SENATE BILL REPORT

SB 6519

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

Brief Summary of First Substitute Bill

Transfers the function of marine pilotage rate-setting from the Board of Pilotage commissioners to the Utilities and Transportation Commission, beginning July 1, 2019.
Prohibits pilotage tariffs from being established more frequently than annually.

Background: Board of Pilotage (BOP). The BOP is a regulatory board consisting of nine part-time members supported by three staff. Seven members are appointed by the Governor, subject to Senate confirmation, each for a term of four years. Additionally, the director of the Department of Ecology, or the director's designee is a member, and the assistant secretary of the Department of Transportation's Ferry Division, or their designee, is the chairperson. The BOP trains, tests, licenses, and regulates marine pilotage in Puget Sound and Grays Harbor. The BOP also sets tariff rates and takes disciplinary action against pilots and vessel owners who violate state pilotage laws. Generally, most foreign-flagged vessels are required to use a licensed marine pilot when in Puget Sound or Grays Harbor waters. Vessels using a pilot are charged a fee known as a pilotage tariff, which is set by the BOP.

Since 2008, the BOP has been a non-appropriated agency, and therefore does not need appropriation authority before making expenditures from the pilotage account. The BOP is required to submit an annual report of its activities and financial transactions, as well as those of the Puget Sound Pilot's Association.

The Washington Utilities and Transportation Commission (UTC). The UTC is a three-member commission appointed by the Governor, subject to Senate confirmation. The UTC has more that 150 staff supporting the commissioners. The UTC regulates and sets rates for, telecommunication companies and privately-owned electric, natural gas, and water companies and also certain transportation businesses such as in-state household movers, solid waste carriers, and private ferries. The UTC also deals with certain safety issues relating to charter buses, railroads, limousines, and special needs transportation. Generally, rate setting cases are heard in a formal, legal setting.

Summary of Bill (First Substitute): The function of marine pilotage rate-setting is transferred from the BOP commissioners to the UTC, beginning July 1, 2019. The UTC would establish pilotage tariffs not more frequently than annually.

The pilotage account is made an appropriated account and UTC expenditures for pilotage tariff-setting is added as an allowable use of the account. Grays Harbor pilotage tariff proposals are sent to the UTC rather than the BOP for approval. The UTC may include reasonable costs incurred by the UTC in the pilotage rate. The UTC may adopt rules relating to setting pilotage tariffs prior to July 1, 2019, and may receive tariff filings 30 days after pilotage rules are adopted. The UTC shall submit any statutory changes necessary to implement this bill by December 1, 2018. Requires the Port of Grays Harbor to include a pension charge for pilots employed prior to October 1, 2001, in its recommended pilotage tariff.

EFFECT OF CHANGES MADE BY TRANSPORTATION COMMITTEE (First Substitute): The pilotage account is made an appropriated account and UTC expenditures for pilotage tariff-setting is added as an allowable use of the account. Grays Harbor pilotage tariff proposals are sent to the UTC rather than the BOP for approval. The UTC may include reasonable costs incurred by the UTC in the pilotage rate. The UTC may adopt rules relating to setting pilotage tariffs prior to July 1, 2019, and may receive tariff filings 30 days after pilotage rules are adopted. Language directing the UTC to report to the Legislature in 2020 is stricken and replaced with language directing the UTC to submit any statutory changes necessary to implement this bill by December 1, 2018. Requires the Port of Grays Harbor to include a pension charge for pilots employed prior to October 1, 2001, in its recommended pilotage tariff.

Staff Summary of Public Testimony on Original Bill: The committee recommended a different version of the bill than what was heard. PRO: This is an appropriate move and would remove some of the animosity from the BOP process. It moves rate setting to an agency that is set up to do rate setting. The Pacific Merchant Shipping Association represents the shipping industry and the people who pay the tariff. This is an important step to transfer the tariff. The Puget Sound Pilots are in support of this bill and support the JTC study recommendations. We look forward to working with the UTC.

OTHER: The UTC is neutral on this bill, however the work is consistent with other work we currently do and we are happy to answer any questions. The Port of Grays Harbor is a lot different than the Puget Sound Pilots District. This bill does not work for the Port, the Port recommends pilotage rates to the BOP. The Port has a public process to determine rates. The BOP has a long history of rate setting and could continue that process. The BOP recognizes the need for more transparency and the need for the process to be analytically driven. Marine safety is tied to the tariff. The BOP is committed to improving its processes, including the tariff process.