§852.16. Security interest in vessels or outboard motors; certificate of title to show interest; notice; exemptions

A. The department, upon receiving an application or financing statement for a certificate of title to a vessel or outboard motor or financing statement showing a security interest in the vessel or outboard motor, shall show upon the face of the certificate of title all security interests in the order of their priority as shown on the application or the order in which the applications or financing statements are received by the department provided such receipt subsequently is validated by the department. The application or financing statement shall contain the name and address of the owner, a description of the vessel or outboard motor as required in R.S. 34:852.7, and the name and address, including zip code, of the secured party. A security interest covering a titled vessel or outboard motor subject to this Part shall be perfected as of the time the application or financing statement is received by the Department of Wildlife and Fisheries, so long as such receipt subsequently is validated by the secretary of the Department of Wildlife and Fisheries. The secretary shall, upon the request of any person, issue a certification whenever the financing statement is delivered to his office. Such certification receipt may include one or more security agreement applications. Security interests affecting titled vessels or outboard motors, perfected by filing with the Department of Wildlife and Fisheries, shall be created by and shall take rank and priority in accordance with Chapter 9 of the Uniform Commercial Code, R.S. 10:9-101 et seq. Such an application or financing statement is filed for such purposes when received provided such receipt subsequently is validated by the department.

B. Security interests created after the original issue of title to the owner must be shown on the certificate of title. The owner shall surrender the original certificate of title to the department and file an application on or financing statement on a form furnished by the department containing the name and address of the secured party. The department shall then issue a new certificate of title showing the name and address of the secured party. The newly issued certificate of title shall be sent to the first secured party who shall retain the title until the security interest is satisfied in full.

C. For the purpose of recording subsequent security interests, the department shall require any secured party to deliver the certificate of title to the department. Upon receipt of the certificate of title and completion of the forms furnished by the department, the department shall then issue a new certificate of title showing the security interests in the order of their priority according to the date of the filing of the application. The newly issued certificate of title shall be sent to the first secured party recorded on the certificate of title.

D. The certificate of title when issued by the department showing a security interest shall be adequate notice to the state, creditors, and purchasers that a security interest in the vessel or outboard motor exists. The recording or filing of such security interest in the local jurisdiction where the purchaser or debtor resides shall not be required.

E. If application for the recordation of a security interest to be placed upon a vessel or outboard motor is filed in the principal office of the department, it shall be valid to all persons as if the recordation had been done on the day the security interest was acquired provided such receipt subsequently is validated by the department.

F. Except in the case of security interest in vessels or outboard motors which are in inventory held for sale or lease, the security interest shown on the certificates of title issued by the department pursuant to applications for certificates shall have priority over any other liens or security interest against the vessel or outboard motor however created and recorded, except for liens designated under Subsection I of this Section.

G. The certificate of title of the vessel or outboard motor shall be delivered to the person holding the security interest having first priority upon the vessel or outboard motor. The title shall be retained by that lienholder until the entire amount of the security interest is fully paid by the owner of the vessel or outboard motor. The certificate of title shall then be delivered to the secured party next in order of priority and so on, or, if none, then to the owner of the vessel or outboard motor.

H. Upon the satisfaction of a security interest in a vessel or outboard motor, the secured party shall attach to the certificate of title a release of security interest in whatever form as may be prescribed by or acceptable to the department. Within thirty days, the secured party shall mail or deliver the certificate of title to the vessel or outboard motor owner together with the security release. Upon request of the owner and upon receipt of the security release and the certificate of title, the department shall correct its records and issue a new certificate of title to the owner.

I. This Section does not apply to any of the following:

(1) A lien given by statute to a supplier of services or materials for the vessel or outboard motor.

(2) A lien given by statute to the United States, a state, or a political subdivision thereof.

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

Acts 2007, No. 319, §2, eff. July 1, 2008; H.C.R. No. 25, 2008 R.S., eff. May 28, 2008; Acts 2009, No. 508, §2, eff. Jan. 1, 2011.