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. 





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             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, 




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          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 




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          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 




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          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 




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          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.




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          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 




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          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

                                   **********




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