AI-assisted research summary: This section defines transfer by operation of law for vessels and outboard motors, sets what a transfer-by-law statement must include, and requires the department to process it within 20 days unless it is rejected for stated reasons or missing satisfactory documentation.
Text of section effective on January 01, 2028 Sec. 31.0577. TRANSFER BY OPERATION OF LAW. (a) In this section: (1) "By operation of law" means, with respect to a vessel or outboard motor, in accordance with a law or judicial order affecting ownership of the vessel or outboard motor: (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 or outboard motor. (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 31.047(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 issued in the name of the owner of record; or (C) the transferee is delivering the written certificate of title to the department 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 department as having an interest, including a security interest, in the vessel or outboard motor. (c) Unless the department rejects a transfer-by-law statement for a reason stated in Section 31.0485(c) or because the statement does not include documentation satisfactory to the department as to the transferee's ownership interest or right to acquire the ownership interest, not later than the 20th day after the date of delivery to the department of the statement and payment of fees due under this chapter and taxes payable under Chapter 160, Tax Code, in connection with the statement or with the acquisition or use of the vessel or outboard motor, the department shall: (1) accept the statement; (2) amend the files of the department 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 of title, regardless of whether the certificate of title has been delivered to the department; (B) issue a new certificate of title indicating the transferee as owner; (C) indicate on the new certificate of title any security interest indicated on the canceled certificate of title, unless a court order provides otherwise; and (D) deliver the new certificate of title or a record evidencing an electronic certificate of title. (d) This section does not apply to a transfer of an interest in a vessel or outboard motor by a secured party under Subchapter F, Chapter 9, Business & Commerce Code. Added by Acts 2025, 89th Leg., R.S., Ch. 185 (S.B. 1267), Sec. 21, eff. January 1, 2028.