"NEW SECTION.  Sec. 1   The legislature finds that the Washington state ferry system is a critical component of the state's highway system. The legislature further finds that ferry system revenues are inadequate to support the capital requirements of aging vessels and terminals, and operating cost growth is fast outpacing the growth of fare revenue and gas tax revenue dedicated to the ferry system. As such, and drawing on more than four consecutive years of legislative analysis and operating policy reforms, the legislature finds that a realignment of the ferry compensation policy framework is an appropriate next step toward the legislature's long-term goal of assuring sustainable, cost-effective ferry service. The legislature further intends to address increased costs of ferry system operations in a manner that balances the interests of the ferry system, ferry workforce, and fare payers. It is the intent of the legislature that final recommendations from the joint transportation committee ferry study, submitted to the legislature during the 2009 regular legislative session, be enacted by the legislature and implemented by the department of transportation as soon as practicable in order to benefit from the efficiencies and cost savings identified in the recommendations. It is also the intent of the legislature to make various additional policy changes aimed at further efficiencies and cost savings. Since the study began in 2006, recommendations have been made with regard to long range planning and implementing the most efficient and effective balance between ferry capital and operating investments. It is intended that this act, the 2009-2011 omnibus transportation appropriations act, and subsequent transportation appropriations acts serve as vehicles for enacting these recommendations in order to maximize the utilization of existing capacity and to make the most efficient use of existing assets and tax dollars.

NEW SECTION.  Sec. 2   (1) The office of financial management shall convene an expert panel of ferry operators to conduct a management review of the Washington state department of transportation, ferries division. The panel must have between three and five members and must represent both management and operations specialists, as well as public and private ferry operators that can bring best practices and state-of-the-art knowledge to this effort. The panel shall review past studies, conduct its own review, and make recommendations of the ferries division's management. The study must be completed and submitted to the transportation committees of the senate and house of representatives by August 1, 2010, and must include:
     (a) A review and comment on the studies and audits conducted on the ferries division over the past four years in areas of overhead and management organization structure and costs, maintenance practices, scheduling, and prioritization of preservation of vessels and terminals to ensure they represent current best practices;
     (b) A report on the implementation of the recommendations in the studies and audits described in (a) of this subsection, and a report on their effectiveness compared to national best practices; and
     (c) A review and report on the procedures for crew and service scheduling and recommendations on opportunities for improvement to provide the least cost of operations while maintaining service schedules that meet the needs of ferries customers.
     (2) This section expires July 1, 2011.

Sec. 3   RCW 47.60.355 and 2007 c 512 s 11 are each amended to read as follows:
     (1) Terminal and vessel preservation funding requests shall only be for assets in the life-cycle cost model.
     (2) Terminal and vessel preservation funding requests that exceed five million dollars per project must be accompanied by a predesign study. The predesign study must include all elements required by the office of financial management.

Sec. 4   RCW 47.60.365 and 2007 c 512 s 12 are each amended to read as follows:
     The department shall develop terminal and vessel design standards that:
     (1) Adhere to vehicle level of service standards as described in RCW 47.06.140;
     (2) Adhere to operational strategies as described in RCW 47.60.327; and
     (3) Choose the most efficient balance between capital and operating investments by using a life-cycle cost analysis.

Sec. 5   RCW 47.60.375 and 2008 c 124 s 3 are each amended to read as follows:
     (1) The capital plan must adhere to the following:
     (a) A current ridership demand forecast;
     (b) Vehicle level of service standards as described in RCW 47.06.140;
     (c) Operational strategies as described in RCW 47.60.327; and
     (d) Terminal and vessel design standards as described in RCW 47.60.365.
     (2) The capital plan must include the following:
     (a) A current vessel preservation plan;
     (b) A current systemwide vessel rebuild and replacement plan as described in RCW 47.60.377;
     (c) A current vessel deployment plan; and
     (d) A current terminal preservation plan that adheres to the life-cycle cost model on capital assets as described in RCW 47.60.345.

Sec. 6   RCW 47.60.385 and 2008 c 124 s 6 are each amended to read as follows:
     (1) Terminal improvement, vessel improvement, and vessel acquisition project funding requests must adhere to the capital plan((.
     (2) Requests for terminal improvement design and construction funding must)), include route-based planning, and be submitted with a predesign study that:
     (a) Includes all elements required by the office of financial management;
     (b) Separately identifies basic terminal and vessel elements essential for operation and their costs;
     (c) Separately identifies additional elements to provide ancillary revenue and customer comfort and their costs;
     (d) Includes construction phasing options that are consistent with forecasted ridership increases;
     (e) Separately identifies additional elements requested by local governments and the cost and proposed funding source of those elements;
     (f) Separately identifies multimodal elements and the cost and proposed funding source of those elements; ((and))
     (g) Identifies all contingency amounts((.
     (h)[(3)] When planning for new vessel acquisitions, the department must evaluate the long-term vessel operating costs related to fuel efficiency and staffing));
     (h) Identifies any terminal, vessel, or other capital modifications that would be required as a result of the proposed capital project;
     (i) Includes planned service modifications as a result of the proposed capital project, and the consistency of those service modifications with the capital plan; and
     (j) Demonstrates the evaluation of long-term operating costs including fuel efficiency, staffing, and preservation.
     (2) The department shall prioritize vessel preservation and acquisition funding requests over vessel improvement funding requests.

NEW SECTION.  Sec. 7   A new section is added to chapter 47.60 RCW to read as follows:
     (1) In addition to the requirements of RCW 47.60.385(1), initial requests for, and substantial modification requests to, vessel acquisition funding must be submitted with a predesign study that:     
     (a) Includes a business decision case on vessel sizing;
     (b) Includes an updated vessel deployment plan demonstrating maximum use of existing vessels, and an updated systemwide vessel rebuild and replacement plan;
     (c) Includes an analysis that demonstrates that acquiring a new vessel or improving an existing vessel is more cost-effective than other alternatives considered. At a minimum, alternatives explored must include:
     (i) Alternatives to new vessel construction that increase capacity of existing vessels;
     (ii) Service level changes in lieu of adding vessel capacity; and
     (iii) Acquiring existing vessels or existing vessel plans rather than wholly new vessels or vessel plans; and
     (d) Demonstrates that the vessel proposed for improvement, construction, or purchase, if intended to replace an existing vessel or to place an existing vessel into inactive or reserve status, is consistent with the scheduled replacements in the rebuild and replacement plan.
     (2) In addition to the requirements of RCW 47.60.385(1), initial requests for, and substantial modification requests to, vessel improvement funding must be submitted with a predesign study that includes:
     (a) An explanation of any regulatory changes necessitating the improvement;
     (b) The requirements under subsection (1) of this section, if the improvement modifies the capacity of a vessel;
     (c) A cost-benefit analysis of any modifications designed to improve fuel efficiency, including potential impacts on vessel maintenance and repair; and
     (d) An assessment of out-of-service time associated with making the improvement and ongoing preservation of the improvement.

NEW SECTION.  Sec. 8   (1) Signage must be prominently displayed at each terminal and on each vessel that informs the public that assaults on Washington state employees will be prosecuted to the full extent of the law.
     (2) The department shall investigate the frequency, severity, and prosecutorial results of assaults on Washington state ferries employees and, if appropriate, make recommendations to the transportation committees of the senate and house of representatives during the 2011 legislative session regarding methods to decrease the number of assaults on employees and procedures for prosecuting those who assault employees.
     (3) This section expires June 30, 2011.

Sec. 9   RCW 47.28.030 and 2007 c 218 s 90 are each amended to read as follows:
     (1)(a) A state highway shall be constructed, altered, repaired, or improved, and improvements located on property acquired for right-of-way purposes may be repaired or renovated pending the use of such right-of-way for highway purposes, by contract or state forces. The work or portions thereof may be done by state forces when the estimated costs thereof are less than fifty thousand dollars and effective July 1, 2005, sixty thousand dollars((: PROVIDED, That)).
     (b) When delay of performance of such work would jeopardize a state highway or constitute a danger to the traveling public, the work may be done by state forces when the estimated cost thereof is less than eighty thousand dollars and effective July 1, 2005, one hundred thousand dollars.
     (c) When the department of transportation determines to do the work by state forces, it shall enter a statement upon its records to that effect, stating the reasons therefor.
     (d) To enable a larger number of small businesses, and minority, and women contractors to effectively compete for department of transportation contracts, the department may adopt rules providing for bids and award of contracts for the performance of work, or furnishing equipment, materials, supplies, or operating services whenever any work is to be performed and the engineer's estimate indicates the cost of the work would not exceed eighty thousand dollars and effective July 1, 2005, one hundred thousand dollars.
     (2) The rules adopted under this section:
     (((1))) (a) Shall provide for competitive bids to the extent that competitive sources are available except when delay of performance would jeopardize life or property or inconvenience the traveling public; and
     (((2))) (b) Need not require the furnishing of a bid deposit nor a performance bond, but if a performance bond is not required then progress payments to the contractor may be required to be made based on submittal of paid invoices to substantiate proof that disbursements have been made to laborers, material suppliers, mechanics, and subcontractors from the previous partial payment; and
     (((3))) (c) May establish prequalification standards and procedures as an alternative to those set forth in RCW 47.28.070, but the prequalification standards and procedures under RCW 47.28.070 shall always be sufficient.
     (3) The department of transportation shall comply with such goals and rules as may be adopted by the office of minority and women's business enterprises to implement chapter 39.19 RCW with respect to contracts entered into under this chapter. The department may adopt such rules as may be necessary to comply with the rules adopted by the office of minority and women's business enterprises under chapter 39.19 RCW.
     (4)(a) For the period of March 15, 2010, through June 30, 2011, work for less than one hundred twenty thousand dollars may be performed on ferry vessels and terminals by state forces.
     (b) The department shall hire a disinterested, third party to conduct an independent analysis to identify methods of reducing out-of-service times for vessel maintenance, preservation, and improvement projects. The analysis must include options that consider consolidating work while vessels are at shipyards by having state forces perform services traditionally performed at Eagle Harbor at the shipyard and decreasing the allowable time at shipyards. The analysis must also compare the out-of-service vessel times of performing services by state forces versus contracting out those services which in turn must be used to form a recommendation as to what the threshold of work performed on ferry vessels and terminals by state forces should be. This analysis must be presented to the transportation committees of the senate and house of representatives by December 1, 2010.
     (c) The department shall develop a proposed ferry vessel maintenance, preservation, and improvement program and present it to the transportation committees of the senate and house of representatives by December 1, 2010. The proposed program must:
     (i) Improve the basis for budgeting vessel maintenance, preservation, and improvement costs and for projecting those costs into a sixteen-year financial plan;
     (ii) Limit the amount of planned out-of-service time to the greatest extent possible, including options associated with department staff as well as commercial shipyards; and
     (iii) Be based on the service plan in the capital plan, recognizing that vessel preservation and improvement needs may vary by route.
     (d) In developing the proposed ferry vessel maintenance, preservation, and improvement program, the department shall consider the following, related to reducing vessel out-of-service time:
     (i) The costs compared to benefits of Eagle Harbor repair and maintenance facility operations options to include staffing costs and benefits in terms of reduced out-of-service time;
     (ii) The maintenance requirements for on-vessel staff, including the benefits of a systemwide standard;
     (iii) The costs compared to benefits of staff performing preservation or maintenance work, or both, while the vessel is underway, tied up between sailings, or not deployed;
     (iv) A review of the department's vessel maintenance, preservation, and improvement program contracting process and contractual requirements;
     (v) The costs compared to benefits of allowing for increased costs associated with expedited delivery;
     (vi) A method for comparing the anticipated out-of-service time of proposed projects and other projects planned during the same construction period;
     (vii) Coordination with required United States coast guard dry dockings;
     (viii) A method for comparing how proposed projects relate to the service requirements of the route on which the vessel normally operates; and
     (ix) A method for evaluating the ongoing maintenance and preservation costs associated with proposed improvement projects.

Sec. 10   RCW 47.64.120 and 2006 c 164 s 3 are each amended to read as follows:
     (1) Except as otherwise provided in this chapter, the employer and ferry system employee organizations, through their collective bargaining representatives, shall meet at reasonable times((,)) to negotiate in good faith with respect to wages, hours, working conditions, and insurance, ((and health care benefits as limited by RCW 47.64.270,)) and other matters mutually agreed upon. Employer funded retirement benefits shall be provided under the public employees retirement system under chapter 41.40 RCW and shall not be included in the scope of collective bargaining. Except as provided under RCW 47.64.270, the employer is not required to bargain over health care benefits. Any retirement system or retirement benefits shall not be subject to collective bargaining.
     (2) Upon ratification of bargaining agreements, ferry employees are entitled to an amount equivalent to the interest earned on retroactive compensation increases. For purposes of this section, the interest earned on retroactive compensation increases is the same monthly rate of interest that was earned on the amount of the compensation increases while held in the state treasury. The interest will be computed for each employee until the date the retroactive compensation is paid, and must be allocated in accordance with appropriation authority. The interest earned on retroactive compensation is not considered part of the ongoing compensation obligation of the state and is not compensation earnable for the purposes of chapter 41.40 RCW. Negotiations shall also include grievance procedures for resolving any questions arising under the agreement, which shall be embodied in a written agreement and signed by the parties.
     (3) Except as otherwise provided in this chapter, if a conflict exists between an executive order, administrative rule, or agency policy relating to wages, hours, and terms and conditions of employment and a collective bargaining agreement negotiated under this chapter, the collective bargaining agreement shall prevail. A provision of a collective bargaining agreement that conflicts with the terms of a statute is invalid and unenforceable.

Sec. 11   RCW 47.64.170 and 2007 c 160 s 1 are each amended to read as follows:
     (1) Any ferry employee organization certified as the bargaining representative shall be the exclusive representative of all ferry employees in the bargaining unit and shall represent all such employees fairly.
     (2) A ferry employee organization or organizations and the governor may each designate any individual as its representative to engage in collective bargaining negotiations.
     (3) Negotiating sessions, including strategy meetings of the employer or employee organizations, mediation, and the deliberative process of arbitrators are exempt from the provisions of chapter 42.30 RCW. Hearings conducted by arbitrators may be open to the public by mutual consent of the parties.
     (4) Terms of any collective bargaining agreement may be enforced by civil action in Thurston county superior court upon the initiative of either party.
     (5) Ferry system employees or any employee organization shall not negotiate or attempt to negotiate directly with anyone other than the person who has been appointed or authorized a bargaining representative for the purpose of bargaining with the ferry employees or their representative.
     (6)(a) Within ten working days after the first Monday in September of every odd-numbered year, the parties shall attempt to agree on an interest arbitrator to be used if the parties are not successful in negotiating a comprehensive collective bargaining agreement. If the parties cannot agree on an arbitrator within the ten-day period, either party may request a list of seven arbitrators from the federal mediation and conciliation service. The parties shall select an interest arbitrator using the coin toss/alternate strike method within thirty calendar days of receipt of the list. Immediately upon selecting an interest arbitrator, the parties shall cooperate to reserve dates with the arbitrator for potential arbitration between August 1st and September 15th of the following even-numbered year. The parties shall also prepare a schedule of at least five negotiation dates for the following year, absent an agreement to the contrary. The parties shall execute a written agreement before November 1st of each odd-numbered year setting forth the name of the arbitrator and the dates reserved for bargaining and arbitration. This subsection (6)(a) imposes minimum obligations only and is not intended to define or limit a party's full, good faith bargaining obligation under other sections of this chapter.
     (b) The negotiation of a proposed collective bargaining agreement by representatives of the employer and a ferry employee organization shall commence on or about February 1st of every even-numbered year.
     (c) For negotiations covering the 2009-2011 biennium and subsequent biennia, the time periods specified in this section, and in RCW 47.64.210 and 47.64.300 through 47.64.320, must ensure conclusion of all agreements on or before October 1st of the even-numbered year next preceding the biennial budget period during which the agreement should take effect. These time periods may only be altered by mutual agreement of the parties in writing. Any such agreement and any impasse procedures agreed to by the parties under RCW 47.64.200 must include an agreement regarding the new time periods that will allow final resolution by negotiations or arbitration by October 1st of each even-numbered year.
     (7) ((Until a new collective bargaining agreement is in effect, the terms and conditions of the previous collective bargaining agreement shall remain in force.)) It is the intent of this section that the collective bargaining agreement or arbitrator's award shall commence on July 1st of each odd-numbered year and shall terminate on June 30th of the next odd-numbered year to coincide with the ensuing biennial budget year, as defined by RCW 43.88.020(7), to the extent practical. It is further the intent of this section that all collective bargaining agreements be concluded by October 1st of the even-numbered year before the commencement of the biennial budget year during which the agreements are to be in effect. After the expiration date of a collective bargaining agreement negotiated under this chapter, all of the terms and conditions specified in the collective bargaining agreement remain in effect until the effective date of a subsequently negotiated agreement, not to exceed one year from the expiration date stated in the agreement. Thereafter, the employer may unilaterally implement according to law.
     (8) The office of financial management shall conduct a salary survey, for use in collective bargaining and arbitration, which must be conducted through a contract with a firm nationally recognized in the field of human resources management consulting.
     (9)(a) The governor shall submit a request either for funds necessary to implement the collective bargaining agreements including, but not limited to, the compensation and fringe benefit provisions or for legislation necessary to implement the agreement, or both. Requests for funds necessary to implement the collective bargaining agreements shall not be submitted to the legislature by the governor unless such requests:
     (i) Have been submitted to the director of the office of financial management by October 1st before the legislative session at which the requests are to be considered; and
     (ii) Have been certified by the director of the office of financial management as being feasible financially for the state.
     (b) The governor shall submit a request either for funds necessary to implement the arbitration awards or for legislation necessary to implement the arbitration awards, or both. Requests for funds necessary to implement the arbitration awards shall not be submitted to the legislature by the governor unless such requests:
     (i) Have been submitted to the director of the office of financial management by October 1st before the legislative session at which the requests are to be considered; and
     (ii) Have been certified by the director of the office of financial management as being feasible financially for the state.
     (c) The legislature shall approve or reject the submission of the request for funds necessary to implement the collective bargaining agreements or arbitration awards as a whole for each agreement or award. The legislature shall not consider a request for funds to implement a collective bargaining agreement or arbitration award unless the request is transmitted to the legislature as part of the governor's budget document submitted under RCW 43.88.030 and 43.88.060. If the legislature rejects or fails to act on the submission, either party may reopen all or part of the agreement and award or the exclusive bargaining representative may seek to implement the procedures provided for in RCW 47.64.210 and 47.64.300.
     (((9))) (10) If, after the compensation and fringe benefit provisions of an agreement are approved by the legislature, a significant revenue shortfall occurs resulting in reduced appropriations, as declared by proclamation of the governor or by resolution of the legislature, both parties shall immediately enter into collective bargaining for a mutually agreed upon modification of the agreement.

Sec. 12   RCW 47.64.200 and 2006 c 164 s 7 are each amended to read as follows:
     As the first step in the performance of their duty to bargain, the employer and the employee organization shall endeavor to agree upon impasse procedures. Unless otherwise agreed to by the employee organization and the employer in their impasse procedures, the arbitrator or panel ((is limited to selecting the most reasonable offer, in its judgment, of the final offers on each impasse item submitted by the parties. The employee organization and the employer may mutually agree to the impasse procedure under which the arbitrator or panel may)) shall issue a decision it deems just and appropriate with respect to each impasse item. If the parties fail to agree upon impasse procedures under this section, the impasse procedures provided in RCW 47.64.210 and 47.64.230 and 47.64.300 through 47.64.320 apply. It is unlawful for either party to refuse to participate in the impasse procedures provided in RCW 47.64.210 and 47.64.230 and 47.64.300 through 47.64.320.

Sec. 13   RCW 47.64.270 and 2006 c 164 s 17 are each amended to read as follows:
     (1) The employer and one coalition of all the exclusive bargaining representatives subject to this chapter and chapter 41.80 RCW shall conduct negotiations regarding the dollar amount expended on behalf of each employee for health care benefits.
     (2) Absent a collective bargaining agreement to the contrary, the department of transportation shall provide contributions to insurance and health care plans for ferry system employees and dependents, as determined by the state health care authority, under chapter 41.05 RCW((; and)).
     (3) The employer and employee organizations may collectively bargain for ((other)) insurance ((and health care)) plans other than health care benefits, and employer contributions may exceed that of other state agencies as provided in RCW 41.05.050. ((To the extent that ferry employees by bargaining unit have absorbed the required offset of wage increases by the amount that the employer's contribution for employees' and dependents' insurance and health care plans exceeds that of other state general government employees in the 1985-87 fiscal biennium, employees shall not be required to absorb a further offset except to the extent the differential between employer contributions for those employees and all other state general government employees increases during any subsequent fiscal biennium. If such differential increases in the 1987-89 fiscal biennium or the 1985-87 offset by bargaining unit is insufficient to meet the required deduction, the amount available for compensation shall be reduced by bargaining unit by the amount of such increase or the 1985-87 shortage in the required offset. Compensation shall include all wages and employee benefits.))

Sec. 14   RCW 47.64.280 and 2006 c 164 s 18 are each amended to read as follows:
     (1) There is created the marine employees' commission. The governor shall appoint the commission with the consent of the senate. The commission shall consist of three members: One member to be appointed from labor, one member from industry, and one member from the public who has significant knowledge of maritime affairs. The public member shall be chair of the commission. One of the original members shall be appointed for a term of three years, one for a term of four years, and one for a term of five years. Their successors shall be appointed for terms of five years each, except that any person chosen to fill a vacancy shall be appointed only for the unexpired term of the member whom he or she succeeds. Commission members are eligible for reappointment. Any member of the commission may be removed by the governor, upon notice and hearing, for neglect of duty or malfeasance in office, but for no other cause. Commission members are not eligible for state retirement under chapter 41.40 RCW by virtue of their service on the commission. Members of the commission shall be compensated in accordance with RCW 43.03.250 and shall receive reimbursement for official travel and other expenses at the same rate and on the same terms as provided for the transportation commission by RCW 47.01.061. The payments shall be made from the Puget Sound ferry operations account.
     (2) The commission shall: (a) Adjust all complaints, grievances, and disputes between labor and management arising out of the operation of the ferry system as provided in RCW 47.64.150; (b) provide for impasse mediation as required in RCW 47.64.210; and (c) ((provide salary surveys as required in RCW 47.64.220; and (d))) perform those duties required in RCW 47.64.300.
     (3)(a) In adjudicating all complaints, grievances, and disputes, the party claiming labor disputes shall, in writing, notify the commission, which shall make careful inquiry into the cause thereof and issue an order advising the ferry employee, or the ferry employee organization representing him or her, and the department of transportation, as to the decision of the commission.
     (b) The parties are entitled to offer evidence relating to disputes at all hearings conducted by the commission. The orders and awards of the commission are final and binding upon any ferry employee or employees or their representative affected thereby and upon the department.
     (c) The commission shall adopt rules of procedure under chapter 34.05 RCW.
     (d) The commission has the authority to subpoena any ferry employee or employees, or their representatives, and any member or representative of the department, and any witnesses. The commission may require attendance of witnesses and the production of all pertinent records at any hearings held by the commission. The subpoenas of the commission are enforceable by order of any superior court in the state of Washington for the county within which the proceeding may be pending. The commission may hire staff as necessary, appoint consultants, enter into contracts, and conduct studies as reasonably necessary to carry out this chapter.

Sec. 15   RCW 47.64.320 and 2006 c 164 s 14 are each amended to read as follows:
     (1) The mediator, arbitrator, or arbitration panel may consider only matters that are subject to bargaining under this chapter, except that health care benefits are not subject to interest arbitration.
     (2) The decision of an arbitrator or arbitration panel is not binding on the legislature and, if the legislature does not approve the funds necessary to implement provisions pertaining to compensation and fringe benefit provisions of an arbitrated collective bargaining agreement, is not binding on the state, the department of transportation, or the ferry employee organization.
     (3) In making its determination, the arbitrator or arbitration panel shall be mindful of the legislative purpose under RCW 47.64.005 and 47.64.006 and, as additional standards or guidelines to aid it in reaching a decision, shall take into consideration the following factors:
     (a) The financial ability of the department to pay for the compensation and fringe benefit provisions of a collective bargaining agreement;
     (b) Past collective bargaining contracts between the parties including the bargaining that led up to the contracts;
     (((b))) (c) The constitutional and statutory authority of the employer;
     (((c))) (d) Stipulations of the parties;
     (((d))) (e) The results of the salary survey as required in RCW ((47.64.220)) 47.64.170(8);
     (((e))) (f) Comparison of wages, hours, employee benefits, and conditions of employment of the involved ferry employees with those of public and private sector employees in states along the west coast of the United States, including Alaska, and in British Columbia doing directly comparable but not necessarily identical work, giving consideration to factors peculiar to the area and the classifications involved;
     (((f))) (g) Changes in any of the foregoing circumstances during the pendency of the proceedings;
     (((g))) (h) The limitations on ferry toll increases and operating subsidies as may be imposed by the legislature; ((and
     (h))) (i) The ability of the state to retain ferry employees;
     (j) The overall compensation presently received by the ferry employees, including direct wage compensation, vacations, holidays and other paid excused time, pensions, insurance benefits, and all other direct or indirect monetary benefits received; and
     (k) Other factors that are normally or traditionally taken into consideration in the determination of matters that are subject to bargaining under this chapter.
     (4) This section applies to any matter before the respective mediator, arbitrator, or arbitration panel.

Sec. 16   RCW 41.80.020 and 2002 c 354 s 303 are each amended to read as follows:
     (1) Except as otherwise provided in this chapter, the matters subject to bargaining include wages, hours, and other terms and conditions of employment, and the negotiation of any question arising under a collective bargaining agreement.
     (2) The employer is not required to bargain over matters pertaining to:
     (a) Health care benefits or other employee insurance benefits, except as required in subsection (3) of this section;
     (b) Any retirement system or retirement benefit; or
     (c) Rules of the director of personnel or the Washington personnel resources board adopted under section 203, chapter 354, Laws of 2002.
     (3) Matters subject to bargaining include the number of names to be certified for vacancies, promotional preferences, and the dollar amount expended on behalf of each employee for health care benefits. However, except as provided otherwise in this subsection for institutions of higher education, negotiations regarding the number of names to be certified for vacancies, promotional preferences, and the dollar amount expended on behalf of each employee for health care benefits shall be conducted between the employer and one coalition of all the exclusive bargaining representatives subject to this chapter. The exclusive bargaining representatives for employees that are subject to chapter 47.64 RCW shall bargain the dollar amount expended on behalf of each employee for health care benefits with the employer as part of the coalition under this subsection. Any such provision agreed to by the employer and the coalition shall be included in all master collective bargaining agreements negotiated by the parties. For institutions of higher education, promotional preferences and the number of names to be certified for vacancies shall be bargained under the provisions of RCW 41.80.010(4).
     (4) The employer and the exclusive bargaining representative shall not agree to any proposal that would prevent the implementation of approved affirmative action plans or that would be inconsistent with the comparable worth agreement that provided the basis for the salary changes implemented beginning with the 1983-1985 biennium to achieve comparable worth.
     (5) The employer and the exclusive bargaining representative shall not bargain over matters pertaining to management rights established in RCW 41.80.040.
     (6) Except as otherwise provided in this chapter, if a conflict exists between an executive order, administrative rule, or agency policy relating to wages, hours, and terms and conditions of employment and a collective bargaining agreement negotiated under this chapter, the collective bargaining agreement shall prevail. A provision of a collective bargaining agreement that conflicts with the terms of a statute is invalid and unenforceable.
     (7) This section does not prohibit bargaining that affects contracts authorized by RCW 41.06.142.

NEW SECTION.  Sec. 17   A new section is added to chapter 47.60 RCW to read as follows:
     Upon expiration of the collective bargaining agreements in existence as of the effective date of this section, the department shall not allow free passage on any ferry vessel operated by the department to:
     (1) Any department employee unless it is directly related to the employee's job duties, directly reporting to duty, or directly returning home from duty;
     (2) Any former department employee or their families; or
     (3) Any department employee's family members.

Sec. 18   2010 c ... (ESSB 6381) s 222 (uncodified) is amended to read as follows:
FOR THE DEPARTMENT OF TRANSPORTATION -- MARINE -- PROGRAM X
Puget Sound Ferry Operations Account -- State
     Appropriation . . . . . . . . . . . . (($425,922,000))
       $425,252,000

     The appropriation in this section is subject to the following conditions and limitations:
     (1) $78,754,952 of the Puget Sound ferry operations account--state appropriation is provided solely for auto ferry vessel operating fuel in the 2009-11 fiscal biennium. This appropriation is contingent upon the enactment of ((sections 716 and 701 of this act)) section 701, chapter . . . (ESSB 6381), Laws of 2010. All fuel purchased by the Washington state ferries at Harbor Island truck terminal for the operation of the Washington state ferries diesel powered vessels must be a minimum of five percent biodiesel blend so long as the per gallon price of diesel containing a five percent biodiesel blend level does not exceed the per gallon price of diesel by more than five percent.
     (2) To protect the waters of Puget Sound, the department shall investigate nontoxic alternatives to fuel additives and other commercial products that are used to operate, maintain, and preserve vessels.
     (3) If, after the department's review of fares and pricing policies, the department proposes a fuel surcharge, the department must evaluate other cost savings and fuel price stabilization strategies that would be implemented before the imposition of a fuel surcharge. The department shall report to the legislature and transportation commission on its progress of implementing new fuel forecasting and budgeting practices, price hedging contracts for fuel purchases, and fuel conservation strategies by November 30, 2010.
     (4) The department shall strive to significantly reduce the number of injuries suffered by Washington state ferries employees. By December 15, 2009, the department shall submit to the office of financial management and the transportation committees of the legislature its implementation plan to reduce such injuries.
     (5) The department shall continue to provide service to Sidney, British Columbia. The department may place a Sidney terminal departure surcharge on fares for out of state residents riding the Washington state ferry route that runs between Anacortes, Washington and Sidney, British Columbia, if the cost for landing/license fee, taxes, and additional amounts charged for docking are in excess of $280,000 CDN. The surcharge must be limited to recovering amounts above $280,000 CDN.
     (6) The department shall analyze operational solutions to enhance service on the Bremerton to Seattle ferry run. The Washington state ferries shall report its analysis to the transportation committees of the legislature by December 1, 2009.
     (7) The office of financial management budget instructions require agencies to recast enacted budgets into activities. The Washington state ferries shall include a greater level of detail in its 2011-13 omnibus transportation appropriations act request, as determined jointly by the office of financial management, the Washington state ferries, and the legislative transportation committees.
     (8) (($4,794,000)) $4,124,000 of the Puget Sound ferry operations account--state appropriation is provided solely for commercial insurance for ferry assets. The office of financial management, after consultation with the transportation committees of the legislature, must present a business plan for the Washington state ferry system's insurance coverage to the 2010 legislature. The business plan must include a cost-benefit analysis of Washington state ferries' current commercial insurance purchased for ferry assets and a review of self-insurance for noncatastrophic events.
     (9) $1,100,000 of the Puget Sound ferry operations account--state appropriation is provided solely for a marketing program. The department shall present a marketing program proposal to the transportation committees of the legislature during the 2010 legislative session before implementing this program. Of this amount, $10,000 is for the city of Port Townsend and $10,000 is for the town of Coupeville for mitigation expenses related to only one vessel operating on the Port Townsend/Keystone ferry route. The moneys provided to the city of Port Townsend and town of Coupeville are not contingent upon the required marketing proposal.
     (10) $350,000 of the Puget Sound ferry operations account--state appropriation is provided solely for two extra trips per day during the summer of 2009 season, beyond the current schedule, on the Port Townsend/Keystone route.
     (11) When purchasing uniforms that are required by collective bargaining agreements, the department shall contract with the lowest cost provider.
     (12) The legislature finds that measuring the performance of Washington state ferries requires the measurement of quality, timeliness, and unit cost of services delivered to customers. Consequently, the department must develop a set of metrics that measure that performance and report to the transportation committees of the legislature and to the office of financial management on the development of these measurements along with recommendations to the 2010 legislature on which measurements must become a part of the next omnibus transportation appropriations act.
     (13) As a priority task, the department is directed to propose a comprehensive incident and accident investigation policy and appropriate procedures, and to provide the proposal to the legislature by November 1, 2009, using existing resources and staff expertise. In addition to consulting with ferry system unions and the United States coast guard, the Washington state ferries is encouraged to solicit independent outside expertise on incident and accident investigation best practices as they may be found in other organizations with a similar concern for marine safety. It is the intent of the legislature to enact the policies into law and to publish that law and procedures as a manual for Washington state ferries' accident/incident investigations. Until that time, the Washington state ferry system must exercise particular diligence to assure that any incident or accident investigations are conducted within the spirit of the guidelines of this act. The proposed policy must contain, at a minimum:
     (a) The definition of an incident and an accident and the type of investigation that is required by both types of events;
     (b) The process for appointing an investigating officer or officers and a description of the authorities and responsibilities of the investigating officer or officers. The investigating officer or officers must:
     (i) Have the appropriate training and experience as determined by the policy;
     (ii) Not have been involved in the incident or accident so as to avoid any conflict of interest;
     (iii) Have full access to all persons, records, and relevant organizations that may have information about or may have contributed to, directly or indirectly, the incident or accident under investigation, in compliance with any affected employee's or employees' respective collective bargaining agreement and state laws and rules regarding public disclosure under chapter 42.56 RCW;
     (iv) Be provided with, if requested by the investigating officer or officers, appropriate outside technical expertise; and
     (v) Be provided with staff and legal support by the Washington state ferries as may be appropriate to the type of investigation;
     (c) The process of working with the affected employee or employees in accordance with the employee's or employees' respective collective bargaining agreement and the appropriate union officials, within protocols afforded to all public employees;
     (d) The process by which the United States coast guard is kept informed of, interacts with, and reviews the investigation;
     (e) The process for review, approval, and implementation of any approved recommendations within the department; and
     (f) The process for keeping the public informed of the investigation and its outcomes, in compliance with any affected employee's or employees' respective collective bargaining agreement and state laws and rules regarding public disclosure under chapter 42.56 RCW.
     (14) $7,300,000 of the Puget Sound ferry operations account--state appropriation is provided solely for the purposes of travel time associated with Washington state ferries employees. However, if Engrossed Substitute House Bill No. 3209 (managing costs of ferry system) is enacted by June 30, 2010, containing an appropriation for purposes of travel time associated with Washington state ferries employees, the amount provided in this subsection lapses.
     (15) $50,000 of the Puget Sound ferry operations account--state appropriation is provided solely to implement a mechanism to report on-time performance statistics.
     (a) The department shall conduct a study to identify process changes that would improve on-time performance on a route-by-route basis. The study must include looking into the slowing down of vessels for fuel economy purposes and touch-and-go sailings on peak runs. The department shall report its findings to the transportation committees of the senate and house of representatives by December 1, 2010.
     (b) The department shall, by November 1, 2010, report to the transportation committees of the legislature statistics regarding its on-time arrival and departure status on a route-by-route and month-by-month basis, as well as an annual route-by-route and systemwide basis, weighted by the number of customers on each sailing and distinguishing peak period on-time performance. The statistics must include reasons for any delays over ten minutes from the scheduled time. The statistics must be prominently displayed on the Washington state ferries' web site. Each Washington state ferries vessel and terminal must prominently display the statistics as they relate to their specific route.
     (16) The department shall investigate outsourcing the call center functions planned for the ferry reservation system and report its findings to the transportation committees of the senate and house of representatives by December 15, 2010.
     (17) By July 1, 2010, the department shall provide to the governor and the transportation committees of the senate and house of representatives a listing of all benefits that Washington state ferries union employees receive that other state employees do not traditionally receive. The listing must include any costs associated with these benefits.

Sec. 19   2010 c ... (ESSB 6381) s 306 (uncodified) is amended to read as follows:
FOR THE DEPARTMENT OF TRANSPORTATION -- WASHINGTON STATE FERRIES CONSTRUCTION -- PROGRAM W
Puget Sound Capital Construction Account -- State
     Appropriation . . . . . . . . . . . . $126,824,000
Puget Sound Capital Construction Account -- Federal
     Appropriation . . . . . . . . . . . . $60,364,000
Puget Sound Capital Construction Account--Local
     Appropriation . . . . . . . . . . . . $200,000
Transportation 2003 Account (Nickel Account) -- State
     Appropriation . . . . . . . . . . . . $51,734,000
Transportation Partnership Account--State
     Appropriation . . . . . . . . . . . . $66,879,000
Multimodal Transportation Account--State
     Appropriation . . . . . . . . . . . . $149,000
          TOTAL APPROPRIATION . . . . . . . . . . . . $306,150,000

     The appropriations in this section are subject to the following conditions and limitations:
     (1) $126,824,000 of the Puget Sound capital construction account--state appropriation, $60,364,000 of the Puget Sound capital construction account--federal appropriation, $200,000 of the Puget Sound capital construction account--local appropriation, $66,879,000 of the transportation partnership account--state appropriation, $51,734,000 of the transportation 2003 account (nickel account)--state appropriation, and $149,000 of the multimodal transportation account--state appropriation are provided solely for ferry capital projects, project support, and administration as listed in LEAP Transportation Document ALL PROJECTS 2010-2 as developed March 8, 2010, Program -Ferries Construction Program (W). Of the total appropriation, a maximum of $10,627,000 may be used for administrative support, a maximum of $8,184,000 may be used for terminal project support, and a maximum of $4,497,000 may be used for vessel project support. Of the total appropriation, $5,851,000 is provided solely for a reservation system and associated communications projects.
     (2) $51,734,000 of the transportation 2003 account (nickel account)--state appropriation, $63,100,000 of the transportation partnership account--state appropriation, and $10,164,000 of the Puget Sound capital construction account--state appropriation are provided solely for the acquisition of three new Island Home class ferry vessels subject to the conditions of RCW 47.56.780. The department shall pursue a contract for the second and third Island Home class ferry vessels with an option to purchase a fourth Island Home class ferry vessel. However, if sufficient resources are available to build one 144-auto vessel prior to exercising the option to build the fourth Island Home class ferry vessel, procurement of the fourth Island Home class ferry vessel will be postponed and the department shall pursue procurement of a 144-auto vessel.
     (a) The first two Island Home class ferry vessels must be placed on the Port Townsend-Keystone route.
     (b) The department may add additional passenger capacity to one of the Island Home class ferry vessels to make it more flexible within the system in the future, if doing so does not require additional staffing on the vessel.
     (c) Cost savings from the following initiatives will be included in the funding of these vessels: The department's review and update of the vessel life-cycle cost model as required under this section; and the implementation of technology efficiencies as required under section 602 of this act.
     (3)(a) $8,450,000 of the Puget Sound capital construction account--state appropriation and $2,450,000 of the transportation partnership account--state appropriation are provided solely for the following projects related to the design of a 144-vehicle vessel class: (i) $1,380,000 is provided solely for completion of the contract for owner-furnished equipment; (ii) $8,320,000 is provided solely for completion of the technical design, detail design, and production drawings, all of which must plan for an aluminum superstructure; (iii) $480,000 is provided solely for the storage of owner-furnished equipment; and (iv) a maximum of $720,000 is for construction engineering. In completing the contract for owner-furnished equipment, the department shall use as much of the already procured equipment as is practicable on the Island Home class ferry vessels if it is likely to be obsolete before it is used in procured 144-vehicle vessels.
     (b) The department shall conduct a cost-benefit study on alternative furnishings and fittings for the 144-vehicle vessel class. The study must review the proposed interior furnishings and fittings for the long-term maintenance and out-of-service vessel costs and, if appropriate, propose alternative interior furnishings and fittings that will decrease long-term maintenance and out-of-service vessel costs. The study must include a projection of out-of-service time and a life-cycle cost analysis of planned out-of-service time, including the impact on fleet size. The department must submit the study to the joint transportation committee by August 1, 2010.
     (c) The department shall identify costs for any additional detail design and production drawings costs related to incorporating the aluminum superstructure and any changes in the proposed furnishings and fittings.
     (4) $6,300,000 of the Puget Sound capital construction account--state appropriation is provided solely for emergency capital costs.
     (5) $3,000,000 of the Puget Sound capital construction account--federal appropriation is provided solely for completing the Anacortes terminal design up to the maximum allowable construction cost phase. Beyond preparing environmental work, these funds may be spent only after the following conditions have been met: (a) A value engineering process is conducted on the existing design and the concept of a terminal building smaller than preferred alternative; (b) the office of financial management participates in the value engineering process; (c) the office of financial management concurs with the recommendations of the value engineering process; and (d) the office of financial management gives its approval to proceed with the design work.
     (6) $3,965,000 of the Puget Sound capital construction account--state appropriation is provided solely for the following vessel projects: Waste heat recovery pilot project for the Issaquah; jumbo Mark 1 class steering gear ventilation pilot project; and improvements to the Yakima and Kaleetan propulsion controls to allow for two engine operation. Before beginning these projects, the Washington state ferries must ensure the vessels' out-of-service time does not negatively impact service to the system.
     (7) The department shall pursue purchasing a foreign-flagged vessel for service on the Anacortes, Washington to Sidney, British Columbia ferry route.
     (8) The department shall provide to the office of financial management and the legislature quarterly reports providing the status on each project listed in this section and in the project lists submitted pursuant to this act and on any additional projects for which the department has expended funds during the 2009-11 fiscal biennium. Elements must include, but not be limited to, project scope, schedule, and costs. The department shall also provide the information required under this subsection via the transportation executive information systems (TEIS). The quarterly report regarding the status of projects identified on the list referenced in subsection (1) of this section must be developed according to an earned value method of project monitoring.
     (9) The department shall review and adjust its capital program staffing levels to ensure staffing is at the most efficient level necessary to implement the capital program in the omnibus transportation appropriations act. The Washington state ferries shall report this review and adjustment to the office of financial management and the house and senate transportation committees of the legislature by July 2009.
     (10) $1,200,000 of the total appropriation is provided solely for improving the toll booth configuration at the Port Townsend and Keystone ferry terminals.
     (11) $2,636,000 of the total appropriation is provided solely for continued permitting work on the Mukilteo ferry terminal. The department shall seek additional federal funding for this project.
     (12) The department shall develop a proposed ferry vessel maintenance, preservation, and improvement program and present it to the transportation committees of the legislature by July 1, 2010. The proposal must:
     (a) Improve the basis for budgeting vessel maintenance, preservation, and improvement costs and for projecting those costs into a sixteen-year financial plan;
     (b) Limit the amount of planned out-of-service time to the greatest extent possible, including options associated with department staff as well as commercial shipyards. At a minimum, the department shall consider the following:
     (i) The costs compared to benefits of Eagle Harbor repair and maintenance facility operations options to include staffing costs and benefits in terms of reduced out-of-service time;
     (ii) The maintenance requirements for on-vessel staff, including the benefits of a systemwide standard;
     (iii) The costs compared to benefits of staff performing preservation or maintenance work, or both, while the vessel is underway, tied up between sailings, or not deployed;
     (iv) A review of the department's vessel maintenance, preservation, and improvement program contracting process and contractual requirements;
     (v) The costs compared to benefits of allowing for increased costs associated with expedited delivery;
     (vi) A method for comparing the anticipated out-of-service time of proposed projects and other projects planned during the same construction period;
     (vii) Coordination with required United States coast guard dry dockings;
     (viii) A method for comparing how proposed projects relate to the service requirements of the route on which the vessel normally operates; and
     (ix) A method for evaluating the ongoing maintenance and preservation costs associated with proposed improvement projects; and
     (c) Be based on the service plan in the capital plan, recognizing that vessel preservation and improvement needs may vary by route.
     (13) $247,000 of the Puget Sound capital construction account--state appropriation is provided solely for the Washington state ferries to review and update its vessel life-cycle cost model and report the results to the house of representatives and senate transportation committees of the legislature by ((March 15)) December 1, 2010. This review will evaluate the impact of the planned out-of-service periods scheduled for each vessel on the ability of the overall system to deliver uninterrupted service and will assess the risk of service disruption from unscheduled maintenance or longer than planned maintenance periods.
     (14) The department shall work with the department of archaeology and historic preservation to ensure that the cultural resources investigation is properly conducted on all large ferry terminal projects. These projects must be conducted with active archaeological management. Additionally, the department shall establish a scientific peer review of independent archaeologists that are knowledgeable about the region and its cultural resources.
     (15) The Puget Sound capital construction account--state appropriation includes up to $114,000,000 in proceeds from the sale of bonds authorized in RCW 47.10.843.
     (16) The Puget Sound capital construction account--state appropriation reflects the reduction of three terminal positions due to decreased terminal activity and funding.
     (17) The department shall provide data to the transportation committees of the senate and house of representatives for a transparent analysis of travel pay policies.

NEW SECTION.  Sec. 20   The following acts or parts of acts are each repealed:
     (1) RCW 47.61.010 (Authority to enter into agreement and apply for financial assistance) and 1984 c 7 s 338 & 1965 ex.s. c 56 s 1;
     (2) RCW 47.61.020 (Bonds for matching funds -- Issuance and sale) and 1965 ex.s. c 56 s 2;
     (3) RCW 47.61.030 (Term of bonds -- Terms and conditions) and 1965 ex.s. c 56 s 3;
     (4) RCW 47.61.040 (Bonds -- Signatures -- Registration -- Where payable--Negotiable instruments) and 1965 ex.s. c 56 s 4;
     (5) RCW 47.61.050 (Bonds -- Denominations -- Manner and terms of sale--Legal investment for state funds) and 1965 ex.s. c 56 s 5;
     (6) RCW 47.61.060 (Proceeds of bonds -- Deposit and use) and 1965 ex.s. c 56 s 6;
     (7) RCW 47.61.070 (Statement describing nature of bond obligation--Pledge of excise taxes) and 1965 ex.s. c 56 s 7;
     (8) RCW 47.61.080 (Bonds to reflect terms and conditions of grant agreement) and 1965 ex.s. c 56 s 8;
     (9) RCW 47.61.090 (Designation of funds to repay bonds and interest) and 1984 c 7 s 339 & 1965 ex.s. c 56 s 9;
     (10) RCW 47.61.100 (Bond repayment procedure -- Highway bond retirement fund) and 1965 ex.s. c 56 s 10;
     (11) RCW 47.61.110 (Sums in excess of bond retirement requirements -- Use) and 1965 ex.s. c 56 s 11;
     (12) RCW 47.60.395 (Evaluation of cost allocation methodology and preservation and improvement costs -- Exception) and 2009 c 470 s 707 & 2007 c 512 s 15;
     (13) RCW 47.60.649 (Passenger-only ferry service -- Finding) and 1998 c 166 s 1;
     (14) RCW 47.60.652 (Passenger-only ferry service -- Vessel and terminal acquisition, procurement, and construction) and 1998 c 166 s 2;
     (15) RCW 47.60.654 (Passenger-only ferry service -- Contingency) and 1998 c 166 s 3;
     (16) RCW 47.60.658 (Passenger-only ferry service between Vashon and Seattle) and 2007 c 223 s 8 & 2006 c 332 s 3;
     (17) RCW 47.60.770 (Jumbo ferry construction -- Notice) and 1993 c 493 s 1;
     (18) RCW 47.60.772 (Jumbo ferry construction -- Bidding documents) and 1993 c 493 s 2;
     (19) RCW 47.60.774 (Jumbo ferry construction -- Procedure on conclusion of evaluation) and 1993 c 493 s 4;
     (20) RCW 47.60.776 (Jumbo ferry construction -- Contract) and 1993 c 493 s 5;
     (21) RCW 47.60.778 (Jumbo ferry construction -- Bid deposits -- Low bidder claiming error) and 1996 c 18 s 9 & 1993 c 493 s 6;
     (22) RCW 47.60.780 (Jumbo ferry construction--Propulsion system acquisition) and 1994 c 181 s 2; and
     (23) RCW 47.64.220 (Salary survey) and 2006 c 164 s 10, 2005 c 274 s 308, 1999 c 256 s 1, 1989 c 327 s 2, & 1983 c 15 s 13.

NEW SECTION.  Sec. 21   Section 18 of this act takes effect if section 222, chapter . . . (Engrossed Substitute Senate Bill No. 6381), Laws of 2010 is enacted into law. If section 222, chapter . . . (Engrossed Substitute Senate Bill No. 6381), Laws of 2010 is not enacted into law, section 18 of this act is void in its entirety.

NEW SECTION.  Sec. 22   Section 19 of this act takes effect if section 306, chapter . . . (Engrossed Substitute Senate Bill No. 6381), Laws of 2010 is enacted into law. If section 306, chapter . . . (Engrossed Substitute Senate Bill No. 6381), Laws of 2010 is not enacted into law, section 19 of this act is void in its entirety.

NEW SECTION.  Sec. 23   If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION.  Sec. 24   This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately."