It is enacted by the General Assembly as follows:

SECTION 1. Sections 34-46-2 and 34-46-5 of the General Laws in Chapter 34-46 entitled "Dry Dock Facilities" are hereby amended to read as follows:

{ADD 34-46-2. Definitions. -- ADD} As used in this chapter, the following words shall have the following meanings unless the context clearly indicates otherwise:

(a) "Default" means the failure to {DEL make payment of the rent within one (1) year after signing a rental agreement DEL} {ADD pay obligations incurred by the storage of a vessel ADD}.

(b) "Dry dock" means any {ADD space and/or ADD} real property designed and used for the purpose of renting or leasing storage space for vessels.

{ADD (c) "Facility" means a marina, boatyard or marine repair facility that provides, as part of its commercial operation, the storage of vessels. ADD}

{DEL (c) DEL} {ADD (d) ADD} "Last known address" means that address provided by the owner in the latest rental agreement or the address provided by the owner in a subsequent notice of a change of address.

{DEL (d) DEL} {ADD (e) ADD} "Lien holder" means a person holding a security interest.

{DEL (e) DEL} {ADD (f) ADD} "Operator" means the proprietor, operator, lessor, or sublessor of a dry dock facility, his or her agent, or any other person authorized by him or her to manage the facility or to receive rent from the owner under a rental agreement.

{DEL (f) DEL} {ADD (g) ADD} "Owner" means a person, other than a lienholder, having a property interest in or title to a vessel. The term includes a person entitled to use or have possession of a vessel subject to an interest in another person, reserved, or created by agreement and securing payment or performance of an obligation, but it does not include a lessee under a lease not intended as security.

{DEL (g) DEL} {ADD (h) ADD} "Personal property" means movable property not affixed to land and includes, but is not limited to equipment, goods, furniture, and household items whether affixed to the vessel or not.

{DEL (h) DEL} {ADD (i) ADD} "Rental agreement" means any written agreement or lease that establishes or modifies the terms, conditions, rules, or any other provisions concerning the storage of a vessel in a dry dock facility.

{DEL (i) DEL} {ADD (j) ADD} "Vessel" means every description of watercraft used or capable of being used as a means of transportation on water {DEL . DEL} {ADD and any personal property located thereon. ADD}

{DEL 34-46-5. Rental agreements -- Notice of this chapter. -- DEL} {ADD 34-46-7. Rental agreements -- Notice of this chapter. -- ADD} All rental agreements which are subject to this chapter shall contain clear and conspicuous language as follows: "BEWARE -- THE VESSEL AND ITS CONTENTS MAY BE SOLD AT PUBLIC AUCTION FOR FAILURE TO PAY STORAGE CHARGES."

SECTION 2. Sections 34-46-3 and 34-46-4 of the General Laws in Chapter 34-46 entitled "Dry Dock Facilities" are hereby repealed in their entirety.

{DEL 34-46-3. Operator's lien. -- DEL} {DEL (a) The operator of a dry dock storage facility and his or her heirs, executors, administrators, successors, and assigns shall have a lien for rent due on all vessels and personal property thereon stored at a dry dock storage facility for rent. Any lien existing prior to the date the vessel and personal property was placed at the dry dock storage facility supersedes any lien of the operator. The lien herein created attaches as of the date the vessel and personal property is stored in the dry dock storage facility, and the rental agreement shall contain a conspicuous statement notifying the owner of the existence of the lien.

(b) The operator loses its lien on any vessel and personal property that it voluntarily delivers or that it unjustifiably refuses to deliver. DEL}

{DEL 34-46-4. Enforcement of operator's lien. -- DEL} {DEL After a vessel has been in storage for not less than two (2) years and after default by the owner for rent due under the rental agreement, an operator may deny the owner access to the vessel and personal property located thereon, may refuse delivery thereof until the default is cured in full and enforce its lien by selling the stored vessel and personal property at a public auction, in accordance with the following procedure:

(a) The operator shall give the owner, lien holder and all other persons known to claim an interest in the vessel and/or personal property stored. The notice shall be sent by certified mail return receipt requested to said person or persons to be notified. The notice shall include: (1) an itemized statement of the claim showing the rent due at the time of the notice and the date(s) when the rent became due; (2) a description of the vessel including its name if any, the title number, the name of the vessel manufacturer, model year, hull identification number, registration number and vessel length and a general description of any personal property subject to the lien; (3) a demand for payment of the rent due by a specified date not less than sixty (60) days after mailing of the notice; (4) a conspicuous statement that unless the rent due is paid by the specified date, the vessel and the personal property shall be advertised for sale at public auction and sold; and (5) the name, street address, and telephone number of the operator who the person may contact to respond to the notice.

(b) After expiration of the time given in the notice, if the rent has not been paid in full as demanded and the operator wishes to auction the vessel and personal property to satisfy its lien, an advertisement of the public auction must be published once a week for three (3) consecutive weeks in a newspaper of general circulation where the public auction is to be held and of general circulation in the state of Rhode Island. The owner of the vessel shall have the right to cure the default within thirty (30) days after the date of the public auction. The advertisement must include a description of the vessel and a general description of the personal property to be auctioned as set forth in subparagraph (a); the name of the owner and operator and the time and place of the sale. Any person claiming an interest or right to the vessel or personal property may within thirty (30) days after the auction, pay the amount necessary to satisfy the lien, and the reasonable expenses incurred by the operator, to redeem the vessel and personal property. Upon receipt of this payment, the operator shall release the vessel and personal property to the payor. The operator may buy at any auction of a vessel and personal property pursuant to this section. A purchaser in good faith of the vessel and personal property auctioned to enforce the operator's lien takes the vessel and personal property subject to any security interest filed in accordance with the uniform commercial code. The operator shall not deliver the vessel to the purchaser until thirty (30) days after the date of the public auction. The operator may satisfy its lien from the proceeds of any auction pursuant to this section and shall pay to the general treasurer of this state the balance, if any, for holding it in accordance with chapter 21-33 of the general laws (unclaimed property). If such other party does not claim the balance of the proceeds within two (2) years of the date of the sale, it shall eschew to the state of Rhode Island. The operator shall be liable for damages caused by failure to comply with the requirements of this chapter, in addition to other actions at law. DEL}

SECTION 3. Chapter 34-46 of the General Laws entitled "Dry Dock Facilities" is hereby amended by adding thereto the following sections:

{ADD 34-46-3. Lien. -- ADD} {ADD (a) Lien created. A facility operator has a lien on a vessel stored at that facility for storage charges, labor, or other charges and for expenses reasonably incurred in the sale of that vessel under the provisions of this chapter.

(b) Exclusion. This chapter does not create a lien on a documented vessel subject to a preferred ship mortgage or other preferred maritime lien pursuant to 46 United States code, chapter 131. ADD}

{ADD 34-46-4. Notice of lien. -- ADD} {ADD (a) A vessel owner must be notified of the lien created by this chapter before enforcement of the lien by a facility operator. Notification of the lien created by this chapter is satisfied by:

(1) Written storage agreement. A written storage agreement signed by the vessel owner that includes a notice of the lien created by this chapter; or

(2) Written notice of lien. Written notification of the lien sent by the facility operator to the vessel owner.

(b) A facility operator who does not have a written storage agreement that includes a notice of the lien created by this chapter may not initiate an enforcement action under section 34-46-5 until thirty (30) days after the written notice of a lien required by subsection 34-46-4(a)(2) herein is delivered to the vessel owner. ADD}

{ADD 34-46-5. Enforcement of lien. -- ADD} {ADD A facility operator may enforce a lien created by this chapter only if the vessel owner has been notified of the lien as required by section 34-46-4.

(1) Sale -- Use of proceeds. -- If a vessel owner is in default for a period of more than ninety (90) days, a facility operator may enforce a lien by selling the stored vessel at a commercially reasonable public sale for cash. As used in this section, "commercially reasonable" shall have the same meaning as in the uniform commercial code. The proceeds of the sale shall be applied in the following order:

(A) To the reasonable expenses of the sale incurred by the facility operator including, but not limited to, reasonable attorneys' fees, legal expenses and expenses of advertisement;

(B) To the satisfaction of the lien created by this chapter;

(C) To the satisfaction of all other liens on the vessel held by all lienholders of record to be paid in the order of priority; and

(D) To the extent that the proceeds of sale exceed the sum of the foregoing, the surplus must be paid by the facility operator to the vessel owner.

If proceeds of the sale are not sufficient to satisfy the vessel owner's outstanding obligations to the facility operator or any lienholder of record, the vessel owner remains liable to the facility operator and/or lienholder for the deficiency.

(2) Advertisement -- Notice of default. Before conducting a sale under this section, the facility operator shall:

(A) Personally serve a notice of default or the vessel owner if the vessel owner is a Rhode Island resident. If the vessel owner is not a Rhode Island resident, notice shall be in accordance with 34-46-5(7). The facility operator shall provide a copy of the notice to each lienholder of record. The notice must include:

(i) A statement that the vessel is subject to a lien held by the facility operator;

(ii) A statement of the facility operator's claim indicating the charges due on the date of the notice, the amount of any additional charges that will or may become due before the date of sale, and the date those additional charges will become due;

(iii) A demand for payment of the charges due within a specified time not less than forty (40) days after the date the notice is delivered to the vessel owner ;

(iv) A statement that unless the claim is paid within the time stated the vessel will be sold, specifying the time and place of the sale; and

(v) The name, street address, and telephone number of the facility operator, or the facility operator's designated agent, whom the vessel owner may contact to respond to the notice;

(B) After the expiration of the forty (40) day period set forth in subparagraph (2)(A) herein, the facility operator shall publish an advertisement of the sale once a week for two (2) consecutive weeks in a newspaper of general circulation in the area where the sale is to be held and of general circulation in the state of Rhode Island. The advertisement must include a general description of the vessel, the name of the vessel owner, and the date, time and place of the sale. The date of the sale must be more than fifteen (15) days after the date the first advertisement of the sale is published.

(3) Location of sale. A sale under this chapter must be held at the facility or at the nearest suitable location.

(4) Purchasers. A purchaser of a vessel sold at a sale pursuant to this chapter takes the vessel free and clear of any rights of persons against whom the lien was valid and all other lienholders of record.

(5) Facility operator liability. If the facility operator complies with the provisions of this chapter, the facility operator's liability is as follows:

(A) To a lienholder of record, the facility operator's liability is limited to payment from the net proceeds received from the sale of the vessel pursuant to section 34-46-5; and

(B) To the vessel owner, the facility operator's liability is limited to the net proceeds received from the sale of the vessel after payment in full of all lienholders of record pursuant to section 34-46-5.

(6) Denying access to storage facility. A facility operator may deny a vessel owner who has been notified under section 34-46-4 access to the storage facility, except that the vessel owner is entitled to access to the facility during normal business hours for the purpose of satisfying the lien or viewing and verifying the condition of the vessel.

(7) Notices. Except as otherwise provided in section 34-45-5(2)(A), all notices required by this chapter must be sent by registered or certified mail, return receipt requested. Notices sent to a facility operator must be sent to the facility operator's business address or to the address of the facility operator's designated representative. Notices to a vessel owner must be sent to the vessel owner at the vessel owner's last known address. Notices to a lienholder of record must be sent to the address of the lienholder as provided in the public filings that serve to perfect the lienholder's interest in the vessel. Notices are considered delivered on the date the return receipt is signed or, if the notice is undeliverable, the date the post office last attempts to deliver the notice. ADD}

{ADD 34-46-6. Cessation of enforcement actions. -- ADD} {ADD A facility operator shall cease enforcement actions immediately upon any of the following:

(a) Payment by owner. The vessel owner pays the facility operator the full amount necessary to satisfy the lien. At any time before the conclusion of a sale conducted under this chapter, the vessel owner may redeem the vessel by paying the full amount necessary to satisfy the lien;

(b) Payment by other lienholders. A person other than the facility operator who has a lien on the vessel pays the facility operator the full amount necessary to satisfy the lien held by the facility operator. Upon payment by a lienholder of record, the facility operator shall hold the vessel for the benefit of and at the direction of that lienholder and may not deliver possession of the vessel to the vessel owner. Unless the facility operator and the lienholder enter into a new storage agreement, the lienholder shall arrange removal of the vessel from the facility forthwith; or ADD}

{ADD (c) Initiation of Civil Action. An owner of a vessel files in a court of competent jurisdiction and serves on the facility operator, not less than ten (10) days before the scheduled date of sale, a complaint against the facility operator relating to the obligations incurred by the storage of the vessel or any claims related to the vessel and in such complaint objects to the enforcement of the lien and sets forth the legal reasons why the lien should not be enforced. The enforcement action shall not resume until either the civil action is resolved or the court enters an order permitting the enforcement action to proceed. ADD}

SECTION 4. This act shall take effect upon passage.