Toll Credits / Transportation Development CreditsOverviewA state may use as a credit toward the non-Federal share requirement for any funds made available to carry out Title 23 (other than the Emergency Relief program authorized by 23 U.S.C. 125 and the Appalachian development highway system program) or Chapter 53 of Title 49 toll revenues that are generated and used by public, quasi-public, and private agencies to build, improve, or maintain highways, bridges, or tunnels that serve the public purpose of interstate commerce. The amount of credit earned is based on revenues generated by the toll authority (i.e., toll receipts, concession sales, right-of-way leases, and interest), including borrowed funds (i.e., bonds, loans) supported by this revenue stream. It cannot include expenditures for routine maintenance (e.g., snow removal or mowing), debt service, or costs of collecting tolls. The toll facility generating the revenue must be open to public travel. Prior to SAFETEA-LU, all such expenditures must have been made entirely without Federal funds. SAFETEA-LU, Section 1905 amended 23 U.S.C. 120(j) to allow the amount of credit earned to be based on expenditures made on facilities using Federal-aid funds. However, in such a case, the toll credit amount earned is to be reduced by a percentage equal to the percentage of the total cost that was derived from Federal funds. Calculating the Amount of Toll Credits Needed for a ProjectExample of Calculating theMatch RequirementA transit agency is purchasing a $100,000 bus with FTA 5307 funds, which requires a 20% match.Total Cost$100,000Local Match Ratiox .20Match Needed $20,000Toll credits are a credit, not cash, so a federal aid project that will use toll credits to substitute a cash match effectively becomes 100% federally funded. To determine the amount of toll credits needed to “match” the project, start with the total cost of the project and calculate the match requirement (ie 80/20) based on the type of Federal funding being used. See the Example at right on calculating the match requirement. Once the amount has been determined, the state will deduct this amount from their toll credit balance. See examples below of the difference in project listings in the STIP if this project uses toll credits vs. a cash match.STIP Project Listing When Using TOLL CREDITSBecause this project is using toll credits, and therefore effectively becomes 100% federally funded, the Federal Cost becomes equal to the Total Phase Cost. The State Cost and Local Cost will remain blank as there is no cash match being applied. The Comments field should indicate the amount of toll credits being used.PhaseFederal Cost ($1000s)Federal Fund SourceState Cost ($1000s)State Fund SourceLocal Cost ($1000s)Local Fund SourceTotal Phase Cost ($1000s)CommentsT-Cap1005307100$20,000 Toll CreditsSTIP Project Listing When Using CASH MATCHBecause this project is using cash match, the Federal Cost is equal to 80% of the Total Phase Cost. Either the State Cost or the Local Cost will be filled in showing the 20% cash match, depending on who is providing the cash match. The Comments field should give more information on the Local Fund Source.PhaseFederal Cost ($1000s)Federal Fund SourceState Cost ($1000s)State Fund SourceLocal Cost ($1000s)Local Fund SourceTotal Phase Cost ($1000s)CommentsT-Cap80530720TRAL100Transit agency using fare box revenue as cash matchFTA Guidance of Toll Credits/Transportation Development CreditsIII. Chapter III General Program Information, 12. Additional Sources of Local Share, b. Transportation Development Credits (formerly referred to as Toll Revenue Credits). A State may use, as a credit toward a projects local share, certain expenditures it has made with toll revenues. The amount of credit toward local share to be earned by a State is based on revenues generated by toll authorities within the State that are used by the authorities to build, improve, or maintain highways, bridges, or tunnels that serve interstate commerce. A recipient wishing to apply the provisions of 23 U.S.C. 120(j) should discuss with its State Department of Transportation (State DOT) the availability of transportation development credits for use as local share in matching FTA grants. FHWA oversees the determination of transportation development credit within each State. FTA will not approve a retroactive application of Transportation Development Credits. The effect of utilizing transportation development credits means that FTA, in essence, provides 100 percent of the total net project cost. For example, if the actual cost of the asset the applicant will purchase is $500,000, FTAs share at 80 percent equals $400,000. The remaining $100,000 match is transportation development credits, so additional Federal funds are needed to equal $500,000 or 100 percent of