In 1969, California and Nevada legislators agreed to a unique Compact for sharing Lake Tahoe resources/responsibilities. The two states and the U.S. Congress amended the Compact in 1980, with public law 96-551, which also established the Tahoe Transportation District (TTD). The agency is responsible for facilitating and implementing safe, environmentally positive, multi-modal transportation plans, programs and projects for the Lake Tahoe Basin, including transit operations.

Specific tax revenue to support transit and transportation facilities can be allotted to the District. TTD may also acquire, own and operate public transportation systems and parking facilities serving the Tahoe region and provide access to convenient transportation terminals outside of the region.