CERTIFICATION OF ENROLLMENT

SUBSTITUTE SENATE BILL 5974

Chapter 374, Laws of 2003

58th Legislature
2003 Regular Session



FERRIES--BUSINESS PRACTICES



EFFECTIVE DATE: 7/27/03

Passed by the Senate April 25, 2003
  YEAS 47   NAYS 0

BRAD OWEN
________________________________________    
President of the Senate
Passed by the House April 16, 2003
  YEAS 97   NAYS 0

FRANK CHOPP
________________________________________    
Speaker of the House of Representatives


 
CERTIFICATE

I, Milton H. Doumit, Jr., Secretary of the Senate of the State of Washington, do hereby certify that the attached is SUBSTITUTE SENATE BILL 5974 as passed by the Senate and the House of Representatives on the dates hereon set forth.

MILTON H. DOUMIT JR.
________________________________________    
Secretary
Approved May 20, 2003.








GARY LOCKE
________________________________________    
Governor of the State of Washington		 
FILED
May 20, 2003 - 2:47 p.m.







Secretary of State
State of Washington


_____________________________________________ 

SUBSTITUTE SENATE BILL 5974
_____________________________________________

AS AMENDED BY THE HOUSE

Passed Legislature - 2003 Regular Session
State of Washington58th Legislature2003 Regular Session

By Senate Committee on Highways & Transportation (originally sponsored by Senators Benton, Haugen, Horn and Oke)

READ FIRST TIME 03/10/03.   



     AN ACT Relating to the exercise of sound business practices to enhance revenues for Washington State Ferries; and amending RCW 47.60.135, 47.60.140, 47.60.150, 47.60.326, and 47.60.330.

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

Sec. 1   RCW 47.60.135 and 1997 c 323 s 2 are each amended to read as follows:
     (1) The charter use of Washington State Ferry vessels when established route operations and normal user requirements are not disrupted is permissible. In establishing chartering agreements, Washington State Ferries shall consider the special needs of local communities and interested parties. Washington State Ferries shall use sound business judgment and be sensitive to the interests of existing private enterprises.
     (2) Consistent with the policy as established in subsection (1) of this section, the ((general manager)) chief executive officer of the Washington State Ferries may approve agreements for the chartering of Washington State Ferry vessels to groups or individuals, including hazardous material transporters, in accordance with the following:
     (a) Vessels may be committed to charter only when established route operation and normal user requirements are not disrupted or inconvenienced. If a vessel is engaged in the transport of hazardous materials, the transporter shall pay for all legs necessary to complete the charter, even if the vessel is simultaneously engaged in an operational voyage on behalf of Washington State Ferries.
     (b) Charter rates for vessels must be established at actual vessel operating costs plus ((fifty percent of such actual costs rounded to the nearest fifty dollars)) a market-rate profit margin. Actual vessel operating costs include, but are not limited to, all labor, fuel, and vessel maintenance costs incurred due to the charter agreement, including deadheading and standby.
     (c) ((Recognizing the need for stabilized charter rates in order to encourage use of vessels, rates must be established and revised July 1st of each year and must remain fixed for a one-year period unless actual vessel operating costs increase five percent or more within that year, in which case the charter rates must be revised in accordance with (b) of this subsection.
     (d) All charter agreements must be in writing and substantially in the form of (e) of this subsection and available, with calculations, for inspection by the legislature and the public.
     (e))) Parties chartering Washington State Ferry vessels shall comply with all applicable laws, rules, and regulations during the charter voyage, and failure to so comply is cause for immediate termination of the charter voyage.


     (("CHARTER CRUISE AGREEMENT


     On this . . . . day of . . . ., . . . ., Washington State Ferries (WSF) and . . . . ., hereinafter called Lessee, enter into this agreement for rental of a ferry vessel for the purpose of a charter voyage to be held on . . . . ., the parties agree as follows:

     1. WSF agrees to supply the vessel . . . . . (subject to change) for the use of the Lessee from the period from . . . . . to . . . . . on . . . . . (date).

     2. The maximum number of passengers; or in the case of hazardous materials transports, trucks and trailers; that will be accommodated on the assigned vessel is . . . . .. This number MAY NOT be exceeded.

     3. The voyage will originate at . . . . ., and the route of travel during the voyage will be as follows:
. . . . . . . . . . . .

     4. The charge for the above voyage is . . . . . dollars ($. . . ) plus a property damage deposit of $350 for a total price of $. . . . , to be paid by cashier's check three working days before the date of the voyage at the offices of the WSF at Seattle Ferry Terminal, Pier 52, Seattle, Washington 98104. The Lessee remains responsible for property damage in excess of $350.

     5. WSF is responsible only for the navigational operation of the chartered ferry and in no way is responsible for directing voyage activities, providing equipment, or any food service.

     6. Other than for hazardous materials transport, the voyage activities must be conducted exclusively on the passenger decks of the assigned ferry. Voyage patrons will not be permitted to enter the pilot house or the engine room, nor shall the vehicle decks be used for any purpose other than loading or unloading of voyage patrons or hazardous materials.

     7. If the Lessee or any of the voyage patrons will possess or consume alcoholic beverages aboard the vessel, the Lessee must obtain the appropriate licenses or permits from the Washington State Liquor Control Board. The Lessee must furnish copies of any necessary licenses or permits to WSF at the same time payment for the voyage is made. Failure to comply with applicable laws, rules, and regulations of appropriate State and Federal agencies is cause for immediate termination of the voyage, and WSF shall retain all payments made as liquidated damages.

     8. WSF is not obligated to provide shoreside parking for the vehicles belonging to voyage patrons.

     9. The Lessee recognizes that the primary function of the WSF is for the cross-Sound transportation of the public and the maintaining of the existing schedule. The Lessee recognizes therefore the right of WSF to cancel a voyage commitment without liability to the Lessee due to unforeseen circumstances or events that require the use of the chartered vessel on its scheduled route operations. In the event of such a cancellation, WSF agrees to refund the entire amount of the charter fee to the Lessee.

     10. The Lessee agrees to hold WSF harmless from, and shall process and defend at its own expense, all claims, demands, or suits at law or equity, of whatever nature brought against WSF arising in whole or in part from the performance of provisions of this agreement. This indemnity provision does not require the Lessee to defend or indemnify WSF against any action based solely on the alleged negligence of WSF.

     11. This writing is the full agreement between the parties.

. . . . . . . . . . . . . WASHINGTON STATE FERRIES
Lessee


By: . . . . . . . . . . . . By: . . . . . . . . . . . .
General Manager"))

Sec. 2   RCW 47.60.140 and 1995 1st sp.s. c 4 s 2 are each amended to read as follows:
     (1) The department is empowered to operate such ferry system, including all operations, whether intrastate or international, upon any route or routes, and toll bridges as a revenue-producing and self-liquidating undertaking. The department has full charge of the construction, rehabilitation, rebuilding, enlarging, improving, operation, and maintenance of the ferry system, including toll bridges, approaches, and roadways incidental thereto that may be authorized by the department, including the collection of tolls and other charges for the services and facilities of the undertaking. The department has the exclusive right to enter into leases and contracts for use and occupancy by other parties of the concessions and space located on the ferries, wharves, docks, approaches, parking lots, and landings, including the selling of commercial advertising space and licenses to use the Washington State Ferries trademarks, but, except as provided in subsection (2) of this section, no such leases or contracts may be entered into for more than ten years, nor without a competitive contract process, except as otherwise provided in this section. The competitive process shall be either an invitation for bids in accordance with the process established by chapter 43.19 RCW, or a request for proposals in accordance with the process established by RCW 47.56.030. All revenues from commercial advertising, concessions, parking, leases, and contracts must be deposited in the Puget Sound ferry operations account in accordance with RCW 47.60.150.
     (2) As part of a joint development agreement under which a public or private developer constructs or installs improvements on ferry system property, the department may lease all or part of such property and improvements to such developers for that period of time, not to exceed fifty-five years, or not to exceed thirty years for those areas located within harbor areas, which the department determines is necessary to allow the developer to make reasonable recovery on its initial investment. Any lease entered into as provided for in this subsection that involves state aquatic lands shall conform with the Washington state Constitution and applicable statutory requirements as determined by the department of natural resources. That portion of the lease rate attributable to the state aquatic lands shall be distributed in the same manner as other lease revenues derived from state aquatic lands as provided in RCW 79.24.580.
     (3) The department shall include in the strategic planning and performance assessment process, as required by RCW 43.88.090, an analysis of the compatibility of public and private partnerships with the state ferry system's core business, and the department's efforts to maximize nonfarebox revenues and provide benefit to the public users of the ferry system facilities. The department shall include an assessment of the need for an open solicitation to identify and select possible public or private partnerships in order to maximize the value of projects and the state's investment in current and future ferry system operations.
     (a) When the department determines that an open solicitation is necessary, a request for proposal shall be released, consisting of an open solicitation outlining functional specifications to be used as the basis for selecting partnerships in the project.
     (b) Any responses to the request for proposal shall be evaluated, at a minimum, on the basis of compatibility with the state ferry system's core business, potential to maximize nonfarebox revenue, longevity of the possible partnership commitment, and benefit to the public users of the ferry system facilities.
     (c) If no responses are received, or those that are received are incompatible with ferry system operations, or do not meet the criteria stated in (b) of this subsection, the state ferry system may proceed with state ferry system operating strategies designed to achieve state ferry system objectives without established partnerships.

Sec. 3   RCW 47.60.150 and 1999 c 94 s 26 are each amended to read as follows:
     Subject to the provisions of RCW 47.60.326, the schedule of charges for the services and facilities of the system shall be fixed and revised from time to time by the commission so that the tolls and other revenues deposited in the Puget Sound ferry operations account for maintenance and operation, and all moneys in the Puget Sound capital construction account available for debt service will yield annual revenue and income sufficient, after allowance for all operating, maintenance, and repair expenses to pay the interest and principal and sinking fund charges for all outstanding revenue bonds, and to create and maintain a fund for ordinary renewals and replacements: PROVIDED, That if provision is made by any resolution for the issuance of revenue bonds for the creation and maintenance of a special fund for rehabilitating, rebuilding, enlarging, or improving all or any part of the ferry system then such schedule of tolls and rates of charges shall be fixed and revised so that the revenue and income will also be sufficient to comply with such provision.
     All income and revenues as collected by the ferry system from any source shall be paid to the state treasurer for the account of the department and deposited into the Puget Sound ferry operations account. Nothing in this section requires tolls on the Hood Canal bridge except as may be required by any bond covenants.

Sec. 4   RCW 47.60.326 and 2001 1st sp.s. c 1 s 1 are each amended to read as follows:
     (1) In order to maintain an adequate, fair, and economically sound schedule of charges for the transportation of passengers, vehicles, and commodities on the Washington state ferries, the department of transportation each year shall conduct a full review of such charges.
     (2) Prior to February 1st of each odd-numbered year the department shall transmit to the transportation commission a report of its review together with its recommendations for the revision of a schedule of charges for the ensuing biennium. The commission on or before July 1st of that year shall adopt as a rule, in the manner provided by the Washington administrative procedure act, a schedule of charges for the Washington state ferries for the ensuing biennium commencing July 1st. The schedule may initially be adopted as an emergency rule if necessary to take effect on, or as near as possible to, July 1st.
     (3) The department in making its review and formulating recommendations and the commission in adopting a schedule of charges may consider any of the following factors:
     (a) The amount of subsidy available to the ferry system for maintenance and operation;
     (b) The time and distance of ferry runs;
     (c) The maintenance and operation costs for ferry runs with a proper adjustment for higher costs of operating outmoded or less efficient equipment;
     (d) The efficient distribution of traffic between cross-sound routes;
     (e) The desirability of reasonable commutation rates for persons using the ferry system to commute daily to work;
     (f) The effect of proposed fares in increasing walk-on and vehicular passenger use;
     (g) The effect of proposed fares in promoting all types of ferry use during nonpeak periods;
     (h) The estimated revenues that are projected to be earned by the ferry system from commercial advertisements, parking, contracts, leases, and other sources;
     (i) Such other factors as prudent managers of a major ferry system would consider.
     (4) If at any time during the biennium it appears that projected revenues from the Puget Sound ferry operations account and any other operating subsidy available to the Washington state ferries will be less than the projected total cost of maintenance and operation of the Washington state ferries for the biennium, the department shall forthwith undertake a review of its schedule of charges to ascertain whether or not the schedule of charges should be revised. The department shall, upon completion of its review report, submit its recommendation to the transportation commission which may in its sound discretion revise the schedule of charges as required to meet necessary maintenance and operation expenditures of the ferry system for the biennium or may defer action until the regular annual review and revision of ferry charges as provided in subsection (2) of this section.
     (5) The provisions of RCW 47.60.330 relating to public participation shall apply to the process of revising ferry tolls under this section.
     (6) Under RCW 43.135.055, the transportation commission may increase ferry tolls included in the schedule of charges adopted under this section by a percentage that exceeds the fiscal growth factor.
     (7) Notwithstanding the provisions of this section and chapter 81.28 RCW, and using sound business judgment, 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 transportation commission a summary of the promotional, discounted, and special event fares offered during each fiscal year and the financial results from these activities.

Sec. 5   RCW 47.60.330 and 1983 c 15 s 26 are each amended to read as follows:
     (1) Before a substantial expansion or curtailment in the level of service provided to ferry users, or a revision in the schedule of ferry tolls or charges, the department of transportation shall consult with affected ferry users. The consultation shall be: (a) By public hearing in affected local communities; (b) by review with the affected ferry advisory committees pursuant to RCW 47.60.310; (c) by conducting a survey of affected ferry users; or (d) by any combination of (a) through (c). Promotional, discount, and special event fares that are not part of the published schedule of ferry charges or tolls are exempt. The department shall report an accounting of all exempt revenues to the transportation commission each fiscal year.
     (2) There is created a ferry system productivity council consisting of a representative of each ferry advisory committee empanelled under RCW 47.60.310, elected by the members thereof, and two representatives of employees of the ferry system appointed by mutual agreement of all of the unions representing ferry employees, which shall meet from time to time with ferry system management to discuss means of improving ferry system productivity.
     (3) Before increasing ferry tolls the department of transportation shall consider all possible cost reductions with full public participation as provided in subsection (1) of this section and, consistent with public policy, shall consider adapting service levels equitably on a route-by-route basis to reflect trends in and forecasts of traffic usage. Forecasts of traffic levels shall be developed by the bond covenant traffic engineering firm appointed under the provisions of RCW 47.60.450. Provisions of this section shall not alter obligations under RCW 47.60.450. Before including any toll increase in a budget proposal by the commission, the department of transportation shall consult with affected ferry users in the manner prescribed in (1)(b) of this section plus the procedure of either (1) (a) or (c) of this section.


         Passed by the Senate April 25, 2003.
         Passed by the House April 16, 2003.
         Approved by the Governor May 20, 2003.
         Filed in Office of Secretary of State May 20, 2003.