Legal Aspects of Transit and Intermodal Transportation Programs. Topic 18-01. Tax Increment Financing for Transit Projects

As the cost of capital projects and financial needs increase, transit agencies continuously search for additional sources of funds. One source of funds that transit agencies are turning to is Tax Increment Financing (TIF). TIFs are a public financing method where municipalities divert future property tax revenue to a geographic area that will benefit from a resulting transit improvement. TIFs may also be referred to as special taxing districts, development authority districts, community facilities districts, or community management districts. TIFs are legal in most states. Examples of states where TIF has been applied for transit include Illinois, California, Oregon, and Georgia. TIFs are becoming an increasingly important source of funds for projects. They have the potential of being a key part of project financing. TIFs, however, can be complex, with many requirements and restrictions. A recent review of three TIF-funded transit projects—Contra Costa Center (CCC) Transit Village, Contra Costa County, California; Wilson Yard Station, Chicago, Illinois; and Portland Central Streetcar, Portland, Oregon—identifies several constraints to the use of TIF for transit. For example, in California and Illinois the state-level TIF-enabling law allows use of TIF funds for operations and maintenance (O&M), including transit projects. In Oregon, the funds can only be used for capital expenses. While TIF revenues can fund transit-related infrastructure such as rail lines and train stations, none of the three states has TIF-enabling legislation that explicitly allow use of TIF funding for rolling stock (e.g., train cars and buses, etc.). The California Redevelopment Law and the Illinois Tax Increment Allocation Act allow TIF funds to be used for “transit-related” infrastructure. There is a need to identify TIF-funded transit projects throughout the United States and to understand the financial and legal structure of the projects. This information will provide guidance to transit agencies considering TIFs as a source of funding for projects. The objectives of this research are to: (1) identify TIF-funded transit projects and state-level TIF-enabling statutes; (2) document and analyze the legal issues associated with the use of TIF to fund transit; (3) suggest ways to make the use of TIF legally defensible, especially to fund rolling stock, repairs, and O&M expenses; and (4) produce a report that includes issues of control and allocation when TIF revenues are shared by multiple overlapping public entities, such as cities and transit agencies.

Language

  • English

Project

  • Status: Proposed
  • Funding: $50000
  • Contract Numbers:

    Project J-05, Topic 18-01

  • Sponsor Organizations:

    Transit Cooperative Research Program

    Transportation Research Board
    500 Fifth Street, NW
    Washington, DC    20001

    Federal Transit Administration

    1200 New Jersey Avenue, SE
    Washington, DC  United States  20590
  • Project Managers:

    Chisholm-Smith, Gwen

  • Start Date: 20180226
  • Expected Completion Date: 0
  • Actual Completion Date: 0

Subject/Index Terms

Filing Info

  • Accession Number: 01661361
  • Record Type: Research project
  • Source Agency: Transportation Research Board
  • Contract Numbers: Project J-05, Topic 18-01
  • Files: TRB, RiP
  • Created Date: Feb 26 2018 3:04PM