BILL REQ. #:  H-3309.3 

Read first time 01/20/12.   Referred to Committee on Transportation.

     AN ACT Relating to public accountability of ferry fares and operating costs; amending RCW 47.60.315; adding new sections to chapter 47.60 RCW; and creating new sections.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   Recognizing that ferry fares comprise a high proportion of the operating revenue of the Washington state ferry system and that high ferry fares impose a special burden on ferry users and impact the economic health of ferry communities, the legislature intends that a ferry communities advisory committee will take a key role in the annual process of setting ferry fares by advising the Washington transportation commission. In addition to providing the committee full access to ferry system budget data, the legislature also intends that current, detailed operating and capital budget data be constantly available to the general public via the Washington state ferries web site. The legislature further intends to follow this effort with a review of the ferry advisory committee system to ensure its viability and relevance.

NEW SECTION.  Sec. 2   This act may be known and cited as the ferry accountability reform act.

NEW SECTION.  Sec. 3   A new section is added to chapter 47.60 RCW to read as follows:
     (1) The Washington state ferry communities advisory committee is created to advise the commission in the annual process of setting ferry fares.
     (2) The executive committee of the Washington state ferry users established under RCW 47.60.310 shall provide the governor with at least one nominee from each of the ferry advisory committees established under RCW 47.60.315 to serve on the Washington state ferry communities advisory committee. By August 1, 2012, the governor shall select and appoint ten individuals from the nominations to serve on the advisory committee. Members of the advisory committee shall serve without compensation.
     (3)(a) The advisory committee members must include:
     (i) Seven members representing each of the main ferry route systems;
     (ii) One marine or maritime industry representative;
     (iii) One ferry service-dependent business representative; and
     (iv) One ferry community-related tourism representative.
     (b) The advisory committee must also include members who have knowledge of the Washington state ferry system, budgeting, and strategic planning.
     (c) If the nominees provided by the executive committee of the Washington state ferry users do not include individuals with the qualifications outlined in (b) of this subsection, the governor may appoint individuals who meet these qualifications.
     (4) The term of the advisory committee members is three years. Members may not serve more than two consecutive terms. Three of the initial advisory committee members must be appointed to serve an initial term of three years, two must be appointed to serve an initial term of two years, and the two remaining members must be appointed to serve an initial term of one year. All subsequent terms are three years. To ensure that the advisory committee can continue to act, a member whose term expires shall continue to serve until his or her replacement is appointed. In the case of any vacancy on the advisory committee for any reason, the governor shall appoint a new member to serve out the term of the person whose position has become vacant. An advisory committee member may be removed for cause by the governor.
     (5) Annually, the advisory committee shall choose its chair from among its membership with the goal of having the chair serve through a full fare-setting cycle. The chair of the advisory committee is responsible for scheduling meetings and setting meeting agendas.

NEW SECTION.  Sec. 4   A new section is added to chapter 47.60 RCW to read as follows:
     (1) The Washington state ferry communities advisory committee created in section 3 of this act shall:
     (a) Develop a detailed understating of the Washington state ferries operating and capital budgets;
     (b) Review proposals to change the fare schedule provided by the department;
     (c) Request and review operating budget cost savings and efficiency strategies provided by the department;
     (d) Recommend changes in overall fare strategies and polices; and
     (e) Recommend fare changes and operating budget cost savings and efficiency strategies to the commission.
     (2)(a) The advisory committee shall serve in an advisory capacity to the commission on all matters related to changes to the ferry fare schedule, as well as operating budget cost savings and efficiency strategies. By August 1, 2013, the commission and the department shall assist the advisory committee in gaining an understanding and familiarity with the Washington state ferries operating budget and fare schedule structure.
     (b) By August 1, 2013, and every August 1st thereafter, the advisory committee shall adopt recommendations regarding the ferry fare schedule and submit them to the commission.
     (c) By November 1, 2013, and every November 1st thereafter, the advisory committee shall adopt recommendations regarding the Washington state ferries operating and capital budgets as related to ferry service, ferry fares, and the life-cycle cost of ownership.
     (d) The advisory committee shall solicit perspectives on service from ferry advisory committees created in RCW 47.60.310. The advisory committee shall also consider information gathered by the ferry advisory committees' user surveys and customer feedback. In consultation with the ferry advisory committees, the advisory committee may suggest specific customer survey data requirements to the department and the commission.
     (e) The advisory committee, in consultation with the commission, shall develop a public outreach process that includes public hearings.
     (3) A fare change may not be imposed or modified unless the advisory committee has been given at least twenty days to review and comment on any proposed fare schedule changes. In setting ferry fares, the commission shall consider any recommendations of the advisory committee.

NEW SECTION.  Sec. 5   A new section is added to chapter 47.60 RCW to read as follows:
     The department must:
     (1) Provide staff assistance to the Washington state ferry communities advisory committee created in section 3 of this act; and
     (2) Provide the advisory committee with Washington state ferries operating cost and fare revenue scenario details to meet existing statutory requirements and the farebox recovery rate as directed in section 6 of this act.

NEW SECTION.  Sec. 6   A new section is added to chapter 47.60 RCW to read as follows:
     Beginning with the 2013-2015 biennial transportation budget, and for every biennial transportation budget thereafter, the legislature shall set a farebox recovery rate in the biennial transportation budget at a ceiling of no more than seventy-three percent of the total Washington state ferries operating costs with the long-term goal of reducing that ceiling by one percent per year for the following ten years.

NEW SECTION.  Sec. 7   A new section is added to chapter 47.60 RCW to read as follows:
     Working with the legislative evaluation and accountability program committee and other relevant offices, the Washington state ferries shall develop an improved online ferry system operating budget display, as well as an organizational chart of Washington state ferries personnel assignments. The Washington state ferries shall keep current the information on the web site. Annually, the Washington state ferry communities advisory committee shall review the online data presentations and recommend improvements to the Washington state ferries and the legislative evaluation and accountability program committee.

Sec. 8   RCW 47.60.315 and 2011 1st sp.s. c 16 s 3 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, as described under section 4 of this act, the ((department)) Washington state ferry communities advisory committee created in section 3 of this act shall provide the commission a report of its review of fares ((and)), pricing policies, and operating budget cost savings and efficiency strategies, with recommendations for the revision of fares ((and)), pricing policies, and operating budget cost savings and efficiency strategies for the ensuing year;
     (b) By September 1st of each year, beginning in ((2008)) 2013, the commission shall adopt by rule fares ((and)), pricing policies, and operating budget cost savings and efficiency strategies for the ensuing year. The commission shall notify the legislative transportation committees, the governor's office, and the department of these fares, policies, and strategies. The department shall review, analyze, and submit the operating budget cost savings and efficiency strategies as part of the department's biennial and supplemental operating budget requests to the governor.
     (2) The department shall submit quarterly cost reports to the commission on activities that are paid for by fares.
     (3) 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))) (4) 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))) (5) 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))) (6) 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))) (7) The commission may not raise fares until the fare rules contain pricing policies developed under RCW 47.60.290, or September 1, ((2009)) 2012, whichever is later.
     (((7))) (8) The commission shall impose a vessel replacement surcharge of twenty-five cents on every one-way and round-trip ferry fare sold, including multiride and monthly pass fares. This surcharge must be clearly indicated to ferry passengers and drivers and, if possible, on the fare media itself.