RELATIONSHIP BETWEEN COUNTY PUBLIC TRANSPORTATION AUTHORITY AND PREEXISTING PRIVATE CARRIER

COUNTIES ‑- TRANSPORTATION ‑ BUSSES ‑- COMMON CARRIERS ‑- RELATIONSHIP BETWEEN COUNTY PUBLIC TRANSPORTATION AUTHORITY AND PREEXISTING PRIVATE CARRIER 

(1) A county public transportation authority organized under chapter 36.57 RCW may not extend its operations to routes already served by a private carrier holding a certificate of public convenience and necessity under RCW 81.68.040 without either acquiring the affected operating authority and equipment of the private carrier or entering into a contract with that carrier for provision of all or part of such service.

(2) A county public transportation authority organized under chapter 36.57 RCW, when extending its operations to routes already served by a private carrier holding a certificate of public convenience and necessity under RCW 81.68.040, may perform part of such service itself and contract with the private carrier to continue to operate part of the service. 

                                                              - - - - - - - - - - - - - 

                                                                   June 16, 1980 

Honorable Curtis M. Janhunen
Prosecuting Attorney
Grays Harbor County
P.O. Box 550
Montesano, Washington 98563

Cite as:  AGO 1980 No. 14                                                                                                                

 Dear Sir: 

            By letter previously acknowledged you requested the opinion of this office on two questions which we paraphrase as follows: 

            (1) May a county public transportation authority organized under chapter 36.57 RCW extend its operations to routes already served by a private  [[Orig. Op. Page 2]] carrier holding a certificate of public convenience and necessity under RCW 81.68.040 without either acquiring the affected operating authority and equipment of the private carrier or entering into a contract with that carrier for provision of all or part of such service?
 

            (2) May a county public transportation authority organized under chapter 36.57 RCW, when extending its operations to routes already served by a private carrier holding a certificate of public convenience and necessity under RCW 81.68.040, perform part of such service itself and contract with the private carrier to continue to operate part of the service? 

            We answer your first question in the negative and your second question in the affirmative. 

                                                                     ANALYSIS 

            The statutory powers of a county public transportation authority are to be found in chapter 36.57 RCW.  Counties are permitted to create such authorities for the purpose of performing the function of public transportation in the county and all cities and towns therein.  RCW 36.57.020.  The legislature, however, has also recognized that the creation of such an authority may come into conflict with existing operations of a certificated private bus company and has provided, in RCW 36.57.040(4), that: 

            "In the event a county transit authority shall extend its transportation function to any area in which service is already offered by any company holding a certificate of public convenience and necessity from the Washington utilities and transportation commission under RCW 81.68.040, it may acquire by purchase or condemnation at the fair market value, from the person holding the existing certificate for providing the services, that portion of the operating authority and equipment representing the services within the area of public operation, or it may contract  [[Orig. Op. Page 3]] with such person or corporation to continue to operate such service or any part thereof for time and upon such terms and conditions as provided by contract." 

            Question (1): 

            Your first question asks whether a county public transportation authority may extend its operations to routes already served by a certificated private carrier withouteither acquiring the assets of the private carrier or contracting with that carrier as thus provided for in RCW 36.57.040(4), supra. 

            On its face, the language of that statutory provision lends itself to the following two possible interpretations: (1) that it is merely an enabling provision which does not preclude other courses of action; or (2) that the acquisition and contract options are, instead, the exclusive choices available in the circumstance under consideration here.  We must, therefore, attempt to resolve the ambiguity and ascertain the true intent of the legislature in enacting RCW 36.57.040(4). 

            Indeed, the principle purpose of statutory construction is to give effect to legislative intent.  Janovich v. Herron, 91 Wn.2d 767, 592 P.2d 1096 (1979).  In order to determine legislative intent in the face of an ambiguity, however, one must look not only to the language of the statute involved but, as well, to the legislative policy behind the statute.  Washington Water Power Co. v. Human Rights Commission, 91 Wn.2d 62, 586 P.2d 1149 (1978).  In this regard, the spirit or purpose of a law prevails over the letter of the law.  Janovich v. Herron,supra.  Another general principle of statutory construction which must be kept in mind here is that unless legislative intent is clear, one should be slow to construe a statute in a fashion so as to work a destruction of property rights.  P.U.D. No. 1 of Pend Oreille County v. City of Seattle, 382 F.2d 666 (1967), cert. den. 396 U.S. 803, 24 L.Ed.2d 59, 90 S.Ct. 22; Cf.,Janovich v. Herron, supra. 

            This last principle is of particular significance here because of the nature of the operating authority which is issued by the Washington Utilities and Transportation Commission to a common carrier.  Such operating authority, evidenced in the case of bus companies by a certificate of public convenience and necessity under RCW 81.68.040, is considered to be in the nature of a  [[Orig. Op. Page 4]] property right.  Luisi Truck Lines, Inc. v. Utilities and Transportation Commission, 72 Wn.2d 887, 435 P.2d 654 (1967).  Further, theLuisi case stands for the proposition that a certificated carrier may be deprived of its rights under its certificate only on grounds as provided for by law.  See, 72 Wn.2d at 891.

            A separate but complementary aspect of common carrier authority is a legislative policy that unnecessarily duplicative transportation service is to be avoided.  In the case of motor freight carriers, for example, even though a certain degree of competition among carriers is fostered, any new or extended authority is still only permitted if the carrier can show that such is required by public convenience and necessity.  RCW 81.80.070.  And in the case of certificated bus companies, the policy against duplicative service is even stronger.  There, the Commission may only grant a certificate to another private bus company to operate in an area already served by an existing certificated bus company if the existing carrier ". . . will not provide the same [service] to the satisfaction of the commission . . ."  RCW 81.68.040. 

            The possible overlap of public transportation facilities with private carriers has also been of historic legislative concern.  That a common carrier has a property right in its operating authority and that duplication of service between public and private carriers is to be avoided have been consistent themes in legislation authorizing public bodies to perform transportation services previously conducted by private carriers.  For example, it will be noted that privately owned ferry services are regulated under essentially the same conditions as private bus companies.  Compare chapter 81.68 RCW with chapter 81.84 RCW.  But with respect to such service, the legislature has specifically provided in RCW 81.84.010 that counties cannot operate a competing ferry service over the same route served by a private operator.  And, in establishing the state ferry service, while the legislature gave the state the right to exclusive service, it also provided that the state must first acquire the certificate rights of any affected private ferry service.  See, RCW 47.60.120. 

            In providing for public bus service, the legislature has established similar protection for the property rights of private bus companies.  Thus, such an expression of policy is found in the statutes authorizing a metropolitan municipal corporation (METRO) to perform public bus service.  See, RCW 35.58.250 under  [[Orig. Op. Page 5]] which‑-upon the commencement of transportation services by a METRO‑-a private carrier may continue to operate in the same metropolitan area only under an agreement with the public agency.  But if the METRO chooses not to enter into such an agreement, it must either purchase or condemn the carrier's assets used in providing the service.  Moreover, when expanding into an area already served by a certificated private carrier, the METRO must acquire (by either purchase or condemnation) the relevant portion of the carrier's authority and equipment.  See, RCW 35.58.240, last paragraph. 

            The legislature has adopted a similar statutory scheme for the establishment of a public transportation benefit area (PTBA) under chapter 36.57A RCW.  There, private certificated carriers are likewise prohibited from operating within the benefit area except in accordance with an agreement with the PTBA.  And again, if such an agreement cannot be reached and the carrier is required to cease operating, the PTBA must either purchase or condemn the authority and equipment of the private carrier.  RCW 36.57A.100.  Further, the private carrier may, under certain conditions, require the PTBA to purchase its assets.  RCW 36.57A.090.

             It is in the context of these other statutory provisions for public transportation services that the authority of a county public transportation authority must be viewed.  It has been the consistent policy of the legislature that a public entity which intends to provide transportation services must recognize the property rights of an affected certificated private carrier.  As discussed above, in certain instances the legislature has provided that the private carrier must cease operations when the public service begins.  The public agency must then either purchase or condemn the rights and assets of the private carrier.  In other instances, the legislature has provided for an additional alternative method‑-the public body and the private carrier may enter into an agreement which permits the carrier to continue to operate. 

            Once again, RCW 36.57.040(4), supra, provides that: 

            "In the event a county transit authority shall extend its transportation function to any area in which service is already offered by any company holding a certificate of public convenience and necessity from the Washington utilities and transportation commission under RCW 81.68.040, it may acquire by purchase or condemnation at  [[Orig. Op. Page 6]] the fair market value, from the person holding the existing certificate for providing the services, that portion of the operating authority and equipment representing the services within the area of public operation, or it may contract with such person or corporation to continue to operate such service or any part thereof for time and upon such terms and conditions as provided by contract."

            In light of legislative policy with regard to this subject, we conclude that in prefacing the option to purchase or condemn and the option to provide for an operating agreement with the term "may," the legislature did not intend to make election of any of the options discretionary on the part of the county public transportation authority.  Rather the legislature is to be taken to have intended to require the county public transportation authority, when extending service to an area served by a certificated carrier, to elect either to purchase or condemn the assets of the certificated carrier, or to enter into an operating agreement with the carrier.  The use of the word "may" must be interpreted to mean that the public authority may choose which of the two options to exercise, and not that any use of the options is discretionary. 

            Therefore, in direct answer to your first question, it is our opinion that a county public transportation authority may not extend its operations to routes already served by a certificated carrier without either acquiring the affected operating authority and equipment of the carrier or entering into a contract with that carrier for the provision of all or part of the service. 

            Question (2):

             Your second question asks whether a county public transportation authority organized under chapter 36.57A RCW, when extending its operations to routes already served by a private certificated carrier, may perform part of the service itself and contract with the private carrier for part of the service. 

            In this case, it is not necessary to analyze legislative intent on this point as the statutory provision in question, RCW 36.57.040(4), supra, specifically contemplates such a situation.  That provision states that when a county public transportation authority extends its transportation service into  [[Orig. Op. Page 7]] an area served by an existing certificated carrier, it may contract with the carrier "to continue to operate such service or any part thereof. . ."  (Emphasis supplied).  Thus, it is clear that the legislature intended that the public transportation authority may provide part of the transportation service itself without acquiring the carrier's rights and assets so long as it contracts with the certificated carrier to continue to operate any part of that service. 

            We trust that the foregoing will be of some assistance to you. 

Very truly yours,
SLADE GORTON
Attorney General 

JOHN W. HOUGH
Assistant Attorney General