Yesterday, Governor Gavin Newsom signed Assembly Bill 2056 (AB 2056), authored by Assemblymember Timothy Grayson. The legislation addresses longstanding revenue issues affecting the pilotage system. This represents the first significant update to the rate structure in over 15 years and 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.

AB 2056 addresses fundamental issues exacerbated by the pandemic and supply chain disruptions which led to an unprecedented 28% decrease in pilotage fee revenue. 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.

“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.”

The San Francisco Bar Pilots, one of California’s essential transportation partners, were a key proponent of this legislation.

“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 “These changes are critical in addressing an outdated pilotage rate-making process and will ensure that the Bar Pilots continue their essential work to push the local, regional, and state economy forward.”

The Bar Pilots worked with industry partners Pacific Merchant Shipping Association, Cruise Lines International Association, and Western States Petroleum Association to support this critical legislation.

"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.”

“AB 2056 enacts several important updates to the state’s pilotage system and tariffs. This multi-stakeholder agreement supports our shared priority for the safe passage and departure of ships from one of the world’s most important ports and allows our cruise line members to continue to provide exceptional experiences to the more than 400,000 passengers who sail each year from San Francisco, generating well over $48 million to the area in total direct, indirect, and induced economic impact,” said Mike McGarry, CLIA’s Senior Vice President for Global Government Affairs and Secretariat, North America. “We would like to thank our industry partners and Assemblymember Grayson for all the hard work and applaud the Governor for signing this important piece of legislation.”

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. Because of the urgency clause associated with this bill, the legislation will immediately go into effect.