Commission Agenda Item No. 15
Presenter:  Frances Stiles

Action
Implementation of Legislation during the 82nd Texas Legislative Session
House Bill 787 — Relating to Abandoned, Wrecked, Dismantled,
Discarded, and Inoperable Aircraft and Vessels
August 25, 2011

I.             Executive Summary:  House Bill 787 (HB 787) as enacted by the 82nd Texas Legislature, allows for local government or public citizens to cleanup and dispose of vehicles, watercraft, outboard motors, or aircraft which have been abandoned.  This change provides an additional avenue which had previously not been available regarding boats and outboard motors when local law enforcement staff and funds have not been available to adequately address the disposal of these assets.

II.          Discussion:  Prior to this legislative change, boats and outboard motors found abandoned on private property could only be taken into custody by the local law enforcement, as defined under the Transportation Code.  If the law enforcement agency chose not to take custody of the asset from private property, then the property owner had no lawful means of disposing of the asset. 

Additionally, within the past two years the department began participating with the United States Coast Guard National Vessel Information System (VIS).  Through this program the department shares boat and motor data with the Coast Guard and has access to the data shared by other states.  In addition to state database records, this national database aids in identifying ownership and is used during the bonded title process.

HB 787 grants the department the authority and ability to title abandoned boats and/or outboard motors through the bonded title process should the owner of record, lien holder, or local law enforcement decline to remove the asset from private property.  The bill incorporates the definition of an abandoned vessel or outboard motor, which is stated as “any vessel or outboard motor that has remained on private property without the consent of the owner or person in charge of the property for more than seven consecutive days.”

The changes resulting from this bill do not negatively impact department resources and expenses as the bonded title process is already established.  These changes will assist with environmental cleanup and bring in a small amount of additional revenue in the form of title and registration fees along with the subsequent renewals of registration.

The changes resulting from HB 787 do require an adjustment and addition to the rules.  The bonded title process consists of the applicant sending notification to recorded owner(s) and lienholder(s), providing documentation and affidavits concerning the situation, and purchasing a surety bond for 1-1/2 times the value of the asset(s).  The department issues the title with bond information printed on the title.  The bond remains in effect for a period of three years after which a clear title can be issued.  During the three year period, any previous owner contesting ownership can file for financial compensation through the surety bonding company by filing a claim and providing proof of ownership.  The person issued the surety bond will then repay the bonding company the amount of the payout.

The proposed rule amends the conditions acceptable for issuing a bonded title and adds the following conditions that must be met for abandoned boats and outboard motors:

  1. III.       Recommendation:  Staff recommends that the Commission adopt the proposed motion with consideration to any relevant comments received:

“The Texas Parks and Wildlife Commission adopts revisions to §53.100 with changes as necessary to the proposed text as published in the July 22, 2011, issue of the Texas Register (36 TexReg 4633-4635).”

Attachments – 1

  1. Exhibit A – Proposed Regulations regarding House Bill 787

Commission Agenda Item No. 15

Exhibit A

RULES REQUIRED OR AUTHORIZED BY LEGISLATION

HOUSE BILL 787

OBTAINING TITLE FOR ABANDONED BOATS AND MOTORS

PROPOSAL PREAMBLE

1. Introduction.

         The Texas Parks and Wildlife Department proposes an amendment to §53.100, concerning Bonded Title—Acceptable Situations. The proposed amendment would create a process for obtaining title for abandoned vessels and outboard motors and make housekeeping-type changes to improve the clarity of the current rule.

         Under Parks and Wildlife Code, §31.047, an application for title to a vessel or outboard motor “must be accompanied by other evidence reasonably required by the department to establish that the applicant or other person is entitled to a certificate of title or a noted security interest.” In cases where the department has refused to issue a title because the applicant does not possess sufficient information to establish ownership, Parks and Wildlife Code, §31.0465, allows the refused applicant to file a bond to obtain a title.

         House Bill 787 (HB 787), enacted by the 82nd Texas Legislature, Regular Session, 2011, amended Parks and Wildlife Code, Chapter 31, to authorize the department to issue a certificate of title for a vessel or outboard motor that qualifies as having been abandoned. Under Parks and Wildlife Code, §31.003(17) as added by HB 787, a vessel or outboard motor is considered to be abandoned if it has remained on private property without the consent of the owner or person in charge of the property for more than seven consecutive days.  Parks and Wildlife Code, §31.0466, as added by HB 787 provides that following the notification of local law enforcement by certified mail, a person seeking a certificate of title may post a surety bond equal to one and one-half times the value of the abandoned property, and 1) must prove to the department or allow the department to verify that  the property is not stolen property, 2) the owner of the property is not being defrauded (as evidenced by an effort to contact the previous owner by verified mail), and 3) the property has not been and will not be seized by a law enforcement agency. The applicant must post notice of the title application to the public and, after the expiration of the third anniversary of the bond, the department will issue a clear certificate of title.

         Parks and Wildlife Code, §31.0466, as added by HB 787, authorizes the department by rule to prescribe the form and manner in which a bond is executed and filed, to designate the manner and period of time of the public notice for application for title, and to define acceptable situations in which certificates of title may be issued after the filing of a bond.

         Subsection (b) of the current rule makes reference to an applicant providing evidence of the “inability to locate the previous owner(s)” of an asset for which a title is being sought. The department has determined that this language is imprecise.  The department’s interest is in establishing that the required documentation cannot be obtained by the applicant.  The current rule language also does not address property that may be affected by liens that could assist in determining ownership. Therefore, the proposed amendment would instead refer to “inability to obtain the required information from the previous owners or applicable lienholders.” The proposed amendment to subsection (b) also would add “verified mail” as an acceptable method of proving that an attempt was made to contact the previous owner of an asset. Senate Bill (SB) 690 , enacted by enacted by the 82nd Texas Legislature, Regular Session, 2011, amended the notice provisions of Property Code, Chapter 59, to include verified mail as an acceptable method of notifying owners of vessels or outboard motors subject to self-service storage facility liens. SB 690 amended Property Code, §59.043(c), to establish that “Notice by verified mail is considered delivered when the notice, properly addressed with postage prepaid, is deposited with the United States Postal Service or a common carrier.” The amendment is necessary to maintain consistency with statutory terms used in Property Code that apply to vessels and outboard motors.

         The proposed amendment to subsection (c) would create an exception to the current rule in order to accommodate the process for obtaining bonded title for abandoned vessels and outboard motors as defined by HB 787. The current rule states that the department will not issue a bonded title if the applicant does not have any proof of payment, ownership transfer or other related documentation to support a claim of ownership. Since the intent of the rulemaking is to create a process for obtaining bonded title for vessels and outboard motors that have been abandoned, an exception to the current provision must be created.

         Proposed new subsection (d) would set forth the requirements (in addition to the statutory requirements of Parks and Wildlife Code, Chapter 31, Subchapters B and B-1) for obtaining a bonded title for an abandoned vessel or outboard motor.

         Proposed new subsection (d)(1) would require the applicant for a bonded title for a vessel or outboard motor that qualifies as being abandoned to notify the local law enforcement agency in whose jurisdiction the abandoned asset is located. The notification would be required to be made by certified mail on a form supplied by the department, and the local law enforcement agency would then have 30 days to notify the applicant of any intent on the part of the agency to remove the asset or take it into custody. The notification requirement is a statutory requirement. HB 787 created Parks and Wildlife Code, §31.0466(b)(2)(C), which requires an applicant to notify local law enforcement by certified mail at least 30 days prior to filing an application for bonded title with the department.

         Proposed new subsection (d)(2) would require the department to publish all applications for bonded title to an abandoned vessel or outboard motor on the department’s website for six consecutive months beginning within 10 days of receiving a qualified application for bonded title for an abandoned vessel or outboard motor. Under Parks and Wildlife Code, §31.0466(b)(3), as added by HB 787, an applicant is required to post notice of the certificate of title application in the manner and for a period of time designated by rule of the department. The department has determined that publication on the department website for a period of six consecutive months would be a constructive and cost-effective way to provide  easily accessible  and authoritative information to the public regarding applications for title for abandoned vessels and outboard motors. Proposed new subsection (d)(2)(A) and (B) would delineate the possible outcomes of the public notice process. Proposed new subparagraph (A) would provide that if there is a claim of interest (with proof of legal ownership) that is adverse to the applicant, the department would not issue a title until the issue is resolved, and that the involved parties could apply to a court of competent jurisdiction for resolution. It is clear that the department cannot proceed with the bonded title process if there are questions as to whether a vessel or outboard motor has indeed been abandoned by the legal or recorded owner, and that there are legally prescribed remedies for property disputes. Therefore, in cases where ownership is disputed, the department believes the logical and prudent path is to delay final processing until legal ownership of the asset is definitively established. Proposed new subparagraph (B) would provide that if no documented claim of interest is received by the department, the department’s consideration of the bonded title application will proceed.

         Proposed new subsection (d)(3) would stipulate that the department will use the department’s Boating Registration Information and Titling System (BRITS) and the the United States Coast Guard’s Vessel Information System (VIS) database  to assist in determining the last owner of record of a vessel or outboard motor for which a bonded title is sought under the provisions of the section. VIS is a nationwide database that compiles boating and titling registries from various states. The data in VIS is useful in determining if an abandoned vessel or outboard motor is the property of someone outside the state of Texas.

2. Fiscal Note.

         Ms. Frances Stiles, Manager of Boat Titling, Registration and Marine Licensing, 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 and local governments as a result of enforcing or administering the rule.

3. Public Benefit/Cost Note.

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

         (A) The public benefit anticipated as a result of enforcing or administering the rule as proposed will be the ability of the public to gain title to vessels and outboard motors that have been abandoned, which should have the added benefit of reducing litter and the custodial and auctioneering costs to local governments associated with disposing of abandoned vessels and outboard motors.

         (B) There will be no adverse economic effect on persons required to comply with the rule as proposed.

         (C) Under the provisions of Government Code, Chapter 2006, a state agency must prepare an economic impact statement and a regulatory flexibility analysis for a rule that may have an adverse economic effect affect on small businesses and micro-businesses. As required by Government Code, §2006.002(g), the Office of the Attorney General has prepared guidelines to assist state agencies in determining a proposed rule’s potential adverse economic impact on small businesses. Those guidelines state that an agency need only consider a proposed rule’s “direct adverse economic impacts” to small businesses and micro-businesses to determine if any further analysis is required. For that purpose, the department considers “direct economic impact” to mean a requirement that would directly impose recordkeeping or reporting requirements; impose taxes or fees; result in lost sales or profits; adversely affect market competition; or require the purchase or modification of equipment or services. Since the proposed rule does not affect small businesses or microbusinesses, the department has determined that the proposed new rule will not impose any direct adverse economic effects on small businesses or microbusinesses. Accordingly, the department has not prepared a regulatory flexibility analysis under Government Code, Chapter 2006.

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

         (E) 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 rule.

4. Request for Public Comment.

         Comments on the proposed amendment may be submitted to Frances Stiles, Texas Parks and Wildlife Department, 4200 Smith School Road, Austin, Texas, 78744; (512) 389-4860 (e-mail: frances.stiles@tpwd.state.tx.us).

5. Statutory Authority.

         The amendment is proposed under the authority of House Bill 787, 82nd Texas Legislature, Regular Session, 2011which added Parks and Wildlife Code, §31.003(17) and §31.0466 authorizing the department by rule to establish the form of a bond for a title to a vessel or outboard motor; prescribe the manner and longevity of public notice of an application for a bonded title; and define acceptable situations in which certificates of title may be issued after the filing of a bond.

         The proposed amendments affect Parks and Wildlife Code, Chapter 31.

         §53.100. Bonded Title—Acceptable Situations.

                 (a) (No change.)

                 (b) Bonded titles may be used in situations where the applicant is unable to produce complete documentation required by the department in order to title or transfer ownership of a vessel or outboard motor. Acceptable situations regarding the filing and award of a bonded title situation will apply where a complete history of ownership for a vessel or outboard motor cannot be produced by the applicant and the department has determined that the customer is unable to provide the history[due to the inability to locate the previous owners]. Missing ownership documentation may consist of a certificate of title, bill of sale, invoice, or tax affidavit signed by the owner of record, or authority to handle a deceased person’s estate. The inability to obtain the required documentation from the[ locate] previous owner(s) or applicable lien holders must be evidenced by one of the following:

                         (1) notice of verified mail, as defined in Property Code, §59.043(c), as mail considered delivered when the notice, properly addressed with postage prepaid, is deposited with the United States Postal Service or a common carrier;

                         (2) proof of returned certified mail; or [by]

                         (3) the lack of any known addresses for a previous owner.

                 (c) The department shall not under any circumstances issue a bonded title if the applicant does not have any proof of payment, ownership transfer or other related documentation to support a claim of ownership, unless the vessel or outboard motor is determined to be abandoned, as defined by Parks and Wildlife Code, §31.003(17).

                 (d) For a bonded title situation involving an abandoned vessel or outboard motor, the requirements of this subsection apply, in addition to any other requirements of this section or Parks and Wildlife Code, Chapter 31, Subchapters B and B-1.

                         (1) The applicant shall send notice via certified mail to the law enforcement agency in whose jurisdiction the property on which the abandoned vessel or outboard motor is located. The notice shall be on a form provided or prescribed by the department. The applicant shall provide a copy of the completed form and evidence of certified mailing to the department at the time the application for bonded title is submitted. The agency receiving the notification shall notify the applicant within 30 days of receipt of the notice of any intent to remove the vessel or outboard motor under the provisions of Transportation Code, §683.011. 

                         (2) The department shall publish public notice of a qualified application for title to an abandoned vessel or outboard motor for a period of six consecutive months on the department’s website. The publication shall take place within 10 days of receipt of the application by the department.

                                  (A) If there is a documented claim of interest by a recorded owner or lien holder adverse to the applicant, the department shall not issue a title until the issue is resolved.  The parties may apply to a court of competent jurisdiction for resolution.

                                  (B) If there is no claim of interest, the applicant may proceed with consideration of the bonded title upon expiration of the six-month posting period.

                         (3) The department may employ the department’s Boat Registration Information and Titling System (BRITS) and the Vessel Identification System (VIS) operated by the United States Coast Guard to determine the most recent owner of record 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

 


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