San Francisco Bay Pilotage System Gets Much-Needed Rate Structure Update

California Governor Gavin Newsom has signed into law a bill providing for the first significant update to the rate structure of San Francisco Bay’s pilotage system in over 15 years.

The bill, Assembly Bill 2056 (AB 2056), was authored by California Assembly member Timothy Grayson to address longstanding revenue issues affecting the pilotage system. These issues have been exacerbated during the pandemic amid supply chain disruptions, leading to an unprecedented 28% decrease in pilotage fee revenue.

Specifically, AB 2056 updates three critical aspects of the pilotage system, including reforming the rate-setting process, implementing Temporary Transit Fees, and modifying the pilot boat replacement surcharge. “This provides both temporary and long-term fixes that will ensure state-regulated pilot operations can continue sustainably to support the future growth of the supply chain well into the future,” according to a press release from the San Francisco Bar Pilots, a key proponent of this legislation.

The legislation will immediately go into effect.

“I’m proud that we have passed a law that will bring long-needed investments in our ports and pilotage system and support the crucial work the San Francisco Bar Pilots conduct in our state,” said Timothy Grayson (D-Concord). “The Bar Pilots help over $1 billion in goods—in addition to thousands of individuals—safely navigate our waterways every day. It is long past time for California to step up and invest in an organization so essential to our state’s success, and I’m thrilled that the Governor has signed AB 2056 to make that a reality.”

Signing of the bill is the culmination of a multi-year effort to reach consensus among the San Francisco Bar Pilots, Pacific Merchant Shipping Association, Cruise Lines International Association, and Western States Petroleum Association.

“On behalf of the San Francisco Bar Pilots, we want to thank Governor Newsom for signing this monumental piece of legislation, Assemblymember Grayson for his leadership in authoring this bill, and our industry partners for their collaboration,” said San Francisco Bar Pilots President, Captain John Carlier. “These changes are critical in addressing an outdated pilotage rate-making process and will ensure that the Bar Pilots continue their essential work to push the local, regional, and state economy forward.”

According to the Bar Pilots, AB 2056 addresses long-sought changes to the rate setting process and removes the Legislature from decisions by establishing an independent administrative process conducted by an Administrative Law Judge (ALJ) with review and oversite by the Board of Pilot Commissioners. 

“Thank you to Governor Newsom both for his signature on this bill and for giving all of the stakeholders the space to negotiate and find the compromises and consensus necessary to bring this effort to a successful conclusion,” said Mike Jacob, Vice President & General Counsel for the Pacific Merchant Shipping Association. “AB 2056 represents an important step forward where the vessels calling on our seaports in the San Francisco Bay pay for both new investments in cleaner equipment with lower emissions from operations and higher rates for pilots, but the State also agrees to modernize its rules for setting pilotage rates in the future and lowers the real-world burdens of their air quality mandates.”

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