Harb. & Nav. Code, § 1194

(a) In addition to other charges for pilotage, there shall be an incremental rate of additional mills per high gross registered ton as is necessary and authorized by the board to recover the pilots’ costs of obtaining new pilot boats, including preliminary design and engineering, and of funding design and engineering modifications for the purposes of extending the service life of existing pilot boats, excluding costs for repair or maintenance. The board may adjust the amount of the surcharge established pursuant to this subdivision as necessary to efficiently administer the pilot boat surcharge.

(b) The incremental mill rate charge authorized by this section shall be identified as a pilot boat surcharge on the pilots’ invoices and separately accounted for in the accounting required by Section 1136. The moneys charged and collected each month from the pilot boat surcharge shall be paid to the board in accordance with Section 1194.1. The moneys shall be used only to fund pilot boat expenses in the manner established by the board pursuant to Sections 1159.1 and 1194.1.

(c) Net proceeds from the sale of existing pilot boats shall be used to reduce the debt on the new pilot boats, or applied as soon as possible against any balance of a new pilot boat, before any capitalization of the debt of the pilot’s costs in obtaining the new pilot boat, and to reduce any debt associated with the modification of pilot boats under this section. The board may adjust a pilot boat surcharge to reflect any associated operational savings resulting from the modification of pilot boats under this subdivision, including, but not limited to, reduced repair and maintenance expenses.

(d) (1) For purposes of this section, the costs of obtaining new pilot boats includes the costs of repowering existing pilot boats or the acquisition of new pilot boats in order to meet the requirements of any rule governing the emissions of commercial harbor craft adopted by the State Air Resources Board.

(2) For purposes of this subdivision, the costs of obtaining new pilot boats may be authorized for identification as a pilot boat surcharge by the board prospectively for the purpose of funding the costs of compliance to meet the requirements of any commercial harbor craft regulation and may be collected before the imposition of costs.

(3) The board shall require a final determination of all accounting of all necessary and authorized costs upon the delivery of a new pilot boat and compare to the funding preliminarily determined to be necessary and authorized by the board to recover the pilots’ costs. All prospectively collected pilot boat surcharge revenues collected before delivery of a new pilot boat shall be identified and used to offset and reduce the costs of design, engineering, construction, and delivery of a new pilot boat, or applied as soon as possible against any balance of a new pilot boat, before any capitalization of the debt of the pilots’ costs in obtaining the new pilot boat.

(4) (A) A cost that is identified as paid and recovered prospectively under this subdivision before the date of delivery and operation of a pilot boat shall not be capitalized into a loan or line of credit to finance the construction of the pilot boat subject to cost recovery under this subdivision.

(B) A cost that is not identified as paid and recovered prospectively under this subdivision before the date of delivery and operation of a pilot boat may be capitalized into a loan or line of credit to finance the construction of the pilot boat subject to cost recovery under this subdivision.

(e) The board shall audit or cause to be audited all pilot boat surcharges imposed pursuant to this section.