California Code of Regulations › Title 7 - Harbors and Navigation › Division 2 - State Board of Pilot Commissioners for the Bays of San Francisco, San Pablo and Suisun › Article 7 - Pilotage Rates › Section 236 - Rate Hearing Procedures

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
				Pilotage rates are set by statute codified at Chapter 5 of Division 5 of the
				Harbors and Navigation Code, beginning with Section
				1190. The Board's role in the
				setting of pilotage rates is to hold public hearings to investigate such rates
				and make recommendations to the Legislature. Any party directly affected by
				pilotage rates may petition the Board for such a rate hearing, as set forth in
				this section; however, nothing contained in this section shall preclude the
				Board from conducting a duly noticed rate hearing on its own motion.
(b) Within ten (10) days after receipt by the
				Board of a petition for a rate hearing from a party directly affected by
				pilotage rates, the Board shall notice a public hearing to be held not less
				than thirty (30) nor more than sixty (60) days from the date of the notice.
				Such notice shall be given to all parties directly affected by pilotage rates
				and to all other interested parties who have requested such notification. The
				purpose of the hearing is to obtain information and data relating to the issues
				raised in the petition or notice.
(c) The party proposing a rate adjustment
				shall have the burden of proving by a preponderance of the evidence that a
				change in the rates is justified. Ten (10) copies of all written evidence
				submitted in support of the petition shall be deposited with the Board at least
				thirty (30) days prior to the date set for the hearing. Such written evidence
				shall be available for public inspection during normal Board hours.
(d) Any party wishing to respond to a
				petition for a rate adjustment shall submit ten (10) copies of all written
				evidence it relies on to support its response, and shall deposit them with the
				Board at least ten (10) days prior to the date set for the hearing. Such
				evidence shall be available for public inspection during normal Board
				hours.
(e) Upon the filing of a
				petition for a rate hearing, copies of the most recent annual audited financial
				statements of the San Francisco Bar Pilots and of the San Francisco Bar Pilots
				Benevolent and Protective Association shall be deposited with the Board and
				made available for public inspection during normal Board hours. The Board may
				also require an independent audit of pilot operations by a public accountant
				selected by the Board. The results of any such independent audit shall be made
				available for public inspection during normal Board hours and shall become a
				part of the record.
(f) Factors to
				be considered by the Board in preparing its recommendation to the Legislature
				on pilotage rates include, but are not limited to, the following:
(1) Costs of Providing Pilot Services.
				Parties directly affected by pilotage rates are encouraged to use the Board's
				process for periodic review of pilotage expenses to reach agreement on whether
				specific expense categories should be considered a "cost of providing pilot
				services" within the meaning of this section. Absent a showing that there was
				no reasonable opportunity to do so, the failure to make use of that process may
				result in the Board's refusal to approve an expense category not previously
				approved as a cost of providing pilot services or in the Board's refusal to
				reverse a previous decision to approve such an expense category.
(2) Net Return to Pilots Sufficient to
				Attract and Hold Qualified Pilots. A party contending that the current rates
				result in a net return which is insufficient to attract or hold qualified
				pilots has the burden of persuading the Board of that point of view. In
				determining the issue, the Board may consider the level of qualifications and
				number of applicants meeting minimum qualifications for its pilot trainee
				training program, the number and circumstances of pilots resigning before their
				eligibility for statutory retirement benefits, and any other evidence relevant
				to the issue.
(3) Cost of Living
				Index. In assessing the adequacy of the net return to pilots, the Board will
				consider, as one factor, the change in the annual average, seasonally
				unadjusted consumer price indices between the last rate hearing and the most
				recent 12-month period for which such data is available from the U. S.
				Department of Commerce, Bureau of Labor Statistics, for the "Western Region"
				and for "All Urban Consumers, San Francisco-Oakland-San Jose."
(4) Rates Charged for Comparable Services in
				Other Ports. "Comparable services" means pilotage from sea to dock in ports
				with generally similar geographic and hydrographic parameters, vessel traffic
				in density and in size and type of vessels, number of vessel movements, length
				of transit, number of pilots, pilot work load and relative difficulty of
				pilotage and hazards encountered. While the Board recognizes that no port will
				be precisely the same in all these categories as the waters under the Board's
				jurisdiction, it encourages the parties to agree on a limited number of ports
				which are sufficiently comparable for this purpose and for which accurate
				pilotage rate, pilot income and/or pilot expense data is reasonably available
				in the public record or is otherwise verifiable.
Absent persuasive evidence to the contrary, the Board
				  recognizes the following ports as comparable for purposes of this section:
				  Columbia Bar/River, Houston, Tampa Bay, Sandy Hook (NY/NJ), New Orleans/Baton
				  Rouge, St. Johns Bar (Jacksonville), Maryland (Chesapeake Bay) and Puget Sound
				  (Seattle). Pilotage rate and pilot income and expense data for other ports
				  shall be supported by evidence that the pilotage services for those ports are
				  comparable as defined in this subsection.
(5) Income Paid for Comparable Services.
				Parties submitting evidence of pilot income and expenses in other ports shall
				limit such evidence to ports providing comparable services, as defined in
				subsection (f)(4) above and for which accurate pilotage rate, pilot income
				and/or pilot expense data is reasonably available in the public record or is
				otherwise verifiable. Evidence of pilot income and expenses in other ports
				shall be accompanied by the cost of living differential between those ports and
				the San Francisco Bay Area for the period for which the pilot income and
				expense data applies if such differential information is available in the
				public record.
(6) Methods of
				Determining Rates in Other Ports. Parties wishing to offer evidence of how
				pilotage rates are determined in other ports should do so for those ports for
				which pilotage rate or pilot income and expense data is also
				provided.
(7) Economic Factors
				Affecting Local Shipping. The Board will consider such competent evidence as
				the parties may submit regarding economic factors affecting the local shipping
				industry, including prospective increases or decreases in income and labor
				costs. A party wishing to affect a rate change on the basis of such economic
				factors has the burden of persuading the Board that the evidence supports that
				party's argument.
(8) Volume of
				Shipping Traffic. The Board may rely on data of vessels piloted as submitted
				monthly by the pilots. That data is available as a public record of the
				Board.
(9) Number of Pilots
				Available. In preparing its recommendation on pilotage rates, the Board will
				consider the number of pilots actually licensed at the time of the rate
				hearing. Any issues regarding the adequacy of that number should be addressed
				in a duly noticed hearing held pursuant to Harbors and Navigation Code Sections
				1170.1
				and
				1170.2.
(10) Risk to Pilots. The Board recognizes the
				inherent risk to the personal safety of the pilots in providing pilotage
				services, including those risks posed by the physical characteristics of the
				pilotage grounds within the Board's jurisdiction. A party seeking to affect a
				rate change on the grounds that there have been material changes in those risks
				has the burden of proving such changes.
(11) Changes in Navigational and Safety
				Equipment/Pilot Support Activities. The Board recognizes that, in recent years,
				there have been substantial changes in training requirements placed on pilots,
				in regulations which pilots must implement, and in the complexity and size of
				vessels which increases the professional demands on pilots. The Board also
				recognizes that pilots have provided services beyond the navigation of vessels.
				Such services are referred to as "pilot support activities." Changes in those
				pilot support activities that are necessary to providing pilot service may be
				considered in determining the appropriate pilotage rate. To the extent such
				changes have increased the costs to the pilots of providing pilot services,
				these costs should be addressed under subsection (f)(1) above. To the extent
				such changes have resulted in increased time demands, such demands should be
				addressed at a duly noticed hearing to determine the number of pilots under
				Harbors and Navigation Code Sections
				1170.1
				and
				1170.2.
(12) The weight to be given to each of the
				factors enumerated in this subsection may vary depending on prevailing
				circumstances and shall be left to the sound discretion of the
				Board.