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Transportation Benefit District

A Transportation Benefit District (TBD) is an independent taxing district created solely to acquire, construct, improve, provide and fund transportation improvements within a defined area. (RCW 36.73) Responsibilities of the Board were absorbed by the Prosser City Council in 2019.

In 1987, the Legislature created Transportation Benefit Districts (“TBD”) as an option for local governments to fund transportation improvements. In 2005, the Legislature has amended the TBD statute to expand its uses and revenue authority. In 2007, the Legislature amended the TBD statute to authorize the imposition of vehicle fees and transportation impact fees without a public vote. In 2010, the Legislature amended the TBD statue again to clarify project eligibility, the use of impact fees, and sales tax expenditures, and make TBD governance more flexible.

What is a Transportation Benefit District (TBD)?
A TBD is a quasi-municipal corporation and independent taxing district created for the sole purpose of acquiring, constructing, improving, providing, and funding transportation improvements within the district.

Who may create a TBD?
The legislative authority of a county or city may create a TBD by ordinance following the procedures set forth in Revised Code of Washington (RCW) Chapter 36.73. The county or city proposing to create a TBD may include other counties, cities, port districts, or transit districts through interlocal agreements.

Who governs the TBD?
The members of the legislative authority (county or city) proposing to establish a TBD serves as the governing body of the TBD. The legislative authority is acting ex officio and independently as the TBD governing body. If a TBD includes additional jurisdictions through interlocal agreements, then the governing body must have at least five members, including at least one elected official from each of the participating jurisdictions, or may be the governing body of a metropolitan planning organization if the TBD boundaries are identical to the boundaries of the metropolitan planning organization serving the district.

Why create a TBD if the county or city legislative authority is the governing board?
A TBD is an independent legal creature. Although a TBD has many of the powers of a county and city (impose taxes, eminent domain powers, can contract and accept gifts, etc.), - it is a separate taxing district, which is important for property tax purposes.

Additionally, by being a separate legal and taxing entity, TBDs have more flexibility. For example, more than one type of jurisdiction can be part of a TBD and the boundaries can be less than countywide or citywide.

Are TBD revenues required to be spent as they are collected?
No. The governing body which creates a TBD must develop a plan that specifies the transportation improvements to be provided or funded by the TBD. As part of this plan, the TBD’s governing board can indicate if the funds will be used immediately, or if they will be collected for a specified period, prior to spending the accumulated funds. Typically, funds that are collected for a specified period before being expended are used to fully fund large projects, when bonding, or serve as a match for state or federal funds that may only become available in a specified time frame.

What are the boundaries of a TBD?
The boundaries of a TBD may be less than the boundaries of those jurisdictions participating in the TBD. For example, a county or city may choose to have the TBD boundaries identical with the county or city, or just include a portion of the county or city. However, if a TBD chooses to exercise the tax authority that does not require a public vote (e.g. vehicle and impact fees), the boundaries of the TBD must be countywide, citywide, or unincorporated countywide.

What transportation improvements can be funded by a TBD?
The definition of transportation improvements is broad. This can include maintenance and improvements to city streets, county roads, state highways, investments in high capacity transportation, public transportation, transportation demand management and other transportation projects identified in a regional transportation planning  organization plan or state plan.

In developing criteria for a transportation improvement, it can include one or more of the following: reduced risk of transportation facility failure and improved safety; improved travel time; improved air quality; increases in daily and peak period trip capacity; improved modal connectivity; improved freight mobility; cost-effectiveness of the investment; optimal performance of the system through time; and other criteria, as adopted by the governing body.

Can a TBD fund maintenance and preservation activities?
Yes. A TBD may fund the operation, maintenance, and preservation of the programs and facilities noted above. Additionally, maintenance and preservation activities are noted in many state and regional transportation plans. For example, preservation of existing transportation facilities is the number one priority within the Washington State Transportation Plan. Eliminating the backlog of asphalt pavement projects and maintaining chip seal paving, along with many other maintenance and preservation activities, are specifically noted as priorities in that Plan.

However, keep in mind that any transportation improvement also needs to be “necessitated by existing or reasonably foreseeable congestion levels”. Consequently, not every street, road, transit program, etc. will qualify as a transportation improvement.

If the TBD transportation improvements must be in a state or regional plan, does that mean only state and regional roads such as arterials, can be funded?
No. The TBD statute originally limited the use of funds for city streets and county roads to 40% of funds generated. That limitation was removed to make TBD an option for purely locally determined activities. For example, both the Washington State Transportation Plan, 2007- 2026 State transportation plan (www.wsdot.wa.gov/NR/rdonlyres/083D185B-7B1F-49F5-B865-C0A21D0DCE32/0/FinalWTP111406_nomaps.pdf) and the Puget Sound Regional Council’s Destination 2030 Update at page 62 (www.psrc.org/projects/mtp/pubs/D2030plan5.07.pdf) note that adequate maintenance, preservation, and expansion of local roads are an important element of the “system” and that new local options should be put to this purpose. 

What if the transportation improvements are not currently in an existing state or regional plan?
We suggest that you work with your Regional Transportation Planning Organization (RTPO) to incorporate your proposed improvements into the RTPO’s plan. As noted above, most RTPO’s and the state plan have already identified a broad range of local transportation improvements as priorities.

What revenue options do TBD’s have?
TBD’s have several revenue options subject to voter approval:
1. Property taxes – a 1-year excess levy or an excess levy for capital purposes;
2. Up to 0.2% sales and use tax;
3. Up to $100 annual vehicle fee per vehicle registered in the district; and
4. Vehicle tolls.  Please Note: There are exemptions or unique requirements when using the vehicle fee or vehicle tolls.

TBD’s have two revenue options not subject to voter approval, but subject to additional conditions:
1. Annual vehicle fee up to $20. This fee is collected at the time of vehicle renewal and cannot be used to fund passenger only ferry-service improvements.
2. Transportation impact fees on commercial and industrial buildings. Residential buildings are excluded. In addition, a county or city must provide a credit for a commercial or industrial transportation impact if the respective county or city has already imposed a transportation impact fee.
Please Note: Foregoing a vote is an option only. A county or city still has the option of placing either the annual fee of up to $20 or the impact fees to the vote of the people as an advisory vote or an actual requirement of imposition.

What are the additional conditions required to impose revenue options not subject to voter approval?
To impose either fee, the TBD’s boundaries must be countywide or citywide, or if applicable, in the unincorporated county.

Vehicle Fees: A county that creates a TBD to impose up to a $20 vehicle fee must first attempt to impose a countywide fee to be shared with cities by interlocal agreement. Sixty percent (60%) of the cities representing seventy-five (75%) of the incorporated population must approve the interlocal agreement for it to be effective. If an interlocal agreement cannot be reached, the county is authorized to create a TBD and impose the fee only in the unincorporated area of the county. Credits must be provided for previously imposed TBD vehicle fees. Credits are not required for voter approved vehicle fees.

Commercial and Industrial Transportation Impact Fees: A TBD that is either countywide or citywide must provide a credit for a commercial or industrial transportation impact fee if the respective county or city has already imposed a transportation impact fee. This is commonly called a “no double-dipping” provision.

Is my vehicle subject to the TBD fee?
To see if your vehicle is subject to the TBD fee, please see the list provided below.

Vehicles subject to fees
•Passenger vehicles
•Trucks that weigh 6,000 pounds or less
•Commercial passenger vehicles and trucks that weigh 6,000 pounds or less
•Combination trucks that weigh 6,000 pounds or less
•Tow trucks
•House moving dollies
•Trucks used exclusively for hauling logs that weigh 6,000 pounds or less
•For–hire or stage vehicles with 6 seats or less
•For–hire or stage vehicles with 7 or more seats that weigh 6,000 pounds or less
•Private use trailers over 2,000 pounds
•Motorcycle trailers
•Travel trailers
•Fixed load vehicles that weigh 6,000 pounds or less
•Mobile homes licensed as vehicles 

Exempt vehicles
•All farm vehicles
•Off–road vehicles
•Personal use trailers with a single axle and less than 2,000 pounds scale weight
•Commercial trailers
•Combination trailers
•Trailers used exclusively for hauling logs
•Horseless carriage, collector, or restored–plate vehicles
•Converter gear
•Government vehicles
•Private school vehicles
•Vehicles properly registered to disabled American veterans