Vessel Identification System

SUMMARY: The Coast Guard is establishing a vessel identification system

(VIS), as required by statute, which includes guidelines for State

vessel titling systems, procedures for certifying compliance with those

guidelines, and rules for participation in this system for undocumented

vessels. VIS, in conjunction with current Coast Guard vessel

documentation information, will provide a nationwide pool of vessel and

vessel owner information that will help in identification and recovery

of stolen vessels and deter vessel theft. A mortgage that covers the

whole of an undocumented vessel and is perfected in a State that both

participates in VIS and holds certification of compliance with

guidelines for State vessel titling systems will be deemed to have

preferred mortgage status.

DATES: This rule is effective on April 24, 1996. Comments must be

received on or before July 24, 1995.

ADDRESSES: Comments may be mailed to the Executive Secretary, Marine

Safety Council (G-LRA/3406), (CGD 89-050), U.S. Coast Guard

Headquarters, 2100 Second Street SW., Washington, DC 20593-0001, or may

be delivered to room 3406 at the same address between 8 a.m. and 3

p.m., Monday through Friday, except Federal holidays. The telephone

number is (202) 267-1477.

The Executive Secretary maintains the public docket for this

rulemaking. Comments will become part of this docket and will be

available for inspection or copying at room 3406, U.S. Coast Guard

Headquarters, between 8 a.m. and 3 p.m., Monday through Friday, except

Federal holidays.

FOR FURTHER INFORMATION CONTACT: CDR Keith Cameron, Office of Marine

Safety, Security and Environmental Protection, Information Management

Division (G-MIM), (202) 267-0385.

SUPPLEMENTARY INFORMATION:

Request for Comments

The Coast Guard encourages interested persons to participate in

this rulemaking by submitting written data, views, or arguments.

Persons submitting comments should include their names and addresses,

identify this rulemaking (CGD 89-050) and the specific section of this

rule to which each comment applies, and give the reason for each

comment. Please submit two copies of all comments and attachments in an

unbound format, no larger than 8\1/2\ by 11 inches, suitable for

copying and electronic filing. Persons wanting acknowledgment of

receipt of comments should enclose stamped, self-addressed postcards or

envelopes.

The Coast Guard will consider all comments received during the

comment period. It may change this rule in view of the comments.

The Coast Guard plans no public hearing. Persons may request a

public hearing by writing to the Marine Safety Council at the address

under ADDRESSES. The request should include the reasons why a hearing

would be beneficial. If it determines that the opportunity for oral

presentations will aid this rulemaking, the Coast Guard will hold a

public hearing at a time and place announced by a later notice in the

Federal Register.

Drafting Information

The principal persons involved in drafting this document are CDR

Keith Cameron, Project Manager, Office of Marine Safety, Security and

Environmental Protection and Helen Boutrous, Project Counsel, Office of

Chief Counsel.

Regulatory History

On October 5, 1993, the Coast Guard published a notice of proposed

rulemaking (NPRM) entitled Vessel Identification System in the Federal

Register (58 FR 51920). The Coast Guard received 27 letters commenting

on the NPRM. No public hearing was requested, and none was held.

Background and Purpose

The Secretary of Transportation is required to establish VIS; to

prescribe the manner and form for participating States to make

information available to VIS; to establish guidelines for State vessel

titling systems; and to establish procedures for certifying compliance

with those guidelines (46 U.S.C. chapters 125, 131 & 313). The

Secretary has delegated to the Commandant, U.S. Coast Guard, the

authority to implement VIS. State participation in VIS is entirely

voluntary, however, in order to participate, States must comply with

certain requirements to ensure the integrity and uniformity of the

information provided to VIS.

This interim final rule establishes the minimum requirements for

States electing to participate in VIS. VIS will comprise a nationwide

information system for identifying recreational vessels that are either

numbered in accordance with 46 U.S.C. 123 or titled under the laws of a

State. VIS will include information identifying vessels and vessel

owners, and information to assist law enforcement officials in the

investigation of stolen vessels. Most of the information to be included

in VIS is already collected by States that number vessels in accordance

with 33 CFR 174.17. This and other information collected by the States

will be automatically accessed by VIS, resulting in a central,

nationwide pool of vessel information, while minimizing the burden of

participating States. Once the VIS requirements are effective, the

Coast Guard will begin to work with participating States to coordinate

VIS access.

This interim final rule also prescribes guidelines for State vessel

titling systems and the procedures for obtaining certification of

compliance with those guidelines. Under 46 U.S.C. 31322(d), perfected

mortgages covering the whole of a vessel titled in a State that both

participates in VIS and has a vessel titling system that has been

certified as meeting the titling guidelines issued by this interim

final rule will be deemed to have preferred mortgage status. Compliance

with the State titling guidelines and requests for certification of

that compliance is entirely voluntary. However, preferred mortgage

status under 46 U.S.C. 31321(d) is conditioned upon both participation

in VIS and certification of compliance with the State titling

guidelines issued by this interim final rule.

This action is being published as an interim final rule to allow

for public comment on a provision, Sec. 187.315, that has been added to

the State vessel titling requirements since publication of the NPRM.

Also, this action is being published with an effective date of one year

from today's date. This effective date will allow States affected by a

statutory amendment to 46 U.S.C. chapter 121, which becomes effective

one year from the effective date of the State titling guidelines issued

as a part of this interim final rule, time to review, and if necessary,

amend their vessel titling requirements. These issues are addressed in

greater detail in the discussion of Sec. 187.315 later in this

preamble.

It is not anticipated that VIS will be operational before the

effective date of this interim final rule. Publishing the

[[Page 20311]] VIS requirements now, however, will provide States with

the information necessary to prepare for participation in the voluntary

VIS system.

Discussion of Comments and Changes

All of the comments received were considered in the development of

this interim final rule. The issues raised by the comments received,

and the sections which have been revised or added since publication of

the NPRM, are discussed below. Some sections were revised or

reorganized for clarity.

Subpart A--General

Sec. 187.1 Applicability.

VIS will cover vessels that are numbered or titled under the laws

of a State. Information pertaining to vessels which are documented by

the Coast Guard will continue to be collected under the current

regulations. Many of the comments suggested that documented vessels be

covered by the VIS requirements. After analyzing the merits of applying

the VIS requirements to documented vessels, the Coast Guard determined

that it will be more efficient to maintain the current Coast Guard data

base on documented vessels, and allow increased access to that

information through VIS. Therefore, documented vessels will not be

covered by the vessel identification system requirements of this

interim final rule. Users of VIS will, however, have access to a

nationwide pool of information on recreational vessels, whether

documented or undocumented, because the planned enhancement of the

documentation data base will allow access to the Coast Guard's data

base on documented vessels through VIS. The Coast Guard currently

maintains an information system on over 200,000 vessels documented

under 46 U.S.C. chapter 121. Maintaining this documentation system,

while allowing access to the data base through VIS, satisfies the

statutory goal of establishing a nationwide vessel data base and is

more efficient than discontinuing the existing documentation record

keeping system.

One comment suggested that the VIS final rule specifically exempt

barges from VIS. The comment noted that the Abandoned Barge Act of 1992

amended 46 U.S.C. 12301 to require the numbering of undocumented barges

greater than 100 gross tons. The Coast Guard published a notice on

October 18, 1994, seeking comments on the development of a numbering

system for barges (59 FR 52646). Currently, barges are not numbered,

and the Coast Guard is in the early stages of developing a mandatory

numbering system. Because this interim final rule applies only to

vessels that are numbered or titled under the laws of a State, barges

are not currently covered by VIS. As the Coast Guard's efforts to

establish a barge numbering system continue, the Coast Guard will

examine whether a specific exclusion of barges from VIS is appropriate.

The Coast Guard will propose future amendments to VIS, if necessary.

Sec. 187.3 Definitions.

One comment suggested that the Coast Guard add the definition of

``titled vessel'' to Sec. 187.3 and another comment suggested adding

the definition of ``perfection''. Under Sec. 187.303, the Coast Guard

requires that participating States define most of the terms included in

Sec. 187.3 in their titling systems substantially as those terms are

defined by the Coast Guard. Therefore, in order to allow the States the

most flexibility possible in establishing approved titling systems, the

Coast Guard has attempted to minimize the number of required

definitions. The Coast Guard agrees that a definition of the term

``titled vessel'' would be helpful, and a definition of that term has

been added. However, the term ``perfection'' will be left to the States

to define in accordance with their own titling systems. The definition

of the term ``person'' has been revised to be consistent with the

definition provided in the regulations regarding State numbering system

requirements at 33 CFR 173.3(e). This revision is intended to result in

no substantive change.

Sec. 187.5 Vessel identifier.

Many comments objected to the use of ``VIN'' as an acronym for

``Vessel Identification Number.'' The comments suggested that this

acronym would confuse law enforcement personnel who are far more

familiar with VIN meaning Vehicle Identification Number. The Coast

Guard agrees with these comments and will not use the acronym VIN in

the VIS regulations. The title of the section has been revised

accordingly.

Some of the comments revealed a misunderstanding of this provision

by objecting to the establishment of a new number. VIS will not

establish a new numbering system for vessels. For purposes of

identifying a vessel within VIS, the number to be used will be the hull

identification number (HIN) assigned to an undocumented vessel in

accordance with Subpart C of part 181. Several comments suggested that

documented vessels be identified within VIS by their HIN. However, as

discussed above, the Coast Guard is maintaining its existing data base

on documented vessels which uses the Coast Guard Official Number to

identify vessels within the current documentation system. Therefore, it

will be necessary to keep the Coast Guard Official Number as the

primary identifier for documented vessels. Information on documented

vessels, such as owner name, Official Number, HIN if one has been

assigned, length, and hailing port, will be available through VIS.

Several comments suggested that Sec. 187.5(c), which requires

States to assign an HIN to vessels under certain circumstances, will be

problematic for States. The comments stated that the requirement leaves

no room for discretion by the States to refuse to assign an HIN to a

vessel which the State may believe to be stolen. These comments

suggested replacing the word ``shall'' with ``may'' in paragraph (c).

The Coast Guard disagrees with these comments. The HIN will be the

primary identifier for all State registered or numbered vessels in the

United States. Section 187.5(b) allows for the use of other

identifiers, such as the number issued on a certificate of number by

the issuing authority of a State, only where a vessel does not have an

HIN (e.g., a vessel built prior to 1972). However, under Sec. 187.5(c),

if the ownership or State of principle use of the vessel changes, the

State is required to assign an HIN to that vessel, just as States

currently do under the authority of 33 CFR 181.31(c) for ``backyard

boat builders''. The HIN must meet the format requirements of 33 CFR

181.25. States may impose any controls necessary to ensure HINs are

assigned appropriately. Section 187.5(c) has been revised to clarify

this issue for the States. The Coast Guard specifically invites

comments on this revised provision from States that anticipate

participating in VIS.

One comment suggested that VIS require mandatory inspection of a

vessel prior to a State assigning an HIN. While the Coast Guard agrees

that inspections could lessen the probability of illegal action by

those attempting to obtain an HIN, it is the Coast Guard's position

that the decision to implement such procedures should be left to the

individual States.

Several comments suggested requiring that all documented vessels be

assigned an HIN. Vessels manufactured or used primarily for

noncommercial use (33 CFR 181.3), the only vessels included in VIS, are

currently required to have an HIN, whether they are documented or not.

However, as discussed above, to utilize the existing database of

information on documented vessels, it [[Page 20312]] will be necessary

to use the Coast Guard Official Number as the primary identifier for a

documented vessel.

Subpart B--Information to be Collected by Participating States

Sec. 187.101 Information to identify a vessel owner.

Many comments objected to the provision that would have required

participating States to collect information on the percentage of

ownership interest of each owner for each vessel. Many comments also

objected to the proposed requirement to obtain the address of each

owner. These comments contended that collecting this amount of

information would be overly burdensome. The Coast Guard agrees with the

comments on this matter, and Sec. 187.101 has been revised to lessen

the information burden. This interim final rule requires the State to

obtain the name of each owner of a vessel, but does not require States

to collect any information regarding the percentages of ownership

interest. Further, States are required to obtain the address of only

one owner.

Several comments objected to the collection of an individual

owner's Social Security Number or, where not available, date of birth

and driver's license number. The comments indicated that some States do

not allow the required collection of an individual's social security

number, and not all individuals have a driver's license. For an

effective information and identification system, there must be a method

of identifying the owner of a vessel beyond the individual's name. The

Coast Guard included collection of date of birth and driver's license

number to assist those States that may have problems collecting Social

Security Numbers. To alleviate the situation that may arise for a State

where no Social Security Number or driver's license number is

available, the Coast Guard will accept, in such situations only, the

individual's date of birth and alternative information identifying the

individual vessel owner as specified by the regulations of the State or

issuing authority.

Sec. 187.103 Information to identify a vessel.

Most of the comments agreed with the NPRM regarding the information

to be collected to identify a vessel.

One comment suggested that information regarding a vessel's type of

propulsion is too detailed for inclusion in VIS. However, it is the

Coast Guard's position that a vessel's type of propulsion is an

excellent means, in combination with other information, to identify a

vessel. Propulsion type greatly influences the value of a vessel, and

this information is currently required to be collected by States with

authorized numbering systems under 33 CFR 174. Therefore, inclusion of

this information in VIS will cause no additional information collection

requirement for these States. However, the term ``jet drive'' has been

removed from the list of propulsion types to be consistent with the

list of propulsion types provided in the regulations regarding State

numbering system requirements at 33 CFR 174.19.

One comment argued that the final rule should not require the

collection of the vessel number previously issued by an issuing

authority. It is the Coast Guard's position that this is valuable

information in assisting in the identification of a vessel. Also, like

propulsion type, this information is required to be collected by States

with authorized numbering systems under 33 CFR part 174 and represents

no increased burden for these States that choose to participate.

Sec. 187.105 Information on titled vessels.

There was general agreement among those commenting regarding the

information to be collected on titled vessels by a participating State.

One comment however, disagreed with the requirement to collect

information regarding evidence of a lien or other security interest.

The comment argued that the information would not be helpful. Also, the

comment argued that it would be difficult to collect information

regarding evidence of a lien kept in another State. Under 46 U.S.C.

12501(b)(5), VIS must include information on titled vessels indicating

where evidence of a lien or other security interest may be found

against the vessel in that State. Therefore, the requirement to collect

information indicating where evidence of a lien may be found is

retained in this interim final rule. Section 187.105(a)(3) has been

revised, however, to clarify that a State must collect information

regarding evidence of a lien or other security interest found in that

State only.

Sec. 187.107 Information to assist law enforcement officials.

Several of the comments agreed with the requirements of

Sec. 187.107 as proposed. The information listed in paragraph (a) of

Sec. 187.107 (report of loss or theft, point of contact) is required to

be collected, while collection of the more detailed information listed

in paragraph (b) is optional. One comment suggested that the Coast

Guard require the collection of the information listed in both

paragraphs (a) and (b). The Coast Guard encourages participating States

to collect the detailed information listed in paragraph (b). However,

in the interest of putting the least possible burden on participating

States while still meeting the needs of the VIS system, the Coast Guard

has determined that, for now, collection of the information listed in

paragraph (b) will remain optional. The Coast Guard has been working

with the Criminal Justice Information Service, Department of Justice,

regarding the mutual supporting roles of the National Crime Information

Center (NCIC) and VIS. Because much of the information listed in

paragraph (b) is contained in NCIC's Boat File, collection of that

information will not be required in this rulemaking.

Subpart C--Vessel Identification System Participation Requirements

Sec. 187.201 Participating State requirements.

Paragraph (b) was reserved in proposed Sec. 187.201. It has been

determined that additional requirments are not necessary in that

section and the paragraphs of Sec. 187.201 have been redesignated

accordingly. Also, a printing error in the wording of proposed

Sec. 187.201(a)(6) (now Sec. 187.201(f)) has been corrected in this

interim final rule.

One comment stated that the retention of previously issued

certificates of number or titles would be overly burdensome. This

section requires a State to collect old, no longer valid, certificates

of number and title when issuing new certificates of number or titles.

The State may retain or dispose of the old documents as it sees fit.

Because a State is free to dispose of these invalid records, the Coast

Guard does not agree that the provision is overly burdensome and the

provision is retained.

Two comments suggested that compliance with the participation

requirements would be easier if States are allowed to use microfiche

technology. States are free to use such technology or other methods of

electronic storage where appropriate. This rulemaking does not address

how that information is to be stored by the States. As discussed

earlier, and in Sec. 187.201(a), Coast Guard-State Cooperative

Agreements will be developed to specify the manner and form that

information will be accessed by VIS.

Several comments suggested that participation in VIS be made

mandatory for States. There is no statutory authority to require

participation in VIS. Under 46 U.S.C. chapter 125, participation in VIS

by the States is to be voluntary. [[Page 20313]]

One comment suggested that the Coast Guard utilize an existing

system, the American Association of Motor Vehicles Administrator's

network (AAMVANET) rather than develop VIS. It was further suggested

that a ``pointer system'' such as used in AAMVANET, would eliminate the

need for a participating State to maintain two systems. VIS, which the

Coast Guard is required by statute to create, will automatically access

information collected by participating States from their databases.

There will be no need for participating States to maintain two systems.

The purpose of VIS is to create a national vessel database that

consists of the information collected by States during numbering and

titling procedures. There will be no need for a participating State to

enter any vessel data twice. VIS will contain data that has been

electronically copied.

One comment suggested that the project was redundant, would place a

paperwork burden on the States, and would be funded by a boat tax. VIS

will be the first nationwide pool of information containing the vessel

and vessel owner information prescribed by this interim final rule. The

framework of the system has been designed to minimize any additional

burden on participating States. Almost all of the information required

is currently collected by States with numbering or titling systems.

There will be no need for these States to collect the information a

second time. As discussed, the information will be automatically

accessed or accepted by VIS. Therefore, the Coast Guard estimates that

participation will not be burdensome for participating States. Finally,

there is no ``boat tax'' associated with this rulemaking or the

enabling legislation. Funding for the establishment of VIS is provided

through the Coast Guard appropriations process.

Subpart D--Guidelines for State Vessel Titling Systems

Sec. 187.301 Eligibility for preferred mortgage status.

One comment suggested that preferred mortgage status would not be

available as described in the NPRM. The comment questioned the

``legality of assigning `preferred mortgage status' to instruments

recorded within'' VIS. No ``instruments'' will be ``recorded'' within

VIS. VIS is an information data base only. As for preferred mortgage

status, 46 U.S.C. 31322(d)(1)(A) and (B) state that a mortgage

perfected under State law, covering the whole of a vessel, is deemed to

be a preferred mortgage if the State's titling system is certified to

be in compliance with the titling guidelines issued by the Secretary,

and if information on the vessel covered by the mortgage is made

available to VIS. Therefore, Sec. 187.301 remains unchanged.

Sec. 187.305 Application for title.

In the NPRM, Sec. 187.305(a) proposed that States require

application for a title within a specified period of time, not to

exceed 90 days, after a change in ownership. Many of the comments

suggested that the period of time required to apply for a title be

changed to within 60 days of a change in ownership. The Coast Guard

agrees with this suggestion and the provision is revised accordingly.

One comment suggested that the phrase ``first purchased'' be

removed from paragraph (a). However, the Coast Guard has decided to

retain this phrase in the provision to distinguish between an act

requiring an initial application for title and other acts transferring

the title.

Many comments disagreed with the requirement in paragraph (b) to

include the amount of indebtedness covered by any security agreement

pertaining to the vessel in its titling application form. The comments

indicated that this requirement constituted unnecessary detail in the

application process. The Coast Guard agrees that including the amount

of indebtedness on a vessel in the titling application form does not

serve a sufficiently useful purpose to outweigh the burden of

collection of that information. Consequently, this interim final rule

requires that the titling application form include an entry indicating

whether there is indebtedness covered by any security agreement

pertaining to the vessel, but does not require disclosure of the actual

amount.

Sec. 187.307 Dealer and manufacturer provisions.

Many of the comments disagreed with paragraphs (a) and (b) of

proposed Sec. 187.307. Paragraph (a) proposed to require States to

require dealers to report acquisition of a used numbered vessel for

resale, and allow them to apply for a certificate of title. Paragraph

(b) proposed to require States to require dealers to apply for a

certificate of title for a used unnumbered vessel acquired for resale

if the vessel is required to be titled. The comments contended that

these provisions are unclear. One comment stated that paragraphs (a)

and (b) are unnecessary because paragraph (a) merely allows something

that States could do without such a provision, and very few vessels fit

the description in paragraph (b). A different comment argued that

requiring dealers to apply for title as described in paragraph (b)

would cause procedural burden. The Coast Guard has revised paragraph

(a) to clarify that States must require dealers to either report

acquisition of used vessels for resale, or, title these vessels if

State law requires such vessels to be titled. Paragraph (b) is deleted.

One comment suggested that the Coast Guard increase the length of

time that dealers and manufacturers must maintain records from 3 to 10

years. Another suggested that the 3 year requirement be decreased. The

Coast Guard's position is that 3 years is a sufficient amount of time

to retain such records without placing an undue burden on dealers and

manufacturers.

Paragraph (d) requires dealers and manufacturers to provide to the

vessel owner a certificate of origin (COO), or other document, at the

time of delivery of a new vessel. Several comments suggested requiring

that manufacturers supply a COO only and delete the words ``or other

documents''. Other comments suggested specific contents to be required

in a COO. The Coast Guard, in another rulemaking, is considering

requirements for COOs (Expanded Hull Identification Number and New

Requirements for Certificates of Origin [CGD 92-065]; May 6, 1994; 59

FR 23651). Such requirements have not been considered as a part of this

rulemaking. If future requirements for COOs are established, the VIS

requirements can be amended if necessary. At the present time, there is

no requirement that manufacturers issue COOs. Therefore, the language

allowing for other documents such as a Builder's Certificate (CG 1261),

is necessary.

Sec. 187.311 Transfer by operation of law.

Many comments suggested that the time limits set for accomplishing

various requirements, such as applying for a certificate of title if a

vessel is transferred by operation of law, as required in Sec. 187.311,

and after a transfer in ownership, as required in Sec. 187.305(a), be

consistent throughout the titling guidelines. Most comments preferred a

60 day time limit. Consequently, this interim final rule changes the

time limit proposed in Sec. 187.311 from ``not to exceed 90 days'' to

``not to exceed 60 days.''

Sec. 187.315 Surrender of title for purposes of documentation.

Under Federal law, a vessel must be documented by the Coast Guard

if it engages in coastwise trade, foreign trade, or fisheries. A

recreational vessel is not required to be documented, but

[[Page 20314]] may be if it meets eligibility requirements. In the

past, some lending institutions have required recreational vessel

owners to obtain Coast Guard documentation so that preferred mortgages

may be recorded to protect security interests. After implementation of

VIS, a mortgage may acquire preferred status under 46 U.S.C. 31322(d)

if it is perfected under State law for a vessel titled in a State that

both participates in VIS and has a titling system certified by the

Coast Guard. However, some States may not choose to participate in VIS.

Therefore, the Coast Guard will continue to provide documentation

services for eligible vessels, whether or not required to be

documented, in order to extend the opportunity to record a preferred

mortgage to those vessels.

Although it was not specifically addressed in the NPRM, a comment

noted that a 1989 amendment to 46 U.S.C. 12102 would render a vessel

titled in a State ineligible for documentation by the Coast Guard. This

amendment will become effective on April 25, 1997, one year after the

effective date of these vessel titling guidelines.

The Coast Guard wishes to emphasize that the statutory prohibition

applies to all State-titled vessels, whether or not the State that

issued the title participates in VIS or follows these titling

guidelines. If a vessel owner has obtained a State title for purposes

of convenience, the owner must choose to surrender either the State

title or the Certificate of Documentation. For a vessel engaged in a

trade for which documentation is required under Federal law, the owner

could not choose to relinquish the Certificate of Documentation and

continue to employ the vessel in trade. Three States (Iowa, New Jersey,

and Vermont) currently require that a vessel receive a State title if

the owner resides in the State or the vessel is principally used in the

State, whether or not the vessel is documented by the Coast Guard. The

Coast Guard's position is that, for vessels required to be documented

under Federal law, the Federal documentation requirement preempts the

State titling requirement. The vessel's Certificate of Documentation

will remain valid and the State title will be void, even if a title is

required by State law.

However, this preemption does not extend to recreational vessels

not required to be documented by Federal law. As of the effective date

of the amendment, a recreational vessel titled by a State is ineligible

for documentation, and any existing Certificate of Documentation will

be invalid. The vessel owner will have to either surrender the title to

the issuing State authority before April 25, 1997 or surrender the

Certificate of Documentation to the Coast Guard. However, an owner will

be unable to surrender the title if the vessel is required to be titled

under State law.

To address this issue, a new provision, entitled ``Surrender of

title for purposes of documentation'', has been added to the State

titling guidelines. To obtain certification of compliance with the

guidelines, a State would have to deem a State-issued title invalid if

a vessel owner surrenders the title to the Coast Guard for the purpose

of obtaining Coast Guard documentation. The Coast Guard would return

the title to the issuing State. This is intended to prevent an owner

from establishing dual chains of ownership, and is consistent with

current practice in most States. States generally accept surrender of

title when a vessel is purchased by an out-of-State owner or an owner

moves to a different State and applies for a new title and

registration. A similar process is used for automobile titles.

This provision was not included in the NPRM. Therefore, the Coast

Guard is promulgating this action as an interim rule to allow

interested parties the opportunity to comment. The Coast Guard

specifically requests comments from States on the impact of the

statutory amendment and the surrender guidelines. Additionally, the

Coast Guard has delayed the effective date of this rule until April 25,

1996 to allow States time to review their titling requirements and make

any necessary changes.

Sec. 187.317 Information on a certificate of title.

Many comments argued against including the percentage of ownership

interest and the address of every owner on certificates of title. These

comments came from State officials who explained that often many people

may own a boat and including the percentage of ownership and each

address on certificates of title would be burdensome and unhelpful.

Also, many married couples own boats jointly and it would serve no

purpose to indicate the percentage of ownership between them. None of

those States commenting on this issue currently collect this

information. The Coast Guard agrees with these comments and has revised

Sec. 187.317 to require the name(s) of all current owner(s) and the

address of one of the owners.

Only one comment argued against the recording of liens on

certificates of title. Lien information is specifically required to be

included in VIS under 46 U.S.C. 12501(b)(5). Lien information is very

important in the development of the integrated boat information and

titling system envisioned by Congress. Therefore, the requirement to

include lien information on the certificate of title is retained in

this interim final rule.

Sec. 187.319 Duplicate title.

Several comments suggested revisions to Sec. 187.319. The NPRM

required that the word ``duplicate'' be ``stamped'' across the face of

a duplicate certificate of title. The comments noted that other means

of marking the document besides ``stamping'' it should be allowed, and

the marking should not be required to be ``across'' the face of the

document. The Coast Guard agrees with these comments and has revised

this provision to require that the word ``duplicate'' be ``clearly and

permanently marked on'' the face of the document.

One comment argued that duplicate certificates of title should not

be allowed. The Coast Guard does not agree with this comment.

Circumstances such as loss, theft, or destruction of the document can

arise and after the State has inquired into those circumstances as

required by this section, a duplicate certificate of title should be

available to the owner.

Another comment suggested specifying a period of time in which an

owner must apply for a duplicate certificate of title. In the interest

of allowing States wishing to comply with these titling guidelines as

much flexibility as possible in designing titling programs for their

States, the Coast Guard has decided to leave to the States the

determination of the appropriate amount of time within which an owner

must apply for a duplicate certificate of title.

Sec. 187.321 Hull identification number provisions.

Several comments suggested that the provisions of Sec. 187.321 be

optional for States complying with the guidelines. The Coast Guard does

not agree with this suggestion. Section 187.321 requires States that

seek certification of compliance with the guidelines to: assign an HIN

to an undocumented vessel without an HIN at the time of registration

upon transfer of ownership or change in State of principal operation;

assign an HIN to an undocumented vessel without an HIN at the time of

title application and record the HIN on the certificate of title; and

prohibit the removal or alteration of an HIN without the authorization

of the [[Page 20315]] Commandant. The proper assignment of an HIN to a

vessel that previously did not have one, whether because of its age or

because the manufacturer failed to permanently affix one, will protect

the new owner and assist law enforcement efforts. Proper identification

of vessels is vital to the success of the VIS and law enforcement

efforts.

One of these comments also suggested that States be allowed to

authorize the removal of an HIN. However, the Coast Guard has

determined that this authority should remain with the Coast Guard

consistent with the HIN requirements at 33 CFR 181.35.

Regulatory Evaluation

This action is not a significant regulatory action under section

3(f) of Executive Order 12866 and does not require an assessment of

potential costs and benefits under 6(a)(3) of that order. It has not

been reviewed by the Office of Management and Budget under that order.

It is not significant under the regulatory policies and procedures of

the Department of Transportation (44 FR 11040; February 26, 1979). The

Coast Guard expects the economic impact of this interim final rule to

be so minimal that a full Regulatory Evaluation under paragraph 10(e)

of the regulatory policies and procedures of DOT is unnecessary. This

interim final rule implements the provisions of the Act requiring the

establishment of VIS, and establishes requirements for States that

elect to participate in VIS, guidelines for State vessel titling

systems, and procedures for certifying compliance with those

guidelines. Participation in VIS and compliance with the guidelines for

State vessel titling systems is entirely voluntary. Most of the

information to be included in VIS is already collected by States when

registering vessels within the State. Preliminary review of titling

laws, regulations and administrative procedures of 28 States revealed

that 21 of the State vessel titling systems would comply with most or

all of the titling guidelines issued by this interim final rule. The

overall impact of this rule will be the improvement of vessel and owner

identification, and a potential decrease in the amount of information

that is collected, other than for vessel registration, to identify a

vessel or owner by State and Federal officials.

Small Entities

It is anticipated that the VIS computer system will facilitate the

collection of information directly from State computer files. The

impact of the rulemaking will be on States electing to participate in

VIS, rather than on small entities. Most of the information to be

included in VIS is already collected by States when registering vessels

within the State and by States that title vessels.

Therefore, the Coast Guard certifies under 605(b) of the Regulatory

Flexibility Act (5 U.S.C. 601 et seq.) that this interim final rule

will not have a significant economic impact on a substantial number of

small entities.

Collection of Information

This rule contains collection of information requirements. The

Coast Guard has submitted the requirements to the Office of Management

and Budget (OMB) for review under section 3504(h) of the Paperwork

Reduction Act (44 U.S.C. 3501 et seq.), and OMB has approved them. The

section numbers are: 187.7, 187.9, 187.101, 187.103, 187.105, 187.107,

187.201, and 187.301. The corresponding OMB control number is 2115-

0607.

Federalism

The Coast Guard has analyzed this rule in accordance with the

principles and criteria contained in Executive Order 12612 and has

determined that this rule does not have sufficient federalism

implications to warrant the preparation of a Federalism Assessment.

This rule is not expected to infringe upon the rights of States to

regulate, or preempt existing State regulations. State participation is

entirely voluntary. However, once electing to participate, a State must

comply with the requirements to ensure integrity and uniformity of

information in VIS. Likewise, requesting certification that a State

vessel titling system complies with the guidelines is also voluntary.

Such certification, for participating States, confers preferred status

on mortgages covering the whole of vessels titled in that State.

However, an amendment to 46 U.S.C. 12102 prohibits vessels from

being both documented and titled beginning one year after the effective

date of the vessel titling guidelines. The statutory amendment applies

to all vessel owners whether or not the State chooses to participate in

VIS or follow the State titling guidelines. For vessels required to be

documented under Federal law, the Federal documentation requirement

preempts State titling requirements. This preemption does not extend to

recreational vessels, for which documentation is not required by

Federal law. States that require documented vessels to be titled may

desire to amend their requirements regarding vessels that are required

by Federal law to be documented.

Environment

The Coast Guard considered the environmental impact of this rule

and concluded that, under paragraph 2.B.2 of Commandant Instruction

M16475.1B, this rule is categorically excluded from further

environmental documentation. This rule establishes a nationwide

information system for identifying vessels and vessel owners, and

guidelines for State vessel titling systems. This action clearly would

have no environmental consequences. A Categorical Exclusion

Determination is available in the docket for inspection or copying

where indicated under ADDRESSES.

List of Subjects in 33 CFR Part 187

Marine safety, Reporting and recordkeeping requirements,

Administrative practice and procedure.

For the reasons set out in the preamble, the Coast Guard amends

chapter I of title 33, Code of Federal Regulations, by adding part 187

to read as follows:

PART 187--VESSEL IDENTIFICATION SYSTEM

Subpart A--General

Sec.

187.1 Applicability.

187.3 Definitions.

187.5 Vessel identifier.

187.7 Participation procedures.

187.9 Procedures for certification of compliance with guidelines

for State vessel titling systems.

Subpart B--Information To Be Collected by Participating States

Sec.

187.101 Information to identify a vessel owner.

187.103 Information to identify a vessel.

187.105 Information on titled vessels.

187.107 Information to assist law enforcement officials.

Subpart C--Vessel Identification System Participation Requirements

Sec.

187.201 Participating State requirements.

187.203 Voluntary provisions for participating States.

Subpart D--Guidelines for State Vessel Titling Systems

Sec.

187.301 Eligibility for preferred mortgage status.

187.303 Definitions.

187.305 Application for title.

187.307 Dealer and manufacturer provisions.

187.309 Transfer of title.

187.311 Transfer by operation of law. [[Page 20316]]

187.313 Title of another State.

187.315 Surrender of title for purposes of documentation.

187.317 Information on a certificate of title.

187.319 Duplicate title.

187.321 Hull identification number (HIN) provisions.

187.323 Perfection of security interests.

187.325 Assignments.

187.327 Satisfaction of a security interest.

187.329 Forms.

187.331 Retaining information.

Appendix A to Part 187--Participating Authorities

Appendix B to Part 187--Participating And Certified Titling

Authorities

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

Subpart A--General

Sec. 187.1 Applicability.

(a) This part establishes minimum requirements for States electing

to participate in the vessel identification system (VIS) established

under 46 U.S.C. chapter 125. This part also prescribes guidelines for

State vessel titling systems and the procedures for obtaining

certification of compliance with those guidelines for those States

electing to establish titling systems to support preferred mortgages.

(b) This part applies only to vessels numbered or titled under the

laws of a State. It does not apply to vessels documented under 46

U.S.C. chapter 121 and the regulations in 46 CFR parts 67 and 68.

Sec. 187.3 Definitions.

The following definitions apply to terms used in this part.

Certificate of Origin (COO) means a document establishing the

initial chain of ownership, such as manufacturer's certificate of

origin (MCO) or statement of origin (MSO), importer's certificate of

origin (ICO) or statement of origin (ISO), and builder's certification

(Form CG-1261; see 46 CFR part 67).

Commandant means the Commandant of the United States Coast Guard.

Dealer means any person who engages wholly or in part in the

business of buying, selling, or exchanging new or used vessels, or

both, either outright or on conditional sale, bailment, lease, chattel

mortgage or otherwise, and who has an established place of business for

the sale, trade, and display of such vessels.

Department or division means the State agency designated to issue

certificates of number or title, or both for vessels, and its duly

authorized representatives.

Documented vessel means a vessel documented under 46 U.S.C. chapter

121.

HIN means the hull identification number assigned to an

undocumented vessel in accordance with subpart C of part 181 of this

subchapter.

Issuing authority means a State that has a numbering system

approved by the Coast Guard or the Coast Guard where a State numbering

system has not been approved.

Lienholder means a person holding a security interest.

Manufacturer means any person engaged in the business of

manufacturing or importing new vessels for the purpose of sale or

trade.

Owner means a person who claims lawful possession of a vessel by

virtue of legal title or equitable interest in it that entitles that

person to such possession.

Participating State means a State that has elected to participate

in VIS and has been certified as complying with the participation

requirements in subpart C of this part. Certified States participating

in VIS are listed in Appendix A of this part.

Person means an individual, firm, partnership, corporation,

company, association, joint-stock association, or governmental entity

and includes a trustee, receiver, assignee, or similar representative

of any of them.

Security interest means an interest that is reserved or created by

an agreement and that secures payment or performance of an obligation

and is valid against third parties generally.

State means a State of the United States, Guam, Puerto Rico, the

Virgin Islands, American Samoa, the District of Columbia, the Northern

Mariana Islands, and any other territory or possession of the United

States.

Titled vessel means a vessel titled in accordance with the laws of

a State.

Titling authority means a State whose vessel titling system has

been certified by the Coast Guard as complying with the guidelines for

State vessel titling systems listed in this part. Titling authorities

participating in VIS are listed in Appendix B of this part.

Vessel includes every description of watercraft other than a

seaplane on the water, used or capable of being used, as a means of

transportation on water.

Sec. 187.5 Vessel identifier.

(a) The vessel identifier is the hull identification number (HIN)

assigned to an undocumented vessel in accordance with subpart C of part

181 of this subchapter. The vessel identifier for a documented vessel

is the official number assigned by the Coast Guard in accordance with

46 U.S.C. chapter 121.

(b) If the vessel does not have an HIN, the vessel identifier for

vessels subject to the numbering requirements of parts 173 and 174 of

this subchapter is the number issued on a certificate of number by the

issuing authority for the State in which the vessel is principally

operated.

(c) If a vessel subject to the numbering requirements of parts 173

and 174 of this subchapter is transferred to a new owner, or the vessel

is required to be numbered in a new State of principal operation, or

application for a title is made, a hull identification number meeting

the format requirements of Sec. 181.25 shall be assigned by the issuing

authority for the State in which the vessel is principally operated in

accordance with the State's established procedures if the vessel does

not have a valid HIN.

Sec. 187.7 Participation procedures.

(a) To participate in VIS, a State official within the department

must submit a written request to the Commandant (G-NAB) and certify

that the State will comply with the VIS participation requirements in

subpart C of this part.

(b) Appendix A of this part lists those States that have elected to

participate in VIS and comply with the participation requirements

prescribed in this part. A State will remain listed in Appendix A of

this part as long as it continues to comply with the participation

requirements in subpart C of this part.

Sec. 187.9 Procedures for certification of compliance with guidelines

for State vessel titling systems.

(a) Under 46 U.S.C. 31322(d), a mortgage or instrument perfected

under State law for a vessel titled under the law of a participating

State is deemed to be a preferred mortgage if the State has been

certified as complying with the guidelines in subpart D of this part.

(b) To obtain certification of compliance with the State titling

guidelines, a State official within the department must submit a

written request along with a copy of the State's titling laws,

regulations and administrative procedures, to the Commandant (G-NAB),

and certify that the State will comply with the participation

requirements in subpart C of this part.

(c) The Commandant will review the material, and, if the State

complies with the guidelines provided in subpart D of this part,

certify compliance.

(d) Appendix B of this part indicates those States that participate

in VIS and, have been certified by the Commandant as complying with the

guidelines prescribed in subpart D of this part and the date of that

certification. A State [[Page 20317]] with a vessel titling system that

complies with the guidelines of subpart D of this part will remain

listed, in Appendix B of this part.

Subpart B--Information To Be Collected by Participating States

Sec. 187.101 Information to identify a vessel owner.

A participating State must collect the following information

regarding the ownership of vessels numbered or titled under the laws of

that State:

(a) Name of each owner.

(b) The address of the principal place of residence of at least one

individual owner, or the address of the principal place of business of

an owner that is not an individual, including zip code.

(c) Mailing address of at least one owner, if different from the

address required by paragraph (b) of this section.

(d) If the owner is an individual, the owner's social security

number, or, if that number is not available, the individual's birth

date and driver's license number or, if the individual does not have a

driver's license, the individual's birth date and other information to

identify that individual as prescribed by the State or titling

authority.

(e) If the owner is other than an individual, the owner's--

(1) Taxpayer identification number; or

(2) If the owner does not have a taxpayer identification number,

the social security number, or if the social security number is not

available, birth date and driver's license number, or if no driver's

license number is available, the birth date and other identifying

information prescribed by State regulation, of an individual who is a

corporate officer, general partner, or individual trustee of the owner

and who signed the application for numbering the vessel.

Sec. 187.103 Information to identify a vessel.

A participating State must collect the following information

regarding the identity of a vessel numbered or titled under the laws of

that State:

(a) Make of vessel or name of vessel builder, if known.

(b) Manufacture year, year vessel built, or vessel model year, if

known.

(c) Vessel identifier required by Sec. 187.5 of this part.

(d) Official number assigned by U.S. Coast Guard or predecessor

agency, if applicable.

(e) Number currently assigned by the State issuing authority, as

printed on the certificate of number.

(f) Length of vessel.

(g) Type of vessel (open, cabin, house, or other).

(h) Whether the hull is wood, fiberglass, metal, plastic, or other.

(i) Whether the propulsion is inboard, outboard, inboard-outdrive,

sail, or other.

(j) Whether the fuel is gasoline, diesel, or other.

(k) Whether the vessel is operated for pleasure, rent or lease,

dealer or manufacturer demonstration, commercial passenger carrying,

commercial fishing, or other commercial operation.

(l) Number previously issued to the vessel by an issuing authority.

(m) Expiration date of certificate of number issued by the State

vessel numbering authority.

Sec. 187.105 Information on titled vessels.

(a) In addition to the information required under Sec. 187.103, a

participating State must collect the following information on a vessel

titled in that State:

(1) Title number issued by the State.

(2) Where evidence of a lien or other security interest may be

found against a vessel titled in that State.

(3) Name(s) of the lienholder(s).

(4) Address of principal place of residence of each individual

lienholder and the address of the principal place of business of each

lienholder that is not an individual, including zip code.

(b) Participating States may collect the following information on

titled vessels:

(1) Mailing address of any lienholder that is different from the

addresses required by paragraph (a)(4) of this section.

(2) Telephone number of each lienholder.

Sec. 187.107 Information to assist law enforcement officials.

(a) Participating States must make the following information

available to assist law enforcement officials:

(1) Notice that a vessel, identified by its vessel identifier, has

been reported lost, stolen, destroyed, abandoned, or recovered.

(2) Name and telephone number of organization to contact for

additional information or to notify regarding the recovery of a vessel.

(b) Participating States may make the following information

available to assist law enforcement officials:

(1) Reported date that the vessel was stolen.

(2) Reported location of vessel when stolen.

(3) Vessel insurance policy number, if insured.

(4) Name of the insurance company.

(5) Address of insurance company, including zip code.

(6) Mailing address of the insurance company for notification, if

different from the address provided under paragraph (b)(5) of this

section.

(7) Telephone number of insurance company.

(8) Date that the vessel was recovered.

(9) Location of vessel when recovered.

(10) Name(s) and telephone number(s) of organization(s), in

addition to the one provided under paragraph (a) of this section,

public or private, to contact for additional information on sighting

and recovery of vessels.

(11) Request to be notified if vessel is sighted.

(12) Purpose of sighting notification request.

(13) Date and time when vessel last sighted.

(14) Location of vessel when last sighted.

(15) Organization to contact for additional information on

sighting.

Subpart C--Vessel Identification System Participation Requirements

Sec. 187.201 Participating State requirements.

A participating State must comply with the following requirements:

(a) Collect the required information listed in subpart B of this

part and provide that information to the vessel identification system

in the manner and form specified in the applicable Coast Guard-State

Cooperative Agreement.

(b) Obtain specific evidence of ownership, such as certificate of

origin or current certificate of title or number, to identify a

vessel's owner.

(c) Return any surrendered Certificate of Documentation to the

issuing Coast Guard Vessel Documentation Office.

(d) Retain previously issued certificate of number or title and

notify issuing authority by mail or electronic message.

(e) Retain information identifying the type of evidence used to

establish the accuracy of the information required to be made available

to VIS, and make it available to the Coast Guard upon request.

(f) Update the information required to be made available to VIS on

a vessel that has not been re-registered by labeling the vessel file

``inactive'' or, if notified that a vessel has been moved to a

nonparticipating State, by indicating the new State and notifying the

Coast Guard.

Sec. 187.203 Voluntary provisions for participating States.

A participating State may--

(a) Provide VIS with the optional information listed in subpart B

of this part; [[Page 20318]]

(b) Make updated information provided by the vessel owner,

government agency or lienholder, available to VIS regarding a vessel

that has been moved to a nonparticipating State; and

(c) Interact with nonparticipating States to make information

available to, or request information from, VIS concerning a vessel or

nationwide statistics.

Subpart D--Guidelines for State Vessel Titling Systems

Sec. 187.301 Eligibility for preferred mortgage status.

A State vessel titling system that meets the requirements of this

subpart may be certified by the Commandant under 46 U.S.C. 31322

(d)(1)(A), in accordance with the procedures of Sec. 187.9, as

complying with the guidelines for vessel titling systems for the

purpose of conveying preferred mortgage status on mortgages perfected

after the date of certification, covering the whole of a vessel titled

in that State, provided that the State also complies with the vessel

identification system participation requirements of Sec. 187.7 and

subpart C of this part.

Sec. 187.303 Definitions.

A State must define the terms, ``certificate of origin'',

``dealer'', ``department'' or ``division'', ``documented vessel'',

``issuing authority'', ``lienholder'', ``manufacturer'', ``owner'',

``person'', ``security interest'', ``titling authority'', and

``vessel'', substantially as those terms are defined in Sec. 187.3.

Sec. 187.305 Application for title.

(a) Except as provided in Sec. 187.307, a State must require

application for a title within a specified period of time, not to

exceed 60 days, after a vessel is first purchased, ownership is

transferred, or there is a change in vessel data listed on the

certificate of title.

(b) A State must require disclosure of the existence of

indebtedness covered by any security agreement pertaining to the vessel

in its titling application form.

(c) The title application must include an entry for identification

of the State or country in which the vessel was last numbered or

titled, if applicable.

(d) A State must require that the title application include a

signed certification that statements made are true and correct to the

best of the applicant's knowledge, information and belief, under

penalty of perjury.

Sec. 187.307 Dealer and manufacturer provisions.

A State must include the following provisions for dealers or

manufacturers, building, buying, acquiring, or transferring vessels, in

that State.

(a) Dealers must be required to either report acquisition of a used

numbered vessel for resale, or, apply for certificate of title if such

vessel is required to be titled.

(b) Dealers must be allowed to apply for a certificate of title for

a new vessel acquired for resale.

(c) Dealers and manufacturers must be required to provide to the

vessel owner a certificate of origin, or other document, at the time of

delivery of a new vessel to initiate the chain of ownership.

(d) Dealers and manufacturers must be required to maintain for at

least 3 years a record of any vessel bought, sold, exchanged, or

received for sale or exchange, and have such records open for

inspection by the State.

Sec. 187.309 Transfer of title.

Except for transfers by operation of law such as inheritance, order

in bankruptcy, replevin, default judgment or execution sale, a State

must require that to complete the sale, assignment or transfer of a

titled vessel, a manufacturer, dealer or individual, must deliver the

vessel's certificate of title to the new owner.

Sec. 187.311 Transfer by operation of law.

A State must require a new owner to apply for a certificate of

title within a specified period of time, not to exceed 60 days, if

ownership of a vessel is transferred by operation of law, such as

inheritance, order in bankruptcy, replevin, default judgment or

execution sale, and to include an original or certified copy of the

legal transfer document along with the application.

Sec. 187.313 Title of another State.

A State must provide for honoring a current and valid title issued

by another State, or a Certificate of Ownership issued by the Coast

Guard, as proof of ownership for transfer or sale of a vessel, and for

applying for certificates of number or title in a new State of

principal operation.

Sec. 187.315 Surrender of title for purposes of documentation.

A State must deem a title issued by that State as invalid when a

vessel owner surrenders it to the U.S. Coast Guard for vessel

documentation purposes. Upon receipt of a title from the U.S. Coast

Guard, a State must accept the returned title for administrative

processing and cancellation.

Sec. 187.317 Information on a certificate of title.

(a) A State must specify the following information on a certificate

of title:

(1) Current owner(s) name(s).

(2) The address of the principal place of residence of an

individual owner, and the address of the principal place of business of

an owner that is not an individual, including zip code.

(3) Date of title issuance.

(4) Vessel description, including the vessel identification number

required by Sec. 187.05 of this part, name of manufacturer or model,

year built or the model year, vessel length, vessel type, drive or

propulsion type, vessel use, hull material and fuel type.

(5) Each lienholder's name and address.

(6) Recording or perfection date of new liens and original

recording date of any liens outstanding.

(b) Space must be provided on the certificate of title form for

assignment of interests in the vessel, with a certification that

statements provided on the title assignment are true and correct to the

best of the owner's knowledge, under penalty of perjury.

Sec. 187.319 Duplicate title.

(a) The term ``DUPLICATE'' must be clearly and permanently marked

on the face of a duplicate certificate.

(b) A State must require the holder of an original title, whether

the owner or lienholder, to apply for a duplicate title within a

specified period of time after, or after the discovery of, the loss,

theft, mutilation, or destruction of an original certificate of title;

provide information concerning the original certificate and the

circumstances of its loss, theft, mutilation, or destruction; and

surrender to the department any recovered original title or remains.

Sec. 187.321 Hull identification number (HIN) provisions.

A State must--

(a) Assign an HIN and require that it be affixed to an undocumented

vessel that does not have an HIN at the time of registration or

application for title after transfer of ownership or change of State of

principal operation;

(b) Assign an HIN to an undocumented vessel without an HIN at time

of title application and record the HIN on the certificate of title;

and

(c) Prohibit removal or alteration of an HIN without authorization

from the Commandant. [[Page 20319]]

Sec. 187.323 Perfection of security interests.

(a) A State must provide that a security interest is not valid

under State law unless perfected under procedures specified by the

State. If a vessel is already subject to a security interest when it is

brought into a State, the validity of the security interest is to be

determined by the law of the jurisdiction where the vessel was titled

when the security interest attached. The State must specify at least

the following procedures.

(1) The procedures by which a security interest is perfected,

including a requirement for the delivery of an application for new or

amended certificate of title.

(2) The procedures by which the date of perfection is determined.

(b) The perfection provisions required to be established under

paragraphs (a) and (b) of this section must not apply to--

(1) A lien given by statute or rule of law to a supplier of

services or materials for the vessel;

(2) A lien given by statute to the United States, a State, or a

political subdivision thereof; or

(3) Any lien arising out of an attachment of a vessel.

Sec. 187.325 Assignments.

A State must specify whether a security interest in a vessel titled

under the State titling system may be assigned and the procedures for

perfecting assignments.

Sec. 187.327 Satisfaction of security interests.

A State must specify evidence and information that lienholders are

required to submit to the State regarding satisfaction of a security

interest, and establish procedures and time limits for its submission.

Sec. 187.329 Forms.

A State must prescribe and provide the application, certificate of

title, notice of security interests, and other forms needed to comply

with the titling system provisions.

Sec. 187.331 Retaining information.

A State must retain information identifying the evidence used to

establish the accuracy of the information required for vessel titling

purposes for 3 years and make the information available to the Coast

Guard on request.

Appendix A to Part 187--Participating Authorities

The following States comply with the requirements for participating

in VIS:

[No States currently comply with the requirements for participating

in VIS.]

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

The following States both comply with the requirements for

participating in VIS and have a titling system certified to be in

compliance with the guidelines for State vessel titling systems:

[No States currently have a certified titling system and

participate in VIS.]

Dated: April 17, 1995.

J.C. Card,

Rear Admiral, U.S. Coast Guard, Chief, Office of Marine Safety,

Security and Environmental Protection.

[FR Doc. 95-10067 Filed 4-24-95; 8:45 am]

BILLING CODE 4910-14-P