BILL ANALYSIS �
AB 2287
Page 1
Date of Hearing: April 23, 2012
ASSEMBLY COMMITTEE ON TRANSPORTATION
Bonnie Lowenthal, Chair
AB 2287 (Swanson) - As Amended: April 9, 2012
SUBJECT : San Francisco Bar Pilots: Second pilotage work
requests and compensation
SUMMARY : Establishes procedures for the use of San Francisco
Bay bar pilots (bar pilots) for special operations.
Specifically, this bill :
1)Requires that a minimum of two bar pilots be on board a vessel
that is subject to the payment of bar pilotage and is inward
or outward bound into or out of the Bays of San Francisco, San
Pablo, Suisun, or Monterey, if the movement of the vessel
involves special circumstances or operations, as defined
below.
2)Requires a vessel that is subject to the payment of bar
pilotage pay the full pilotage rate for vessel movements for
the first pilot, and 1/2 the full pilotage rate for vessel
movements for the other pilot.
3)Defines special circumstances to mean the following:
a) The movement of a vessel that exceeds 1,115 feet in
length and is destined for the Port of Oakland.
b) The night-time movement of a vessel that involves
anhydrous ammonia.
c) The movement of a vessel that requires the turning of a
vessel that is between 1,000 feet and 1,115 feet in length.
d) The movement of a vessel that takes place during a time
of restricted visibility caused by fog, weather conditions,
or darkness.
1)Requires the Board of Pilot Commissioners (Board), no later
than January 1, 2014, to adopt regulations specifying the
requirements that must be met for the safe operation of
vessels in those bays during periods of restricted visibility
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caused by fog, weather conditions, or darkness.
EXISTING LAW :
1)Establishes the Board, to license and regulate maritime pilots
who guide vessels entering or leaving the Bays of San
Francisco, San Pablo and Suisun, and Monterey. The Board has
seven members who are appointed by the Governor with the
consent of the Senate. The Board reports to the Secretary of
the Business, Transportation and Housing Agency.
2)Requires the Board to recommend that the Legislature, by
statute, adopt a schedule of pilotage rates providing that
provide fair and reasonable return to pilots engaged in ship
movements or special operations if the rates for those
movements or operations are not specified by law.
3)Requires a vessel using pilots for ship movements or special
operations that do not constitute bar pilotage to pay the rate
specified in the schedule of pilotage rates adopted by the
Legislature.
4)Recognizes the increase in vessel size and traffic, and the
increase in cargoes carried in bulk (particularly oil and gas
and hazardous chemicals) create substantial hazards to the
life, property, and values associated with the environment of
those waters.
FISCAL EFFECT : Unknown
COMMENTS : Brief historical background : Bar pilots have been
guiding ships into San Francisco Bay since 1835. This
passageway was considered one of the most treacherous in the
world. 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
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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 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 over 1000-foot supertankers. The bar
pilots move more than 9,000 vessels a year, working closely with
shipping agencies, tug companies, and the U.S Coast Guard to
deliver cargo and passengers safely and on time. Their scope of
services is unique in that it includes bar, bay, and inland
river pilotage. With the advent of the global positioning
system (GPS), the navigational aid system involving satellites
and computers that can determine the latitude and longitude of a
receiver on the earth, bar pilots use computers to aid in
navigating around shoals and other navigational impediments.
Purpose of AB 2287 : Pilots are generally mandatory in every
major port throughout the world and their pilotage service is
paid for by the vessel owner/agent. As noted above, the bar
pilots have been state regulated and licensed since 1850 to
pilot vessels to various ports in the San Francisco Bay Area
such as San Francisco, Oakland, Redwood City, Martinez,
Richmond, Pittsburgh, Vallejo, Rodeo, Antioch, Stockton,
Sacramento and, more recently, including Monterey. Vessels make
payment to the San Francisco Bar Pilots Association (SF Bar
Pilots Association) for services in these areas.
According to the author's office, as justification for the bill,
they cite the Board's May 2011 action recommending that the
Legislature adopt the rate schedule that permitted a charge for
the use of an additional pilot for safety considerations. The
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Board deliberated the necessity of requiring a second pilot
because of safety concerns due to the size or configuration of
the vessel either limiting visibility from the bridge or causing
difficulties in handling and steering, particularly in confined
or shallow waters. The author further contends that the Board
considered other special circumstances similar to this bill when
a second pilot would be required such as visibility restrictions
caused by conditions of fog, weather, or darkness as well as the
toxic chemical composition of the transported cargo. The author
indicated that the Board approved this action on a five to one
vote.
California ports pilotage services : The ports of Los Angeles,
Long Beach, San Diego, Port Hueneme, and Humboldt Bay are
governed by local government entities. Los Angeles pilots are
municipal employees and Long Beach has an exclusive contract
with a private company. The other ports contract with a pilot
association similar to the SF Bar Pilots Association. All of
these pilots hold only federal licenses.
The Los Angeles Pilot Service provides navigation port pilot
services for ship traffic to and from Los Angeles Harbor. These
pilots are employees of the City of Los Angeles and are covered
under the pension system as well as the city's liability
insurance in the event of a shipping incident. If the
assistance of a second pilot is considered necessary for the
safety of the vessel or harbor property, or is requested by the
master, owners, agents, charterers, operators or the pilot of
the vessel, a charge of one-half the total of the first pilot
fee, subject to a minimum charge of $392.00, is assessed.
For the Port of Long Beach, ships entering the harbor area are
provided port pilots who are under contract with a private pilot
service. According to the private service, they indicate that
they have been using multiple pilots on high profile jobs for
many years. Most of the multiple pilot jobs are two pilots
only, but some jobs have three pilots. They charge full rate
for each pilot onboard and comment that they "are pushing the
limits of the size of ships coming into our port and the only
way to mitigate the risk is to have multiple pilots onboard."
Vessels entering the San Francisco Bay are required by law to
utilize the services of a licensed bar pilot and are charged
fees for those services. The Board regulates and contracts for
the services of the bar pilots who are independent contractors,
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not state employees. The bar pilots, represented by the SF Bar
Pilots Association, have their membership and rates fixed by
California statute. There are no competitive options for ship
owners who use San Francisco Bay ports other than to employ the
services of this legal monopoly. The bar pilots are the only
coastal pilots that have their rates set in statute by the
Legislature.
Table of Pilotage Rates at various major North American Ports :
The Board included the following table in their record of
proceedings of their May 2011 hearings on the adjustments of
pilotage rates for the bar pilots. The table represents various
pilotage rate charges for the same vessel at various ports in
North America.
-----------------------------------------------------------------
| | Century | Hanjin | Hatsu |MSC Texas | British |
| | Highway | Hong | Eagle | | Pride |
| | #2 | Kong | | | |
|-----------+---------+---------+----------+----------+-----------|
|Long Beach |$2,660.16|$3,734.40|$4,896.00 |$5,445.52 | $6,043.60 |
| | | | | | |
|-----------+---------+---------+----------+----------+-----------|
|Vancouver |$6,351.94|$8,797.66|$13,420.00|$15,426.92|$28,508.86 |
| | | | | | |
|-----------+---------+---------+----------+----------+-----------|
|Puget |$8,541.94|$7,589.54|$17,111.92|$20,400.46|$34,058.46 |
|Sound | | | | | |
|-----------+---------+---------+----------+----------+-----------|
|Oakland |$12,429.6|$10,405.4|$19,811.07|$24,792.14|$43,439.36 |
| | 9 | 0 | | | |
|-----------+---------+---------+----------+----------+-----------|
|Ensenada |$5,900.74|$4,883.10|$9,990.35 |$11,887.55|$20,912.76 |
| | | | | | |
|-----------+---------+---------+----------+----------+-----------|
|Mazatlan |$6,991.63|$5,779.00|$11,842.34|$14,094.24|$24,800.83 |
| | | | | | |
|-----------+---------+---------+----------+----------+-----------|
|Lazaro |$9,252.96|$7,708.95|$15,063.07|$17,786.82|$30,638.96 |
|Cardenas | | | | | |
|-----------+---------+---------+----------+----------+-----------|
|Houston |$6,703.02|$8,758.92|$19,635.62|$22,322.60|$33,412.02 |
AB 2287
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| | | | | | |
|-----------+---------+---------+----------+----------+-----------|
|Tampa |$8,791.84|$8,230.76|$14,023.80|$16,236.86|$27,557.12 |
| | | | | | |
|-----------+---------+---------+----------+----------+-----------|
|New York |$6,881.64|$10,357.8|$11,191.60|$11,679.28|$14,589.60 |
| | | 0 | | | |
|-----------+---------+---------+----------+----------+-----------|
|*Los |$2,423.38|$3,398.62| $4,458.94| $4,959.06| $5,431.46|
|Angeles | | | | | |
|-----------+---------+---------+----------+----------+-----------|
| | | | | | |
-----------------------------------------------------------------
* Note: Los Angeles information added after May 25, 2011 Board
proceedings
Special circumstances for second pilotage : The Board, at their
May 25, 2011, rate adjustment proceedings, considered when an
additional pilot should be used in the navigation of a vessel in
transit or in its docking or departure from a dock. The Board's
in-depth discussion led to recommendations that are reflected in
this bill's provisions pertaining to the definition of "special
circumstances." Subsequent to the Board's deliberations, it
adopted a rate adjustment of 1/2 bar pilot rate that is
reflected in this bill.
Arguments in Support :
1)The author contends that the current rate structure for bar
pilot compensation was drafted with the use and consideration
of a single pilot on all ships. They do not believe that the
Legislature did not contemplate changes in shipping practices,
especially the ever-increasing sizes of the large ships that
are being deployed now. Accordingly, the author indicates
that "the law is silent with respect to the use and related
fee assessment for an additional pilot."
2)The bill's sponsor, the SF Bar Pilots Association that
represent the bar pilots collectively, contend that this
measure is not about pilot income, which rises and falls based
on shipping traffic calling at various Bay Area ports.
Rather, they indicate that the issue is about fairness and the
ability of the bar pilots to recoup their costs.
3)The bill codifies the recommendation of the Board's May 2011
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action where it approved the use of a second pilot with pay
commensurate to 1/2 regular bar pilotage rate.
4)According to the author, the use of an additional pilot for
special operations and a related fee assessment is not
unprecedented, it is the pattern and practice of the marine
pilot industry at the Port of Los Angeles and the Port of Long
Beach. The Port of Los Angeles (a municipal pilotage
district) requires a half-pilot charge for the use of an
additional pilot and the Port of Long Beach (pilotage services
provided by a private contractor) assesses full bar pilotage
fees for the use of additional pilots.
Arguments in Opposition :
1)Writing in opposition to this bill, the Pacific Marine
Shipping Association (PMSA), contends that "State-licensed
pilots in the San Francisco Bay participate in a monopoly
which exercises its privilege of compulsory pilotage and, as a
result, less than 60 individuals enjoyed net incomes of over
$451,000 per pilot in 2011. This includes a year-over-year
raise of $58,000 over their 2010 income, and represents a
windfall of $50,000 more than the pilots themselves expected
four years early. For this level of compensation, pilots are
asked to work less than six months a year - as they stand duty
for approximately 175 days, do approximately 140 jobs per
year, and spend an estimated 3.6 hours per duty day piloting."
2)PMSA also points out that the last time the Legislature
increased pilot rates in 2002, their published average net
income was over $239,000 per year and today they are making
90% more. They cite that as the reason another bill
pertaining to bar pilot compensation was rejected last year in
the Senate (AB 907 (Ma) of 2011).
3)According to Maersk, Inc., writing in opposition to the bill,
they contend that the larger ships pay more fees than the
average vessel because pilotage charges are based on the size
of the vessels with the understanding that the larger vessels
could present additional navigational challenges and may need
additional pilot resources to be moved safely. They question
why the state would double pay bar pilots that are "currently
the highest compensated pilots on the West Coast."
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4)The table on Page 4 points out the high pilotage costs of the
Port of Oakland in comparison to other ports within North
America, especially those in California. Opponents cite that
continued increases in fees make it more expensive for every
calling on the San Francisco ports and, if continued, could
give shippers incentive to use port facilities elsewhere.
Author's amendments : Attempting to allay concerns relative to
the bill's provisions that identify the special circumstances
when a second pilot is necessary, the author is proposing to
amend the bill to narrow the scope of the provisions to:
1)Narrow the scope of night transports of anhydrous ammonia to
pertain to only rivers and not the bay waters and the
chargeable second pilot would be at the request of the
customer or their agent.
2)Eliminate the need for a second pilot when visibility is
restricted due to fog, weather conditions, or darkness as well
as the requirement of the Board to adopt regulations for these
weather situations or darkness.
Related bill : AB 907 (Ma), of 2011, would have increased
pilotage rates as well as establish rates for a second pilot.
The bill failed passage in the Senate Governmental Organization
Committee and was subsequently amended to deal with surety
bonding of California farm products.
REGISTERED SUPPORT / OPPOSITION :
Support
San Francisco Bar Pilots Association (sponsor)
Opposition
California Chamber of Commerce
California Citrus Mutual
California Cotton Ginners and Growers Associations
California Farm Bureau Federation
California Grape and Tree Fruit League
California Grocers Association
California Manufacturers & Technology Association
California Rice Industry Association
California Trade Coalition
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Cruise Lines International Association
Maersk Line
Matson Navigation Company
Nisei Farmers League
Pacific Marine Shipping Association
Western Agricultural Processors Association
Western States Petroleum Association
Analysis Prepared by : Ed Imai / TRANS. / (916) 319-2093