibilities among the 

various levels of government. We have 

analyzed this proposed rule under 

Executive Order 13132 and have 

determined that it is consistent with the 

fundamental federalism principles and 

preemption requirements described in 

Executive Order 13132. Our analysis 

follows. 

52808 Federal Register / Vol. 86, No. 181 / Wednesday, September 22, 2021 / Proposed Rules 

The purpose of this rulemaking is to 

revise Coast Guard requirements for 

State participation in the Coast Guardmaintained VIS and guidelines for State 

vessel titling systems. The Coast Guard 

is mandated to establish and maintain 

the VIS, but State participation in the 

VIS is voluntary. Nothing in this 

proposed rule would require States to 

participate in the VIS. However, once 

electing to participate in the VIS, a State 

must comply with the VIS requirements 

to ensure integrity and uniformity of 

information. Likewise, requesting 

certification that a State vessel titling 

system complies with the guidelines is 

also voluntary, but such a system must 

comply with subpart D for voluntary 

certification. This proposed rule would 

not require States to request 

certification, change their existing 

titling systems, or otherwise preempt 

related State regulations. Therefore, the 

proposed rule is consistent with the 

principles of federalism and preemption 

requirements in Executive Order 13132. 

While it is well settled that States may 

not regulate in categories in which 

Congress intended the Coast Guard to be 

the sole source of a vessel’s obligations, 

the Coast Guard recognizes the key role 

that State and local governments may 

have in making regulatory 

determinations. Additionally, for rules 

with federalism implications and 

preemptive effect, Executive Order 

13132 specifically directs agencies to 

consult with State and local 

governments during the rulemaking 

process. If you believe this proposed 

rule has implications for federalism 

under Executive Order 13132, please 

contact the person listed in the FOR

FURTHER INFORMATION section of this 

preamble. 

F. Unfunded Mandates Reform Act 

The Unfunded Mandates Reform Act 

of 1995, 2 U.S.C. 1531–1538, requires 

Federal agencies to assess the effects of 

their discretionary regulatory actions. In 

particular, the Act addresses actions 

that may result in the expenditure by a 

State, local, or tribal government, in the 

aggregate, or by the private sector of 

$100,000,000 (adjusted for inflation) or 

more in any one year. Although this 

proposed rule would not result in such 

an expenditure, we do discuss the 

effects of this proposed rule elsewhere 

in this preamble. 

G. Taking of Private Property 

This proposed rule would not cause a 

taking of private property or otherwise 

have taking implications under 

Executive Order 12630 (Governmental 

Actions and Interference with 

Constitutionally Protected Property 

Rights). 

H. Civil Justice Reform 

This proposed rule meets applicable 

standards in sections 3(a) and 3(b) (2) of 

Executive Order 12988, (Civil Justice 

Reform), to minimize litigation, 

eliminate ambiguity, and reduce 

burden. 

I. Protection of Children 

We have analyzed this proposed rule 

under Executive Order 13045 

(Protection of Children from 

Environmental Health Risks and Safety 

Risks). This proposed rule is not an 

economically significant rule and would 

not create an environmental risk to 

health or risk to safety that might 

disproportionately affect children. 

J. Indian Tribal Governments 

This proposed rule does not have 

tribal implications under Executive 

Order 13175 (Consultation and 

Coordination with Indian Tribal 

Governments), because it would not 

have a substantial direct effect on one or 

more Indian tribes, on the relationship 

between the Federal Government and 

Indian tribes, or on the distribution of 

power and responsibilities between the 

Federal Government and Indian tribes. 

K. Energy Effects 

We have analyzed this proposed rule 

under Executive Order 13211 (Actions 

Concerning Regulations That 

Significantly Affect Energy Supply, 

Distribution, or Use). We have 

determined that it is not a ‘‘significant 

energy action’’ under that order because 

it is not a ‘‘significant regulatory action’’ 

under Executive Order 12866 and is not 

likely to have a significant adverse effect 

on the supply, distribution, or use of 

energy. 

L. Technical Standards 

The National Technology Transfer 

and Advancement Act, codified as a 

note to 15 U.S.C. 272, directs agencies 

to use voluntary consensus standards in 

their regulatory activities unless the 

agency provides Congress, through 

OMB, with an explanation of why using 

these standards would be inconsistent 

with applicable law or otherwise 

impractical. Voluntary consensus 

standards are technical standards (e.g., 

specifications of materials, performance, 

design, or operation; test methods; 

sampling procedures; and related 

management systems practices) that are 

developed or adopted by voluntary 

consensus standards bodies. 

This proposed rule does not use 

technical standards. Therefore, we did 

not consider the use of voluntary 

consensus standards. 

M. Environment 

We have analyzed this proposed rule 

under Department of Homeland 

Security Management Directive 023–01, 

Rev. 1, associated implementing 

instructions, and Environmental 

Planning COMDTINST 5090.1 (series), 

which guide the Coast Guard in 

complying with the National 

Environmental Policy Act 1969 (42 

U.S.C. 4321–4370f), and have made a 

preliminary determination that this 

action is one of a category of actions that 

do not individually or cumulatively 

have a significant effect on the human 

environment. A preliminary Record of 

Environmental Consideration 

supporting this determination is 

available in the docket. For instructions 

on locating the docket, see the 

ADDRESSES section of this preamble. 

This proposed rule would be 

categorically excluded under paragraphs 

L54 and L57 of Appendix A, Table 1 of 

DHS Instruction Manual 023–01–001– 

01, Rev. 01. Paragraph L54 pertains to 

regulations which are editorial or 

procedural and L57 pertains to 

regulations concerning documentation 

of vessels. This proposed rule involves 

changes to regulations for certifying a 

State’s titling system for undocumented 

vessels. We seek any comments or 

information that may lead to the 

discovery of a significant environmental 

impact from this proposed rule. 

List of Subjects in 33 CFR Part 187 

Administrative practice and 

procedure, Marine safety, Reporting and 

recordkeeping requirements. 

For the reasons discussed in the 

preamble, the Coast Guard proposes to 

amend 33 CFR part 187 as follows: 

PART 187—VESSEL IDENTIFICATION 

SYSTEM 

■ 1. Revise the authority citation for part 

187 to read as follows: 

Authority: 46 U.S.C. 2103, 12501, 31322; 

Department of Homeland Security Delegation 

No. 0170.1(92). 

■ 2. Revise § 187.7 to read as follows: 

§ 187.7 Definitions. 

As used in this part— 

Approved numbering system means a 

numbering system approved by the 

Secretary of Homeland Security under 

46 U.S.C. Chapter 123. 

Barge means a vessel that is not selfpropelled or fitted for propulsion by 

sail, paddle, oar, or similar device. 

Federal Register / Vol. 86, No. 181 / Wednesday, September 22, 2021 / Proposed Rules 52809 

Builder’s certificate means a 

certificate of the facts of build of a 

vessel described in 46 CFR 67.99. 

Buyer means a person who buys or 

contracts to buy a vessel. 

Cancel, with respect to a certificate of 

title, means to make the certificate 

ineffective. 

Certificate of documentation means 

Coast Guard Form CG–1270. 

Certificate of origin means a record 

created by a manufacturer or importer as 

the manufacturer’s or importer’s proof 

of identity of a vessel, and includes a 

manufacturer’s certificate or statement 

of origin and an importer’s certificate or 

statement of origin, but excludes a 

builder’s certificate. 

Certificate of ownership means Coast 

Guard Form CG–1330. 

Certificate of title means a record, 

created by the office or by a 

governmental agency of another State 

under the law of that State, which is 

designated as a certificate of title by the 

office or agency and is evidence of 

ownership of a vessel. 

Commandant means the Commandant 

of the U.S. Coast Guard or an authorized 

representative of the Commandant of 

the U.S. Coast Guard. 

Dealer means a person, including a 

manufacturer, in the business of selling 

vessels. 

Documented vessel means a vessel 

covered by a certificate of 

documentation issued pursuant to 46 

U.S.C. Section 12105, and excludes a 

foreign-documented vessel. 

Electronic means relating to 

technology having electrical, digital, 

magnetic, wireless, optical, 

electromagnetic, or similar capabilities. 

Electronic certificate of title means a 

certificate of title consisting of 

information that is stored solely in an 

electronic medium and is retrievable in 

perceivable form. 

Foreign-documented vessel means a 

vessel the ownership of which is 

recorded in a registry maintained by a 

country other than the United States, 

identifying each person having an 

ownership interest in a vessel, and 

includes a unique alphanumeric 

designation for the vessel. 

Good faith means honesty in fact and 

the observance of reasonable 

commercial standards of fair dealing. 

Hull damaged means compromised 

with respect to the integrity of a vessel’s 

hull by a collision, allision, lightning 

strike, fire, explosion, running aground, 

or similar occurrence, or the sinking of 

a vessel in a manner that creates a 

significant risk to the integrity of the 

vessel’s hull. 

Hull identification number or HIN 

means the alphanumeric designation 

assigned to a vessel under subpart C of 

33 CFR part 181. 

Issuing authority means either a State 

that has an approved numbering system 

or the Coast Guard in a State that does 

not have an approved numbering 

system. 

Lien creditor, with respect to a vessel, 

means— 

(1) A creditor that has acquired a lien 

on the vessel by attachment, levy, or the 

like; 

(2) An assignee for benefit of creditors 

from the time of assignment; 

(3) A trustee in bankruptcy from the 

date of the filing of the petition; or 

(4) A receiver in equity from the time 

of appointment. 

Manufacturer means any person 

engaged in the business of 

manufacturing or importing new vessels 

for the purpose of sale or trade. 

Office means the State department or 

agency that creates certificates of title. 

Owner means a person having legal 

title to a vessel. 

Owner of record means the owner 

indicated in the files of the Office or, if 

the files indicate more than one owner, 

the one first indicated. 

Participating State means a State 

certified by the Commandant as meeting 

the requirements of subpart C of this 

part. 

Person means an individual or any 

form of legal or commercial entity. 

Purchase means to take by any 

voluntary transaction that creates an 

interest in a vessel. 

Purchaser means a person taking by 

purchase. 

Record means information inscribed 

on a tangible medium or stored in an 

electronic or other medium and is 

retrievable in perceivable form. 

Secured party, with respect to a 

vessel, means a person— 

(1) In whose favor a security interest 

is created or provided for under a 

security agreement, whether or not any 

obligation to be secured is outstanding; 

(2) Who is a consignor under State 

law as prescribed by State law related to 

security interests in goods; or 

(3) Who holds a security interest 

arising under State law related to 

security interests in goods. 

Secured party of record means the 

secured party whose name is indicated 

as the name of the secured party in the 

files of the office or, if the files indicate 

more than one secured party, the one 

first indicated. 

Security interest means an interest in 

a vessel that secures payment or 

performance of an obligation if the 

interest is created by contract or 

otherwise as prescribed by state law 

related to security interests in goods. 

Sign means, with present intent to 

authenticate or adopt a record, to— 

(1) Make or adopt a tangible symbol; 

or 

(2) Attach to or logically associate 

with the record an electronic symbol, 

sound, or process. 

State means a State of the United 

States, the District of Columbia, 

American Samoa, Guam, Northern 

Mariana Islands, Puerto Rico, U.S. 

Virgin Islands, and any other territory or 

possession of the United States. 

State of principal operation means the 

State on whose waters a vessel is or will 

be used, operated, navigated, or 

employed more than on the waters of 

any other State during a calendar year. 

Title brand means a designation of 

previous damage, use, or condition that 

must be indicated on a certificate of 

title. 

Titled vessel means a vessel titled by 

a State. 

Titling authority means a State whose 

vessel titling system has been certified 

by the Commandant under subpart D of 

this part. 

Transfer of ownership means a 

voluntary or involuntary conveyance of 

an interest in a vessel. 

Vessel means every description of 

watercraft used or capable of being used 

as a means of transportation on water, 

except— 

(1) A seaplane; 

(2) An amphibious vehicle for which 

a certificate of title is issued pursuant to 

a state’s motor vehicle certificate of title 

act or a similar statute of another state; 

(3) Watercraft that operate only on a 

permanently fixed, manufactured course 

and the movement of which is restricted 

to or guided by means of a mechanical 

device to which the watercraft is 

attached or by which the watercraft is 

controlled; 

(4) A stationary floating structure 

that— 

(i) Does not have and is not designed 

to have a mode of propulsion of its own; 

(ii) Is dependent for utilities upon a 

continuous utility hookup to a source 

originating on shore; and 

(iii) Has a permanent, continuous 

hookup to a shore side sewage system. 

(5) Watercraft owned by the United 

States, a State, or a foreign government 

or a political subdivision of any of them; 

and 

(6) Watercraft used solely as a lifeboat 

on another watercraft. 

Vessel Identification System or VIS 

means a system for collecting 

information on vessels and vessel 

ownership as required by 46 U.S.C. 

12501. 

Vessel number means the 

alphanumeric designation for a vessel 

issued pursuant to 46 U.S.C. 12301. 

52810 Federal Register / Vol. 86, No. 181 / Wednesday, September 22, 2021 / Proposed Rules 

Written certificate of title means a 

certificate of title consisting of 

information inscribed on a tangible 

medium. 

■ 3. Revise subpart D, consisting of 

§§ 187.301 through 187.325, to read as 

follows: 

Subpart D—State Vessel Titling Systems 

Sec. 

187.301 Certification for preferred mortgage 

status—Eligibility requirements. 

187.302 Terms States must define. 

187.303 Applicability. 

187.304 Titling exclusively in one State. 

187.305 Law governing vessel covered by 

certificate of title. 

187.306 Certificate of title required. 

187.307 Application for certificate of title. 

187.308 Creation and cancellation of 

certificate of title. 

187.309 Content of certificate of title. 

187.310 Title brand. 

187.311 Maintenance of and access to files. 

187.312 Action required on creation of 

certificate of title. 

187.313 Effect of certificate of title. 

187.314 Effect of possession of certificate of 

title; judicial process. 

187.315 Perfection of security interest. 

187.316 Termination statement. 

187.317 Transfer of ownership. 

187.318 Effect of missing or incorrect 

information. 

187.319 Transfer of ownership by secured 

party’s transfer statement. 

187.320 Transfer by operation of law. 

187.321 Application for transfer of 

ownership or termination of security 

interest without certificate of title. 

187.322 Replacement certificate of title. 

187.323 Rights of purchaser other than 

secured party. 

187.324 Rights of secured party. 

187.325 Duties and operation of office. 

Subpart D—State Vessel Titling 

Systems 

§ 187.301 Certification for preferred 

mortgage status—Eligibility requirements. 

The Commandant, under 46 U.S.C. 

31322(d)(1)(A) and 33 CFR 187.13, will 

certify a State whose vessel titling 

system meets the requirements of this 

subpart as eligible to have security 

interests that are perfected under its law 

deemed preferred mortgages under 46 

U.S.C. 31322. The State must also 

comply with the VIS participation 

requirements of 33 CFR 187.11 and 

subpart C of this part and make vessel 

information it collects available to the 

VIS. 

§ 187.302 Terms States must define. 

(a) A State must define the terms 

‘‘certificate of origin’’, ‘‘dealer’’, 

‘‘documented vessel’’, ‘‘issuing 

authority’’, ‘‘manufacturer’’, ‘‘owner’’, 

‘‘person’’, ‘‘secured party’’, ‘‘security 

interest’’, ‘‘titling authority’’, and 

‘‘vessel’’ substantially as defined in 33 

CFR 187.7. 

(b) In addition to the definitions in 33 

CFR 187.7, a State must also define the 

following terms as prescribed by State 

law related to security interests in 

goods: 

(1) Agreement; 

(2) Buyer in ordinary course of 

business; 

(3) Conspicuous; 

(4) Consumer goods; 

(5) Debtor; 

(6) Knowledge; 

(7) Lease; 

(8) Lessor; 

(9) Notice; 

(10) Representative; 

(11) Sale; 

(12) Security agreement; 

(13) Seller; 

(14) Send; and 

(15) Value. 

(c) The definitions in 33 CFR 187.7 

and paragraph (b) of this section do not 

apply to any State or Federal law 

governing licensing, numbering, or 

registration if the same term is used in 

that law. 

§ 187.303 Applicability. 

Subject to a savings clause provided 

under state law, this subpart applies to 

any transaction, certificate of title, or 

record relating to a vessel, even if the 

transaction, certificate of title, or record 

was entered into or created before the 

effective date of the state law. 

§ 187.304 Titling exclusively in one State. 

A State must require that all vessels 

required to be numbered in the State 

under 46 U.S.C. Chapter 123 be titled 

only in that State, if that State issues 

titles to that class of vessels. 

§ 187.305 Law governing vessel covered 

by certificate of title. 

(a) The local law of the State under 

whose certificate of title a vessel is 

covered governs all issues relating to the 

certificate from the time the vessel 

becomes covered by the certificate until 

the vessel becomes covered by another 

certificate or becomes a documented 

vessel, even if no other relationship 

exists between the State and the vessel 

or its owner. 

(b) A vessel becomes covered by a 

certificate of title when an application 

for the certificate and the applicable fee 

are delivered to the office in accordance 

with this subpart or to the governmental 

agency that creates a certificate in 

another jurisdiction in accordance with 

the law of that jurisdiction. 

§ 187.306 Certificate of title required. 

(a) Except as otherwise provided in 

paragraphs (b) and (c) of this section, 

the owner of a vessel must deliver to the 

office of the State in which the vessel is 

principally used an application for a 

certificate of title for the vessel, with the 

applicable fee, not later than 20 days 

after the later of— 

(1) The date of a transfer of 

ownership; or 

(2) The date the State becomes the 

State of principal use. 

(b) An application for a certificate of 

title is not required for— 

(1) A documented vessel; 

(2) A foreign-documented vessel; 

(3) A barge; 

(4) A vessel before delivery if the 

vessel is under construction or 

completed pursuant to contract; or 

(5) A vessel held by a dealer for sale 

or lease. 

(c) The office may not issue, transfer, 

or renew a certificate of number for a 

vessel issued pursuant to 46 U.S.C. 

12301 unless it has created a certificate 

of title for the vessel or an application 

for a certificate for the vessel and the 

applicable fee have been delivered to 

the office. 

§ 187.307 Application for certificate of title. 

(a) Except as otherwise provided in 

§§ 187.310, 187.315, 187.319, 187.320, 

187.321, and 187.322, only an owner 

may apply for a certificate of title. 

(b) An application for a certificate of 

title must be signed by the applicant 

and contain— 

(1) The applicant’s name, the street 

address of the applicant’s principal 

residence, and, if different, the 

applicant’s mailing address; 

(2) The name and mailing address of 

each other owner of the vessel; 

(3) The social security number or 

taxpayer identification number of each 

owner; 

(4) The hull identification number 

(HIN) for the vessel or, if none, an 

application for the issuance of a HIN for 

the vessel; 

(5) The vessel number for the vessel 

or, if none issued by the office, an 

application for a vessel number; 

(6) A description of the vessel as 

required by the office, which must 

include— 

(i) The official number for the vessel, 

if any, assigned by the Coast Guard; 

(ii) The name of the manufacturer, 

builder, or maker; 

(iii) The model year or the year in 

which the manufacture or build of the 

vessel was completed; 

(iv) The overall length of the vessel; 

(v) The vessel type, as described in 33 

CFR 174.19; 

(vi) The hull material, as described in 

33 CFR 174.19; 

(vii) The propulsion type, as 

described in 33 CFR 174.19; 

(viii) The engine drive type, as 

described in 33 CFR 174.19, if any; and 

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(ix) The fuel type, as described in 33 

CFR 174.19, if any; 

(7) An indication of all security 

interests in the vessel known to the 

applicant and the name and mailing 

address of each secured party; 

(8) A statement that the vessel is not 

a documented vessel or a foreigndocumented vessel; 

(9) Any title brand known to the 

applicant and, if known, the jurisdiction 

under whose law the title brand was 

created; 

(10) If the applicant knows that the 

vessel is hull damaged, a statement that 

the vessel is hull damaged; 

(11) If the application is made in 

connection with a transfer of ownership, 

the transferor’s name, street address, 

and, if different, mailing address, the 

sales price, if any, and the date of the 

transfer; and 

(12) If the vessel was previously 

registered or titled in another 

jurisdiction, a statement identifying 

each jurisdiction known to the applicant 

in which the vessel was registered or 

titled. 

(c) In addition to the information 

required by paragraph (b) of this section, 

an application for a certificate of title 

may contain an electronic 

communication address of the owner, 

transferor, or secured party. 

(d) Except as otherwise provided in 

§§ 187.319, 187.320, 187.321, and 

187.322, an application for a certificate 

of title must be accompanied by a 

certificate of title signed by the owner 

shown on the certificate which 

identifies the applicant as the owner of 

the vessel, or is accompanied by a 

record that identifies the applicant as 

the owner. 

(e) If there is no certificate of title as 

discussed in paragraph (d) of this 

section, an application for a certificate 

of title must be accompanied by— 

(1) If the vessel was a documented 

vessel, a record issued by the Coast 

Guard that shows the vessel is no longer 

a documented vessel and identifies the 

applicant as the owner; 

(2) If the vessel was a foreigndocumented vessel, a record issued by 

the foreign country which shows the 

vessel is no longer a foreigndocumented vessel and identifies the 

applicant as the owner; or 

(3) In all other cases, a certificate of 

origin, bill of sale, or other record that 

to the satisfaction of the office identifies 

the applicant as the owner. 

(f) A record submitted in connection 

with an application is part of the 

application and the office must 

maintain it in its files. 

(g) The office may require an 

application for a certificate of title to be 

accompanied by payment or evidence of 

payment of all fees and taxes payable by 

the applicant under State law if in 

connection with the application or the 

acquisition or use of the vessel. 

§ 187.308 Creation and cancellation of 

certificate of title. 

(a) Unless an application for a 

certificate of title is rejected under 

paragraph (c) or (d) of this section, the 

office must create a certificate for the 

vessel in accordance with paragraph (b) 

of this section not later than 20 days 

after delivery to it of an application that 

complies with 33 CFR 187.307. 

(b) If the office creates electronic 

certificates of title, it must create an 

electronic certificate unless in the 

application the secured party of record 

or, if none, the owner of record, requests 

that the office create a written 

certificate. 

(c) Except as otherwise provided in 

paragraph (d) of this section, the office 

may reject an application for a 

certificate of title only if— 

(1) The application does not comply 

with 33 CFR 187.307; 

(2) The application does not contain 

documentation sufficient for the office 

to determine whether the applicant is 

entitled to a certificate; 

(3) There is a reasonable basis for 

concluding that the application is 

fraudulent or issuance of a certificate 

would facilitate a fraudulent or illegal 

act; or 

(4) The application does not comply 

with State law. 

(d) The office must reject an 

application for a certificate of title for a 

vessel that is a documented vessel or a 

foreign-documented vessel. 

(e) The office may cancel a certificate 

of title created by it only if the office— 

(1) Could have rejected the 

application for the certificate under 

paragraph (c) of this section; 

(2) Is required to cancel the certificate 

under another provision of this subpart; 

or 

(3) Receives satisfactory evidence that 

the vessel is a documented vessel or a 

foreign-documented vessel. 

§ 187.309 Content of certificate of title. 

(a) A certificate of title must contain— 

(1) The date the certificate was 

created; 

(2) The name of the owner of record 

and, if not all owners are listed, an 

indication that there are additional 

owners indicated in the files of the 

office; 

(3) The mailing address of the owner 

of record; 

(4) The hull identification number 

(HIN); 

(5) The information listed in 

§ 187.307(b)(6); 

(6) Except as otherwise provided in 

§ 187.315(b), the name and mailing 

address of the secured party of record, 

if any, and if not all secured parties are 

listed, an indication that there are other 

security interests indicated in the files 

of the office; and 

(7) All title brands indicated in the 

files of the office covering the vessel, 

including brands indicated on a 

certificate created by a governmental 

agency of another jurisdiction and 

delivered to the office. 

(b) This subpart does not preclude the 

office from noting on a certificate of title 

the name and mailing address of a 

secured party that is not a secured party 

of record. 

(c) For each title brand indicated on 

a certificate of title, the certificate must 

identify the jurisdiction under whose 

law the title brand was created or the 

jurisdiction that created the certificate 

on which the title brand was indicated. 

If the meaning of a title brand is not 

easily ascertainable or cannot be 

accommodated on the certificate, the 

certificate may state: ‘‘Previously 

branded in (insert the jurisdiction under 

whose law the title brand was created or 

whose certificate of title previously 

indicated the title brand).’’ 

(d) If the files of the office indicate 

that a vessel was previously registered 

or titled in a foreign country, the office 

must indicate on the certificate of title 

that the vessel was registered or titled in 

that country. 

(e) A written certificate of title must 

contain a form that all owners indicated 

on the certificate may sign to evidence 

consent to a transfer of an ownership 

interest to another person. The form 

must include a certification, signed 

under penalty of perjury, that the 

statements made are true and correct to 

the best of each owner’s knowledge, 

information, and belief. 

(f) A written certificate of title must 

contain a form for the owner of record 

to indicate, in connection with a 

transfer of an ownership interest, that 

the vessel is hull damaged. 

§ 187.310 Title brand. 

(a) Unless paragraph (c) of this section 

applies, at or before the time the owner 

of record transfers an ownership interest 

in a hull-damaged vessel that is covered 

by a certificate of title created by the 

office, if the damage occurred while that 

person was an owner of the vessel and 

the person has notice of the damage at 

the time of the transfer, the owner 

must— 

(1) Deliver to the office an application 

for a new certificate that complies with 

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§ 187.307 of this part and includes the 

title brand designation ‘‘Hull Damaged’’; 

or 

(2) Indicate on the certificate in the 

place designated for that purpose that 

the vessel is hull damaged and deliver 

the certificate to the transferee. 

(b) Not later than 20 days after 

delivery to the office of the application 

under paragraph (a)(1) of this section or 

the certificate of title under paragraph 

(a)(2) of this section, the office must 

create a new certificate that indicates 

that the vessel is branded ‘‘Hull 

Damaged’’. 

(c) Before an insurer transfers an 

ownership interest in a hull-damaged 

vessel that is covered by a certificate of 

title created by the office, the insurer 

must deliver to the office an application 

for a new certificate that complies with 

§ 187.306 and includes the title brand 

designation ‘‘Hull Damaged’’. Not later 

than 20 days after delivery of the 

application to the office, the office must 

create a new certificate that indicates 

that the vessel is branded ‘‘Hull 

Damaged’’. 

(d) An owner of record who fails to 

comply with paragraph (a) of this 

section, a person who solicits or 

colludes in a failure by an owner of 

record to comply with paragraph (a), or 

an insurer that fails to comply with 

paragraph (c) of this section is subject to 

penalty as prescribed by state law. 

§ 187.311 Maintenance of and access to 

files. 

(a) For each record relating to a 

certificate of title submitted to the 

office, the office must— 

(1) Ascertain or assign the hull 

identification number (HIN) for the 

vessel in accordance with 33 CFR part 

181; 

(2) Maintain the HIN and all the 

information submitted with the 

application pursuant to § 187.307(b) to 

which the record relates, including the 

date and time the record was delivered 

to the office; 

(3) Maintain the files for public 

inspection subject to paragraph (e) of 

this section; and 

(4) Index the files of the office as 

required by paragraph (b) of this section. 

(b) The office must maintain in its 

files the information contained in all 

certificates of title created under this 

subpart. The information in the files of 

the office must be searchable by the HIN 

of the vessel, the vessel number, the 

name of the owner of record, and any 

other method used by the office. 

(c) The office must maintain in its 

files, for each vessel for which it has 

created a certificate of title, all title 

brands known to the office, the name of 

each secured party known to the office, 

the name of each person known to the 

office to be claiming an ownership 

interest, and all stolen-property reports 

the office has received. 

(d) Upon request, for safety, security, 

or law-enforcement purposes, the office 

must provide to Federal, State, or local 

government the information in its files 

relating to any vessel for which the 

office has issued a certificate of title. 

(e) Except as otherwise provided by 

laws of the titling State, the information 

required under § 187.309 is a public 

record, but the information provided 

under § 187.307(b)(3) is not a public 

record. 

§ 187.312 Action required on creation of 

certificate of title. 

(a) On creation of a written certificate 

of title, the office must promptly send 

the certificate to the secured party of 

record or, if none, to the owner of 

record, at the address indicated for that 

person in the files of the office. On 

creation of an electronic certificate of 

title, the office must promptly send a 

record evidencing the certificate to the 

owner of record and, if there is one, to 

the secured party of record, at the 

address indicated for that person in the 

files of the office. The office may send 

the record to the person’s mailing 

address or, if indicated in the files of the 

office, an electronic address. 

(b) If the office creates a written 

certificate of title, any electronic 

certificate of title for the vessel is 

canceled and replaced by the written 

certificate. The office must maintain in 

the files of the office the date and time 

of cancellation. 

(c) Before the office creates an 

electronic certificate of title, any written 

certificate for the vessel must be 

surrendered to the office. If the office 

creates an electronic certificate, the 

office must destroy or otherwise cancel 

the written certificate for the vessel that 

has been surrendered to the office and 

maintain in the files of the office the 

date and time of destruction or other 

cancellation. If a written certificate 

being canceled is not destroyed, the 

office must indicate on the face of the 

certificate that it has been canceled. 

§ 187.313 Effect of certificate of title. 

A certificate of title is prima facie 

evidence of the accuracy of the 

information in the record that 

constitutes the certificate. 

§ 187.314 Effect of possession of 

certificate of title; judicial process. 

Possession of a certificate of title does 

not by itself provide a right to obtain 

possession of a vessel. Garnishment, 

attachment, levy, replevin, or other 

judicial process against the certificate is 

not effective to determine possessory 

rights to the vessel. This subpart does 

not prohibit enforcement under State 

law, other than this subpart (33 CFR 

part 187 subpart D), of a security 

interest in, levy on, or foreclosure of a 

statutory or common-law lien on a 

vessel. Absence of an indication of a 

statutory or common-law lien on a 

certificate does not invalidate the lien. 

§ 187.315 Perfection of security interest. 

(a) Except as otherwise provided in 

this section or a savings clause provided 

under state law, a security interest in a 

vessel may be perfected only by delivery 

to the office of an application for a 

certificate of title that identifies the 

secured party and otherwise complies 

with 33 CFR 187.307. The security 

interest is perfected on the later of 

delivery to the office of the application 

and the applicable fee or attachment of 

the security interest as prescribed by 

State law related to security interests in 

goods. 

(b) If the interest of a person named 

as owner, lessor, consignor, or bailor in 

an application for a certificate of title 

delivered to the office is a security 

interest, the application sufficiently 

identifies the person as a secured party. 

Identification on the application for a 

certificate of a person as owner, lessor, 

consignor, or bailor is not by itself a 

factor in determining whether the 

person’s interest is a security interest. 

(c) If the office has created a 

certificate of title for a vessel, a security 

interest in the vessel may be perfected 

by delivery to the office of an 

application, on a form the office may 

require, to have the security interest 

added to the certificate. The application 

must be signed by an owner of the 

vessel or by the secured party and must 

include— 

(1) The name of the owner of record; 

(2) The name and mailing address of 

the secured party; 

(3) The hull identification number for 

the vessel; and 

(4) If the office has created a written 

certificate of title for the vessel, the 

certificate. 

(d) A security interest perfected under 

paragraph (c) of this section is perfected 

on the later of delivery to the office of 

the application and all applicable fees 

or attachment of the security interest as 

prescribed by State law related to 

security interests in goods. 

(e) On delivery of an application that 

complies with paragraph (c) of this 

section and payment of all applicable 

fees, the office must create a new 

certificate of title pursuant to 33 CFR 

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187.308 and deliver the new certificate 

or a record evidencing an electronic 

certificate pursuant to 33 CFR 

187.312(a). The office must maintain in 

the files of the office the date and time 

of delivery of the application to the 

office. 

(f) If a secured party assigns a 

perfected security interest in a vessel, 

the receipt by the office 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. 

Upon obtaining a release from the 

secured party indicated in the files of 

the office or on the certificate, a 

purchaser of a vessel subject to a 

security interest takes free of the 

security interest and of the rights of a 

transferee unless the transfer is 

indicated in the files of the office or on 

the certificate. 

(g) This section does not apply to a 

security interest— 

(1) Created in a vessel by a person 

during any period in which the vessel 

is inventory held for sale or lease by the 

person or is leased by the person as 

lessor if the person is in the business of 

selling vessels; 

(2) In a barge for which no application 

for a certificate of title has been 

delivered to the office; or 

(3) In a vessel before delivery if the 

vessel is under construction, or 

completed, pursuant to contract and for 

which no application for a certificate 

has been delivered to the office. 

(h) This paragraph applies if a 

certificate of documentation for a 

documented vessel is deleted or 

canceled. If a security interest in the 

vessel was valid immediately before 

deletion or cancellation against a third 

party as a result of compliance with 42 

U.S.C. 31321, the security interest is and 

remains perfected until the earlier of 4 

months after cancellation of the 

certificate or the time the security 

interest becomes perfected under this 

subpart. 

(i) A security interest in a vessel 

arising under State law related to 

security interests in goods is perfected 

when it attaches but becomes 

unperfected when the debtor obtains 

possession of the vessel, unless before 

the debtor obtains possession the 

security interest is perfected pursuant to 

paragraph (a) or (c) of this section. 

(j) A security interest in a vessel as 

proceeds of other collateral is perfected 

to the extent provided in State law. 

(k) A security interest in a vessel 

perfected under the law of another 

jurisdiction is perfected to the extent 

provided in State law. 

§ 187.316 Termination statement. 

(a) A secured party indicated in the 

files of the office as having a security 

interest in a vessel must deliver a 

termination statement to the office and, 

on the debtor’s request, to the debtor, by 

the earlier of— 

(1) Twenty days after the secured 

party receives a signed demand from an 

owner for a termination statement and 

there is no obligation secured by the 

vessel subject to the security interest 

and no commitment to make an 

advance, incur an obligation, or 

otherwise give value secured by the 

vessel; or 

(2) If the vessel is consumer goods, 30 

days after there is no obligation secured 

by the vessel and no commitment to 

make an advance, incur an obligation, or 

otherwise give value secured by the 

vessel. 

(b) If a written certificate of title has 

been created and delivered to a secured 

party and a termination statement is 

required under paragraph (a) of this 

section, the secured party, not later than 

the date required by paragraph (a), must 

deliver the certificate to the debtor or to 

the office with the statement. If the 

certificate is lost, stolen, mutilated, 

destroyed, or is otherwise unavailable or 

illegible, the secured party must deliver 

with the statement, not later than the 

date required by paragraph (a), an 

application for a replacement certificate 

meeting the requirements of 33 CFR 

187.322. 

(c) On delivery to the office of a 

termination statement authorized by the 

secured party, the security interest to 

which the statement relates ceases to be 

perfected. If the security interest to 

which the statement relates was 

indicated on the certificate of title, the 

office must create a new certificate and 

deliver the new certificate or a record 

evidencing an electronic certificate. The 

office must maintain in its files the date 

and time of delivery to the office of the 

statement. 

(d) 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 its 

failure to comply and which could not 

reasonably have been prevented and for 

the cost of an application for a 

certificate of title under 33 CFR 187.307 

or 187.322. 

§ 187.317 Transfer of ownership. 

(a) On voluntary transfer of an 

ownership interest in a vessel covered 

by a certificate of title, the following 

rules apply: 

(1) If the certificate is a written 

certificate of title and the transferor’s 

interest is noted on the certificate, the 

transferor must promptly sign the 

certificate and deliver it to the 

transferee. If the transferor does not 

have possession of the certificate, the 

person in possession of the certificate 

has a duty to facilitate the transferor’s 

compliance with this paragraph. A 

secured party does not have a duty to 

facilitate the transferor’s compliance 

with this paragraph if the proposed 

transfer is prohibited by the security 

agreement. 

(2) If the certificate of title is an 

electronic certificate of title, the 

transferor must promptly sign and 

deliver to the transferee a record 

evidencing the transfer of ownership to 

the transferee. 

(3) The transferee has a right 

enforceable by specific performance to 

require the transferor comply with 

paragraph (a)(1) or (2) of this section. 

(b) The creation of a certificate of title 

identifying the transferee as owner of 

record satisfies paragraph (a) of this 

section. 

(c) A failure to comply with paragraph 

(a) of this section or to apply for a new 

certificate of title does not render a 

transfer of ownership of a vessel 

ineffective between the parties. Except 

as otherwise provided in 33 CFR 

187.318, 187.319, 187.323(a), or 

187.324, a transfer of ownership without 

compliance with paragraph (a) of this 

section is not effective against another 

person claiming an interest in the 

vessel. 

(d) A transferor that complies with 

paragraph (a) of this section is not liable 

as owner of the vessel for an event 

occurring after the transfer, regardless of 

whether the transferee applies for a new 

certificate of title. 

§ 187.318 Effect of missing or incorrect 

information. 

Except as otherwise provided as 

prescribed by State law related to 

security interests in goods, a certificate 

of title or other record required or 

authorized by this subpart is effective 

even if it contains incorrect information 

or does not contain required 

information. 

§ 187.319 Transfer of ownership by 

secured party’s transfer statement. 

(a) In this section, ‘‘secured party’s 

transfer statement’’ means a record 

signed by the secured party of record 

stating— 

(1) That there has been a default on 

an obligation secured by the vessel; 

(2) The secured party of record is 

exercising or has exercised post-default 

remedies with respect to the vessel; 

(3) By reason of the exercise, the 

secured party of record has the right to 

52814 Federal Register / Vol. 86, No. 181 / Wednesday, September 22, 2021 / Proposed Rules 

transfer the ownership interest of an 

owner, and the name of the owner; 

(4) The name and last known mailing 

address of the owner of record and the 

secured party of record; 

(5) The name of the transferee; 

(6) Other information required by 33 

CFR 187.307(b); and 

(7) One of the following: 

(i) The certificate of title is an 

electronic certificate; 

(ii) The secured party does not have 

possession of the written certificate of 

title created in the name of the owner 

of record; or 

(iii) The secured party is delivering 

the written certificate of title to the 

office with the secured party’s transfer 

statement. 

(b) Unless the office rejects a secured 

party’s transfer statement for a reason 

stated in 33 CFR 187.308(c), not later 

than 20 days after delivery to the office 

of the statement and payment of fees 

and taxes payable under State law in 

connection with the statement or the 

acquisition or use of the vessel, the 

office must— 

(1) Accept the statement; 

(2) Amend the files of the office 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— 

(i) Cancel the certificate even if the 

certificate has not been delivered to the 

office; 

(ii) Create a new certificate indicating 

the transferee as owner; and 

(iii) Deliver the new certificate or a 

record evidencing an electronic 

certificate. 

(c) An application under paragraph (a) 

of this section or the creation of a 

certificate of title under paragraph (b) of 

this section is not by itself a disposition 

of the vessel and does not by itself 

relieve the secured party of its duties 

under State law. 

§ 187.320 Transfer by operation of law. 

(a) In this section— 

(1) ‘‘By operation of law’’ means 

pursuant to a law or judicial order 

affecting ownership of a vessel— 

(i) Because of death, divorce or other 

family law proceeding, merger, 

consolidation, dissolution, or 

bankruptcy; 

(ii) Through the exercise of the rights 

of a lien creditor or a person having a 

lien created by statute or rule of law; or 

(iii) Through other legal process. 

(2) ‘‘Transfer-by-law statement’’ 

means a record signed by a transferee 

stating that by operation of law the 

transferee has acquired or has the right 

to acquire an ownership interest in a 

vessel. 

(b) A transfer-by-law statement must 

contain— 

(1) The name and last known mailing 

address of the owner of record and the 

transferee and the other information 

required by 33 CFR 187.307(b); 

(2) Documentation sufficient to 

establish the transferee’s ownership 

interest or right to acquire the 

ownership interest; 

(3) A statement that— 

(i) The certificate of title is an 

electronic certificate of title; 

(ii) The transferee does not have 

possession of the written certificate of 

title created in the name of the owner 

of record; or 

(iii) The transferee is delivering the 

written certificate to the office with the 

transfer-by-law statement; and 

(4) Except for a transfer described in 

paragraph (a)(1)(i) of this section, 

evidence that notification of the transfer 

and the intent to file the transfer-by-law 

statement has been sent to all persons 

indicated in the files of the office as 

having an interest, including a security 

interest, in the vessel. 

(c) Unless the office rejects a transferby-law statement for a reason stated in 

33 CFR 187.308(c) or because the 

statement does not include 

documentation satisfactory to the office 

as to the transferee’s ownership interest 

or right to acquire the ownership 

interest, not later than 20 days after 

delivery to the office of the statement 

and payment of fees and taxes payable 

under State law in connection with the 

statement or with the acquisition or use 

of the vessel, the office must— 

(1) Accept the statement; 

(2) Amend the files of the office 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— 

(i) Cancel the certificate even if the 

certificate has not been delivered to the 

office; 

(ii) Create a new certificate indicating 

the transferee as owner; 

(iii) Indicate on the new certificate 

any security interest indicated on the 

canceled certificate, unless a court order 

provides otherwise; and 

(iv) Deliver the new certificate or a 

record evidencing an electronic 

certificate. 

(d) This section does not apply to a 

transfer of an interest in a vessel by a 

secured party as prescribed by State law 

related to security interests in goods. 

§ 187.321 Application for transfer of 

ownership or termination of security 

interest without certificate of title. 

(a) Except as otherwise provided in 33 

CFR 187.319 and 187.320, if the office 

receives, unaccompanied by a signed 

certificate of title, an application for a 

new certificate that includes an 

indication of a transfer of ownership or 

a termination statement, the office may 

create a new certificate under this 

section only if— 

(1) All other requirements under 33 

CFR 187.307 and 187.308 are met; 

(2) The applicant provides an affidavit 

stating facts showing that the applicant 

is entitled to a transfer of ownership or 

termination statement; 

(3) The applicant provides the office 

with satisfactory evidence that 

notification of the application has been 

sent to the owner of record and all 

persons indicated in the files of the 

office as having an interest, including a 

security interest, in the vessel, at least 

45 days have passed since the 

notification was sent, and the office has 

not received an objection from any of 

those persons; and 

(4) The applicant submits any other 

information required by the office as 

evidence of the applicant’s ownership 

or right to terminate the security 

interest, and the office has no credible 

information indicating theft, fraud, or an 

undisclosed or unsatisfied security 

interest, lien, or other claim to an 

interest in the vessel. 

(b) The office may indicate in a 

certificate of title created under 

paragraph (a) of this section that the 

certificate was created without 

submission of a signed certificate or 

termination statement. Unless credible 

information indicating theft, fraud, or an 

undisclosed or unsatisfied security 

interest, lien, or other claim to an 

interest in the vessel is delivered to the 

office not later than 1 year after creation 

of the certificate, on request in a form 

and manner required by the office, the 

office must remove the indication from 

the certificate. 

§ 187.322 Replacement certificate of title. 

(a) If a written certificate of title is 

lost, stolen, mutilated, destroyed, or 

otherwise becomes unavailable or 

illegible, the secured party of record or, 

if no secured party is indicated in the 

files of the office, the owner of record 

may apply for and, by furnishing 

information satisfactory to the office, 

obtain a replacement certificate in the 

name of the owner of record. 

(b) An applicant for a replacement 

certificate of title must sign the 

application, and, except as otherwise 

permitted by the office, the application 

must comply with 33 CFR 187.307. The 

application must include the existing 

certificate unless the certificate is lost, 

stolen, mutilated, destroyed, or 

otherwise unavailable. 

Federal Register / Vol. 86, No. 181 / Wednesday, September 22, 2021 / Proposed Rules 52815 

(c) A replacement certificate of title 

created by the office must comply with 

33 CFR 187.309 and indicate on the face 

of the certificate that it is a replacement 

certificate. 

(d) If a person receiving a replacement 

certificate of title subsequently obtains 

possession of the original written 

certificate, the person must promptly 

destroy the original certificate of title. 

§ 187.323 Rights of purchaser other than 

secured party. 

(a) A buyer in ordinary course of 

business has the protections afforded by 

State law even if an existing certificate 

of title was not signed and delivered to 

the buyer or a new certificate listing the 

buyer as owner of record was not 

created. 

(b) Except as otherwise provided in 33 

CFR 187.317 and 187.324, the rights of 

a purchaser of a vessel who is not a 

buyer in ordinary course of business or 

a lien creditor are governed by State 

law. 

§ 187.324 Rights of secured party. 

(a) Subject to paragraph (b) of this 

section, the effect of perfection and 

nonperfection of a security interest and 

the priority of a perfected or 

unperfected security interest with 

respect to the rights of a purchaser or 

creditor, including a lien creditor, is 

governed by State law. 

(b) If, while a security interest in a 

vessel is perfected by any method under 

this subpart, the office creates a 

certificate of title that does not indicate 

that the vessel is subject to the security 

interest or contain a statement that it 

may be subject to security interests not 

indicated on the certificate— 

(1) A buyer of the vessel, other than 

a person in the business of selling or 

leasing vessels 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; and 

(2) The security interest is 

subordinate to a conflicting security 

interest in the vessel that is perfected 

under 33 CFR 187.315 after creation of 

the certificate and without the 

conflicting secured party’s knowledge of 

the security interest. 

§ 187.325 Duties and operation of office. 

(a) The office must retain the evidence 

used to establish the accuracy of the 

information in its files relating to the 

current ownership of a vessel and the 

information on the certificate of title. 

(b) The office must retain in its files 

all information regarding a security 

interest in a vessel for at least 10 years 

after the office receives a termination 

statement regarding the security 

interest. The information must be 

accessible by the hull identification 

number (HIN) for the vessel and any 

other methods provided by the office. 

(c) If a person submits a record to the 

office, or submits information that is 

accepted by the office, and requests an 

acknowledgment of the filing or 

submission, the office must send to the 

person an acknowledgment showing the 

HIN of the vessel to which the record or 

submission relates, the information in 

the filed record or submission, and the 

date and time the record was received 

or the submission accepted. A request 

under this section must contain the HIN 

and be delivered by means authorized 

by the office. 

(d) The office must send or otherwise 

make available in a record the following 

information to any person that requests 

it and pays the applicable fee: 

(1) Whether the files of the office 

indicate, as of a date and time specified 

by the office, but not a date earlier than 

3 days before the office received the 

request, any certificate of title, security 

interest, termination statement, or title 

brand that relates to a vessel— 

(i) Identified by a HIN designated in 

the request; 

(ii) Identified by a vessel number 

designated in the request; or 

(iii) Owned by a person designated in 

the request. 

(2) With respect to the vessel— 

(i) The name and address of any 

owner as indicated in the files of the 

office or on the certificate of title; 

(ii) The name and address of any 

secured party as indicated in the files of 

the office or on the certificate, and the 

effective date of the information; and 

(iii) A copy of any termination 

statement indicated in the files of the 

office and the effective date of the 

termination statement. 

(3) With respect to the vessel, a copy 

of any certificate of origin, secured party 

transfer statement, transfer-by-law 

statement under 33 CFR 187.320, and 

other evidence of previous or current 

transfers of ownership. 

(e) In responding to a request under 

this section, the office may provide the 

requested information in any medium. 

On request, the office must send the 

requested information in a record that is 

in keeping with State rules of evidence. 

Dated: September 10, 2021. 

J.W. Mauger, 

Rear Admiral, U.S. Coast Guard, Assistant 

Commandant for Prevention Policy. 

[FR Doc. 2021–20095 Filed 9–21–21; 8:45 am] 

BILLING CODE 9110–04–P