Report Title:

Pilotage; Board of Pilot Commissioners


Establishes general provisions for piloting regulations, including the reinstitution of a board of pilot commissioners, transfer of jurisdiction to the department of transportation, and the transfer of authority of the director to the board.


H.B. NO.









relating to pilotage.



SECTION 1. The legislature finds that piloting is an essential service of such paramount importance that its continued existence must be secured by the State and may not be left open to market forces.

Because safety is the primary objective in the regulation of piloting by the State and because of the significant economies of scale in delivering the service, the requirement of a large capital investment in order to provide required service, and the fact that pilots are supplying services that are considered to be essential to the economy and the public welfare, the legislature finds that economic regulation, rather than competition in the marketplace, will better serve to protect the public health, safety, and welfare.

The rate-setting process, the issuance of licenses only in numbers deemed necessary or prudent by the board and other aspects of the economic regulation of piloting established in this Act are intended to protect the public from the adverse effects of unrestricted competition which would result from an unlimited number of licensed pilots being allowed to market their services on the basis of lower prices rather than safety concerns. This system of regulation benefits and protects the public interest by maximizing safety, avoiding uneconomic duplication of capital expenses and facilities, and enhancing state regulatory oversight. The system seeks to provide pilots with reasonable revenues, taking into consideration the normal uncertainties of vessel traffic and port usage, sufficient to maintain reliable, stable piloting operations. Pilots shall be subject to certain restrictions and obligations under this system.

SECTION 2. Chapter 462A, Hawaii Revised Statutes, is amended by adding eight new sections to be appropriately designated and to read as follows:

"462A-   Duties of pilots. Pilots shall have the following duties:

(1) Pilots shall not refuse to provide piloting services to any person or entity that may lawfully request such services, except for justifiable concerns relating to safety, or, in the case of a vessel planning a departure, for nonpayment of pilotage pursuant to section 462A-14;

(2) Pilots shall not unilaterally determine the pilotage rates they charge. The pilotage rates shall instead be determined by the board, in the public interest, as set forth in section 462A-l1; and

(3) Pilots shall maintain or secure adequate pilot boats, office facilities and equipment, dispatch systems, communication equipment and other facilities, and equipment and support services necessary for a modern, dependable piloting operation.

462A-   Board of pilot commissioners. There is established within the department for administrative purposes a board of pilot commissioners consisting of seven members who shall be appointed under section 26-34. Two of the members shall be port pilots licensed under this chapter; two of the members shall represent commercial marine interests that are actively engaged in a business that requires the use of Hawaii state licensed pilots; two of the members, who shall not be connected with the commercial marine industry or the port pilots or in public employment, shall represent the public; and one of the members shall be the harbors administrator.

The members of the board shall serve without pay but shall be reimbursed for expenses, including travel expenses, necessary for the performance of their duties. Five members shall constitute a quorum for the transaction of all business.

462A-   Limitation of licenses. (a) At no time shall the board issue more deputy pilot or port pilot licenses than are reasonably necessary to meet the requirements of commerce and port safety. The board shall govern the number of pilots necessary to maintain an efficient pilotage service. Beginning January 1, 2005, the number of port pilot licenses issued shall be limited to a maximum of nine. Thereafter, the board may set the number of licenses issued; provided that the number of licenses shall not be increased or decreased without a hearing in accordance with section 91-3. If a proposal to limit the number of licenses issued would significantly limit competition among licensees or pilot associations, the board shall first make a determination that the limitation is essential to protect the safety of the public.

(b) The board, in setting or adjusting the number of licenses, shall give primary consideration to the public interest in assuring that there is an adequate supply of qualified pilots to safely and economically meet the requirements of commerce.

462A-   Lawful compensation. No pilot shall demand or receive any greater, lesser, or different compensation for piloting a vessel upon any of the pilotage waters of the State than is allowed by law.

462A-   Liability for pilotage fees. The master, owner, charterer, agent, or consignee entering or clearing a vessel at any port in the State shall be jointly and severally liable for pilotage fees at the rate prescribed by the rules of the board.

462A-   Accounts of pilotage fees; payment to the board. Once in every quarter, the pilot association shall render to the board an accurate account of all vessels subject to this chapter, piloted by its individual members and all moneys received by the pilot as fees for pilotage of such vessels. The board may impose on the pilots a charge not to exceed 0.25 per cent of the pilotage fees for the operation of the board.

462A-   Hearings; appeal. (a) Before any pilot or deputy pilot shall have a license suspended or revoked by the board, the pilot or deputy pilot shall be given a hearing under section 91-13.1.

(b) A pilot or deputy pilot whose license has been suspended or revoked may appeal the board's decision to a circuit court as provided in chapter 91.

462A-   Adequate supply of licenses. (a) The board shall determine the number of pilots necessary to maintain an efficient pilotage service in accordance with section 462A-3(3).

(b) The board, in consultation with users of pilotage services, the department's harbors division, and the professional association of port pilots in the State shall give primary consideration to the public interest in ensuring that there is an adequate supply of qualified pilots to safely and economically meet the requirements of commerce."

SECTION 3. Section 462A-1, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows:

""Board" means the board of pilot commissioners established pursuant to this chapter."

SECTION 4. Section 462A-1, Hawaii Revised Statutes, is amended by amending the definition of "department" to read as follows:

""Department" means the department of [commerce and consumer affairs.] transportation."

SECTION 5. Section 462A-3, Hawaii Revised Statutes, is amended to read as follows:

"462A-3 Powers and duties of the [director.] board. [In addition to any other powers and duties authorized by law, the director shall:] The board shall have powers and perform the duties set forth in this section and such other powers and duties as may be provided by law:

(1) Grant licenses to port pilots and deputy port pilots pursuant to this chapter, when the need arises;

(2) Adopt, amend, or repeal rules in accordance with chapter 91 as may be necessary to carry out the purposes of this chapter which are to provide for maximum efficiency in navigating vessels entering or leaving the waters of this State; maintain a pilotage system devoted to the preservation, and protection of lives, environment, property, and vessels entering or leaving waters of the State; and ensure an adequate supply of qualified pilots in aid of commerce and navigation;

(3) Develop appropriate standards for licensure to maintain an adequate supply of pilots based on the needs of users of pilotage services or the [department of transportation's] department's harbors division. Licensing requirements shall include examinations and investigations to determine whether persons applying for full port pilot, or deputy port pilot licenses are qualified;

(4) Enforce this chapter and rules adopted pursuant thereto;

(5) Suspend, revoke or deny the issuance of any license for any cause prescribed by this chapter, or for any violation of the rules;

(6) Investigate any person for violations of any provisions of this chapter;

(7) Adopt methods to improve disciplinary and enforcement programs against violations of this chapter; and

(8) Do all things reasonable, necessary, and expedient to insure proper and safe pilotage and to facilitate the efficient administration of this chapter."

SECTION 6. Section 462A-6, Hawaii Revised Statutes, is amended to read as follows:

"462A-6 Duration and renewal of license. All licenses shall expire on June 30 of even-numbered years. All applicants for renewal of license shall submit a renewal application and comply with all applicable rules of the [department.] board. No applicant shall be denied a renewal of the applicant's license, except as provided in this chapter, as long as the applicant possesses the qualifications established by the [department] board and remains in active service as a pilot in the State."

SECTION 7. Section 462A-8, Hawaii Revised Statutes, is amended to read as follows:

"462A-8 Denial, suspension, or revocation. In addition to any other actions authorized by law, the [director] board may deny the issuance of a license to any applicant, and may suspend or revoke the license of any pilot for any cause authorized by law, including but not limited to the following:

(1) Violation of this chapter or any rule adopted by the [director;] board;

(2) Loss, damage, or injury due to negligent pilotage;

(3) Habitual use of any substance rendering a pilot unfit to be entrusted with the charge of a vessel;

(4) Inability to physically or mentally perform the duties of a pilot;

(5) Failure to maintain active service as a pilot in the State;

(6) Procurement of a license through fraudulent misrepresentation or deceit;

(7) Participation in any unfair or deceptive act or practice as prohibited by section 480-2;

(8) Violation of any law or rule intended to promote marine safety or protect navigational waters;

(9) Failure to report marine accidents in accordance with the rules of this chapter; or

(10) Failure to maintain a current and valid federal pilots license issued in accordance with title 46, United States Code, chapter 71."

SECTION 8. Section 462A-11, Hawaii Revised Statutes, is amended to read as follows:

"462A-11 Rates of pilotage. The [director] board shall establish the rates of pilotage for vessels subject to this chapter as follows:

(1) The rates of pilotage in effect on [July 1, 1978,] January 1, 1997, shall remain in effect until changed by the [director] board pursuant to this chapter. Upon filing of a petition for changes in rates and charges, the board shall assign the petition to a hearings officer for further proceedings consistent with chapter 91.

(2) No rate shall be increased, lowered, or altered without a public hearing in accordance with chapter 91. Due notice of hearing shall be mailed at least thirty days prior to the date of hearing to the individual licensed pilots, the pilot's association, and all owners, charterers, operators, and agents of vessels who have registered with the department.

(3) The [director,] board, in setting rates of pilotage, shall fix such amounts as will be a fair charge for the services rendered with due regard to necessary operating expenses, maintenance of, depreciation on, and return on investment for property used in the business of pilotage, and the rates and charges of pilotage at comparable ports of the United States.

(4) Persons aggrieved by the [director's] board's decision setting the rates of pilotage may appeal to circuit court as provided in chapter 91."

SECTION 9. Section 462A-15, Hawaii Revised Statutes, is amended to read as follows:

"462A-15 Pilot association. The pilots licensed under this chapter, each of whom shall be deemed an individual contractor, [may] shall form a nonprofit association which shall not be deemed a partnership or corporation for liability purposes, in order to provide such arrangements and facilities as may be necessary and desirable for the efficient dispatching of vessels and rendering of pilotage services required under this chapter. The association shall have no control over the selection of persons to be licensed as pilots or their discharge. The association shall have no direction over the manner in which an individual pilot performs the pilot's duties. The association may adopt any working rules that are not inconsistent with the law or of the rules of the department."

SECTION 10. Section 462A-17, Hawaii Revised Statutes, is amended to read as follows:

"462A-17 Description of pilotage waters. Pilotage waters as established under this chapter shall be the waters of the State described as follows:

(1) Port Allen: All waters inside a line drawn from Puolu Point to Weli Point.

(2) Nawiliwili: All waters inside a line drawn from Ninini Point to Kawaii Point.

(3) Honolulu: All waters inside a line drawn from Diamond Head Light, 278 true, to the intersection of a line drawn from the seaward edge of the reef runway at Latitude 21-18.2' North and Longitude 157-55.6' West, 180 true.

(4) Kahului: All waters inside a line drawn from Waiehu Point to Waihee Reef Lighted Buoy 2 in Latitude 20 55.9' North and Longitude 156 28.5' West and thence to Papaula Point.

(5) Hilo: All waters inside a line drawn from the outer extremity of the Hilo Bay breakwater to Paukaa Point Light.

(6) Kawaihae: All waters inside a line drawn from the outer extremity of the Kawaihae Harbor breakwater due West to Longitude 155 51' West, thence due North to Latitude 2003' North and thence due East to where it intersects with the shoreline.

(7) Barbers [Point:] Point-Kalaeloa Harbor: All waters inside a line drawn from the northernmost refinery tower, 250 true, to the intersection of a line drawn tangentially to Maile Point, 165 true."

SECTION 11. Section 462A-1, Hawaii Revised Statutes, is amended by deleting the definition of "director".

[""Director" means the director of the department of commerce and consumer affairs."]

SECTION 12. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 13. This Act shall take effect upon its approval.