Lack of clarity in the State enabling legislation prior to project implementation.
Adverse changes in the State enabling legislation that take place prior to project implementation.
State or local legislative changes affecting business or incentives used to spur development.
TRZ legislation in Texas allows counties to establish a TRZ.
However, the Texas Constitution has been interpreted as not allowing counties to pledge incremental tax revenue to repay debt issued for a project.
Authority of a county to form a transportation reinvestment zone, collect an ad valorem tax increment, and pledge and assign all or part of the increment to secure bonds or pay the cost of a transportation project. Texas Attorney General. Op. GA-0981 (2012).
A constitutional amendment proposal to address the issue was defeated by voters in 2011.
A new amendment was to be voted on in November 2021.
"The constitutional amendment authorizing a county to finance the development or redevelopment of transportation or infrastructure in unproductive, underdeveloped, or blighted areas in the county.“ Texas Proposition 2 (HJR 99) (2021).
Mitigation: When dealing with a newly created local funding mechanism, conduct a thorough legal feasibility assessment.
There are regulations that restrict naming rights, such as the 1965 Highway Beautification Act or the 14th Amendment of the U.S. Constitution.
Pub. L. 89–285, Oct. 22, 1965
Portland, Maine’s bus service faced controversy over ads promoting a marijuana ballot initiative on its buses.
Los Angeles Metro canceled its plan to sell station and other naming rights due to concerns about legal risk exposure.
Mitigation: When dealing with a new funding mechanism, conduct a thorough legal feasibility assessment early on.
Landowners and developers resisted the creation of Transportation Improvement Districts (TIDs), a new tax.
There were concerns that landowners/developers outside the TIDs and/or future residents were not asked to pay, despite benefiting from the improvements.
The Landowners Economic Alliance for the Dulles Extension of Rail (LEADER) gathered support from at least 51 percent of landowners to establish the TID.
Mitigation: Conducting effective outreach and identifying champions in the developer community to generate awareness of the project’s value generation benefits.
