Page 16: of Maritime Reporter Magazine (April 2000)

Legal Beat funded by the FBDP is 80 percent, with the remaining 20 percent funded from other sources, which can be a combina- tion of state, local or private sources.

To be eligible for FBDP funding, the ferry and/or terminal to be constructed or improved must be (a) publicly owned, or (b) publicly operated, or (c) majority owned by a public authority if the oper- ation provides substantial public bene- fits. In addition, the ferry must have a route linked to a public road (other than an Interstate highway) or provide pas- senger-only service. Ferries that oper- ate in international waters, except for

Hawaii. Puerto Rico, Alaska, and ferries between the United States and Canada, are ineligible.

Companies interested in receiving

FBDP funding must submit an applica- tion to their state department of transportation, which then forwards selected applications to the FHWA. The

FHWA then selects projects based on the following criteria: (1) expeditious completion; (2) leverage of private or other public funding; (3) amount of funding requested (smaller requests are given priority); (4) state priorities; and (5) national geographic distribution of funding.

Congestion Mitigation Air Quality

Improvement Program

The CMAQ program, also initially established under ISTEA, funds trans- portation projects that will reduce traffic congestion and improve air quality.

Administered by the FHWA and the

Federal Transit Administration ("FTA"), the CMAQ program provides funding for capital improvements, as well as operating assistance. The federal share for most projects funded under CMAQ is 80-90 percent. Total CMAQ program funding of has been authorized at approximately $1.4 billion for each of fiscal years 1999-2003.

CMAQ funds are apportioned to states based on a statutory formula, incorpo- rating the air quality and population of the state. The method of allocation of

CMAQ funds to projects varies within each state with either the state depart- ment of transportation, the relevant met- ropolitan planning organization, or both generally having responsibility for

CMAQ funds. CMAQ money is avail- able only in areas that have not been in compliance with air quality standards under the federal Clean Air Act for cer- tain air pollutants. Generally, medium to large metropolitan areas are eligible.

Projects must result in tangible emis- sions reductions. Projects also must be included in a state's conforming trans- portation plan and in its transportation improvement program, which are required by TEA-21.

Conclusion

There are a number of financing sources for ferries in today's market.

Which option, or combination of options, is best depends on the situation of the operator, whether a start-up or existing business. An operator should explore all alternatives and select one to maximize benefits. Generally, only larger borrowers will find it easy to access bank lending, while finance com- panies provide more flexibility. Title XI is always a good option if you have the required equity and can pass the govern- ment's due diligence standards. Where operators can team up with a public sponsor and where a project meets a demonstrated transportation need, fed- eral grants under TEA-21 provide an attractive option. by Todd D. Snyder & Lara Bernstein

Mathews, Dyer Ellis & Joseph

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