FINAL BILL REPORT

                 SHB 1931

                         C 427 L 93

                     Synopsis as Enacted

Brief Description:  Regulating steamboat operators.

By House Committee on Transportation (originally sponsored by Representatives Schmidt, Zellinsky and Wood).

House Committee on Transportation

Senate Committee on Transportation

Background:  Since 1927, for-hire or common carrier vessels and ferries operating between fixed termini or over regular routes on Washington waters have been regulated by the Washington Utilities and Transportation Commission (WUTC) as steamboat companies under Chapter 81.84 RCW.  The entry standard for granting a certificate is "public convenience and necessity" (PC&N).

Two types of private ferry service exist:  private passenger and freight ferries, and launch services.  Launch services provide ship-to-shore transportation of freight and a ship's crew for large ships anchored in Washington waters.  To date, the WUTC has granted 19 steamboat certificates.

A steamboat certificate holder normally has exclusive rights to the route granted.  This means a certificate, once granted, may remain outstanding indefinitely, with or without activity, unless the certificate provides otherwise; the certificate holder fails to provide reasonable and adequate service; or the certificate holder violates the requirements of the certificate.

In addition to determining whether the applicant meets the PC&N test, the WUTC must consider whether the proposed service violates the requirements of RCW 47.60.120 which prohibits the construction and operation of commercial ferry crossings within 10 miles of a state ferry crossing.  This is commonly referred to as the "10-mile rule."

A 1990 attorney general opinion found that the 10-mile distance is 10 highway miles measured in airline distance and is applied by comparing the two end points of a commercial ferry crossing to the two end points of a state crossing.  If the former is within 10 miles of the latter, the crossing is prohibited.

In some instances, strict application of the 10-mile rule can produce an unreasonable result in those cases where private ferry service does not impact state service, and where there is a benefit to the traveling public.

In 1990 an interim subcommittee of the Legislative Transportation Committee (LTC) examined the certification process for private passenger ferries.  The following issues were identified during the subcommittee's review of the subject:  notice of an application for commercial ferry operation to the DOT and cities and counties; the financial responsibility of private companies and their ability to provide reasonable, reliable service over time; the absence in existing law of a procedure for determining and taking action on a certificate that is dormant; and the absence of a statutory definition of the "10-mile rule."

In 1991, proposed legislation addressing the aforementioned issues was introduced and heard in the House and Senate Transportation Committees, but did not pass the Legislature.

Summary:  All references to "steamboat operator" are changed to "commercial ferry operator."

The "10-mile rule" is defined as 10 statute miles measured by airline distance and is applied by comparing the two end points or termini of a state ferry crossing to those of a private ferry crossing.

The WUTC is authorized, upon written petition of a certificated, commercial ferry operator or an applicant for certification and upon notice and hearing, to grant a waiver from the 10-mile restriction.  The decision to grant a waiver must be based on consideration of the impact of the waiver on transportation congestion mitigation, air quality improvement, and the overall impact on the state ferry system.  The waiver is effective for five years and becomes permanent at the end of that period unless appealed by the WUTC, the Department of Transportation (DOT), or an interested party.

Upon the filing of an application for certification, in addition to any common carrier that may be adversely impacted, the WUTC is required to notify the DOT and affected cities and counties.

A standard of service is included which requires operators to exercise a certificate in a manner consistent with the conditions established in the certificate or tariffs.

No public agency may compete with or operate on the same route as a certificate holder without first acquiring the rights of the certificate holder.

The holder of a certificate is required to initiate service within five years of obtaining the certificate and to report to the WUTC every six months on the progress of the certificated route.  The progress report must include, at a minimum, environmental impact, parking, docking and financing considerations.  The WUTC may extend the certificate on a 12-month basis for up to three years, provided the six-month progress reports indicate there is significant advancement toward initiating service.  The WUTC may grant a second extension for existing certificates for a period up to two years.

The WUTC must determine the financial ability of an applicant to operate the proposed service for at least 12 months, based upon the submission by the applicant of a pro forma financial statement of operations.  An applicant, under penalty of perjury, must certify and declare that the financial information submitted is true.  The financial responsibility provisions do not apply to a certificate pending as of the effective date of the act.

A certificate holder is required to obtain liability and property damage insurance on each vessel used.

Conditions under which the WUTC is required to cancel, revoke, suspend, alter or amend a certificate are established.  These include, but are not limited to, failure to initiate service within five years or by the conclusion of the extension periods; failure to operate and perform reasonable service after initiating service; failure of the certificate holder to file an annual report and observe the provisions or conditions of the certificate or tariffs; or failure to maintain the required insurance coverage.  After notice and a hearing, the WUTC is required to act within 30 days on its motion or that of an interested party.

The WUTC is authorized to issue temporary certificates for a period of up to 180 days after a finding that issuance of such certificates is necessary due to an immediate and urgent need and is otherwise consistent with the public interest.

Votes on Final Passage:

House  96 0

Senate 48 1 (Senate amended)

House            (House refused to concur)

Conference Committee

Senate 41 0

House  94 0

Effective:  July 25, 1993