VESSEL IDENTIFICATION SYSTEM AMENDMENTS.

SEC. 401. VESSEL IDENTIFICATION SYSTEM AMENDMENTS. (a) In General.— Chapter 121 of title 46, United States Code, is amended— (1) by striking “or is not titled in a State” in section 12102(a); and (2) by adding at the end the following: “§12124. Surrender of title and number “(a) A documented vessel shall not be titled by a State or required to display numbers under chapter 123, and any certificate of title issued by a State for a documented vessel shall be surrendered in accordance with regulations prescribed by the Secretary of Transportation. 112 STAT. 3425 “(b) The Secretary may approve the surrender under subsection (a) of a certificate of title for a vessel covered by a preferred mortgage under section 31322(d) of this title only if the mortgagee consents.”. (b) Conforming Amendment.— The chapter analysis for chapter 121 of title 46, United States Code, is amended by adding at the end the following: “12124. Surrender of title and number.”. (c) Other Amendments.— Title 46, United States Code, is amended— (1) by striking section 31322(b) and inserting the following: “(b) Any indebtedness secured by a preferred mortgage that is filed or recorded under this chapter, or that is subject to a mortgage, security agreement, or instruments granting a security interest that is deemed to be a preferred mortgage under subsection (d) of this section, may have any rate of interest to which the parties agree.”; (2) by striking “mortgage or instrument” each place it appears in section 31322(d)(1) and inserting “mortgage, security agreement, or instrument”; (3) by striking section 31322(d)(3) and inserting the following: “(3) A preferred mortgage under this subsection continues to be a preferred mortgage even if the vessel is no longer titled in the State where the mortgage, security agreement, or instrument granting a security interest became a preferred mortgage under this subsection.”; (4) by striking “mortgages or instruments” in subsection 31322(d)(2) and inserting “mortgages, security agreements, or instruments”; (5) by inserting “a vessel titled in a State,” in section 31325(b)(1) after “a vessel to be documented under chapter 121 of this title,”; (6) by inserting “a vessel titled in a State,” in section 31325(b)(3) after “a vessel for which an application for documentation is filed under chapter 121 of this title,”; and (7) by inserting “a vessel titled in a State,” in section 31325(c) after “a vessel to be documented under chapter 121 of this title,”.