HB 2398

Senate Engrossed
  House Bill
watercraft; insurance
  requirements; penalties
State of Arizona
House of Representatives
Fifty-seventh Legislature
Second Regular Session
2026
HOUSE BILL 2398
AN
ACT
amending section 5-301, Arizona
Revised Statutes; AMENDING title 5, chapter 3, article 5, Arizona Revised
Statutes, by adding sections 5-342 and 5-342.01; amending sections
5-350 and 5-371, arizona revised statutes; amending title 5,
chapter 3, Arizona Revised Statutes, by adding article 8.1; relating to
operation of watercraft.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it
enacted by the Legislature of the State of Arizona:
Section [1.]1. Section
5-301, Arizona Revised Statutes, is amended to read:
START_STATUTE5-301. Definitions
In this chapter, unless the context otherwise requires:
1. "Boat livery" means a
business that rents, leases or charters a motorized watercraft, a personal
watercraft or any other watercraft to the general public for noncommercial,
recreational use.
1. 2. "Commercial
motorized watercraft" means a motorized watercraft that carries passengers
or property for a valuable consideration that is paid to the owner, charterer,
operator or agent or to any other person interested in the watercraft.
2. 3. "Commission"
means the Arizona game and fish commission.
3. 4. "Department"
means the Arizona game and fish department.
4. 5. "Documented
watercraft" means any watercraft currently registered as a watercraft of
the United States pursuant to 46 Code of Federal Regulations part 67.
5. 6. "Domicile"
means a person's true, fixed and permanent home and principal residence, proof
of which may be demonstrated as prescribed by rules adopted by the commission.
6. 7. "Launch"
means any motorized watercraft that carries a coach and that is used to follow
and monitor rowing shells during practice, training or competitive rowing
events.
7. 8. "Motorboat"
means any watercraft that is not more than sixty-five feet in length and
that is propelled by machinery whether or not such machinery is the principal
source of propulsion.
8. 9. "Motorized
watercraft" means any watercraft that is propelled by machinery whether or
not the machinery is the principal source of propulsion.
9. 10. "Nonresident"
means a citizen of the United States or an alien person who is not domiciled in
this state and who is not a resident as defined in this section.
10. 11. "Operate"
means to operate or be in actual physical control of a watercraft while on
public waters.
11. 12. "Operator"
means a person who operates or is in actual physical control of a watercraft.
12. 13. "Person"
includes any individual, firm, corporation, partnership or association, and any
agent, assignee, trustee, executor, receiver or representative thereof.
14. "Personal watercraft"
means a watercraft that is all of the following:
(a) Less than
sixteen feet long.
(b) Propelled
by machinery powering a water-jet pump.
(c) Designed to
be operated by a person who sits, stands or kneels on the watercraft rather
than sitting or standing inside the watercraft.
13. 15. "Public
waters" means any body of water that is publicly owned or that the public
is allowed to use without permission of the owner and on
which a motorized watercraft can be navigated, including that part of waters
that is common to interstate boundaries and that is within the boundaries of
this state.
14. 16. "Resident"
means a person who is either:
(a) A member of the armed forces of the United
States on active duty and stationed in this state for a period of thirty days
immediately before the date of application for a watercraft decal.
(b) A member of the armed forces of the United
States on active duty and stationed in another state or another country and who
lists this state as that member's home of record at the time of an application
for a watercraft decal.
(c) Domiciled in this state for at least six
consecutive months immediately before the date of the application for a
watercraft decal and who does not claim residency for any purpose in any other
state or country.
15. 17. "Revocation"
means invalidating the certificate of number, numbers and annual validation
decals issued by the department to a watercraft and prohibiting the operation
of the watercraft on the waters of this state during a period of noncompliance
with this chapter.
16. 18. "Rowing
shell" means a manually propelled watercraft that is recognized by a
national racing association for use in practice, training or competitive
rowing.
17. 19. "Sailboard"
means any board of less than fifteen feet in length that is designed to be
propelled by wind action on a sail for navigation on the water by a person
operating the board.
18. 20. "Special
anchorage area" means an area set aside and under the control of a
federal, state or local governmental agency, or by a duly authorized marina
operator or concessionaire for the mooring, anchoring or docking of watercraft.
19. 21. "State
of principal operation" means the state where a watercraft is primarily
used, navigated or employed.
20. 22. "Underway"
means a watercraft that is not at anchor, is not made fast to the shore or is
not aground.
21. 23. "Undocumented
watercraft" means any watercraft that does not have and is not required to
have a valid marine document as a watercraft of the United States.
22. 24. "Wakeless
speed" means a speed that does not cause the watercraft to create a wake,
but in no case in excess of five miles per hour.
23. 25. "Watercraft"
means any boat designed to be propelled by machinery, oars, paddles or wind
action on a sail for navigation on the water, or as may be defined by rule of
the commission.
24. 26. "Waterway"
means any body of water, public or private, on which a watercraft can be
navigated.END_STATUTE
Sec. [2.]2. Title
5, chapter 3, article 5, Arizona Revised Statutes, is amended by adding sections
5-342 and 5-342.01, to read:
START_STATUTE5-342. Watercraft; insurance responsibility requirements; required
limits; violation; classification; applicability; definition
A. Notwithstanding any other law, an
owner of a watercraft who provides a watercraft for rent or
charter in this state shall maintain a commercial boat liability policy or a personal lines boat policy with a specified commercial or charter
boat liability coverage endorsement.
B. An owner's commercial boat
liability policy or personal lines boat policy with a
specified commercial or charter boat liability coverage endorsement shall
provide primary boat liability insurance coverage as follows:
1. $25,000 because of bodily injury
to or death of one person in any one accident.
2. Subject to the limit for one
person, $50,oo0 because of bodily injury to or death of two or more persons in
any one accident.
3. $20,000 because of injury to or
destruction of property of others in any one accident.
C. The owner of a watercraft who
provides a watercraft for rent or charter in this state
shall maintain at all times the amounts prescribed in subsection B of this
section for injuries to persons and for loss or damage to property by reason of
the rental or operation of the watercraft that is provided by the owner of the
watercraft for rent or charter.
D. The commission may require an
owner of a watercraft who is subject to the insurance responsibility
requirements of this section to certify the existence of insurance
responsibility in the form and at the time the commission deems
necessary. The commission may forward the certification to the named
insurer to determine if the certification is correct.� Civil liability does not
accrue to the insurer or any of its employees for reports made to the
commission if the reports are made in good faith based on the most recent
INFORMATION available to the insurer.
E. An owner of a watercraft who rents
or charters a watercraft in this state without meeting
the insurance responsibility requirements of this section is guilty of:
1. A class 3 misdemeanor.
2. A class 1 misdemeanor if the
watercraft is involved in an accident in this state.
F. This section does not apply to the
owner of a watercraft who provides a watercraft for rent or charter in this
state fewer than four times in a calendar year.
g. For
the purposes of this section, "Watercraft for rent":
1. Means
the transfer of possession and use of a watercraft to a person other than the
watercraft's owner for a defined period of time in exchange for a fee and the
owner of the watercraft is not present on the watercraft during the defined period
of time.
2. Does not include a Watercraft that
is available for rent through a peer-to-peer watercraft sharing
program pursuant to article 8.1 of this chapter. END_STATUTE
START_STATUTE5-342.01. Commercial boat liability insurance; no mandatory offer;
definition
A. Notwithstanding any other law, an
insurer that is authorized to transact insurance in this state is not required
to offer, issue, renew or provide a commercial boat liability policy.
B. this section does not prohibit an
insurer from voluntarily offering or providing a commercial boat liability
policy pursuant to the insurer's underwriting standards and risk selection.
C. For the purposes of this section,
"commercial boat liability policy" means liability insurance coverage
that is described in section 20-255 and that is issued in connection with
a watercraft that is used primarily for commercial, for-hire, rental,
charter or business purposes. END_STATUTE
Sec. [3.]3. Section
5-350, Arizona Revised Statutes, is amended to read:
START_STATUTE5-350. Personal watercraft; requirements for operation; applicability
A. A person shall not operate a personal watercraft
unless each person aboard is wearing a wearable personal flotation device that
is approved by the United States coast guard.
B. A person who operates a personal watercraft that
is equipped by the manufacturer with a lanyard type engine cutoff switch shall
attach the lanyard to his body, clothing or personal flotation device as
appropriate for the specific watercraft.
C. A person shall not operate or knowingly allow
another person to operate a personal watercraft under his the person's ownership or control in a reckless or negligent
manner endangering the life or property of another person. Prima
facie evidence of reckless operation exists if the person commits two or more
of the following acts simultaneously:
1. Operates the personal watercraft within a zone of
proximity to another watercraft closer than sixty feet unless both are leaving
a flat wake or are traveling at a speed of five nautical miles per hour or
less.
2. Operates the personal watercraft within the
vicinity of a motorboat in a manner that obstructs the visibility of either
operator.
3. Heads into the wake of a motorboat that is within
a zone of proximity closer than sixty feet and causes one-half or more of
the length of the personal watercraft to leave the water.
4. Within a zone of proximity to another watercraft
closer than sixty feet, maneuvers quickly, turns sharply or swerves, unless the
maneuver is necessary to avoid a collision.
D. If equipped by the manufacturer, a person shall
not operate a personal watercraft without a functioning spring-loaded
throttle mechanism that immediately returns the engine to an idle speed on
release of the operator's hand from the control or without any other engine
cutoff feature that is installed by the manufacturer.
E. A personal watercraft shall not be loaded and
operated with passengers or cargo beyond its safe carrying capacity or the
manufacturer's recommended limits.
F. A person who owns, leases or hires a personal
watercraft or who has charge or control over a personal watercraft shall not
authorize or knowingly permit allow
the personal watercraft to be operated in violation of this section.
G. This section does not apply to a performer who
engages in a professional exhibition or to a person who participates in an
officially sanctioned regatta, race, marine parade, tournament or exhibition.
H. For purposes of this section,
"personal watercraft" means a watercraft that is less than sixteen
feet long, propelled by machinery powering a water jet pump and designed to be
operated by a person who sits, stands or kneels on rather than sitting or
standing inside the watercraft.END_STATUTE
Sec. [4.]4. Section
5-371, Arizona Revised Statutes, is amended to read:
START_STATUTE5-371. Boat liveries; requirements; insurance requirements; required
limits; violation; classification
A. The owner of a boat livery shall keep or cause to
be kept a record of the name and address of the person or persons hiring any
watercraft which that is designed or
permitted allowed by him the owner to be operated as a watercraft, the identification
number thereof of the watercraft,
the departure date and time and the expected and actual time of
return. Such record shall be preserved for at least three months.
B. Neither the owner of a boat livery nor his the owner's agent or employee shall permit allow any watercraft to be operated
from his the owner's premises unless
it shall have been provided, either by the owner or renter, with the equipment
required by this chapter.
C. The certificate of number for a watercraft less
than twenty-six feet in length that is leased or rented to a person for
noncommercial use of less than twenty-four hours may be retained on shore
by the owner or his the owner's
representative at the place from which the watercraft departs or returns to the
possession of the owner or his the owner's
representative. A watercraft which that does not have the certificate of number on board shall be
identified while in use as may be prescribed by the regulations of the
commission.
d. the owner of a boat livery shall
maintain a commercial boat liability policy for persons who hire a watercraft
for use on a waterway in this state. this liability coverage shall
be in effect at any time that the watercraft is operated on a waterway in this
state.
E. A Boat Livery owner's commercial
boat liability policy shall provide primary boat liability insurance coverage
as follows:
1. $25,000 because of bodily injury
to or the death of one person in any one accident.
2. Subject to the limit for one
person, $50,000 because of bodily injury to or the death of two or more persons
in any one accident.
3. $20,000 because of injury to or
destruction of property of others in any one accident.
F. The owner of a boat Livery shall
maintain at all times the amounts prescribed in subsection E of this section.
G. The commission may require the
owner of a boat livery that is subject to the insurance responsibility
requirements of this section to certify the existence of insurance
responsibility in the form and at the time the commission deems necessary. The
commission may forward the certification to the named insurer to determine
whether the certification is correct. Civil liability does not
accrue to the insurer or any of its employees for reports made to the
commission if the reports are made in good faith and are based on the most
recent information available to the insurer.
H. The owner of a boat livery that
causes a watercraft to be operated on a waterway in this state without meeting
the insurance responsibility requirements of this section is guilty of:
1. A class 3 misdemeanor.
2. A class 1 misdemeanor if the
watercraft is involved in an accident in this state. END_STATUTE
Sec. [5.]5. Title
5, chapter 3, Arizona Revised Statutes, is amended by adding article 8.1, to
read:
ARTICLE
8.1. PEER-TO-PEER WATERCRAFT SHARING
START_STATUTE5-385. Definitions
In this article, unless the context otherwise
requires:
1. "peer-to-peer watercraft
sharing" means the authorized use of a shared watercraft through a
peer-to-peer watercraft sharing program by an individual other than the shared
watercraft owner.
2. "Peer-to-peer watercraft
sharing program":
(a) Means a
business platform that connects watercraft owners with watercraft operators to
enable the sharing of watercraft for financial consideration.
(b) Does not include:
(i) A boat livery.
(ii) Commercial
motorized watercraft.
3. "Shared
watercraft":
(a) Means a watercraft that is available for sharing through
a peer-to-peer watercraft sharing program.
(b) does not include:
(i) Commercial
motorized watercraft.
(ii) A
watercraft that is owned by a boat livery and that is made available for rent
or use in this state.
4. "Shared watercraft
operator" means an individual who has been authorized to operate a shared
watercraft by the shared watercraft owner pursuant to a shared watercraft
transaction.
5. "Shared watercraft
owner" means the registered owner of a watercraft that is made available
for sharing to a shared watercraft operator through a peer-to-peer watercraft
sharing program.
6. "Shared watercraft
transaction" means the authorized use of a shared watercraft by an
individual other than the shared watercraft owner through a peer-to-peer
watercraft sharing program.
7. "Watercraft sharing
period" means the period of time that begins with the watercraft sharing
start time and ends at the watercraft sharing termination time.
8. "Watercraft sharing start
time" means the time when a shared watercraft becomes subject to the
control of the shared watercraft operator at or after the time that the
reservation of the shared watercraft is scheduled to begin as documented in the
records of a peer-to-peer watercraft sharing program.
9. "Watercraft sharing
termination time" means the earliest of the following:
(a) The
expiration of the agreed period of time established for the use of a shared
watercraft in the shared watercraft transaction and the shared watercraft is
delivered to the location that is specified in the shared watercraft
transaction.
(b) When the
shared watercraft is returned to a location as alternatively agreed to by the
shared watercraft owner and the shared watercraft operator as established
through a peer-to-peer watercraft sharing program.
(c) when The
shared watercraft owner or a designee of the shared watercraft owner takes
possession and control of the shared watercraft.
END_STATUTE
START_STATUTE5-386. Insurance requirements; information sharing; recordkeeping;
liability; indemnification
A. A
peer-to-peer watercraft sharing program shall maintain a primary commercial
boat liability insurance policy that provides coverage for bodily injury or
property damage that occurs during the watercraft sharing
period in an amount that is stated in the shared
watercraft transaction and that is not less than:
1. $25,000 because of bodily injury
to or death of one person in any one accident.
2. Subject to the limit for one
person, $50,000 because of bodily injury to or death of two or more persons in
any one accident.
3. $20,000 because of injury to or
destruction of property of others in any one accident.
B. A peer-to-peer watercraft sharing
program shall ensure that the commercial liability insurance policy that
provides insurance coverage and that is required by this section meets both of
the following requirements:
1. Recognizes that the watercraft
that is insured under the policy is made available and used through the
peer-to-peer watercraft sharing program.
2. Does not exclude the use of a
shared watercraft by a shared watercraft operator.
C. A peer-to-peer watercraft sharing
program shall provide proof of insurance to the shared watercraft operator
before the watercraft sharing start time.� If an accident occurs during the
watercraft sharing period, the shared watercraft operator and the peer-to-peer
watercraft sharing program shall provide proof of insurance at the time of the
accident to the parties involved in the accident.
D. A peer-to-peer watercraft sharing
program shall collect and verify records relating to the use of a shared
watercraft, including times used, fees paid by the shared watercraft operator
and monies received by the shared watercraft owner.� the peer-to-peer
watercraft sharing program shall retain these records for at least six years
after the termination of a shared watercraft transaction.
E. in an insurance claim
investigation, the peer-to-peer watercraft sharing program and any insurer that
provides the insurance coverage required by this section shall fully cooperate
with all other parties involved in the claim. In an insurance claim
investigation, both of the following apply:
1. The peer-to-peer watercraft
sharing program shall provide to any interested party the records required by
subsection d of this section.
2. Any insurer that provides the
insurance coverage required by this section shall provide a clear description
of the coverage afforded, any exclusions from the coverage and the limits of
the coverage provided under the insurance policy.
f. Notwithstanding any other law,
this section does not prohibit a peer-to-peer watercraft sharing program from
recovering the peer-to-peer watercraft sharing program's insurance
costs that are incurred in satisfying the peer-to-peer watercraft
sharing program's obligations pursuant to this section from a shared watercraft
owner or shared watercraft operator.
G. This section does not limit either
of the following:
1. The liability of a peer-to-peer
watercraft sharing program for any act or omission of the peer-to-peer
watercraft sharing program that results in injury to any person as a result of
the use of a shared watercraft through a shared watercraft transaction.
2. The ability of the peer-to-peer
watercraft sharing program, by contract, to seek indemnification from the
shared watercraft owner or the shared watercraft operator for economic loss
that is sustained by the peer-to-peer watercraft sharing program and that
results from a breach of the terms and conditions of the shared watercraft
TRANSACTION.
H. An insurance policy required by
this section may be obtained from an insurer authorized to transact insurance
in this state pursuant to title 20, chapter 2, article 1, a domestic surplus
lines insurer authorized to issue insurance coverage in this state or a surplus
lines insurer pursuant to title 20, chapter 2, article 5.END_STATUTE