BILL NUMBER: AB 951 CHAPTERED 08/30/99 CHAPTER 261 FILED WITH SECRETARY OF STATE AUGUST 30, 1999 APPROVED BY GOVERNOR AUGUST 30, 1999 PASSED THE SENATE AUGUST 19, 1999 PASSED THE ASSEMBLY MAY 13, 1999 AMENDED IN ASSEMBLY MAY 10, 1999 AMENDED IN ASSEMBLY APRIL 5, 1999 INTRODUCED BY Assembly Member Wiggins FEBRUARY 25, 1999 An act to amend Sections 1163, 1164, 1190, and 1191 of the Harbors and Navigation Code, relating to bay pilots, and making an appropriation therefor. LEGISLATIVE COUNSEL'S DIGEST AB 951, Wiggins. Bay pilots. (1) Existing law provides for retirement benefits for pilots for the Bays of San Francisco, San Pablo, and Suisun and specified inland waters and for the purposes of that law distinguishes between service as a pilot and service as an inland pilot. To determine an inland pilot's full years of service for retirement benefit purposes, any periods of service that an inland pilot has performed as a pilot is required to be added to any service time performed as an inland pilot after January 1, 1993. This bill would permit any periods of service that an inland pilot has performed as a pilot to be added to service time performed as an inland pilot after January 1, 1987. The bill would make related changes. (2) Existing law establishes a program for licensing of pilots for the Bays of San Francisco, San Pablo, and Suisun, administered by the Board of Pilot Commissioners. Existing law specifies the rates for pilotage for vessels entering or leaving those bays through the Golden Gate, including $7.35 per draft foot of the vessel's deepest draft and fractions of a foot pro rata and an additional charge of 64.88 mills per high gross registered ton, adjusted by the board, as prescribed. This bill would increase the rate to $8.11 per draft foot and the additional charge to 73.01 mills per high gross registered ton. The bill would provide for a decrease in the mill rate once the number of licensed pilots is reduced to 60 and an increase in the mill rate for any subsequent increase in the number of pilots. The bill also would provide for 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. Existing law also imposes a board operation surcharge of 7.5% of pilotage fees, to be deposited in the Board of Pilot Commissioners' Special Fund and used to support the board, and imposes an additional charge for pension benefits payable to a fiduciary agent, as specified. The fund is continuously appropriated for the payment of the compensation and expenses of the board, its officers and employees, and the pilot training programs. This bill would increase rates imposed pursuant to these provisions, incrementally, on January 1, 2000, January 1, 2001, and January 1, 2002, as specified. (3) Existing law requires the board to adopt a schedule of pilotage rates for those operations that are not provided for in (1). This bill would increase these rates, incrementally, on January 1, 2000, January 1, 2001, and January 1, 2002, as specified. (4) Because the bill would increase the amount of money deposited in a continuously appropriated fund, the bill would make an appropriation. Appropriation: yes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 1163 of the Harbors and Navigation Code is amended to read: 1163. (a) (1) (A) Each retired pilot and inland pilot, who has completed 25 full years of service as a pilot or inland pilot, or both, shall receive, as a target monthly pension, an amount that is initially equal to 46 percent of an amount that is an average of the highest three of the last five years of audited annual average net income per pilot, prior to the pilot's or inland pilot's retirement, divided by 12, which initial target monthly pension amount shall be subject to periodic adjustment pursuant to Section 1167. Pilots or inland pilots with other than 25 full years of service as a pilot or inland pilot, or both, shall receive a monthly pension in an amount that is determined by multiplying the above calculated target monthly pension by a fraction, the numerator of which shall be the number of full years of service that the pilot or inland pilot has rendered and the denominator of which shall be 25 years, which initial monthly pension amount shall be subject to periodic adjustment pursuant to Section 1167. (B) Each disabled pilot or inland pilot shall receive as an initial target monthly pension an amount that is based on 46 percent of the greater of the following, which amount shall be subject to periodic adjustment pursuant to Section 1167: (i) An amount that is the average of the highest three of the last five years of audited annual average net income per pilot divided by 12 and multiplied by a fraction, the numerator of which shall be the number of full years of service that the pilot or inland pilot has rendered and the denominator of which shall be 25 years. (ii) The audited annual average net income per pilot, for the last year prior to the pilot's or inland pilot's disability, divided by 12 and multiplied by a fraction, the numerator of which shall be the number of full years of service that the pilot or inland pilot has rendered and the denominator of which shall be 25 years. (C) Each pilot who retired before January 1, 1985, shall receive as an initial target monthly pension an amount that is one hundred seventy-eight dollars ($178) multiplied by the number of full years of service he or she performed as a pilot licensed under this division, which amount shall be subject to periodic adjustment pursuant to Section 1167. (D) Each pilot who retired on or after January 1, 1985, or each inland pilot who retired after January 1, 1993, shall receive as an initial target monthly pension an amount that is the greater of the following, which amount shall be subject to periodic adjustment pursuant to Section 1167: (i) An amount that is calculated by multiplying one hundred seventy-eight dollars ($178) by the number of full years of service the pilot or inland pilot performed as a pilot or inland pilot licensed under this division. (ii) An amount that is 46 percent of the average of the highest three of the last five years of audited annual average net income per pilot, prior to the pilot's or inland pilot's retirement, divided by 12 and multiplied by a fraction, the numerator of which is the pilot' s or inland pilot's actual number of full years of service and the denominator of which is 25 years. (2) A pilot or inland pilot who retires or becomes disabled shall not begin to receive a pension until the beginning of the benefit payment period next following the date on which the pilot or inland pilot retires or becomes disabled. (3) A pilot or inland pilot shall not receive any benefits pursuant to the pension plan in any benefit payment period unless the pilot's or inland pilot's resignation as an active pilot or inland pilot specifying a proposed date of retirement was submitted, in writing, to the board, prior to November if the pilot's or inland pilot's retirement is to be effective the first day of the following January, prior to February if the pilot's or inland pilot's retirement is to be effective the first day of the following April, prior to May if the pilot's or inland pilot's retirement is to be effective the first day of the following July, or prior to August if the pilot's or inland pilot's retirement is to be effective the first day of the following October. The pilot's or inland pilot's resignation as an active pilot or inland pilot shall become effective on either January 1, April 1, July 1, or October 1, as specified in the written resignation. (4) If a retired or disabled pilot or inland pilot who is receiving a pension dies without a surviving spouse, the pilot's or inland pilot's successor in interest shall receive the monthly pension for the remainder of the benefit payment period within which the death occurs, after which time the monthly pension shall cease. (b) (1) The surviving spouse of a deceased pilot who is eligible for a pension pursuant to paragraph (1) of subdivision (e) of Section 1164 and the surviving spouse of a deceased inland pilot who is eligible for a pension pursuant to paragraph (2) of subdivision (e) of Section 1164 shall each receive, as a monthly pension, three-fourths of the amount that the deceased pilot or inland pilot would have received as a monthly pension pursuant to this section had the pilot or inland pilot lived, calculated as if the deceased pilot or inland pilot had been disabled pursuant to subparagraph (B) of paragraph (1) of subdivision (a). (2) If a retired or disabled pilot or inland pilot who was receiving a pension dies, the surviving spouse shall continue to receive the full amount of the monthly pension to which the deceased pilot or inland pilot was entitled for the balance of the benefit payment period within which the death occurs, after which the surviving spouse shall receive the amount specified in paragraph (1). (3) If a surviving spouse receiving a pension dies, the surviving spouse's successor in interest shall receive the monthly pension for the remainder of the benefit payment period within which the death occurs, after which time the monthly pension shall cease. (c) For the purpose of the computations described in paragraph (1) of subdivision (a), six months or more of service by a pilot or inland pilot shall be considered a full year. (d) Except as provided otherwise in this section and paragraph (4) of subdivision (e) of Section 1164, monthly pension amounts payable pursuant to this section to retired pilots and inland pilots and to their surviving spouses are payable for the life of that retired pilot, inland pilot, or spouse. (e) To determine an inland pilot's full years of service under this chapter, any periods of service that an inland pilot has performed as a pilot shall be added to any service time performed as an inland pilot after January 1, 1987. (f) In calculating the benefits of a retired or disabled pilot who was issued an original pilot's license in 1985 and who was not thereafter issued an inland pilot's license, or in calculating the benefits of the widow of such a pilot who is deceased, the number of years of service used in the calculation shall be the greater of the following: (1) The actual number of full years of service the pilot has rendered. (2) Ten years. SEC. 2. Section 1164 of the Harbors and Navigation Code is amended to read: 1164. (a) Except as provided in subdivision (b), a pilot shall be eligible for the pension provided in Section 1163 if the pilot meets all of the following requirements: (1) Held a license as a pilot and served at least 10 years in that capacity or has attained 62 years of age, whichever occurs first. (2) Retired after January 1, 1972. (3) Is at least 60 years of age. (b) A disabled pilot shall be eligible for the pension provided in Section 1163 if it has been determined by the board, based upon competent medical evidence, that the pilot is unable to perform the duties of a pilot. As used in this chapter, "disabled" means a disability of permanent or extended and uncertain duration, as determined by the board, on the basis of competent medical opinion. (c) Except as provided in subdivision (d), an inland pilot shall be eligible for the pension provided in Section 1163 if the inland pilot meets all of the following requirements: (1) Held a license as an inland pilot and served at least 10 years in that capacity after January 1, 1987, or has attained 62 years of age, whichever occurs first. (2) Retired after January 1, 1987. (3) Is at least 60 years of age. (4) Since January 1, 1987, has held himself or herself out as providing pilotage assistance to the entire shipping industry consistent with the inland pilot's license. (5) For services provided after January 1, 1994, performs a minimum of 75 assignments per calendar year unless excused from performance of that requirement due to medical needs satisfactory to the board. (d) A disabled inland pilot who meets the requirements of paragraph (4) of subdivision (c) shall be eligible for the pension provided in Section 1163 if it has been determined by the board, based upon competent medical evidence, that the inland pilot is unable to perform the duties of an inland pilot. (e) (1) A surviving spouse of a deceased pilot shall be eligible for the pension provided in subdivision (b) of Section 1163 if that deceased pilot died after January 1, 1972, and that deceased pilot had held a license as a pilot. (2) A surviving spouse of a deceased inland pilot shall be eligible for the pension provided in subdivision (b) of Section 1163 if the deceased inland pilot died after January 1, 1987, had held a license as an inland pilot, and since January 1, 1987, had held himself or herself out as providing pilotage assistance to the entire shipping industry consistent with the inland pilot's license. (3) In order for a surviving spouse to be eligible for any pension benefits pursuant to this chapter, the surviving spouse shall have been legally married to the deceased pilot or inland pilot for at least one year prior to the deceased pilot's or inland pilot's death. (4) A surviving spouse of a deceased pilot or inland pilot shall neither be eligible for, nor receive, pension benefits pursuant to this chapter if the surviving spouse remarries. If a surviving spouse who is receiving a monthly pension under this chapter remarries, the surviving spouse's successor in interest shall receive the amount of the monthly pension for the remainder of the benefit payment period as if the surviving spouse had died, in accordance with paragraph (3) of subdivision (b) of Section 1163. SEC. 3. Section 1190 of the Harbors and Navigation Code is amended to read: 1190. (a) Every vessel spoken inward or outward bound shall pay the following rate of bar pilotage through the Golden Gate and into or out of the Bays of San Francisco, San Pablo, and Suisun: (1) Eight dollars and eleven cents ($8.11) per draft foot of the vessel's deepest draft and fractions of a foot pro rata, and an additional charge of 73.01 mills per high gross registered ton as changed pursuant to law in effect on December 31, 1999. The mill rates established by this paragraph may be changed as follows: (A) Once the number of pilots licensed by the board is reduced to 60 pilots, for any subsequent decrease in the number of pilots, the mill rate then in effect shall be decreased by an incremental amount that is proportionate to one-half of the last audited annual average net income per pilot for each pilot licensed by the board below 60 pilots. Once the number of pilots licensed by the board falls below 60, for any subsequent increase in the number of pilots, the mill rate then in effect shall be increased by an incremental amount that is proportionate to one-half of the last audited annual average net income per pilot for each new pilot that results in an increase in the number of pilots then licensed by the board. The incremental mill rate adjustment authorized by this subparagraph shall be calculated using the data reported to the board for the number of gross registered tons handled by pilots licensed under this division during the same 12-month period as the audited annual average net income per pilot. The incremental mill rate adjustment shall become effective at the beginning of the quarter (January 1, April 1, June 1, or October 1) as directed by the board. (B) 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. The incremental mill rate charge authorized by this subparagraph shall be identified as a pilot boat surcharge on the pilots' invoices and separately accounted for in the accounting required by Section 1136. Net proceeds from the sale of existing pilot boats shall be used to reduce the debt on the new pilot boats. (C) In addition to the rate change specified in subparagraph (A) and the incremental rate specified in subparagraph (B), the mill rate established by this subdivision may be adjusted at the direction of the board if, after a hearing conducted pursuant to 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 catastrophic cost increase to the pilots that would result in at least a 2-percent increase in the overall annual cost of providing pilot services. (2) A minimum charge for bar pilotage shall be six hundred sixty-two dollars ($662) for each vessel piloted. (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 such transit inward or outward. (b) The rate specified in subdivision (a) shall apply only 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 a movement fee in addition to the basic bar pilotage rate as specified by the board 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. This subdivision does not apply to the rates charged by inland pilots for their services. (d) The board shall determine the number of pilots to be licensed based on the 1986 manpower study adopted by the board. (e) Consistent with the board's January 1999 adoption of rate recommendations, the rates imposed pursuant to paragraph (1) of subdivision (a) that are in effect on December 31, 1999, shall be increased by 4 percent on January 1, 2000; those in effect on December 31, 2000, shall be increased by 3 percent on January 1, 2001; and those in effect on December 31, 2001, shall be increased by 3 percent on January 1, 2002. SEC. 4. Section 1191 of the Harbors and Navigation Code is amended to read: 1191. (a) The board, pursuant to Chapter 6 (commencing with Section 1200), shall recommend that the Legislature, by statute, adopt a schedule of pilotage rates providing fair and reasonable return to pilots and inland pilots engaged in ship movements or special operations where rates for those movements or operations are not specified in Section 1190. (b) Every vessel using pilots and inland pilots for ship movements or special operations that do not constitute bar pilotage shall pay the rate specified in the schedule of pilotage rates adopted by the Legislature. (c) The minimum rates charged by pilots or inland pilots for ship movements and internal operations shall be the schedule of ship pilot fees recommended for adoption by the board in January 1999, and published by the San Francisco Bar Pilots. (d) Consistent with the board's January 1999 adoption of rate recommendations, the rates imposed pursuant to this section that are in effect on December 31, 1999, shall be increased by 22 percent on January 1, 2000; those in effect on December 31, 2000, shall be increased by 15 percent on January 1, 2001; and those in effect on December 31, 2001, shall be increased by 10 percent on January 1, 2002.