SRC-TAG S.B. 1772 78(R) BILL ANALYSIS Senate Research Center S.B. 1772 By: Williams Natural Resources 4/4/2003 As Filed DIGEST AND PURPOSE Currently, state law provides for the licensing and regulation of branch pilots and deputy pilots and the establishment of pilotage rate for the port in this state. The ports of Corpus Christi, Houston, and Galveston have adopted similar Acts which provide due process rights for pilots and consignees of vessels; standard pilot qualifications; hearing processes for pilot license applications and applications for rate changes; and accountability provisions for both pilots and consignees of vessels. As proposed, S.B. 1772 sets forth the guidelines for the licensing and regulation of branch pilots and deputy branch pilots for the Ports of Jefferson and Orange counties. RULEMAKING AUTHORITY Rulemaking authority is expressly granted to the board of pilot commissioners for the ports of Jefferson and Orange counties in SECTION 1 (Sections 69.016, 69.017, 69.035, and 69.068, Transportation Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Chapter 69, Transportation, Code, as follows: CHAPTER 69. New heading: JEFFERSON AND ORANGE COUNTY PILOTS LICENSING AND REGULATORY ACT SUBCHAPTER A. New heading: GENERAL PROVISIONS Sec. 69.001. SHORT TITLE. Authorizes this chapter to be cited as the Jefferson and Orange County Pilots Licensing and Regulatory Act. Deletes pilot rate procedures. Sec. 69.002. Definitions. Defines "board," "consignee," "port," "pilot," "pilotage rate," "pilot services," and "vessel." Sec. 69.003. Applicability of Chapter. Provides that this chapter applies only to a Jefferson and Orange County port. SUBCHAPTER B. BOARD OF PILOT COMMISSIONERS Sec. 69.011. Board. Requires each of the five members of the board of the pilot commissioners for Jefferson and Orange county port (board) to reside in either Jefferson or Orange County and be appointed by the governor, in accordance with Chapter 63, Transportation Code. Requires the chairman of the board to be selected by the members of the board and requires the terms of the members to be staggered. Sec. 69.012. Prohibited Interest. Prohibits a person from being a member of the board if the person has a direct or indirect pecuniary interest in a pilot boat or branch pilot in the business of the board's trust. Sec. 69.013. Oath. Requires each board member, before serving as a board member, to take and sign, before a person authorized to administer oaths, an oath to faithfully and impartially discharge the duties of the office. Sec. 69.014. Term of Office. Provides that each member of the board serves a term of two years. Sec. 69.015. Jurisdiction. Provides that the board has exclusive jurisdiction over the piloting of vessels and the pilot services provided in Jefferson and Orange County ports, including intermediate stops and landing places for vessels on navigable streams wholly or partially located in the board's jurisdiction. Sec. 69.016. Administration; Rules. (a) Requires the board to administer this chapter and authorizes it to perform any act or function necessary to carry out its powers and duties under this chapter. (b) Authorizes the board to adopt rules to carry out this chapter. Sec. 69.017. Duties. (a) Requires the board to perform certain duties. (b) Authorizes the board to take certain actions. Sec. 69.018. Unfair Discrimination Prohibited. (a) Prohibits the board, in all its duties, including rulemaking, the board from conducting discriminatory practices or discriminate against a pilot or pilot applicant because of race, religion, sex, ethnic origin, or national origin. (b) Requires a person seeking a remedy for a violation of this section to bring suit in a district court in Jefferson county. Sec. 69.019. Open Meetings Law. Provides that Chapter 551 (Open Meetings Law), Government Code, applies to actions and proceedings under this chapter. Sec. 69.020. Rule or Rate Change. (a) Requires the board to give a least 10 days notice as provided by this section before the board adopts a rule or changes a pilotage rate. (b) Requires the board to post the notice and a copy of the proposed rule or change at the county court houses for Jefferson and Orange counties, publish the notice in a newspaper of general circulation in Jefferson and Orange counties, and give notice of the proposed rule or change, by certified mail to the last known address, to certain individuals. Sec. 69.021. Contested Case Notice. Requires the board to give notice in each contested case in accordance with Section 69.020(b) that includes the same information as the notice given to the parties in each contested case. Sec. 69.022. Judicial Review. Requires proceedings for judicial review of a board decision to be brought in a Jefferson county district court. Sec. 69.023. Budget; Annual Report; Audits. (a) Requires the board to adopt a proposed fiscal year budget forty-five days prior to the start of the fiscal year and authorizes it to expend funds only after a public meeting has been held to explain the proposed budget and after the board has approved the budget. (b) Provides that the accounts of the board are subject to audit by the state auditor. (c) Requires the board to keep minutes of its meetings and other books and records that clearly reflect all acts and transactions of the board. Requires the board to open its records to examination by any participating producer during regular business hours. (d) Requires the board, within 30 days following the end of its fiscal year, to submit to the governor a report itemizing all income and expenditures and describing all activities of the board during the previous fiscal year. Sec. 69.024. Depository Bank; Expenditure of Funds. Requires the board to deposit all money received by the board under this chapter, including assessments, and grants from governmental agencies, in a bank located in Jefferson or Orange County and selected by the board. SUBCHAPTER C. PILOT LICENSES AND CERTIFICATES Sec. 69.031. License or Certificate Required. Prohibits a person from providing pilot services unless the person has a license or certificate issued under this chapter for the Jefferson and Orange County ports in which the pilot services are to be provided. Sec. 69.032. Exemptions. Provides that the requirement to use a pilot does not apply to certain vessels. Sec. 69.033. Qualifications for License. Sets forth the required qualifications. Sec. 69.034. Qualifications for Certificates. Set forth the required qualifications for a deputy branch pilot. Sec. 69.035. Application for License or Certificate. Requires a person, to apply for a branch pilot's license or a deputy branch pilot's certificate, to give to the board a written application in the form and manner required by board rule. Sec. 69.036. Consideration of Application. (a) Requires the board to carefully consider each application and to conduct any investigation it considers necessary to determine whether an applicant is qualified for a license or certificate. (b) Authorizes the board, as a part of its consideration of applications for licenses and certificates, to develop and administer examinations to determine an applicant's knowledge of piloting, management of vessels, and the water in the board's jurisdiction. Sec. 69.037. Branch Pilot Appointment by Governor. (a) Requires the board, upon filing of the bond and oath required by Section 69.039, to certify to the governor that a person licensed as a branch pilot has qualified. (b) Requires the governor, upon receiving the board certification, to issue to the person, in the name of the state and under the state seal, a commission to serve as a branch pilot to and from Jefferson and Orange county ports. Sec. 69.038. Deputy Branch Pilot Appointment. Authorizes each branch pilot to take certain actions. Sec. 69.039. Oath; Bond. (a) Requires a person appointed as a pilot to take the official oath before entering service as a pilot. Requires the oath to be endorsed on the bond required by Subsection (b). (b) Requires each pilot to execute a $25,000 bond payable to the governor and conditioned on compliance with the laws, rules, and orders relating to pilots and on the faithful performance of the pilot's duties. (c) Requires each bond to be approved by the board. Sec. 69.040. Terms of Licenses and Certificates. (a) Provides that a branch pilot's license expires on the fourth anniversary of the date it is issued or renewed; provided that no pilot may furnish pilot services under authority of a license after the pilot's 68th birthday unless such a pilot [who's license or certificate unless such an individual- sic] is a pilot under this chapter on the effective date of this chapter or who becomes a pilot within one year after the effective date of this chapter. (b) Provides that a deputy branch pilot's certificate expires on the second anniversary of the date it is issued and prohibits it from being renewed. Sec. 69.041 Branch Pilot's License Renewal. (a) Requires the governor to renew a branch pilot's expiring license if the board recommends renewal. (b) Requires the board, if a pilot applies in writing and qualifies, to recommend renewal unless the board determines there is probable cause not to renew the license. (c) Provides that probable cause not to renew a license exists if the board finds that the license holder does not possess a qualification required by this chapter for pilots or has a disability that will affect the license holder's ability to serve as a pilot. (d) Requires the board, if it determines that it has probable case not to renew a license, to notify the license holder of that determination by the 60th day before the date the license expires. Requires the board, upon request, to provide a hearing after proper notice to consider whether the board has cause not to recommend renewal of the license. (e) Requires the board, if it finds at the conclusion of the hearing that it lacks probable cause for nonrenewal of the license, to recommend that the governor renew the license. (f) Requires the board to issue a written order recommending that the governor not renew a license and prohibits the governor from renewing the license in certain circumstances. (g) Provides that the denial of renewal of a pilot's license does not prohibit the pilot from applying for a new license and being reappointed. Sec. 69.042. Deputy Branch Pilot. Prohibits a person who has been issued a deputy branch pilot's certificate from being issued a deputy branch pilot's certificate before the fifth anniversary of the date the person was previously issued a deputy branch pilot's certificate. Sec. 69.043. Suspension or Revocation of Branch Pilot's License. (a) Authorizes the board, on complaint or on its own motion, and after notice and hearing, to suspend a branch pilot's license for not more than six months or recommend that the governor revoke a branch pilot's license if the board finds that the pilot has failed to meet certain standards and rules. (b) Requires the board, if the federal pilot's license of a pilot licensed under this chapter is suspended or revoked, on a finding that it has good cause, to suspend the license for the same period or revoke the license under this chapter. (c) Requires the board, on determining that a license should be suspended or revoked, to adopt a written order that states its findings and suspends the license for a state period or recommends to the governor revocation of the license. (d) Requires the governor, upon receipt of a board order recommending revocation of license, to revoke the license. (e) Provides that a suspension of a license takes effect on adoption of the board's order. Provides that a revocation of a branch pilot's license takes effect on issuance of the governor's decision. Sec. 69.044. Suspension or Revocation of Deputy Branch Pilot's Certificate. Authorizes a deputy branch pilot's certificate to be suspended or revoked by the board in the same manner and for the same reasons as provided for the revocation or suspension of a branch pilot's license by Section 69.043. Sec. 69.045. Liability to Pilot. (a) Provides that a person who is not a pilot and who, in violation of this chapter, pilots a vessel and the consignee of the vessel are liable to a pilot, on written demand, for the amount of the applicable pilotage rate. (b) Authorizes the court, in an action to recover compensation under Subsection (a), to include in a judgement in favor of a pilot an award of the court costs and reasonable attorney's fees. SUBCHAPTER D. PILOTAGE RATES Sec. 69.061. Pilotage Rate Change. Prohibits the board from charging any change rates before the first anniversary of the preceding rate change. Sec. 69.062. Pilotage Rate Change Application (a) Authorizes an application for a change in pilotage rate to be submitted by certain individuals. (b) Requires the application to be written and to state specifically the changes requested. (c) Requires the board to set a hearing date within two weeks of receipt of an application. Requires the board to hold the hearing by the 20th day and not later than the 40th day after the date the board sets the hearing date. (d) Requires an applicant to give notice of the application and the hearing date, by certified mail to the last known address, to certain individuals. (e) Prohibits the board from increasing pilotage rates for the public ports of Beaumont, Port Arthur, or Orange unless the affected board of commissioners approves the increase. Sec. 69.063. Pilot Financial Report. (a) Requires the pilots who are licensed or certified to serve the port for which the rates are being considered, by the 10th day before the date set for a pilotage rate hearing, to submit in writing to the board and to any party designed by the board certain financial disclosures. (b) Requires the pilots to provide certain information. (c) Authorizes the board to require an independent audit of financial information submitted under Subsection (a) by an account selected by the board. Requires the board, as it considers fair and just, to assess the cost of the audit against one or more applicants and objecting parties. (d) Authorizes the board to require relevant additional information it deems necessary to determine a proper pilotage rate. Sec. 69.064. Factors for Board Consideration. Requires the board, in establishing pilotage rates, to consider certain factors relevant to determining reasonable and just pilotage rates. Sec. 69.065. Rate Decision. Requires the board, by the 10th day after the day of the completion of hearing on an application for a change in pilotage rates, to issue a written decision that grants or denies the application in whole or in part; state the reasons for the decision; and state each new pilotage rate. Sec. 69.069. Costs. Authorizes the board, in a final order under this subchapter, to charge all or part of the costs of processing an application to the parties in the proceedings. [Section 69.066 not included in bill as drafted and two Sections 69.069 included.] Sec. 69.067. Appeals of Board Decision. Authorizes any party aggrieved by a board decision on pilotage rates, after exhausting all administrative remedies, to appeal the order to a court. Sec. 69.068. Emergency Pilotage Rates. (a) Authorizes the board to establish emergency pilotage rates for the period of an emergency, not to exceed 30 days, if the board finds that a natural or man-made disaster has created a substantial hazard to piloting vessels into and out of a port and the existence of the hazard overrides the necessity to comply with normal pilotage rate-setting procedures. (b) Provides that the board, in adopting emergency pilotage rates, is not required to comply with the procedures in this chapter or in its rules relating to adoption of pilotage rates. (c) Prohibits emergency pilotage rates from being appealed. (d) Requires the board to adopt rules to carry out this section. Sec. 69.069. Pilot Services Required. Requires the consignee of a vessel under the consignee's control to obtain pilot services for the vessel and to pay the pilot who pilots the vessel into and out of the port area compensation according to the pilotage rates filed by the board. Sec. 69.070. Pilotage Rate Liability. (a) Provides that a consignee who declines the services of a pilot offered outside the bar and enters the port without the aid of a pilot is liable for the payment of pilotage to the first pilot whose services were declined. (b) Provides that a consignee is liable for the payment of pilotage to the pilot who brings a vessel in if the vessel goes out without employing a pilot. (c) Provides that a consignee is liable for the payment of pilotage for a vessel that goes out without the aid of a pilot and that came in without the aid of a pilot to the pilot who first offered services before the vessel came in. (d) Provides that a consignee is not liable for the payment of pilotage for a vessel going out without a pilot if the vessel came in without the aid of a pilot or came in without the offer of a pilot outside. (e) Provides that Subsections (a)-(d) do not apply to a consignee exempt under this chapter from payment of pilotage rates. (f) Specifies that a pilot who charges a rate for pilot services different from the pilotage rates established under this chapter for the port in which the pilot serves is liable to each person who was charged the different rate for double the amount of pilotage. (g) Authorizes a court to include in a judgment in favor of a person who files suit to collect an amount owed under this chapter an award to cover court costs and reasonable attorney's fees. Sec. 69.071. Recovery of Compensation. Provides that a pilot who offers pilot services to a vessel required under this chapter to obtain pilot services and whose services are refused is entitled to recover from the consignee the pilotage rate for the services. SUBCHAPTER E. PILOT LIABILITY Sec. 69.081. Purpose. Sets forth the purpose of this subchapter. Sec. 69.082. Pilot Liability. Provides that a pilot is not liable directly or as a member of an organization of pilot for certain claims. Sec. 69.083. Pilot Liability Limited. (a) Establishes that a pilot providing pilot services is not liable for more than $1,000 for damage or loss caused by the pilot's error, omission, fault, or neglect in the performance of the pilot services, except as provided by Subsection (b). (b) Specifies that Subsection (a) does not apply to certain claims. (c) Provides that this section does not exempt a vessel or its owner or operator from liability for damage or loss caused by the vessel to a person or property on the grounds that the vessel was piloted by a pilot or the damage or loss was caused by the error, omission, fault, or neglect of a pilot. (d) Establishes that in an action brought against a pilot for an act or omission for which liability is limited as provided by this section and in which other claims are made or anticipated with respect to the same act or omission, the court shall dismiss the proceedings as to the pilot to the extent the pleadings allege pilot liability that exceeds $1,000. SECTION 2. Effective date: upon passage or September 1, 2003.