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From Hinvalid.com:

IF THE THIRD LETTER OF A HIN IS A "Z" WHY SHOULD I TAKE SPECIAL NOTICE?
When the third digit of a HIN is a "Z," this indicates that the HIN has been state-issued or "re-tagged." In these cases, the "Z" will be preceded by the issuing state's abbreviation (e.g. "NYZ" or "FLZ"). There are a few ways this can happen. It could have been a home made boat and its builder requested that a HIN be issued by the state; this is completely legal and correct. Such a HIN may also indicate that the vessel had been sold as "salvage" and part or most of it was refurbished and presented as a "home built" or "custom made" boat. It may not look home made, but this too is legal within certain guidelines. The important thing is that you are advised of this before you buy the vessel so you can ask any questions you may have about its history and how it came to be re-tagged.
 
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