Amended in Senate April 4, 2016

Senate Bill No. 1312

Introduced by Senator Wieckowski

February 19, 2016

An act to amend Sections 1122, 1137, 1170.1, 1190, 1190.1, 1195.1, 1196.1, 1200, 1201, 1201.5, and 1202 of, to add Sections 1103, 1190.2, 1190.3, 1190.5, 1191.1, 1195.2, 1196.2, and 1204 to, to add and repeal Section 1190.4 of, and to repeal and add Section 1191 of, the Harbors and Navigation Code, relating to harbors and navigation, and making an appropriation therefor.

LEGISLATIVE COUNSEL’S DIGEST

SB 1312, as amended, Wieckowski. Bar pilotage rates.

(1) Existing law provides for the licensing and regulation of pilots for the Monterey Bay and the Bays of San Francisco, San Pablo, and Suisun, by the Board of Pilot Commissioners for the Bays of San Francisco, San Pablo, and Suisun in the Transportation Agency. Existing law establishes pilotage rates and surcharges that are paid to licensed pilots by vessels piloted in those bays. Existing law establishes those pilotage rates and surcharges, and provides for changes to them based on the number of pilots licensed by the board and recommendations by the board to the Legislature. Existing law requires each licensed pilot to submit a monthly account to the board of all moneys received by the pilot for pilotage services.

This bill would revise and recast those provisions and would require that certain surcharges be separately identified on the pilots’ invoices and in their monthly account to the board. The bill would, until January 1, 2021, additionally authorize a technology surcharge, not to exceed a cumulative amount of $1,200,000, to recover pilots’ costs for navigation software, hardware, and equipment authorized by the board on or after January 1, 2017. The bill would require the board to submit a schedule of all pilotage rates and surcharges to the Office of Administrative Law for publication in the California Regulatory Notice Register and to post that schedule on the board’s Internet Web site. The bill would require an independent audit of all charges collected by pilots to be conducted annually by a public accountant selected by the board.

(2) Existing law requires the Board of Pilot Commissioners to review and evaluate pilotage expenses in making recommendations to the Legislature to adjust certain pilotage rates. Existing law establishes procedures for any party directly affected by those rates to petition the board for a public hearing. Existing law requires the board, at the conclusion of the hearings, to review and evaluate the evidence and to submit to the Secretary of the Senate and the Chief Clerk of the Assembly a copy of its findings and recommendations for a final determination.

Existing law requires each vessel to pay a board operations surcharge to compensate the board and the Transportation Agency for the services and incidental expenses of the board and agency. Existing law requires those moneys to be deposited in the Board of Pilot begin delete Commissioner’s end delete begin insert Commissioners end insert begin insert ’ end insert Special Fund and continuously appropriates those moneys for the compensation and expenses of the board and its officers and employees.

This bill would instead require the hearing on a petition to be before an administrative law judge, as provided, who would act as a finder of fact. The bill would prescribe procedures for the conduct of those hearings, the review of evidence, and the filing of decisions. The bill would require the board to review and evaluate the administrative law judge’s decision and either submit the decision to the Secretary of the Senate and the Chief Clerk of the Assembly or prepare and submit a written statement of its reasons for not doing so. The bill would require the administrative law judge to be compensated by the board from revenues from the board operations surcharge. By authorizing the expenditure of continuously appropriated funds for a new purpose, the bill would make an appropriation.

(3) Existing law requires that moneys collected from a pilot trainee surcharge and a pilot continuing education surcharge be deposited into the Board of Pilot begin delete Commissioner’s end delete begin insert Commissioners end insert begin insert ’ end insert Special Fund and continuously appropriates those moneys for pilot trainee and pilot continuing education programs, respectively.

This bill would create the Pilot Trainee Special Fund, require moneys collected from the pilot trainee surcharge to be deposited into that fund, and continue to continuously appropriate those moneys for pilot trainee programs. The bill would also create the Pilot Continuing Education Special Fund, require moneys collected from the pilot continuing education surcharge to be deposited into that fund, and require those moneys, upon appropriation, to be used for pilot continuing education programs.

(4) Under existing law, a pilot who is carried to sea against the pilot’s will or unnecessarily detained on board a vessel, as provided, is entitled to receive $600 per day, plus expenses, from the owner, operator, or agents of the detaining vessel.

This bill would increase that amount to $2,028 per day.

Vote: majority. Appropriation: yes. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

It is the intent of the Legislature to improve the
process by which bar pilotage rates and charges are set, managed
and maintained, and published by the Board of Pilot
Commissioners. It is further the intent of the Legislature that the
provisions of this act will reflect the actual rates and charges paid
by vessels operating in Monterey Bay, and the Bays of San
Francisco, San Pablo, and Suisun. It is not the intent of the
Legislature that this act will result in the increase of any pilotage
rates or charges currently in effect.

SEC. 2.  

Section 1103 is added to the Harbors and Navigation
Code, to read:

1103.  

The Legislature finds and declares all of the following:

(a) Transparency and accountability regarding how the board
operates and makes its decisions is critical to gaining and retaining
the confidence of the public and serving the ratepayers affected
by its decisions.

(b) In order to ensure and promote the highest level of safety
in pilotage and to eliminate competition between state-licensed
pilots on the basis of the rate of charges to vessels, the state enacts
statutes that set a tariff of charges and levies that must be paid by
vessels for the provision of pilotage services by a pilot licensee.

(c) The economic benefits of ocean-going vessels’ safe
navigation to our ports are essential to our day-to-day lives and
fundamentally affect every California family and business. Because
of the importance that ocean-going vessels play in our economy,
the pilotage tariff schedule set forth in this division, its
management, and any recommendations for the amendment of
existing pilotage rates should be maintained and implemented in
a manner that is transparent and accountable to the public.

(d) The greater and more unfettered the public’s power in an
important component of our economy, the greater the public’s
interest in monitoring the exercise of that power. Accordingly, the
conduct of the public’s business by the board is of the highest
public interest.

SEC. 3.  

Section 1122 of the Harbors and Navigation Code is
amended to read:

1122.  

(a) A pilot carried to sea against the pilot’s will, or
unnecessarily detained on board a vessel when a pilot vessel is in
attendance to receive the pilot, shall receive two thousand
twenty-eight dollars ($2,028) per day while so carried to sea or
detained, plus reimbursement for any expenses incurred by the
pilot in returning to the pilot station.

(b) The owner, operator, and agents of the detaining vessel are
jointly and severally liable for paying the amount specified in
subdivision (a).

SEC. 4.  

Section 1137 of the Harbors and Navigation Code is
amended to read:

1137.  

(a) The account required pursuant to Section 1136 shall
show all of the following:

(1) The name of each vessel piloted.

(2) The name of each vessel for which pilotage has been charged
or collected.

(3) The amount charged to or collected for each vessel.

(4) Any rebates made and allowed and for what amounts.

(5) The amount of the fees and surcharges not collected pursuant
to Section 1193.

(6) The depth of each vessel’s draft and its highest gross
tonnage.

(7) Whether the vessel was inward or outward bound.

(b) The board shall record the accounts in full detail in a book
prepared for that purpose. The account book is a public record.

(c) The board shall cause an independent audit of all charges
collected by pilots pursuant to this division to be conducted
annually by a public accountant selected by the board.

SEC. 5.  

Section 1170.1 of the Harbors and Navigation Code
is amended to read:

1170.1.  

In determining the number of pilots needed, pursuant
to Section 1170, the board shall take into consideration the findings
and declarations in Sections 1100, 1101, and 1102, the results of
an audit made pursuant to, and the factors specified in, Section
1203, the industry’s current economic trends, fluctuations in the
number of vessel calls, the size of vessels, whether the need for
pilotage is increasing or decreasing, the 1986 manpower study
adopted by the board, and the results of the study required pursuant
to Section 1196.5.

SEC. 6.  

Section 1190 of the Harbors and Navigation Code is
amended to read:

1190.  

(a) (1) Every vessel spoken inward or outward bound
shall pay a rate of bar pilotage through the Golden Gate and into
or out of the Bays of San Francisco, San Pablo, begin delete and end delete

begin delete (1) end delete begin delete   end delete begin delete Eight dollars and eleven cents ($8.11) end delete begin insert and end insert Suisun of ten
dollars and twenty-six cents ($10.26) per draft foot of the vessel’s
deepest draft and fractions of a foot pro rata, and an additional
charge of ninety-two and four hundred twenty-three thousandths
mills ($0.092423) per high gross registered ton.

begin insert

(2) A minimum charge for bar pilotage shall be six hundred
sixty-two dollars ($662) for each vessel piloted.

end insert begin insert

(3) The vessel’s deepest draft shall be the maximum draft
attained, on a stillwater basis, at any part of the vessel during the
course of that transit inward or outward.

end insert

(b) The rate specified in subdivision (a) is the bar pilotage rate
and that rate alone shall apply to a pilotage that passes through the
Golden Gate to or from the high seas to or from a berth within an
area bounded by the Union Pacific Railroad Bridge to the north
and Hunter’s Point to the south. The rate for pilotage to or from
the high seas to or from a point past the Union Pacific Railroad
Bridge or Hunter’s Point shall include both the bar pilotage rate
as specified in subdivision (a) and an additional movement fee as
specified pursuant to Section 1191.

(c) The rate established in paragraph (1) of subdivision (a) shall
be for a trip from the high seas to dock or from the dock to high
seas. The rate specified in Section 1191 shall not be charged by
pilots for docking and undocking vessels.

SEC. 7.  

Section 1190.1 of the Harbors and Navigation Code
is amended to read:

1190.1.  

Every vessel that uses a pilot under this division while
navigating the waters of Monterey Bay shall pay the rate provided
by Section 1190.

SEC. 8.  

Section 1190.2 is added to the Harbors and Navigation
Code, to read:

1190.2.  

(a) In addition to the rate specified in Section 1190,
there may be an incremental rate of additional mills per high gross
registered ton as is necessary and authorized at the direction of the
board if, after a public meeting conducted in accordance with the
requirements of the Bagley-Keene Open Meeting Act (Article 9
(commencing with Section 11120) of Chapter 1 of Part 1 of
Division 3 of Title 2 of the Government Code), the board
determines that there has been a catastrophe or natural disaster
that has resulted in significant, unexpected cost increases that are
necessary to restore pilot services to customers, repair, replace, or
restore damaged pilot facilities or equipment, or to comply with
government agency orders resulting from a declared disaster.

(b) The incremental mill rate charge authorized by this section
shall be identified as a catastrophic event surcharge on the pilots’
invoices and separately accounted for in the accounting required
by subdivision (b) of Section 1136.

(c) Proceeds from the catastrophic event surcharge shall be used
only to recover the pilots’ costs related to the catastrophe or natural
disaster underlying the incremental mill rate charge, and the
surcharge shall cease to be collected upon full recovery of those
costs.

SEC. 9.  

Section 1190.3 is added to the Harbors and Navigation
Code, to read:

1190.3.  

(a) There shall be an incremental rate of additional
mills per high gross registered ton as is necessary and authorized
by the board to recover the pilots’ costs of obtaining new pilot
boats and of funding design and engineering modifications for the
purposes of extending the service life of existing pilot boats,
excluding costs for repair or maintenance. The board may adjust
the incremental rate to reflect any associated operational savings
resulting from the modification of pilot boats under this section,
including, but not limited to, reduced repair and maintenance
expenses.

(b) The incremental mill rate charge authorized by subdivision
(a) shall be identified as a pilot boat surcharge on the pilots’
invoices and separately accounted for in the accounting required
by subdivision (b) of Section 1136.

(c) Net proceeds from the sale of existing pilot boats shall be
used to reduce the debt on the new pilot boats and any debt
associated with the modification of pilot boats under this section.

SEC. 10.  

Section 1190.4 is added to the Harbors and Navigation
Code, to read:

1190.4.  

(a) There shall be a movement fee as is necessary and
authorized by the board imposed to recover a pilot’s costs for the
purchase, lease, or maintenance of navigation software, hardware,
and ancillary equipment that is authorized by the board as
reasonable and necessary on or after January 1, 2017.

(b) The software, equipment, and technology covered by this
section shall be used strictly and exclusively to aid in piloting on
the pilotage grounds.

(c) The movement fee authorized by this section shall be
identified as a navigation technology surcharge on a pilot’s invoices
and separately accounted for in the accounting required by
subdivision (b) of Section 1136.

(d) The cumulative amount of the surcharge collected pursuant
to this section shall not exceed one million two hundred thousand
dollars ($1,200,000).

(e) The board shall review and adjust as necessary the navigation
technology surcharge authorized by this section at least quarterly.

(f) This section shall remain in effect only until January 1, 2021,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2021, deletes or extends that date.

SEC. 11.  

Section 1190.5 is added to the Harbors and Navigation
Code, to read:

1190.5.  

The board shall submit to the Office of Administrative
Law for publication in the California Regulatory Notice Register
and shall post on its Internet Web site the schedule of all pilotage
rates and surcharges in effect pursuant to Sections begin insert 1159.2, 1165, end insert
1190, 1190.2, 1190.3, begin delete and 1190.4 end delete begin insert 1190.4, 1195, and 1196 end insert as the
“BAR PILOTAGE TARIFF.”

SEC. 12.  

Section 1191 of the Harbors and Navigation Code is
repealed.

SEC. 13.  

Section 1191 is added to the Harbors and Navigation
Code, to read:

1191.  

Any ship movement or special operation that does not
constitute bar pilotage shall be subject to, and shall pay, the rate
specified in the schedule of pilotage rates for bay and river pilotage
services, as adopted by the Legislature in Section 2 of Chapter 765
of the Statutes of 2002, consistent with the board’s adoption or
rate recommendations in May 2002.

SEC. 14.  

Section 1191.1 is added to the Harbors and Navigation
Code, to read:

1191.1.  

The board shall submit to the Office of Administrative
Law for publication in the California Regulatory Notice Register
and shall publish on its Internet Web site, the schedule of all
pilotage rates for ship movement or special operations that do not
constitute bar pilotage, as described in Section 1191, begin insert and
applicable surcharges end insert as the “BAY AND RIVER PILOTAGE
TARIFF.”

SEC. 15.  

Section 1195.1 of the Harbors and Navigation Code
is amended to read:

1195.1.  

(a) The moneys charged and collected each month
from the pilot trainee surcharge pursuant to Section 1195 shall be
paid to the Pilot Trainee Special Fund established pursuant to
Section 1195.2. The moneys shall be used only to fund the pilot
trainee training program referred to in subdivision (h) of Section
1171.5 and Section 1195.3.

(b) Information regarding moneys remitted to the Pilot Trainee
Special Fund collected from the surcharge authorized pursuant to
Section 1195, or otherwise collected by the board for that purpose,
and information regarding moneys spent as pilot trainee training
program expenses authorized by Section 1195.3 shall be made
available to the public upon request and to the board or its finance
committee.

SEC. 16.  

Section 1195.2 is added to the Harbors and Navigation
Code, to read:

1195.2.  

(a) The Pilot Trainee Special Fund is hereby created
within the State Treasury. All moneys received by the board from
the surcharge authorized by Section 1195 shall be accounted for
at the close of each month to the Controller in the form the
Controller may prescribe and, at the same time on the order of the
Controller, all these moneys shall be paid into the State Treasury
to the credit of the Pilot Trainee Special Fund.

(b) Notwithstanding Section 13340 of the Government Code,
the moneys in the fund are continuously appropriated for carrying
out the purposes specified in Section 1195.1.

(c) Except as provided by this division, moneys in the General
Fund or any other state fund shall not be transferred to the Pilot
Trainee Special Fund or otherwise used to support the board or to
pay the debts, obligations, or encumbrances of the board, its
licensees, or trainees.

SEC. 17.  

Section 1196.1 of the Harbors and Navigation Code
is amended to read:

1196.1.  

(a) The moneys charged and collected each month
from the pilot continuing education surcharge pursuant to Section
1196 shall be paid to the Pilot Continuing Education Special Fund
created pursuant to Section 1196.2. The moneys shall be used only
to fund the pilot continuing education program referred to in
subdivision (h) of Section 1171.5 and Section 1196.3.

(b) Information regarding moneys collected from the surcharge
authorized pursuant to Section 1196, or otherwise collected by the
board for that purpose, and information regarding moneys spent
as pilot continuing education expenses authorized by Section
1196.3 shall be made available to the public upon request and to
the board or its finance committee.

SEC. 18.  

Section 1196.2 is added to the Harbors and Navigation
Code, to read:

1196.2.  

(a) The Pilot Continuing Education Special Fund is
hereby created within the State Treasury. The fund shall receive
all proceeds from the surcharge authorized by Section 1196.
Moneys in the fund may be used by the board, upon appropriation,
for continuing education for pilots as provided in Section 1196.1.

(b) Except as provided in this division, moneys in the General
Fund or any other state fund shall not be transferred to the Pilot
Continuing Education Special Fund or otherwise used to support
the board or to pay the debts, obligations, or encumbrances of the
board, its licensees, or trainees.

SEC. 19.  

Section 1200 of the Harbors and Navigation Code is
amended to read:

1200.  

(a) The board may make recommendations to the
Legislature regarding potential amendments to the pilotage rates
that are specified in Sections 1190 and 1191.

(b) The board shall, from time to time, review pilotage expenses
and establish guidelines for the evaluation and application of these
expenses regarding its recommendations for adjustments in rates.

SEC. 20.  

Section 1201 of the Harbors and Navigation Code is
amended to read:

1201.  

(a) Any party directly affected by pilotage rates
established under this chapter may petition the board for a public
hearing on any of the matters set forth in Section 1200.

(b) Within 10 days from the filing of the petition the board shall
call public hearings to be held not less than 30 nor more than 60
days of the date of call for the purpose of holding an evidentiary
hearing on the petition. The board shall schedule this evidentiary
hearing before an administrative law judge experienced with
ratemaking from begin delete either end delete the Office of Administrative begin delete Hearings or
the Administrative Law Judge Division of the Public Utilities
Commission. end delete begin insert Hearings. end insert

(c) The board shall give notice of the hearings to all interested
parties who have requested the notification. All interested parties
shall have the right to submit comments and evidence in response
to a petition prior to the public hearings.

(d) The evidentiary hearing shall be a quasi-judicial proceeding
held before an administrative law judge who shall act as a finder
of fact. The petitioning party shall have the burden of proving, by
a preponderance of the evidence, all of the facts upon which the
petition is based.

(e) At the conclusion of the hearing or hearings, the
administrative law judge shall issue a decision setting forth
recommendations, findings, and conclusions. The decision shall
be supported by findings of fact on all issues material to the
decision, and the findings of fact shall be based on the evidence
in the record developed by the parties before the administrative
law judge. Any recommendation to approve the petition or
modification in order to partially approve the petition shall be
accompanied by a written explanation of each part of the decision
or changes made to the petition in the decision.

(f) The decision of the administrative law judge shall be filed
with the board and served on all parties without undue delay, but
not later than 60 days after the matter has been submitted for
decision.

(g) The board shall review and evaluate the findings and
recommendations in the administrative law judge’s decision and
all of the evidence obtained and, within 30 days from the filing of
the decision, shall either submit to the Secretary of the Senate and
the Chief Clerk of the Assembly a copy of the administrative law
judge’s decision, findings, and recommendations, supported by a
transcript of those proceedings, or prepare and submit to the
Secretary of the Senate and the Chief Clerk of the Assembly a
written statement of its reasons for not submitting the decision.

SEC. 21.  

Section 1201.5 of the Harbors and Navigation Code
is amended to read:

1201.5.  

(a) The administrative law judge and board shall not
consider any written evidence for the purpose of considering
pilotage rates unless 10 or more copies of the evidence have been
deposited with the board as public documents by the party
petitioning for a rate adjustment 30 or more days prior to the date
set for the commencement of the hearing.

(b) The administrative law judge and board shall not consider
any written evidence at the hearing from any party responding to
the petition unless the evidence is deposited with the board 10 or
more days prior to the date set for the commencement of the
hearing.

SEC. 22.  

Section 1202 of the Harbors and Navigation Code is
amended to read:

1202.  

(a) Notwithstanding any other law, any meeting of the
board or hearing by an administrative law judge at which the rates,
charges, and levies subject to this division are to be imposed,
changed, or discussed shall be open and public, and a transcript
of any such meeting shall be prepared and kept by the board.

(b) Public hearings for the purpose of investigating
recommendations and findings related to a petition for a change
in pilotage rates shall be conducted in accordance with the
Bagley-Keene Open Meeting Act (Article 9 (commencing with
Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of
the Government Code) and a full record shall be kept of all
evidence offered.

(c) No officer, employee, or agent of the board shall participate
in the decision of any factually related petition proceeding,
including participation in or advising the administrative law judge
as to findings of fact, conclusions of law, or orders, including as
a witness or declarant regarding a petition. Nothing in this
subdivision prohibits an administrative law judge from asking for
an officer, employee, or agent of the board to appear as a witness
in open session, unless the officer, employee, or agent has a conflict
of interest or is otherwise prohibited by statute from participating
in the proceeding.

(d) Ex parte communications with the administrative law judge
adjudicating the petition or any members of the board regarding
a petition filed under this division are prohibited, including any
oral or written communications concerning procedural matters,
except for procedural communications with the administrative law
judge or the board’s executive director, if the ex parte
communications are in writing and transmitted to all other
interested parties on the same day as the original communication
with the administrative law judge or executive director. Written
ex parte communications shall be part of the final record of the
proceeding made available to the Secretary of the Senate and Chief
Clerk of the Assembly, but shall not be made available to members
of the board prior to its final action on a decision by an
administrative law judge.

SEC. 23.  

Section 1204 is added to the Harbors and Navigation
Code, to read:

1204.  

The Office of Administrative Hearings begin delete or the
Administrative Law Judge Division of the Public Utilities
Commission end delete shall be compensated at cost by the board for costs
associated with the conduct of a hearing or other matters as required
by this chapter. Any such expense shall be funded by revenues
received by the board from the board operations surcharge, as
described in Section 1159.2. The board shall ensure that an
administrative law judge has been fully compensated pursuant to
this section.