State of Michigan
JENNIFER M. GRANHOLM governor	DEPARTMENT OF NATURAL RESOURCES Lansing	REBECCA A. HUMPHRIES director

BILL ANALYSIS

BILL NUMBER: SENATE BILL 116, AS INTRODUCED

TOPIC: Watercraft; Registration of Historic Vessels

SPONSOR: Senator Michelle McManus

CO-SPONSORS: Basham, George, Jelinek, Cropsey, Sanborn, Kuipers, Van Woerkom, Allen, Garcia, Goschka, and Birkholz

COMMITTEE: Natural Resources and Environmental Affairs

Analysis Done: February 18, 2005

POSITION

The Department opposes this legislation.

PROBLEM/BACKGROUND

Unknown.

DESCRIPTION OF BILL

SB 116 proposes to change the age of a vessel which could qualify as historic vessel status from 30 years to 25 years. The legislation also changes the period that a registration for an historic vessel is valid from the current three year period which is standard for all vessel registration to ten years. Additionally, historic vessels would require an inspection and certification as safe to operate.

SUMMARY OF ARGUMENTS

Pro

• Extending the period that a registration is valid from 3 to 10 years for an historic vessel is more convenient and more economical for owners of these vessels.
• Changing the 30 year age requirement to 25 years could allow more vessels to qualify for historic vessel status and registration.
• Requiring a safety inspection of historic vessels could potentially make these crafts safer to operate.

Con

• This legislation would require changes to the established registration pattern and decal color-code scheme to provide for a ten year registration. The current system revolves around a three year registration and four year color-coded decal rotation as mandated in 324.80124(18). This is also required under 46 U.S.C. Chapter 123 and must meet the requirements of 33 C.F.R. Part 174. These mandate a three year registration schedule and four year color scheme. Michigan has an agreement to follow this numbering scheme which provides approximately $2,500,000 in Federal funds to this state.
• This new system would require more administrative processing for the Department of State (new decals every 3 years without fees) and less revenue for administration.
• The discounted fee for historic vessels is extended and in effect changes from a one-third to a one-tenth rate. These fees go into the Marine Safety Fund which funds law enforcement efforts for Conservation Officers and grants to 80 County Sheriffs.
• The legislation would also require an inspection certifying the historic vessel as safe to operate. It does not address inspection fees or who is responsible for these inspections.

Watercraft registration fees have not been increased since 1990 and projections indicate diminishing fund balances (Marine Safety Fund) due to inflation and a decrease in the number of registered boats.

FISCAL/ECONOMIC IMPACT

Are there revenue or budgetary implications in the bill to the --

(a) Department

Budgetary:

Increased administrative costs and possible inspection costs for historic vessels as “safe to operate”.

Revenue:

Decreased revenue.

Comments:

If would be difficult to project numbers. Disposition of the revenues generated from this source are as follows: 17.5% Waterways Fund, 33.5% Harbor Development Fund, and 49% Marine Safety Fund.

(b) State

Budgetary:

None.

Revenue:

None.

Comments:

This would require administrative changes for the Secretary of State.

(c) Local Government

Comments:

County Sheriff Departments could be impacted by erosion of revenues to the Marine Safety Fund. It is this fund that provides grants to counties for marine safety enforcement and boater safety education training.

OTHER STATE DEPARTMENTS

The Secretary of State is responsible for processing watercraft registration.

ANY OTHER PERTINENT INFORMATION

None.

ADMINISTRATIVE RULES IMPACT

Rules may require amendment to the section which details the color-coded rotation for annual registration decals.

_______________________________

Rebecca A. Humphries

Director

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Date

LED