Current through Register 2024 Notice Reg. No. 12, March 22, 2024
(a) A
separate surcharge on pilotage fees called a Pilot Boat Surcharge is authorized
by Section
1190(a)(1)(B)
of the Harbors and Navigation Code to recover those of the pilots' costs of
obtaining new pilot boats and of funding design and engineering modifications
for extending the service life of existing pilot boats that are authorized by
law. The surcharge is in the form of additional mills per high gross registered
ton. This section sets forth the procedures for obtaining the Board's
authorization to recover such costs and to set and periodically adjust the
Pilot Boat Surcharge.
(b) For
purposes of this section, the term "new pilot boat" shall include an existing
vessel acquired from another owner.
(c) Requests made pursuant to this section
shall be submitted to the Board in writing and shall be supported by the data
and documentation required by this section. The requesting party must establish
to the satisfaction of the Board that the expenditures for a new pilot boat or
for life extension modifications to an existing pilot boat are -- or, if those
costs have already been incurred, were -- reasonable and necessary. The process
requires a necessity determination, a preliminary authorization and a final
authorization, which are described in subsections (d), (e) and (f)
respectively.
(d) Necessity
Determination
(1) A request for a Board
determination that expenditures for a new pilot boat or for life extension
modifications to an existing pilot boat are or were necessary may be made prior
to or at the same time as a request for preliminary authorization to recover
such costs.
(2) The Board may
consider a request for a necessity determination at a duly noticed regular or
special Board meeting held after the request and all documentation in support
of the request have been deposited with the Board and made available for public
inspection. Notice shall be given to all parties directly affected by pilotage
rates or to a trade organization representing such parties and to all other
parties who have requested such notification.
(3) Documentation in support of a necessity
determination shall be sufficient to allow the Board to assess the remaining
service life of the existing pilot boats, both with the proposed life extension
modifications, if any, and without such modifications. The Board or its
advisory committee may request additional documentation or conduct its own
investigation prior to making a necessity determination hereunder.
(4) A necessity determination made under this
section shall be valid for one year unless directed otherwise by the
Board.
(e) Preliminary
Authorization
(1) A request for the Board's
preliminary authorization to recover the pilots' costs of obtaining new pilot
boats or funding design and engineering modifications for extending the service
life of existing pilot boats shall precede a request for a final authorization
and shall include a request for a necessity determination unless a necessity
determination is pending or has been issued by the Board and remains
valid.
(2) The Board may consider a
request for preliminary authorization at a duly noticed regular or special
meeting held after the request and all documentation in support of the request
have been deposited with the Board and made available for public inspection.
Notice shall be given to all parties directly affected by pilotage rates or to
a trade organization representing such parties and to all other parties who
have requested such notification.
(3) Documentation in support of a request for
preliminary authorization shall be sufficient for the Board to assess the
reasonableness of the request in light of its necessity determination and shall
include basic design and performance specifications, cost estimates, proposed
timeline of major milestones for design and construction of a new pilot boat or
for acquisition and modification of an existing vessel, or installation of life
extension modifications on an existing pilot boat, and plans for long term
financing. The Board or its advisory committee may request additional
documentation from the requesting party prior to issuing a preliminary
authorization hereunder.
(4) The
purpose of a preliminary authorization is to provide an opportunity for
meaningful and early communication among affected parties and the Board on
issues relevant to the costs of obtaining new pilot boats or of funding design
and engineering modifications of existing pilot boats. Preliminary
authorizations may be issued in stages as circumstances dictate.
(5) The Board may issue a preliminary
authorization on such terms as it may deem appropriate to provide guidance to
the parties on such matters as have been addressed and to set the conditions
and timing for a final authorization determination. The authority to recover
costs under this section or to set a Pilot Boat Surcharge rate shall only be
issued after a final authorization.
(f) Final Authorization
(1) A request for final authorization to
recover the pilots' costs of obtaining new pilot boats or of funding design and
engineering modifications intended to extend the service life of existing pilot
boats may be submitted to the Board at such time as directed in the Board's
preliminary authorization issued pursuant to subsection (e)(5).
(2) The Board may consider a request for
final authorization at a duly noticed regular or special Board meeting held
after the request and all documentation in support of the request have been
deposited with the Board and made available for public inspection. Notice shall
be given to all parties directly affected by pilotage rates or to a trade
organization representing such parties and to all other parties who have
requested such notification.
(3)
Documentation in support of a request for final authorization shall be
sufficient for the Board to assess the reasonableness of the request in light
of its necessity determination and shall include such information and data as
determined in the preliminary authorization.
(4) In the case of service life extension
modifications, the documentation shall also include sufficient data to
determine and quantify the associated operational savings, including reduced
repair and maintenance expenses that are reasonably expected to result from the
service life extension modifications, and shall set forth the proposed basis
for periodic review to determine actual savings over the life of the pilot
boat.
(5) The Board or its advisory
committee may request additional documentation from the requesting party prior
to issuing a final authorization hereunder.
(6) The Board may issue a final authorization
setting forth the costs to be recovered by the pilots under this section, the
reasons therefor, the initial surcharge rate and the date it is to go into
effect.
(7) The Board may, as a
condition of issuing a final authorization relative to proposed service life
extension modifications to existing pilot boats, require periodic data from the
requesting party to identify any associated operational savings, including
reduced repair and maintenance expenses, resulting from such modifications and
adjust the Pilot Boat Surcharge rate from time to time to reflect such
savings.
(8) The Port Agent shall
provide timely information to the Board of the sale or other disposition of any
pilot boats, of the net proceeds from such sale or disposition, and of the
manner in which the net proceeds are to be used to reduce the debt associated
with the new pilot boat or with the modifications to existing pilot boats
hereunder. The Board may adjust the Pilot Boat Surcharge rate or reduce the
costs to be recovered thereby to ensure compliance with the debt reduction
provision of Harbors and Navigation Code Section
1190(a)(1)(B).
(g) A Pilot Vessel Advisory Committee may be
appointed pursuant to Section
208 to review and assess the
documentation relative to the requests pursuant to subsections (d)(3), (e)(3)
and (f)(3) of this section, to conduct independent investigation of the issues
and request additional documentation as it may deem appropriate, and to develop
recommendations to the Board relevant to such requests or as otherwise directed
by the Board. Actions on the requests shall only be taken at duly noticed
meetings of the Board.
(h) The
Finance Committee of the Board shall periodically, or at such times as the
Board may direct, review the costs authorized for recovery and the current and
projected income from the Pilot Boat Surcharge and shall prepare
recommendations to the Board for periodic adjustments to the surcharge rate to
ensure that the surcharge rate is sufficient to recover all costs -- and only
those costs -- authorized by the Board for recovery. The rate should be
sufficient to maintain a commercially reasonable reserve to allow for ordinary
or anticipated fluctuations in surcharge income until all costs authorized have
been recovered. Any rate adjustment shall be made by Board action at a duly
noticed meeting and shall take effect at such dates as the Board may
direct.
(i) For purposes of this
section, "sale of existing pilot boats" shall include donation or other
disposition of an existing pilot boat, and "net proceeds" from such sale
includes the tax benefit realized from such donation less the costs associated
with the donation.
1. New section
filed 6-10-2008; operative 7-10-2008 (Register 2008, No. 24).
Note: Authority cited: Section
1154,
Harbors and Navigation Code. Reference: Section
1190(a)(1)(B),
Harbors and Navigation Code.
