Transportation Benefit Districts are authorized by state law solely for the purpose of transportation improvements. They are a type of special district. A Transportation Benefit Districts (TBD) was established by Ordinance 2584 of the Mountlake Terrace City Council in December 2011.

The Mountlake Terrace TBD Board consists of City Council members in an independent ex officio role as required by State law. The TBD Board had its first meeting on January 3, 2012 and adopted TBD Ordinance No. 1 to provide a $20 annual vehicle license fee. The TBD's priority project is the Downtown Main Street Revitalization Project.