"NEW SECTION.  Sec. 1   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.

Sec. 2   RCW 47.60.355 and 2007 c 512 s 11 are each amended to read as follows:
     (1) Terminal and vessel preservation funding requests received after the effective date of this section 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. 3   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. 4   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. 5   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 received after the effective date of this section must adhere to the capital plan((.
     (2) Requests for terminal improvement design and construction funding must)) and be submitted with a predesign study that:
     (a) Includes all elements required by the office of financial management;
     (b) Separately identifies basic terminal 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 an analysis of the effect of the proposed capital project on the entire route;
     (j) Includes planned service modifications as a result of the proposed capital project, and the consistency of those service modifications with the capital plan; and
     (k) 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. 6   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) Existing vessels or vessel plans;     
     (d) Includes documentation of community reaction to proposed vessel capacity changes;
     (e) 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 additional 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.

Sec. 7   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:
     (i) Less than fifty thousand dollars and effective July 1, 2005, sixty thousand dollars((: PROVIDED, That)); or
     (ii) Subject to subsection (4) of this section, less than one hundred thousand dollars for work performed on ferry vessels or terminals.
     (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) The department and the unions representing workers at the Eagle Harbor maintenance facility shall report to the transportation committees of the legislature by December 1, 2009, on what steps they have taken to reduce vessel out-of-service time. The report must address all identifiable obstacles to reducing vessel out-of-service time.

Sec. 8   RCW 47.60.315 and 2007 c 512 s 6 are each amended to read as follows:
     (1) The commission shall adopt fares and pricing policies by rule, under chapter 34.05 RCW, according to the following schedule:
     (a) Each year the department shall provide the commission a report of its review of fares and pricing policies, with recommendations for the revision of fares and pricing policies for the ensuing year, including options for active demand management pricing strategies;
     (b) By September 1st of each year, beginning in 2008, the commission shall adopt by rule fares and pricing policies for the ensuing year.
     (2) The commission may adopt by rule fares that are effective for more or less than one year for the purposes of transitioning to the fare schedule in subsection (1) of this section.
     (3) The commission may increase ferry fares included in the schedule of charges adopted under this section by a percentage that exceeds the fiscal growth factor.
     (4) The chief executive officer of the ferry system may authorize the use of promotional, discounted, and special event fares to the general public and commercial enterprises for the purpose of maximizing capacity use and the revenues collected by the ferry system. The department shall report to the commission a summary of the promotional, discounted, and special event fares offered during each fiscal year and the financial results from these activities.
     (5) Fare revenues and other revenues deposited in the Puget Sound ferry operations account created in RCW 47.60.530 may not be used to support the Puget Sound capital construction account created in RCW 47.60.505, unless the support for capital is separately identified in the fare.
     (6) The commission may not raise fares until the fare rules contain pricing policies developed under RCW 47.60.290, or September 1, 2009, whichever is later.
     (7) Before raising fares due to predicted increased fuel costs, the commission shall verify that the department has considered operational changes to reduce fuel consumption.
     (8) When setting ferry fares to raise required total system revenues, first consideration must be given to raising revenues through increased off-peak vehicle ridership.
     (9) The commission may authorize a fuel surcharge effective no sooner than July 1, 2013.

Sec. 9   RCW 47.60.290 and 2007 c 512 s 5 are each amended to read as follows:
     (1) The department shall annually review fares and pricing policies applicable to the operation of the Washington state ferries.
     (2) Beginning in 2008, the department shall develop fare and pricing policy proposals that must:
     (a) Recognize that each travel shed is unique, and might not have the same farebox recovery rate and the same pricing policies;
     (b) Use data from the current survey conducted under RCW 47.60.286;
     (c) Be developed with input from affected ferry users by public hearing and by review with the affected ferry advisory committees, in addition to the data gathered from the survey conducted in RCW 47.60.286;
     (d) Generate the amount of revenue required by the biennial transportation budget;
     (e) Consider the impacts on users, capacity, and local communities; and
     (f) Keep fare schedules as simple as possible.
     (3) While developing fare and pricing policy proposals, the department must consider the following:
     (a) Options for using pricing to level vehicle peak demand; and
     (b) Options for using pricing to increase off-peak ridership.
     (4) Before proposing fare increases due to predicted increased fuel costs, the department shall consider operational changes to reduce fuel consumption.

NEW SECTION.  Sec. 10   A new section is added to chapter 47.60 RCW to read as follows:
     The legislature finds 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 house of representatives and senate 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 transportation budget.

Sec. 11   RCW 43.19.642 and 2007 c 348 s 201 are each amended to read as follows:
     (1) Effective June 1, 2006, for agencies complying with the ultra-low sulfur diesel mandate of the United States environmental protection agency for on-highway diesel fuel, agencies shall use biodiesel as an additive to ultra-low sulfur diesel for lubricity, provided that the use of a lubricity additive is warranted and that the use of biodiesel is comparable in performance and cost with other available lubricity additives. The amount of biodiesel added to the ultra-low sulfur diesel fuel shall be not less than two percent.
     (2) Effective June 1, 2009, state agencies are required to use a minimum of twenty percent biodiesel as compared to total volume of all diesel purchases made by the agencies for the operation of the agencies' diesel-powered vessels, vehicles, and construction equipment.
     (3) All state agencies using biodiesel fuel shall, beginning on July 1, 2006, file biannual reports with the department of general administration documenting the use of the fuel and a description of how any problems encountered were resolved.
     (4) For the 2009-2011 fiscal biennium, the Washington state ferries is required to use a minimum of five percent biodiesel as compared to total volume of all diesel purchases made by the Washington state ferries for the operation of the Washington state ferries diesel-powered vessels 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. If the per gallon price of diesel containing a five percent biodiesel blend level exceeds the per gallon price of diesel by more than five percent, then the requirements of this section do not apply to vessel fuel purchases by the Washington state ferries.
     (5) By December 1, 2009, the department of general administration shall:
     (a) Report to the legislature on the average true price differential for biodiesel by blend and location; and
     (b) Examine alternative fuel procurement methods that work to address potential market barriers for in-state biodiesel producers and report these findings to the legislature.

Sec. 12   RCW 47.60.310 and 1988 c 100 s 1 are each amended to read as follows:
     (1) The department is further directed to conduct such review by soliciting and obtaining expressions from local community groups in order to be properly informed as to problems being experienced within the area served by the Washington state ferries. ((In order that local representation may be established, the department)) The department shall meet the requirements of this section by means of no more than quarterly meetings with the legislative authority of each ferry-served county. This subsection may not be construed to limit the number of meetings that legislative authorities of ferry-served counties or ferry advisory committees may conduct.
     (2) The legislative authorities of ferry-served counties:
     (a) Shall give prior notice of ((the review)) meetings described in subsection (1) of this section to the ferry advisory committees established in this section and to the governing officials of cities or towns with ferry terminals;
     (b) Shall update the membership of the ferry advisory committees to reflect statutory requirements regarding numbers of members, expiration of terms, and diversity of representation on the committees; and
     (c) May request the ferry advisory committees to conduct public outreach to gather community input, document the method and findings of the public outreach, and report the results at the meetings with the department.
     (((2))) (3) The legislative authorities of San Juan, Skagit, Clallam, and Jefferson counties shall each appoint a committee to consist of ((five)) a maximum of six members to serve as an advisory committee to the ((department or its designated representative)) legislative authorities of ferry-served counties in such review. The legislative authority of Kitsap county shall appoint a maximum of five members for each terminal area to serve as advisory committees. The legislative authorities of other counties that contain ferry terminals shall appoint ferry advisory committees consisting of ((three)) a maximum of four members for each terminal area in each county, except for Vashon Island, which shall have one committee, and its members shall be appointed ((by)) in consultation with the Vashon/Maury Island community council. ((At least one person appointed to))
     (4) Membership in each ferry advisory committee shall be representative of ((an)) established ferry user ((group or of frequent users of the ferry system)) groups consistent with the most recent ferry ridership survey conducted by the Washington state transportation commission. The membership of county ferry advisory committees shall include an elected local official and a representative of commercial users. Each member shall reside in the vicinity of the terminal that the advisory committee represents.
     (((3))) (5) The members of the ((San Juan, Clallam, and Jefferson county)) ferry advisory committees shall be appointed for four-year terms. ((The initial terms shall commence on July 1, 1982, and end on June 30, 1986.)) Any vacancy shall be filled for the remainder of the unexpired term by the appointing authority. ((At least one person appointed to the advisory committee shall be representative of an established ferry-user group or of frequent users of the ferry system, at least one shall be representative of persons or firms using or depending upon the ferry system for commerce, and one member shall be representative of a local government planning body or its staff. Every member shall be a resident of the county upon whose advisory committee he or she sits, and not more than three members shall at the time of their appointment be members of the same major political party.
     (4) The members of each terminal area committee shall be appointed for four-year terms. The initial terms of the members of each terminal area committee shall be staggered as follows: All terms shall commence September 1, 1988, with one member's term expiring August 31, 1990, one member's term expiring August 31, 1991, and the remaining member's term expiring August 31, 1992. Any vacancy shall be filled for the remainder of the unexpired term by the appointing authority. Not more than two members of any terminal-area committee may be from the same political party at the time of their appointment, and in a county having more than one committee, the overall party representation shall be as nearly equal as possible.
     (5) The chairmen of the several committees constitute an executive committee of the Washington state ferry users. The executive committee shall meet twice each year with representatives of the marine division of the department to review ferry system issues.
     (6))) The committees to be appointed by the county legislative authorities shall serve without fee or compensation.

NEW SECTION.  Sec. 13   RCW 47.60.395 (Evaluation of cost allocation methodology and preservation and improvement costs) and 2007 c 512 s 15 are each repealed."