Presenter: Alfonso Campos

Commission Agenda Item No. 17
Action
Vessel Regulations - Authorized/Mandated by Legislation (H.B. 3764)
Use of Inventory Vessels for Test, Show or Demonstration Purposes
Fee for Electronic Vessel Registration Renewal
Fee for Original and Duplicate Validation Cards
August 23, 2007

I. Executive Summary: This item presents proposed new rules implementing the provisions of House Bill 3764, which authorized the department to create exceptions to the current statutory provisions governing the show, test, and demonstration of inventory vessels.

II. Discussion: House Bill 3764, enacted by the 80th Texas Legislature, authorized the Commission to adopt rules relating to the use of inventory vessels by licensed marine dealers, distributors, or manufacturers. Prior to the passage of H.B. 3764, marine dealers, distributors, and manufacturers were permitted to show, test, or demonstrate an inventory vessel under a dealer or manufacturer license, provided the show, test, or demonstration did not involve recreational use or participation in contests or events. Under the provisions of H.B. 3764, the Commission is authorized to promulgate rules allowing the use of inventory vessels by dealers, distributors, and manufacturers to show, test, or demonstrate on a limited and temporary basis for recreation purposes and in contests or events. To accomplish that, the proposed rules create a validation card and decal that must be displayed on any inventory vessel used by a dealer, distributor, or manufacturer to show, test, or demonstrate by means of recreational use or participation in a contest or event. The proposed rules also implement a fee for the validation card and decal. TPWD staff worked closely with the Boating Trades of Texas Association to develop rules that work efficiently and effectively for both the Department and the boating industry. The proposed rules were published in the July 20, 2007, issue of the Texas Register (32 TexReg 4523, 4524). Staff will provide a summary of public comment at the time of the meeting.

III. Recommendation: The staff recommends the Texas Parks and Wildlife Commission adopt the following motion:

"The Texas Parks and Wildlife Commission adopts new §53.18, concerning Other Fees, and new §55.130, concerning Show, Test, and Demonstration of Vessels, with changes as necessary to the proposed text as published in the July 20, 2007 issue of the Texas Register (32 TexReg 4523, 4524)."

Attachments – 2

  1. Exhibit A – Show, Test, and Demonstration of Unregistered Vessels Proposal Preamble
  2. Exhibit B – Show, Test, and Demonstration of Untitled Vessels - Fees and Electronic Vessel Registration Renewal - Fees Proposal Preamble

Commission Agenda Item No. 17
Exhibit A

Show, Test, and Demonstration of Unregistered Vessels
Proposal Preamble

1. Introduction.

The Texas Parks and Wildlife Department proposes new §55.130, concerning Show, Demonstration, or Test of Vessel.

The proposed new rule would allow the limited temporary use of non-registered vessels by dealers, distributors, and manufacturers for recreational purposes or for participation in contests or events. House Bill 3764, enacted by the 80th Texas Legislature, amended Parks and Wildlife Code, Chapter 31, to allow the Texas Parks and Wildlife Commission to establish rules concerning the issuance and price of validation cards permitting the limited and temporary use of vessels for recreational purposes or participation in contests or events. Prior to the passage of House Bill 3764, a dealer, distributor, or manufacturer of vessels was able to show, demonstrate, or test a vessel without securing a certificate of number for the vessel, but the showing, testing, or demonstration could not involve the use of the vessel for recreational purposes or for participation in a contest or event.

Proposed new §55.130(a) would restate the statutory provision allowing the show, test, or demonstration of a vessel by a licensed dealer, distributor, or manufacturer.

Proposed new §55.130(b) would prohibit the use of a dealer, distributor, or manufacturer license to show, test, or demonstrate a vessel for recreational purposes or for participation in a contest or event except as provided in the subchapter. The provision is necessary in order to delineate the circumstances under which a dealer, distributor, or manufacturer may show, test, or demonstrate a vessel for recreational purposes or for participation in a contest or event.

Proposed new §55.130(c) would allow a dealer, distributor, or manufacturer to use an unregistered vessel for recreational purposes or for participation in a contest or event, provided the licensee has purchased a validation card and decal from the department, displays them in the prescribed manner, and does not use a card and decal for more than six consecutive days or more than 12 days in any calendar month. The provision is necessary to allow for the “limited and temporary use of vessels for recreational purposes or participation in contests or events” as authorized under the terms of H.B. 3764. The department considered that “limited and temporary,” in the absence of a statutory definition, must be understood in the context of preventing the full-time, permanent use of an unregistered vessel for recreational purposes or for participation in contests or events. The department then considered that the most likely show, test, or demonstration uses of vessels for recreational purposes or for participation in a contest or events would be for fishing tournaments, “poker runs,” water-skiing competitions, and similar events that typically do not last longer than a holiday weekend. The department concluded that the six-consecutive-day limit, coupled with a limit on the maximum number of days per month, is sufficient to allow for thorough showing, testing, or demonstration of a vessel for a potential buyer, while still satisfying the legislative requirement for “limited and temporary” character.

Proposed new §55.130(d) would require that a validation card be made available upon the request of any peace officer, marine safety enforcement officer, or department employee acting within the scope of official duties. The provision is necessary to provide a method for enforcement and administrative personnel to quickly determine if a person operating an unregistered vessel is in fact authorized to do so.

Proposed new subsection (e) would provide that a validation card and decal be included at no additional cost to the purchaser of a dealer, distributor, or manufacturer license, and that additional cards could be purchased from the department. The proposed new section also provides that decals would not be available separately. The provision is necessary to provide a mechanism for dealers, distributors, and manufacturers to show, test, and demonstrate multiple vessels simultaneously. However, because card/decal units are uniquely numbered and the decals are pre-printed, there is no way to replace damaged, defaced, or destroyed decals; thus, if a decal needs to be replaced, the licensee would have to purchase a card/decal unit.

Proposed new §55.130(f) would require licensees to maintain a daily log accounting for all usage of validation decals and cards under a license. The provision is necessary because the department must be able to determine, if necessary, that the licensee has complied with the maximum use provisions of no more than six consecutive days and no more than 12 days in a calendar month. The proposed subsection also would require that the log be retained for not less than two years and made available upon the request of any peace officer, marine safety enforcement officer, or department employee acting within the scope of official duties. The provision is necessary to provide a method for enforcement and administrative personnel to quickly determine that a licensee has complied or is complying with the maximum provisions of the subchapter.

Proposed new §55.130(g) would provide that a validation card is not valid unless the corresponding license is valid and that a validation card expires on the last day of the last month that a license is valid. The provision is necessary to prevent confusion and possible unethical conduct. By establishing a specific period of validity, the department intends that there be no question as to whether a given validation card is lawful to use.

Proposed new §55.130(h) would provide that nothing in the rule authorizes the use of a licensee’s number or a validation card and validation decals for purposes not related to the legitimate business activities of the licensee. The proposed new subchapter would define “legitimate business activities” to mean the sale, transfer, exchange, service, or transportation of a vessel or outboard motor.

2. Fiscal Note.

Ms. Frances Stiles, Assistant Director of Revenue, has determined that for each of the first five years that the rule as proposed is in effect, there will be minimal implications to state government as a result of enforcing or administering the rules. The department will incur costs related to the printing of validation cards and decals, but the fee assessed for additional decals should cover those costs. There will be no additional costs to the department for enforcement of the rule, as the department’s law enforcement officers currently enforce the existing statutory provisions governing the showing, testing, or demonstration of unregistered vessels and the new rule is not expected to result in appreciable additional time or effort related to those enforcement activities.

There will be no fiscal implications for units of local government as a result of administering the rules as proposed.

3. Public Benefit/Cost Note.

Ms. Stiles also has determined that for each of the first five years the rule as proposed are in effect:

(A) The public benefit anticipated as a result of enforcing or administering the rule as proposed will be the ability of vessel dealers, distributors, and manufacturers to more fully demonstrate the capabilities of vessels to the public and the increased ability of consumers contemplating the potential purchase of a vessel to be able to better determine the suitability of the vessel to their needs.

(B) There will be no adverse economic effect on small businesses, microbusinesses, or persons required to comply with the rule as proposed; however, in another rulemaking published elsewhere in this issue, the department is proposing a fee of $120 for each validation card/decal set. The department’s small and microbusiness impact statement for that rulemaking is reproduced here as a courtesy.

The fee amount of $120 for a validation card/decal set was derived by taking the maximum fee amount currently charged by the department to register and title a vessel, which is $115, and adding $5 to recoup administrative costs associated with the printing of validation cards and decals.

The fee of $10 to replace a lost or damaged validation card is established to recover the department’s costs in printing and mailing the replacement card to the customer.

The revenue from the sale of validation cards and decals will be approximately equivalent to the revenue that would be realized were each vessel used to show, test, or demonstrate to be registered and titled. Therefore, the fiscal impact of the proposed amendment is revenue neutral. There will be no additional costs to the department for enforcement of the rule, as the department’s law enforcement officers currently enforce the existing statutory provisions governing the showing, testing, or demonstration of unregistered vessels and the new rule is not expected to result in appreciable additional time or effort related to those enforcement activities.

The department believes that most if not all dealers, distributors, and manufacturers qualify as small businesses or microbusinesses. A dealer, distributor, or manufacturer’s license includes a validation card/decal, so no licensee will be unable to show, test, or demonstrate vessels for a recreational purpose or in a contest or event; however if a licensee desires to simultaneously show, test, or demonstrate multiple vessels for a recreational purpose or in a content or event, will incur a minimum cost of $120 per additional vessel. The economic cost of compliance is the same for the largest and the smallest businesses affected by the rule. For a business employing one employee, the cost of compliance would be between $120 per employee per validation card purchased. For a business employing 20 employees, the cost of compliance would be $3 per employee per validation card purchased. For a business employing 100 employees, the cost of compliance would be between $0.12 per employee per validation card purchased.

(C) The department has not drafted a local employment impact statement under the Administrative Procedures Act, §2001.022, as the agency has determined that the rules as proposed will not impact local economies.

(D) The department has determined that there will not be a taking of private real property, as defined by Government Code, Chapter 2007, as a result of the proposed rules.

4. Request for Public Comment.

Comments on the proposed rules may be submitted to Al Campos, Texas Parks and Wildlife Department 4200 Smith School Road, Austin, Texas, 78744; (512) 389-4624 (e-mail: alfonso.campos@tpwd.state.tx.us).

5. Statutory Authority.

The new section is proposed under the authority of House Bill 3764, 80th Texas Legislature, Regular Session, which amended Parks and Wildlife Code, Chapter 31, to authorize the commission to establish rules concerning the issuance and price of validation cards permitting the limited and temporary use of vessels for recreational purposes or participation in contests or events and to adopt rules regarding dealer’s, distributor’s, and manufacturer’s licenses, including application forms, application and renewal procedures, and reporting and recordkeeping requirements.

The proposed new section affects Parks and Wildlife Code, Chapter 31.

§53.112. Show, Demonstration or Test of Vessel.

(a) A licensed dealer, distributor, or manufacturer (hereinafter “licensee”) may use the licensee’s number to show, demonstrate, or test a vessel on the water of this state without acquiring a certificate of number and registration decals. The licensee’s number shall be attached, affixed, or inscribed on both sides of the vessel in an easily visible location. The use of removable signs which can be temporarily but firmly attached to the vessel is permissible.

(b) A licensee may not use the licensee’s number for the use of a vessel on the water of this state for recreational purposes or for participation in contests or events, except as permitted in this subchapter.

(c) On a limited and temporary basis, a licensee, or person or persons authorized by the licensee, may use a vessel for recreational purposes or participation in contests or events only if:

(1) the licensee’s number is attached, affixed, or inscribed on both sides of the vessel in an easily visible location;

(2) a department-issued validation decal is prominently displayed on both sides of the vessel in an easily visible location;

(3) a department-issued validation card is aboard the vessel; and

(4) the temporary use does not occur on more than six consecutive days, and does not occur on more than twelve days in any calendar month.

(d) A validation card must immediately be made available for inspection upon the request of any peace officer, marine safety officer, or department employee acting within the scope of their official duties.

(e) A dealer, distributor, or manufacturer license shall include one validation card and two validation decals, which shall be issued at the time the license is issued. Additional validation cards may be purchased separately upon payment of the fee specified in §53.16 of this title (relating to Vessel, Motor, and Marine Licensing Fees). Each additional validation card includes two validation decals. Validation decals may not be purchased separately.

(f) A licensee shall maintain at their place of business a current daily log accounting for each use of each validation card issued to the licensee. The log shall be retained for a period of two years and must immediately be made available for inspection during normal business hours at the request of any peace officer, marine safety officer, or department employee acting within the scope of their official duties. The log shall indicate, for each use of a validation card:

(1) the date and location of the use;

(2) the hull identification number of the vessel;

(3) the specific business purpose of the recreational use–, contest, or event;

(4) the name, address, and driver’s license number or state-issued identification card number of the person or persons authorized by the licensee to operate the vessel; and

(5) the name of licensee’s agent authorizing use of the validation card.

(g) A validation card is not valid if the corresponding license is not valid. A validation card and corresponding validation decals expire on the last day of the last month that a dealer, distributor, or manufacturer license is valid.

(h) Nothing in this subchapter authorizes the use of a licensee’s number or a validation card and validation decals for purposes not related to the legitimate business activities of the licensee. “Legitimate business activities” means the sale, transfer, exchange, service, or transportation of a vessel or outboard motor.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's authority to adopt.

Issued in Austin, Texas, on


Commission Agenda Item No. 17
Exhibit B

Chapter 53. Finance
Show, Test, and Demonstration of Untitled Vessels - Fees
Electronic Vessel Registration Renewal - Fees
Proposal Preamble

1. Introduction.

The Texas Parks and Wildlife Department proposes an amendment to §53.16, concerning Vessel, Motor, and Marine Licensing Fees.

The proposed amendment would alter subsection (a) to provide for electronic vessel registration by credit card. In the very near future, the department will be able to provide boat registration services over the Internet and by phone if the customer agrees to pay a convenience fee for handling payments made by credit card. The proposed amendment to §53.16(a) would allow the electronic payment of vessel registration fees, including any handling fees assessed by the credit card company. The amendment is necessary to provide greater customer service.

House Bill 3764 as enacted by the 80th Texas Legislature, amended Parks and Wildlife Code, §31.041, to authorize the department to establish rules concerning the issuance and price of validation cards permitting the limited and temporary use of untitled vessels for recreational purposes or participation in contests or events under a marine dealer, distributor or manufacturer license. Proposed rules governing the use, display, and recordkeeping with respect to the validation cards are in another rulemaking published elsewhere in this issue of the Texas Register.

One validation card and decal would be included with the purchase of a marine dealer, distributor, or manufacturer permit. Additional card/decal pairs would be $120. The fee for replacing a lost of destroyed validation card would be $10.

2. Fiscal Note.

Ms. Frances Stiles, Assistant Director of Revenue, has determined that for each of the first five years that the rule as proposed is in effect, there will be no fiscal implications to state or local government as a result of enforcing or administering the rule.

With respect to the convenience fee for electronic vessel registration by credit card, the fee charged to the customer will be a pass-through fee. Thus, there will be no fiscal impact on the department.

With respect to the fee for a validation card/decal set, the fee amount of $120 was derived by taking the maximum fee amount currently charged by the department to register and title a vessel, which is $115, and adding $5 to recoup administrative costs associated with the printing of validation cards and decals.

The fee of $10 to replace a lost or damaged validation card is established to recover the department’s costs in printing and mailing the replacement card to the customer.

The revenue from the sale of validation card/decal sets will be approximately equivalent to the revenue that would be realized were each vessel used to show, test, or demonstrate to be registered and titled. Therefore, the fiscal impact of the proposed amendment is revenue neutral. There will be no additional costs to the department for enforcement of the rule, as the department’s law enforcement officers currently enforce the existing statutory provisions governing the showing, testing, or demonstration of unregistered vessels and the new rule is not expected to result in appreciable additional time or effort related to those enforcement activities.

3. Public Benefit/Cost Note.

Ms. Stiles also has determined that for each of the first five years the rule as proposed are in effect:

(A) The public benefit anticipated as a result of enforcing or administering the rule as proposed will be greater customer service and the ability of vessel dealers, distributors, and manufacturers to more fully demonstrate the capabilities of vessels to the public and the increased ability of consumers contemplating the potential purchase of a vessel to be able to better determine the suitability of the vessel to their needs.

(B) There will be an adverse economic effect on small businesses, microbusinesses, or persons required to comply with the rule as proposed. The department believes that most if not all dealers, distributors, and manufacturers qualify as small businesses or microbusinesses. A dealer, distributor, or manufacturer’s license includes a validation card/decal, so no licensee will be unable to show, test, or demonstrate vessels for a recreational purpose or in a contest or event; however if a licensee desires to simultaneously show, test, or demonstrate multiple vessels for a recreational purpose or in a content or event, will incur a minimum cost of $120 per additional vessel. The economic cost of compliance is the same for the largest and the smallest businesses affected by the rule. For a business employing one employee, the cost of compliance would be between $120 per employee per validation card purchased. For a business employing 20 employees, the cost of compliance would be $3 per employee per validation card purchased. For a business employing 100 employees, the cost of compliance would be between $0.12 per employee per validation card purchased.

(C) The department has not drafted a local employment impact statement under the Administrative Procedures Act, §2001.022, as the agency has determined that the rules as proposed will not impact local economies.

(D) The department has determined that there will not be a taking of private real property, as defined by Government Code, Chapter 2007, as a result of the proposed rules.

4. Request for Public Comment.

Comments on the proposed rules may be submitted to Al Campos, Texas Parks and Wildlife Department 4200 Smith School Road, Austin, Texas, 78744; (512) 389-4624 (e-mail: alfonso.campos@tpwd.state.tx.us).

5. Statutory Authority.

The amendment is proposed under the authority of House Bill 3764, 80th Texas Legislature, Regular Session, which amended Parks and Wildlife Code, Chapter 31, to authorize the commission to establish rules concerning the issuance and price of validation cards permitting the limited and temporary use of vessels for recreational purposes or participation in contests or events and to adopt rules regarding dealer’s, distributor’s, and manufacturer’s licenses, including application forms, application and renewal procedures, and reporting and recordkeeping requirements.

The proposed new section affects Parks and Wildlife Code, Chapter 31.

§53.16. Vessel, Motor, and Marine Licensing Fees.

(a) Registration fees. After the initial registration of a vessel, the vessel may be registered electronically by credit card by agreeing to pay any applicable credit card handling or convenience fees in addition to the normal registration fee. Fees:

(1) livery vessel-Class A—$30;

(2) vessel-Class A—$30;

(3) vessel-Class 1—$50;

(4) vessel-Class 2—$70;

(5) vessel-Class 3—$90;

(b) Titling fees:

(1) certificate of title—$25

(2) administrative surcharge for expedited title to a vessel (in addition to applicable fee)—$35;

(3) administrative surcharge for expedited title to a motor (in addition to applicable fee)—$35; and

(4) bonded certificate of title—$35.

(c) Duplicate/transfer fees:

(1) vessel-transfer of ownership—$10;

(2) vessel-duplicate certificate of number—$10;

(3) vessel-duplicate decals—$10.

(d) Marine dealer/distributor/manufacturer fees:

(1) marine dealer manufacturer number (effective until February 29, 2004)—$130;

(2) marine dealer, distributor or manufacturer license—$500;

(3) marine dealer, distributor or manufacturer ownership transfer of license—$500;

(4) marine dealer, distributor or manufacturer location transfer—$10;

(5) marine dealer, distributor or manufacturer information update/license correction-$3;[.]

(6) additional validation card (with decal) for recreational purposes or participation in contests or events-$120; and

(7) replacement validation card-$10.

(e) Report fees:

(1) current owner of record report for vessel or outboard motor—$2;

(2) certified history report of ownership for vessel or outboard motor—$10;

(3) accident/water fatality report up to five pages in length—$5; and

(4) accident/water fatality report over five pages in length—$10

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's authority to adopt.

Issued in Austin, Texas, on


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