SB266 By Senator Blackwell RFD Transportation and Energy Rd 1 17-FEB-16

SYNOPSIS: This bill would adopt the Uniform Certificate of Title for Vessels Act.

This bill would allow the owner of a vessel to voluntarily obtain a certificate of title on the vessel and would provide a procedure for the owner of a vessel to make application with the Alabama State Law Enforcement Agency.

This bill would specify the process for perfecting a security interest on a vessel and provide for the maintenance of records and files regarding the security agreement.

A BILL TO BE ENTITLED AN ACT

To adopt the Uniform Certificate of Title for Vessels Act, to provide for the issuance by the Alabama State Law Enforcement Agency of certificates of title on vessels; to allow owners of vessels to voluntarily obtain a certificate of title; to provide for the application process; to provide for the issuance of certificates of title; and to provide the perfecting of a security interest on a vessel and to provide for the maintenance of records and files regarding security interests.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. SHORT TITLE. This act may be cited as the Uniform Certificate of Title for Vessels Act.

Section 2. DEFINITIONS.

(a) In this act:

(1) "Barge" means a vessel that is not selfpropelled or fitted for propulsion by sail, paddle, oar, or similar device.

(2) "Builder's certificate" means a certificate of the facts of build of a vessel described in 46 C.F.R. Section 67.99, as amended.

(3) "Buyer" means a person that buys or contracts to buy a vessel.

(4) "Cancel," with respect to a certificate of title, means to make the certificate ineffective.

(5) "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. The term includes a manufacturer's certificate or statement of origin and an importer's certificate or statement of origin. The term does not include a builder's certificate.

(6) "Certificate of title" means a record, created by the office under this act or by a governmental agency of another jurisdiction under the law of that jurisdiction that is designated as a certificate of title by the office or agency and is evidence of ownership of a vessel.

(7) "Dealer" means a person, including a manufacturer, in the business of selling vessels.

(8) "Documented vessel" means a vessel covered by a certificate of documentation issued pursuant to 46 U.S.C. Section 12105, as amended. The term does not include a foreign-documented vessel.

(9) "Electronic" means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.

(10) "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.

(11) "Foreign-documented vessel" means a vessel the ownership of which is recorded in a registry maintained by a country other than the United States which identifies each person that has an ownership interest in a vessel and includes a unique alphanumeric designation for the vessel.

(12) "Good faith" means honesty in fact in the conduct or transaction concerned.

(13) "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.

(14) "Hull identification number" means the alphanumeric designation assigned to a vessel pursuant to 33 C.F.R. Part 181, as amended.

(15) "Lien creditor," with respect to a vessel, means:

(A) a creditor that has acquired a lien on the vessel by attachment, levy, or the like;

(B) an assignee for benefit of creditors from the time of assignment;

(C) a trustee in bankruptcy from the date of the filing of the petition;

(D) a receiver in equity from the time of appointment; or

(E) a person with a lien arising under Section 35-11-60, Code of Alabama 1975.

(16) "Office" means the Alabama State Law Enforcement Agency.

(17) "Owner" means a person that has legal title to a vessel.

(18) "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.

(19) "Person" means an individual, corporation, business trust, estate, trust, statutory trust, partnership, limited liability company, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity.

(20) "Purchase" means to take by sale, lease, mortgage, pledge, consensual lien, security interest, gift, or any other voluntary transaction that creates an interest in a vessel.

(21) "Purchaser" means a person that takes by purchase.

(22) "Record" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

(23) "Secured party," with respect to a vessel, means a person:

(A) 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;

(B) that is a consignor under Title 7, Article 9A of the Code of Alabama 1975; or

(C) that holds a security interest arising under Section 7-2-401, 7-2-505, 7-2-711(3), or 7-2A-508(5) of the Code of Alabama 1975.

(24) "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.

(25) "Security interest" means an interest in a vessel which secures payment or performance of an obligation created by contract or pursuant to Article 9A of Title 7 of the Code Alabama 1975, or this act, or if the interest is created by contract or arises under Section 7-2-401, 7-2-505, 7-2-711(3), or 7-2A-508(5) of the Code of Alabama 1975. The term includes any interest of a consignor in a vessel in a transaction that is subject to Title 7, Article 9A of the Code of Alabama 1975. The term does not include the special property interest of a buyer of a vessel on identification of that vessel to a contract for sale under Section 7-2-501 of the Code of Alabama 1975, but a buyer also may acquire a security interest by complying with Title 7, Article 9A of the Code of Alabama 1975. Except as otherwise provided in Section 7-2-505, Code of Alabama 1975, the right of a seller or lessor of a vessel under Section 7, Article 2 or 2A of the Code of Alabama 1975 to retain or acquire possession of the vessel is not a security interest, but a seller or lessor also may acquire a security interest by complying with Title 7, Article 9A of the Code of Alabama 1975. The retention or reservation of title by a seller of a vessel notwithstanding shipment or delivery to the buyer under Section 7-2-401 of the Code of Alabama 1975 is limited in effect to a reservation of a security interest. Whether a transaction in the form of a lease creates a security interest is determined by Section 7-1-203 of the Code of Alabama 1975.

(26) "Sign" means, with present intent to authenticate or adopt a record, to:

(A) make or adopt a tangible symbol; or

(B) attach to or logically associate with the record an electronic symbol, sound, or process.

(27) "State" means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.

(28) "State of principal use" 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.

(29) "Title brand" means a designation of previous damage, use, or condition that must be indicated on a certificate of title.

(30) "Transfer of ownership" means a voluntary or involuntary conveyance of an interest in a vessel.

(31) "Vessel" means any watercraft used or capable of being used as a means of transportation on water, except:

(A) a seaplane;

(B) an amphibious vehicle for which a certificate of title is issued pursuant to Chapter 8 of Title 32 of the Code of Alabama 1975 or a similar statute of another state;

(C) watercraft less than 16 feet in length and not capable of being motorized;

(D) 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;

(E) a stationary floating structure that:

(i) does not have and is not designed to have a mode of propulsion of its own;

(ii) is dependent for utilities upon a continuous utility hookup to a source originating on shore; and

(iii) has a permanent, continuous hookup to a shoreside sewage system;

(F) watercraft owned by the United States, a state, or a foreign government or a political subdivision of any of them; and

(G) watercraft used solely as a lifeboat on another watercraft.

(32) "Vessel number" means the alphanumeric designation for a vessel issued pursuant to 46 U.S.C. Section 12301, as amended.

(33) "Written certificate of title" means a certificate of title consisting of information inscribed on a tangible medium.

(b) The following definitions and terms also apply to this act:

(1) "Agreement," Section 7-1-201(b)(3) of the Code of Alabama 1975.

(2) "Buyer in ordinary course of business," Section 7-1-201(b)(9) of the Code of Alabama 1975.

(3) "Conspicuous," Section 7-1-201(b)(10) of the Code of Alabama 1975.

(4) "Consumer goods," Section 7-9A-102(a)(23) of the Code of Alabama 1975.

(5) "Debtor," Section 7-9A-102(a)(28) of the Code of Alabama 1975.

(6) "Knowledge," Section 7-1-202 of the Code of Alabama 1975.

(7) "Lease," Section 7-2A-103(1)(j) of the Code of Alabama 1975.

(8) "Lessor," Section 7-2A-103(1)(p) of the Code of Alabama 1975.

(9) "Notice," Section 7-1-202 of the Code of Alabama 1975.

(10) "Representative," Section 7-1-201(b)(33) of the Code of Alabama 1975.

(11) "Sale," Section 7-2-106(1) of the Code of Alabama 1975.

(12) "Security agreement," Section 7-9A-102(a)(74) of the Code of Alabama 1975.

(13) "Seller," Section 7-2-103(1)(d) of the Code of Alabama 1975.

(14) "Send," Section 7-1-201(b)(36) of the Code of Alabama 1975.

(15) "Value," Section 7-1-204 of the Code of Alabama 1975.

(c) The definitions in subsections (a) and (b) do not apply to any state or federal law governing licensing, numbering, or registration if the same term is used in that law.

Section 3. APPLICABILITY. Subject to Section 29, this act 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 January 1, 2017.

Section 4. SUPPLEMENTAL PRINCIPLES OF LAW AND EQUITY. Unless displaced by a provision of this act, the principles of law and equity supplement its provisions.

Section 5. LAW GOVERNING VESSEL COVERED BY CERTIFICATE OF TITLE.

(a) The law of the jurisdiction 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 jurisdiction and the vessel or its owner.

(b) A vessel becomes covered by a certificate of title when an application for the certificate is delivered to the office in accordance with this act or to the governmental agency that creates a certificate in another jurisdiction in accordance with the law of that jurisdiction.

Section 6. CERTIFICATE OF TITLE.

(a) Except as otherwise provided in subsections (b) and (c), the owner of a vessel for which this state is the state of principal use may deliver to the office an application for a certificate of title for the vessel not later than 20 days after the later of:

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

(2) the date this state becomes the state of principal use.

(b) An application for a certificate of title is voluntary and is not required for any vessel.

(c) The office may not issue, transfer, or renew a certificate of number for a vessel issued pursuant to the requirements of 46 U.S.C. Section 12301, as amended, unless the office has created a certificate of title for the vessel or an application for a certificate of title for the vessel has been delivered to the office.

Section 7. APPLICATION FOR CERTIFICATE OF TITLE.

(a) Except as otherwise provided in Sections 10, 15, 19, 20, 21, and 22, only an owner may request 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 for the vessel or, if none, an application for the issuance of a hull identification number 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:

(A) the official number for the vessel, if any, assigned by the United States Coast Guard;

(B) the name of the manufacturer, builder, or maker;

(C) the model year or, if none, the year in which the manufacture or build of the vessel was completed;

(D) the overall length of the vessel;

(E) the vessel type;

(F) the hull material;

(G) the propulsion type;

(H) the engine drive type, if any; and

(I) the fuel type, 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 foreign-documented 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 previously was 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 subsection (b), 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 Section 19, 20, 21, or 22, an application for a certificate of title must be accompanied by:

(1) a certificate of title signed by the owner shown on the certificate and which:

(A) identifies the applicant as the owner of the vessel; or

(B) is accompanied by a record that identifies the applicant as the owner; or

(2) if there is no certificate of title:

(A) if the vessel was a documented vessel, a record issued by the United States Coast Guard which shows the vessel is no longer a documented vessel and identifies the applicant as the owner;

(B) if the vessel was a foreign-documented vessel, a record issued by the foreign country which shows the vessel is no longer a foreign-documented vessel and identifies the applicant as the owner; or

(C) 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.

(e) A record submitted in connection with an application is part of the application. The office shall maintain the record in its files.

(f) The office may require that an application for a certificate of title be accompanied by payment or evidence of taxes payable by the applicant under law of this state other than this act in connection with the application or the acquisition or use of the vessel. If a provision of this act places a duty on the office on delivery to it of an application for a certificate of title and the office requires that the application be accompanied by payment or evidence of payment of taxes payable by the applicant under law of this state other than this act, the office is not required to carry out its duty in the absence of such payment or evidence of payment.

Section 8. CREATION AND CANCELLATION OF CERTIFICATE OF TITLE.

(a) Unless an application for a certificate of title is rejected under subsection (c) or (d), the office shall create a certificate for the vessel in accordance with subsection (b) not later than 20 days after delivery to it of an application that complies with Section 7.

(b) If the office creates electronic certificates of title, the office shall 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 subsection (d), the office may reject an application for a certificate of title only if:

(1) the application does not comply with Section 7;

(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 the law of this state other than this act.

(d) The office shall 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 subsection (c);

(2) is required to cancel the certificate under another provision of this act; or

(3) receives satisfactory evidence that the vessel is a documented vessel or a foreign-documented vessel.

(f) The office shall provide an opportunity for an administrative review at which the owner and any other interested party may present evidence in support of or opposition to cancellation of a certificate of title. The office shall serve all owners and secured parties indicated in the files of the office with notice of the opportunity for an administrative review. Service must be made personally or by mail through the United States Postal Service, properly addressed, postage paid, return receipt requested. Service by mail is complete on deposit with the United States Postal Service. The office by rule may authorize service by electronic transmission if a copy is sent on the same day by first-class mail or by a commercial delivery company. If not later than 30 days after the notice was served, the office receives a request for an administrative review from an interested party, the office shall hold the review not later than 20 days after receiving the request.

Section 9. 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;

(5) the information listed in Section 7(b)(6);

(6) except as otherwise provided in Section 15(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 act 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 previously was registered or titled in a foreign country, the office shall 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 for making an unsworn falsification to authorities pursuant to Section 13A-10-109 of the Code of Alabama 1975, as amended, 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.

(g) A written certificate of title must contain a form for a secured party to indicate release of its security interest.

Section 10. TITLE BRAND.

(a) Unless subsection (c) 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 shall:

(1) deliver to the office an application for a new certificate that complies with Section 7 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 subsection (a)(1) or the certificate of title under subsection (a)(2), the office shall 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 shall deliver to the office an application for a new certificate that complies with Section 6 and includes the title brand designation "Hull Damaged". Not later than 20 days after delivery of the application to the office, the office shall create a new certificate that indicates that the vessel is branded "Hull Damaged".

(d) An owner of record that fails to comply with subsection (a), a person that solicits or colludes in a failure by an owner of record to comply with subsection (a), or an insurer that fails to comply with subsection (c) is subject to an administrative penalty not to exceed one thousand dollars ($1,000).

Section 11. MAINTENANCE OF AND ACCESS TO FILES.

(a) For each record relating to a certificate of title submitted to the office, the office shall:

(1) ascertain or assign the hull identification number for the vessel;

(2) maintain the hull identification number and all the information submitted with the application pursuant to Section 7(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 subsection (e); and

(4) index the files of the office as required by subsection (b).

(b) The office shall maintain in its files the information contained in all certificates of title created under this act. The information in the files of the office must be searchable by the hull identification number of the vessel, the vessel number, the name of the owner of record, and any other method used by the office.

(c) The office shall 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 shall 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 the law of this state other than this act, the information required under Section 9 is a public record. The information provided under Section 7(b)(3) is not a public record.

Section 12. ACTION REQUIRED ON CREATION OF CERTIFICATE OF TITLE.

(a) On creation of a written certificate of title, the office promptly shall 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 promptly shall 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 shall 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 shall destroy or otherwise cancel the written certificate for the vessel which 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 shall indicate on the face of the certificate that it has been canceled.

Section 13. 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.

Section 14. 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 act does not prohibit enforcement under law of this state other than this act 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 security interest, statutory lien, or common-law lien on a certificate does not invalidate the security interest or lien.

Section 15. PERFECTION OF SECURITY INTEREST.

(a) Except as otherwise provided in this section or Section 29, 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 Section 7. The security interest is perfected on the later of delivery to the office of the application or attachment of the security interest under Section 7-9A-203 of the Code of Alabama 1975.

(b) If the interest of a person named as owner 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 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 subsection (c) is perfected on the later of delivery to the office of the application or attachment of the security interest under Section 7-9A-203 of the Code of Alabama 1975.

(e) On delivery of an application that complies with subsection (c), the office shall create a new certificate of title pursuant to Section 8 and deliver the new certificate or a record evidencing an electronic certificate pursuant to Section 12(a). The office shall 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. A purchaser of a vessel subject to a security interest which obtains a release from the secured party indicated in the files of the office or on the certificate 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 a dealer;

(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 subsection 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 46 U.S.C. Section 31321, the security interest is and remains perfected until the earlier of four months after cancellation of the certificate or the time the security interest becomes perfected under this act.

(i) A security interest in a vessel arising under Section 7-2-401, 7-2-505, 7-2-711(3), or 7-2A-508(5) of the Code of Alabama 1975 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 subsection (a) or (c).

(j) A security interest in a vessel as proceeds of other collateral is perfected to the extent provided in Section 7-9A-315 of the Code of Alabama 1975.

(k) A security interest in a vessel perfected under the law of another jurisdiction is perfected to the extent provided in Section 7-9A-316(d) of the Code of Alabama 1975.

Section 16. TERMINATION STATEMENT.

(a) Except as provided in subsection (b), a secured party indicated in the files of the office as having a security interest in a vessel shall deliver a termination statement to the office and, on request of the owner of record in a signed record, shall deliver a copy of the termination statement to the owner of record, 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.

(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; or

(b) If a written certificate of title has been created and delivered to a secured party, the secured party may comply with the requirements of subsection (a) by signing the release form on the certificate and delivering the certificate to the office or to the owner of record no later than the date required by subsection (a). On request of the owner of record, a secured party that delivers a written certificate with a signed release form to the office shall, not later than the date required by subsection (a), deliver a copy of the certificate showing the signed release form to the owner of record. If the certificate is lost, stolen, mutilated, destroyed, or is otherwise unavailable or illegible, the secured party shall deliver a termination statement to the office as required by subsection (a) and shall deliver to the office with the statement an application for a replacement certificate meeting the requirements of Section 22.

(c) On delivery to the office of a termination statement under subsection (a) or (b), or on delivery of a written certificate of title with a signed release form to the office or the owner of record under subsection (b), any security interest to which the statement or certificate relates ceases to be perfected. If the security interest to which the statement relates was indicated on the certificate, the office shall create a new certificate and deliver the new certificate or a record evidencing an electronic certificate pursuant to Section 12(a). The office shall maintain in its files the date and time of delivery to the office of a termination statement or written certificate with a signed release form.

(d) A secured party that fails to comply with this section is liable to the owner of record for a penalty not to exceed the amount of five hundred dollars ($500). Nothing in this subsection precludes the owner of record or another owner from recovering damages under law of this state other than this act.

Section 17. TRANSFER OF OWNERSHIP.

(a) On voluntary transfer of an ownership interest in a vessel already 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 shall 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 subdivision. A secured party does not have a duty to facilitate the transferor's compliance with this subdivision if the proposed transfer is prohibited by the security agreement.

(2) If the certificate of title is an electronic certificate of title, the transferor shall 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 subdivision (1) or (2).

(b) The creation of a certificate of title identifying the transferee as owner of record satisfies subsection (a).

(c) A failure to comply with subsection (a) 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 Section 18, 19, 23(a), or 24, a transfer of ownership without compliance with subsection (a) is not effective against another person claiming an interest in the vessel.

(d) A transferor that complies with subsection (a) is not liable solely in the capacity as owner of the vessel for an event occurring after the transfer, regardless of whether the transferee applies for a new certificate of title.

Section 18. EFFECT OF MISSING OR INCORRECT INFORMATION.

Except as otherwise provided in Section 7-9A-337 of the Code of Alabama 1975, a certificate of title or other record required or authorized by this act is effective even if it contains incorrect information or does not contain required information.

Section 19. 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) that the secured party of record has exercised post-default remedies with respect to the vessel;

(3) that, by reason of the exercise, a transferee has acquired the ownership interest of an owner;

(4) the name of the owner whose ownership interest has been acquired by the transferee;

(5) the name and last-known mailing address of the owner of record and the secured party of record;

(5) the name of the transferee;

(6) other information required by Section 7(b); and

(7) one of the following:

(A) that the certificate of title is an electronic certificate;

(B) that the secured party does not have possession of the written certificate of title created in the name of the owner of record; or

(C) that the secured party of record is delivering the written certificate of title created in the name of the owner of record to the office, with the release form signed, with the transfer statement.

(b) Unless the office rejects a secured party's transfer statement for a reason stated in Section 8(c), not later than 20 days after delivery to the office of the statement the office shall:

(1) accept the statement;

(2) amend its files to reflect the transfer; and

(3) if the name of the owner whose ownership interest has been transferred is indicated on the certificate of title:

(A) cancel the certificate;

(B) create a new certificate substituting the name of the transferee for the name of the owner; and

(C) deliver the new certificate or a record evidencing an electronic certificate pursuant to Section 12(a).

(c) An application under subsection (a) or the creation of a certificate of title under subsection (b) is not by itself a disposition of the vessel and does not by itself relieve the secured party of its duties under Title 7, Article 9A of the Code of Alabama 1975.

Section 20. 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:

(A) because of death, divorce or other family law proceeding, merger, consolidation, dissolution, or bankruptcy;

(B) through the exercise of the rights of a lien creditor or a person having a lien created by statute or rule of law; or

(C) through other legal process.

(2) "Transfer-by-law statement" means a record signed by a transferee stating that by operation of law the transferee has acquired or has the right to acquire an ownership interest in a vessel.

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

(1) the name and last known mailing address of the owner of record and the transferee and the other information required by Section 7(b);

(2) documentation sufficient to establish the transferee's ownership interest or right to acquire the ownership interest;

(3) a statement that:

(A) the certificate of title is an electronic certificate of title;

(B) the transferee does not have possession of the written certificate of title created in the name of the owner of record; or

(C) the transferee is delivering the written certificate to the office with the transfer-by-law statement; and

(4) except for a transfer described in subsection (a)(1)(A), evidence that notification of the transfer and the intent to file the transfer-by-law statement has been sent to all persons indicated in the files of the office as having an interest, including a security interest, in the vessel.

(c) Unless the office rejects a transfer-by-law statement for a reason stated in Section 8(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 taxes payable under the law of this state other than this act in connection with the statement or with the acquisition or use of the vessel, the office shall:

(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:

(A) cancel the certificate even if the certificate has not been delivered to the office;

(B) create a new certificate indicating the transferee as owner;

(C) indicate on the new certificate any security interest indicated on the canceled certificate, unless a court order provides otherwise; and

(D) 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 under Title 7, Article 9, Part 6 of the Code of Alabama 1975.

Section 21. APPLICATION FOR TRANSFER OF OWNERSHIP OR TERMINATION OF SECURITY INTEREST WITHOUT CERTIFICATE OF TITLE.

(a) Except as otherwise provided in Section 19 or 20, 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 Sections 7 and 8 are met;

(2) the applicant provides an affidavit stating facts showing 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 subsection (a) 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 one year after creation of the certificate, on request in a form and manner required by the office, the office shall remove the indication from the certificate.

(c) Before the office creates a certificate of title under subsection (a), the office may require the applicant to post a bond. The bond may not exceed twice the value of the vessel as determined by the office. The bond must be in form, amount, and term required by the office and provide for indemnification of any owner, purchaser, or other claimant for any expense, loss, delay, or damage, including reasonable attorney's fees and costs, but not including incidental or consequential damages, resulting from creation or amendment of the certificate.

Section 22. 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 Section 7. The application must include the existing certificate unless the certificate is lost, stolen, mutilated, destroyed, or otherwise unavailable.

(c) A replacement certificate of title created by the office must comply with Section 9 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 promptly shall destroy the original certificate of title.

Section 23. RIGHTS OF PURCHASER OTHER THAN SECURED PARTY.

(a) A buyer in ordinary course of business has the protections afforded by Sections 7-2-403(2) and 7-9A-320(a) of the Code of Alabama 1975 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 Sections 17 and 24, the rights, with respect to a vessel, of a purchaser that is not a buyer in ordinary course of business are governed by Title 7 of the Code of Alabama 1975.

Section 24. RIGHTS OF SECURED PARTY.

(a) Subject to subsection (b), 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 Title 7 of the Code of Alabama 1975. For purposes of the application of the provisions of Title 7 of the Code of Alabama 1975, lien creditor has the meaning provided by this act.

(b) If, while a security interest in a vessel is perfected by any method under this act, 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 Section 15 after creation of the certificate and without the conflicting secured party's knowledge of the security interest.

Section 25. DUTIES AND OPERATION OF OFFICE.

(a) The office shall 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 shall 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 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 shall send to the person an acknowledgment showing the hull identification number 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 hull identification number and be delivered by means authorized by the office.

(d) The office shall send or otherwise make available in a record the following information to any person that requests it:

(1) whether the files of the office indicate, as of a date and time specified by the office, but not a date earlier than three days before the office received the request, any certificate of title, security interest, termination statement, or title brand that relates to a vessel:

(A) identified by a hull identification number designated in the request;

(B) identified by a vessel number designated in the request; or

(C) owned by a person designated in the request;

(2) with respect to the vessel:

(A) the name and address of any owner as indicated in the files of the office or on the certificate of title;

(B) 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

(C) a copy of any termination statement indicated in the files of the office and the effective date of the termination statement; and

(3) with respect to the vessel, a copy of any certificate of origin, secured party transfer statement, transfer-by-law statement under Section 20, 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 as determined by the office. On request, the office shall send the requested information in a record that is self-authenticating under Alabama Rule of Evidence 902(1).

Section 26. UNIFORMITY OF APPLICATION AND CONSTRUCTION. In applying and construing this uniform act, consideration must be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it.

Section 27. RELATION TO ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT.

This act modifies, limits, and supersedes the federal Electronic Signatures in Global and National Commerce Act, 15 U.S.C. Section 7001, et seq., but does not modify, limit, or supersede Section 101(c) of that act, 15 U.S.C. Section 7001(c), or authorize electronic delivery of any of the notices described in Section 103(b) of that act, 15 U.S.C. Section 7003(b).

Section 28. EFFECTIVE DATE; TRANSITION RULES; SAVINGS CLAUSE.

(a) This act takes effect on January 1, 2017.

(b) Except as provided in subsection (c), this act applies to any vessel as defined in Section 2 (a)(2) for which this state is the state of principal use on or after January 1, 2017.

(c) The owner of a vessel may voluntarily elect for the provisions of this act to apply to any vessel that has never been titled.

(d) The owner of a vessel may voluntarily apply for a certificate of title as provided in Section 6. If the owner of a vessel applies for a certificate of title, the provisions of this act apply to the vessel for all purposes when the application for a certificate of title is delivered to the office and thereafter.

(e) Notwithstanding any provision of this act to the contrary, the rights, duties, and interests flowing from a transaction, certificate of title, security interest, or record relating to a vessel which was validly entered into or created before the effective date of this act and would be subject to this act if it had been entered into or created on or after the effective date of this act, shall remain valid on and after the effective date of this act.

(f) This act does not affect an action or proceeding commenced before the effective date of this act.

(g) Except as otherwise provided in subsection (i), a security interest in a vessel that is enforceable immediately before the effective date of this act and at that time had priority over the rights of a person that became a lien creditor, is a perfected security interest under this act.

(h) A security interest in a vessel perfected immediately before January 1, 2017, remains perfected until the time perfection would have ceased under the law under which the security interest was perfected. A security interest in a vessel perfected on or after January 1, 2017, remains perfected for five years.

(i) This act does not affect the priority of a security interest in a vessel if, immediately before the effective date of this act, the security interest is enforceable and perfected, and that priority is established.

Section 29. This act shall become effective on January 1, 2017.

Vessels

Certificate of Title

Security Interest

Law Enforcement Agencies