(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 33-5B-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) After delivery to the office of the application under subdivision (a)(1) or the certificate of title under subdivision (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 33-5B-6 and includes the title brand designation “Hull Damaged.” 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 of one thousand dollars ($1,000).
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