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Stakeholders and Institutions Affecting Ferry Services 15 flood protection projects, which are often used for vessel operation. In addition, USACE regu- lates some aspects of navigable waters, including enforcing environmental regulation through dredging permits and wetlands protection. U.S. Environmental Protection Agency EPA is the federal agency that regulates discharges of pollutants into the water, ground, and air. Ferry operators are subject to EPA regulation on their discharges and emissions. In addition, the EPA administers grant programs that provide new technology designed to reduce emissions and improve efficiency. U.S. Fish and Wildlife Service (U.S. Department of the Interior) The U.S. Fish and Wildlife Service is a part of the U.S. Department of the Interior. The U.S. Fish and Wildlife Service may have jurisdiction over ferry docks and landings due to their potential impact on habitat. State and Local Agencies State and local agencies exercise regulatory control over shorelines and waterfronts and some- times exercise economic control over routes, fares, and schedules. The case studies presented in Section 5 of this report indicate a broad range of state and local agencies that impact ferry ser- vice. Such impact includes, for example, towns that through their zoning ordinances regulate terminals and other landside facilities, as well as states that regulate state-owned tidelands and control access to state resources such as personnel, funds, and lands. Funding Sources It should be noted that funding is fluid, as budgets and funding programs can change annu- ally. The purpose of the following discussion is to identify the range of funding sources currently in use at federal, state, and local levels. Federal At the federal level, funding for ferries can come from sources of highway and transit funding as well as from federal loan guarantees, federal tax deferral, and the American Recovery and Reinvest- ment Act (ARRA). Highway Federal funding for ferry vessels, terminals, and other ferry-related expenditures is available under various federal funding categories, including ferry-only funding, transit funding, and, in some cases, highway funding. For example, federal law has allowed states to use non-Interstate funds to build ferry infrastructure (including access roads and other facilities) when the route is part of a designated federally eligible highway (except Interstates). Beginning with the Inter- modal Surface Transportation Efficiency Act of 1991 (ISTEA), the Ferry Boat Discretionary Pro- gram has provided additional and separate funding for the construction of ferry boats and ferry terminal facilities. The Ferry Boat Discretionary Program was continued through the Trans- portation Equity Act for the 21st Century (TEA-21) and the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU). More recently, the 2009 federal

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16 Guidelines for Ferry Transportation Services stimulus bill, officially known as ARRA, authorized several ferry funding programs prior to Congress considering the next transportation appropriations bill. Transit FTA can fund ferry boats through its normal formula and discretionary funding sources. FTA funding has been used for vessels, terminals, and other facilities that provide for an urban, mass transit passenger ferry service. Federal Loan Guarantees Both MARAD and FHWA (through the Transportation Infrastructure Financing Innovations Act, TIFIA) can provide loan guarantees for ferry operators to purchase vessels. In addition, TIFIA can also fund ferry facilities and other landside projects. These programs are not grants, however, and the funds must be repaid or the government repossesses the assets. As a result, both programs have strict credit and business-plan criteria. While MARAD can finance 90 percent of a vessel, TIFIA is limited to one-third of the project cost. Federal Tax Deferral The capital construction fund program (CCF) is a program created to encourage reinvestment by U.S. maritime companies. The fund is not direct assistance, but rather allows the maritime entity (including ferry operators) to defer a portion of tax monies that would otherwise be paid to the U.S. Treasury during the tax year. Like a maritime IRA, the CCF program allows the mar- itime entity to accumulate and use otherwise taxable earnings for the purposes of acquiring, con- structing, or reconstructing vessels built and documented in the United States and operated in the United States foreign, Great Lakes, or noncontiguous domestic trade and in the fisheries. The program is administered through MARAD (for private ferry operators) and requires a contract between the operator and MARAD. American Recovery and Reinvestment Act ARRA appropriated millions of federal dollars for the ferry industry to be disbursed through a number of different transportation-related agencies for a number of different purposes. Exam- ples of how the ferry monies were distributed through the various agencies and the types of allocations are the following: The Ferry Boat Discretionary Program received $60 million to be dispersed for ferry boat and terminal construction. Through the FHWA, ferries could qualify for some of the $27.5 billion stimulus funds as intermodal connectors, bridge improvements, and pavement construction. Under the FTA, $323 million was set aside especially for ferries. The EPA has set aside $32 million for diesel emission reductions in port areas that ferries may qualify for. The U.S. Department of the Interior has $20 million designated for ferries providing improved access to national parks. DHS has $150 million in a port security grant to support the TWIC program. Ferry operators can be supported in this grant. State and Local Programs Several metropolitan agencies and authorities, as well as states, provide funding for ferry oper- ations and capital improvements. These sources vary from state to state, but they include many of the following: Toll revenues. Often ferries are either part of a larger toll crossing authority or are cross- subsidized to provide supplemental capacity in a bridge corridor.

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Stakeholders and Institutions Affecting Ferry Services 17 General transit revenues (often including gas taxes). These revenues are provided to fund the ferry service as part of the overall transit system. Port revenues. Some ports and port authorities subsidize ferries to generate additional traffic and support waterfront real estate development. Development revenues. Some ferries are financed through either special taxes or real estate fees to provide access to remote development sites or areas poorly served by other transporta- tion services.