Analysis Complete for Engrossed Substitute House Bill 2161

You are receiving this email as a subscriber to the Initiative 960 email list. RCW 43.135.031 (I-960) requires that notices be sent each time a bill that raises taxes or fees is: introduced in either house; scheduled for a public hearing; approved by any legislative committee; or passed by either house of the Legislature.

Please note: This email message was sent from a notification-only address. Please do not reply to this message.

The Office of Financial Management has identified this bill as requiring a ten-year projection of increased cost to the taxpayers or affected fee payers.

Ten-year projection:

This bill contains taxes or fees subject to the requirements of RCW 43.135.031 (Initiative 960) in the following sections, with description of the intended action by the Transportation Commission as the State Tolling Authority:

Section 3(8) of this bill requires the commission to impose an additional vessel replacement surcharge in an amount sufficient to fund twenty-five year debt service on one 144-auto hybrid vessel. It requires the commission to take into account funds provided in EHB 1789 which provides additional revenue from higher service fees that will be deposited in the Puget Sound Ferry Operations Account. Section 3(9) of this bill directs that all vessel replacement surcharges may only be used for the construction or purchase of ferry vessels and to pay the principal and interest on bonds authorized for the construction or purchase of new ferry vessels.

The Transportation Commission does not reflect cash receipts since the Washington State Department of Transportation (WSDOT) collects this fee (surcharge). 

The Commission assumes it will set this surcharge as part of the fare setting process for the 2019-21 biennium, with an effective date of May 1, 2020.

This bill requires the Washington State Transportation Commission (WSTC), beginning May 1, 2020, to impose an additional vessel replacement surcharge to generate sufficient revenue to cover 25-year debt service for funding one 144-auto hybrid vessel. Currently the vessel replacement surcharge is $0.25 for all fares. 

Cash Receipts Impact

The cash receipts from ESHB 2161 are indeterminate because it requires action by the Transportation Commission to impose additional vessel replacement surcharges beginning May 1, 2020 and the amount of the surcharge is yet to be determined. The additional revenue from the higher capital surcharge will go to the WSF Capital Vessel Replacement Account (18J) but it may also lower ferry ridership and operating revenue so there will be a reduction to the Puget Sound Ferry Operating Account (PSFOA) (109). This law change also requires the WSTC to take into consideration the higher service fees enacted in EHB 1789, which provides additional revenue to the PSFOA. The higher service fees enacted in EHB 1789 are anticipated to generate $9 to $10 million per year.