BILL ANALYSIS Ó Bill No: AB 1025 SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION Senator Roderick D. Wright, Chair 2011-2012 Regular Session Staff Analysis AB 1025 Author: Skinner As Amended: April 13, 2011 Hearing Date: June 28, 2011 Consultant: Art Terzakis SUBJECT Bays of Monterey, San Francisco, San Pablo & Suisun: bar pilots DESCRIPTION AB 1025 makes the following substantive changes to existing provisions of the Harbors and Navigation Code relating to bar pilotage in Monterey Bay and the Bays of San Francisco, San Pablo and Suisun: 1. Modifies the definition of "inland pilot" to mean a person holding an inland pilot license prior to January 1, 2011 and deletes all references to inland pilots. 2. Requires that the Board of Pilot Commissioner's assistant director be appointed by the Secretary of Business, Transportation and Housing (BT&H), instead of the Governor, and serve at the pleasure of the Secretary, as a "career executive." 3. Recasts certain provisions relating to violations of safety standards to require the executive director instead of an assigned commission investigator to perform investigations, make findings and recommendations and report to the Board of Pilot Commissioners. AB 1025 (Skinner) continued Page 2 4. Authorizes the Board of Pilot Commissioners to charge an examination fee, in an amount established by the board and not to exceed the board's costs to administer the exam, to each applicant to the pilot trainee training program who participates in any written or simulation examination for the purposes of determining admission to the program. 5. Makes other minor, technical and code maintenance changes. EXISTING LAW Existing law establishes in state government the Board of Pilot Commissioners, with jurisdiction over Monterey Bay and the Bays of San Francisco, San Pablo, and Suisun. Existing law directs the Board to regulate pilotage and provides for the licensing, regulation, and management of pilots in these Bays. The Board consists of 7 members appointed by the Governor, with the consent of the Senate, as follows: (1) two members must be licensed pilots; (2) two members must represent the industry and be substantial users of Monterey Bay and any of the waters of the Bays of San Francisco, San Pablo, or Suisun; and, (3) three must be "public" members. Additionally, the Secretary of Business, Transportation & Housing Agency serves ex officio. Existing law requires the Board to adopt a continuing education program for pilots and inland pilots funded from fees from the surcharge for each movement of a vessel using pilot services. Existing law also requires the Board to adopt training standards and a training program for pilot trainees. Existing law requires the executive director of the Board to assign a commission investigator, if suspected equipment safety standard violations are reported to the board, to personally inspect the equipment for its compliance with the relevant safety standards promulgated by the U.S. Coast Guard and the International Maritime Organization. Additionally, existing law requires the commission investigator to report preliminary conclusions to the executive director. Furthermore, existing law requires the commission investigator to submit a report, required to remain confidential, to an incident review committee and the committee is required to report its findings, if any, AB 1025 (Skinner) continued Page 3 to the Board. Existing law requires the Governor to appoint an assistant director to serve at the pleasure of the Governor. The law also provides for an executive director (who is appointed by the Board) and requires that the executive director assign duties to the assistant director who is responsible to the executive director for the performance of his/her duties. BACKGROUND Brief Historical Perspective: Bar pilots have been guiding ships into San Francisco Bay, one of the most treacherous passages in the world, since at least 1835. The work that bar pilots performed was so important that one of the first legislative enactments by the newly formed California Legislature that met in San Jose in 1850 was to address the regulation of bar pilots. California's history of piloting parallels to a large extent the history of pilotage throughout the United States. Prior to the American Revolution, pilotage was regulated by colonial legislatures. They generally provided for the commissioning of pilots, apprenticeship requirements to become a pilot, specified the type and size of pilot boats used in the service, and established fees to be charged. When the United States Constitution was adopted, it recognized that pilotage fell within the domain of the federal government because it involved regulation of instruments of foreign commerce. One of the first acts of the newly formed Congress in 1789 was to recognize the existing state laws regulating pilots and delegate to the states the authority to continue to regulate pilotage because of its unique character. Bar pilots are responsible for steering an arriving vessel through the Golden Gate of San Francisco Bay, the Bay waters and adjoining navigable waters, which include San Pablo Bay, Suisun Bay, the Sacramento River and its tributaries. When a vessel approaches the "SF" buoy several miles west of the Golden Gate Bridge, a bar pilot boards the ship and takes navigational control. (Pilots in San Francisco are called "Bar Pilots" because they board and disembark ships just beyond a treacherous sand bar which provides a natural obstacle to shipping.) It becomes AB 1025 (Skinner) continued Page 4 the pilot's responsibility to guide the ship to its berth. The bar pilots provide service to all types of vessels, from 100-foot tugs to 1000-foot supertankers. Purpose of AB 1025: According to the author's office, this measure has been introduced to increase the efficiency of the board's operations. Specifically, the author's office points out that the board has expressed its frustration that individuals complete the board's examination process, which includes navigation simulation and which is free of charge, in order to gain navigation experience, with no intention of ever becoming San Francisco Bay pilots. The board claims that allowing it to charge a fee will not only discourage disingenuous exam takers but also ensure the board can cover expenses resulting from administering the exam. This measure also proposes to change the appointing authority from the Governor to the Secretary of the Business, Transportation and Housing Agency (BT&H) for the assistant director of the Board. On January 1, 2009, the Board was moved from an independent entity existing in state government to be a part of BT&H. The Secretary of BT&H was added as a non-voting Member of the Board. Because the Board is now under the aegis of BT&H, the Secretary is much closer to the administration of the Board, and thus, for consistency purposes, the author and co-sponsors of AB 1025 believe it makes sense to have the Secretary make the appointment rather than the appointment coming from the Governor's Office. Additionally, AB 1025 modifies the investigation and reporting procedure for safety equipment to put the executive director in the lead position, rather than the commission investigator. Furthermore, this measure removes references to "inland pilot." The author's office states that the last inland pilot has retired and there is no longer a distinction between "inland pilot" and "pilot." Accordingly, the term is now obsolete and unnecessary. Staff Comments: Prior to 1984, in addition to the bar pilots, another group of pilots known as "inland pilots" were employed to moor vessels and guide them through the narrow channels inside the Bay. At the time, inland pilots AB 1025 (Skinner) continued Page 5 were not licensed by the state but acted as independent contractors. Also, there was no requirement that inland pilots be used. A third group of pilots employed by company-owned vessels performed the same duties as inland pilots. AB 1768 (Papan) Chapter 1653 of 1984 established a unified system of state regulated bar and inland pilotage for the Bays of San Francisco, San Pablo and Suisun. Specifically, AB 1768 provided that only pilots licensed by the Board of Pilot Commissioners who are not the master or owner of the piloted vessel have the right of pilotage between and within the ports of the bays. At the time, a group of approximately 10 independent pilots were initially opposed to AB 1768 on the basis that it would abolish the existing system of "preferred pilots" in favor of a rotational, pooling system that would make it more expensive to use them. AB 1768 granted the inland pilots the opportunity to be licensed as bar pilots or be grandfathered as inland pilots with the additional requirement that they seek license renewal each year and hold an active and proper license to pilot vessels on the waters on which the pilot operates - a handful of inland pilots chose to remain inland pilots. The last of the "inland pilots" recently retired, thus there is no need for the term "inland pilot" in statute. PRIOR/RELATED LEGISLATION AB 907 (Ma) 2011-12 Session. Would make specified changes to various provisions of the Harbors and Navigation Code relating to bar pilotage rates for Monterey Bay and the Bays of San Francisco, San Pablo and Suisun. (Pending in this Committee) AB 656 (Huber) 2011-12 Session. Would sunset, as of January 1, 2011, the Board of Pilot Commissioners and transfer, as of that date, the board's duties to the Secretary of Business, Transportation and Housing. (Pending in this Committee) AB 1888 (Ma) Chapter 455, Statutes of 2010. Among other things, revised the terms for members of the board who are licensed pilots and members who represent the industry and exempted from those pilotage fees and surcharges noncommercial vessels that are maritime academy training AB 1025 (Skinner) continued Page 6 vessels and vessels owned and operated by nonprofit museums or foundations. These vessels would be subject to the board operations surcharge. SB 300 (Yee) Chapter 497, Statutes of 2009. Established a surcharge for payment of navigational aids for bar pilots and revised the pilotage rate based upon the current number of bar pilots. SB 1627 (Wiggins) Chapter 567, Statutes of 2008. Made numerous substantive, clarifying and technical changes to the body of law relating to the Board of Pilot Commissioners. Specifically, injected ongoing and continuous legislative oversight and administrative responsibility within the existing pilot licensing framework, without altering the Board, its charge, or composition and without changing current pilotage rates, pilot pension benefits, or duties and responsibilities of current, past or future licensed pilots. Also, directed the Bureau of State Audits to conduct a comprehensive performance and financial audit of the Board. SB 1217 (Yee) Chapter 568, Statutes of 2008. Required the Board of Pilot Commissioners to appoint a physician or physicians who are qualified to determine the suitability of a person to perform his or her duties as a pilot, an inland pilot, or a pilot trainee in accordance with specified requirements. Also, required the Board to terminate a pilot trainee or suspend or revoke the license of a pilot or an inland pilot who fails to submit the prescribed medication information required by these provisions. AB 852 (Leno) Chapter 129, Statutes of 2005. Among other things, authorized revenue generated by the pilot boat surcharge to be used to pay for pilot boat design and engineering modifications intended to extend the service life of existing boats, in addition to the existing purpose of purchasing new pilot boats. SB 1303 (Torlakson) Chapter 560, Statutes of 2004. Made a minor change to an existing provision of law relative to representation on the Board of Pilot Commissioners by clarifying that the Board's two industry members must be substantial users of any of the waters of the Bays of San Francisco, San Pablo, Suisun, or Monterey. AB 1025 (Skinner) continued Page 7 SB 1353 (Perata) Chapter 765, Statutes of 2002. Established a schedule of incremental changes (through January 1, 2006) to the rates and special surcharges that bar pilots may impose on vessels that move in and out of the Bays of San Francisco, San Pablo and Suisun. SB 637 (McPherson) Chapter 177, Statutes of 2001. Allowed San Francisco bar pilots to pilot commercial vessels calling on ports in "Monterey Bay" by including Monterey Bay within the system of state regulated pilotage for the Bays of San Francisco, San Pablo and Suisun. SB 2177 (McPherson) 1999-2000 Session. Would have applied existing provisions of law relative to the regulation, licensing, and management of pilots for the Bays of San Francisco, San Pablo and Suisun to persons who pilot vessels into or out of the waters of Monterey Bay. (Held in Assembly policy committee at author's request) SB 2144 (Perata) Chapter 394, Statutes of 2000. Made various modifications to provisions of law governing the licensing of bar pilots. SB 1109 (Burton) Chapter 786, Statutes of 2000. Among other things, required a vessel owner and its operators to defend, indemnify, and hold harmless, a bar pilot from any liability and expenses in connection with any civil claim suit as action arising out of the pilot's performance of the pilotage services, except for acts of willful misconduct. AB 951 (Wiggins) Chapter 261, Statutes of 1999. Codified the agreement on bar pilot rate increases reached between the San Francisco Bar Pilots and the Pacific Merchant Shipping Association. SB 1741 (Johnston) Chapter 1115, Statutes of 1996. Among other things, established a schedule of bar pilotage rate increases that were phased in over a three-year period (1997-99). SB 496 (M. Thompson) Chapter 711, Statutes of 1995. Revised the formula the fiduciary uses to calculate the quarterly adjustment for pilotage rates. Also, changed the schedule of pilotage fees for ship movements and internal AB 1025 (Skinner) continued Page 8 operations, as specified. SB 2068 (Johnston) Chapter 385, Statutes of 1994. Increased the pilotage rate from 60.70 mills to 64.88 mills and required the board to temporarily reduce the additional charge, as specified, if maintenance and repair costs of two pilot boats are less than $200,000. SB 238 (Lockyer) Chapter 1192, Statutes of 1993. Increased the rate of the additional pilotage charge from 60.56 mills per high gross registered ton to 60.70 mills. Also, included inland pilots, as defined, in the pension benefit program. AB 1768 (Papan) Chapter 1653, Statutes of 1984. Among other things, established a unified system of state regulated pilotage whereby inland pilots became members of the San Francisco Bar Pilots Association and the combined group assumed joint responsibility for all pilotage moves on the pilotage grounds (e.g., San Francisco, San Pablo, and Suisun Bays and all other ports included therein.) AB 1061 (Agnos) Chapter 1306, Statutes of 1983. Increased pilotage rates and pension benefits, as specified. AB 2027 (Felando) 1983 Session. Among other things, would have created three classes of pilots (pilots, inland pilots, and company pilots) and would have repealed existing law relative to the Legislature establishing pilotage rates. (Held in this Committee at author's request) AB 3603 (Brown, W.) 1982 Session. Would have provided a unified system of state regulated bar and inland pilotage. (Dropped at author's request in Senate Finance Committee) SUPPORT: As of June 24, 2011: Pacific Merchant Shipping Association (co-sponsor) San Francisco Bar Pilots (co-sponsor) OPPOSE: None on file as of June 24, 2011. FISCAL COMMITTEE: Senate Appropriations Committee ********** AB 1025 (Skinner) continued Page 9