Extension of and improvements to the TIFIA program

(a) Extension Section 11101(a)(2) of the Infrastructure Investment and Jobs Act (Public Law 117–58; 135 Stat. 443) is amended by striking fiscal years 2022 through 2026 and inserting fiscal years 2027 through 2031. (b) Definitions Section 601(a) of title 23, United States Code, is amended— (1) in the matter preceding paragraph (1), by inserting and section 612 after 609; (2) by redesignating paragraphs (1) through (22) as paragraphs (2), (3), (4), (6), (7), (8), (9), (10), (11), (12), (13), (14), (15), (16), (17), (18), (19), (20), (21), (22), (23), and (24), respectively; (3) by inserting before paragraph (2) (as so redesignated) the following: (1) Attainable housing project The term attainable housing project means a transit-oriented development project— (A) that serves households with an income that is not more than 120 percent of the area median income; and (B) in which the majority of the housing units in the project are affordable to households with an income that is not more than 80 percent of the area median income.; (4) by inserting after paragraph (4) (as so redesignated) the following: (5) Investment-creditworthiness assessment alternative The term investment-creditworthiness assessment alternative means, with respect to project obligations for a transit-oriented development project, a sufficient demonstration of fiscal soundness and low risk of credit default that is not an investment-grade rating, such as— (A) a joint liability agreement or equivalent between the project lead and a State or unit of local government with a sufficient credit rating; (B) an alternative rating sufficient to account for the risk assumed by the Department of Transportation for a project in which the Federal credit instrument is $150,000,000 or less, as determined by the Secretary; or (C) a certification that a project is deemed creditworthy by an approved originator-servicer under section 612.; (5) in paragraph (12) (as so redesignated), in subparagraph (D)(ii)— (A) by striking investment grade rating and inserting investment-grade rating; and (B) by inserting or an investment-creditworthiness assessment alternative after rating agency; (6) in paragraph (14) (as so redesignated), by striking subparagraph (E) and inserting the following: (E) a transit-oriented development project;; and (7) by adding at the end the following: (25) Transit-oriented development project The term transit-oriented development project means a project located within 1/2 mile walking distance of a fixed guideway transit facility, bus rapid transit facility, passenger rail station, or multimodal facility, including a transportation, public utility, or capital project described in section 5302(4)(G)(vi) of title 49, and related infrastructure— (A) that consists entirely of, or includes, residential, commercial, public infrastructure, or mixed-used development or other related infrastructure, including public or community space; (B) that incorporates private investment; and (C) for which the project sponsor demonstrates the ability to generate new revenue for the relevant station, facility, or service by increasing ridership, increasing tenant lease payments, or carrying out other activities that generate revenue exceeding costs.. (c) Determination of eligibility and project selection Section 602 of title 23, United States Code, is amended— (1) in subsection (a)— (A) in paragraph (2)— (i) in subparagraph (A)— (I) in clause (iii)— (aa) by striking investment grade rating and inserting investment-grade rating; and (bb) by inserting or an investment-creditworthiness assessment alternative after credit instrument; and (II) in clause (iv), by inserting, or an investment-creditworthiness assessment alternative after sufficient; and (ii) in subparagraph (B)— (I) by striking investment grade rating and inserting investment-grade rating; and (II) by inserting, or an investment-creditworthiness assessment alternative after sufficient; (B) in paragraph (3)— (i) by striking A project and inserting the following: (A) In general Except as provided in subparagraph (B), a project; and (ii) by adding at the end the following: (B) Transit-oriented development projects (i) Compatibility with planning In the case of a transit-oriented development project, the project sponsor shall be required— (I) to provide evidence of a significant nexus with a project included in the transportation improvement program developed by the applicable metropolitan planning organization under section 134(j) and the statewide transportation improvement program developed by the applicable State under section 135(g); or (II) to demonstrate compatibility with the long-range transportation plan developed by the applicable metropolitan planning organization under section 134(i). (ii) Coordination In the case of a transit-oriented development project that is located within a metropolitan planning area, the project sponsor shall coordinate with the applicable metropolitan planning organization, including by providing timely notification to the metropolitan planning organization during the planning and entitlement process, and by sharing information on project details, transportation impacts, and mitigation measures.; (C) in paragraph (5)(B)(ii), by striking project described in section 601(a)(12)(E) and inserting transit-oriented development project; and (D) by adding at the end the following: (12) Requirement for attainable housing projects In the case of an attainable housing project, not less than 75 percent of the total financial assistance provided for the project under the TIFIA program shall be used for residential components of the project.; (2) in subsection (b)(3), in the matter preceding subparagraph (A), by striking The Secretary and inserting Except in a case in which a project intends to use an investment-creditworthiness assessment alternative, the Secretary; (3) in subsection (c)(2)— (A) by striking No funding and inserting the following: (A) In general No funding; and (B) by adding at the end the following: (B) Transit-oriented development (i) Pre-award acquisition exemption The National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) shall not apply to land acquisition activities prior to an application for assistance under the TIFIA program with respect to a transit-oriented development project, except for components of the project located within the geographic boundaries of the parcel of land acquired that will be owned, in full or in part, by a public entity for the majority of the loan term. (ii) Categorical exclusions (I) In general A transit-oriented development project that involves an activity described in subclause (II) shall be categorically excluded from the requirements of the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.). (II) Activities described An activity referred to in subclause (I) is any of the following: (aa) Rehabilitation or conversion of an existing office building to residential or mixed use within substantially the same footprint. (bb) Reconstruction or construction of a new commercial building primarily using land disturbed for transportation use as described in section 771.118(c)(9) of title 23, Code of Federal Regulations (or successor regulations), or disturbed land adjacent to land disturbed for transportation use.; (4) in subsection (d)(1)— (A) by striking and to the maximum extent practicable; and (B) by striking, to the maximum extent practicable,; (5) in subsection (e), by striking section 601(a)(2)(A) and inserting section 601(a)(3)(A); and (6) by adding at the end the following: (f) Other requirements Transit-oriented development projects and attainable housing projects assisted under the TIFIA program, shall be subject to the standards of section 5333(a) of title 49, U.S. Code.. (d) Secured loans Section 603 of title 23, United States Code, is amended— (1) in subsection (a)(3), by inserting or an investment-creditworthiness assessment alternative, as applicable after 602(b)(3)(B); and (2) in subsection (b)— (A) in paragraph (2)— (i) in subparagraph (A)— (I) by striking subparagraph (B) and inserting subparagraphs (B) and (C); and (II) by striking investment grade rating and inserting investment-grade rating or an investment-creditworthiness assessment alternative; and (ii) by adding at the end the following: (C) Transit-oriented development projects The amount of a secured loan under this section for a transit-oriented development project that contains a significant general housing or attainable housing component (as determined by the Secretary) or involves a partnership with a transit agency, State, local government partner, or nonprofit financing entity shall not exceed 75 percent of the reasonably anticipated eligible project costs.; (B) in paragraph (4)— (i) in subparagraph (A), by striking subparagraphs (B) and (C) and inserting “subparagraphs (B), (C), and (D); and (ii) by adding at the end the following: (D) Attainable housing projects The interest rate of a loan offered to an attainable housing project under the TIFIA program shall be at 1/2 of the Treasury Rate in effect on the date of execution of the loan agreement.; and (C) in paragraph (7)— (i) by striking The Secretary and inserting the following: (A) In general The Secretary; and (ii) by adding at the end the following: (B) Disclosure of fees The Secretary shall develop and make publicly available a straightforward, scalable, and reasonable fee structure with respect to fees that may apply under this section. (C) Guidance on project requirements The Secretary shall develop and make publicly available guidance on eligibility requirements for transit-oriented development projects, including guidance relating to— (i) minimum debt service coverage ratios by project type; (ii) maximum loan-to-cost and loan-to-value thresholds; and (iii) distribution covenants.. (e) Lines of credit Section 604(a)(4) of title 23, United States Code, is amended by inserting or securing an investment-creditworthiness assessment alternative after rating agencies. (f) Funding Section 608(a) of title 23, United States Code, is amended— (1) in paragraph (4)— (A) by striking the paragraph designation and heading and all that follows through described in section 601(a)(12)(G) in subparagraph (B), in the matter preceding clause (i), and inserting the following: (4) Limitation for airport-related projects The Secretary may use to carry out projects described in section 601(a)(14)(G); and (B) by redesignating clauses (i) and (ii) as subparagraphs (A) and (B), respectively, and indenting appropriately; and (2) in paragraph (6), by striking fiscal years 2022 through 2026 and inserting fiscal years 2027 through 2031. (g) Delegated origination and underwriting program for TOD projects (1) In general Chapter 6 of title 23, United States Code, is amended by adding at the end the following: 612. Delegated origination and underwriting program for TOD projects (a) In general In carrying out the TIFIA program, the Secretary shall establish a delegated origination and underwriting program for the purpose of providing credit assistance under the TIFIA program for transit-oriented development projects under which a qualified originator-servicer, acting on behalf of and under the oversight of the Secretary, carries out the origination, underwriting, and servicing of loans and loan guarantees and lines of credit provided under the TIFIA program, including assessments of creditworthiness for applicants and projects. (b) Structure The program under subsection (a) shall be based on the lender approval, quality control, and baseline creditworthiness standards established under the Multifamily Accelerated Processing system established by the Department of Housing and Urban Development. (c) Creditworthiness Notwithstanding any other provision of law, a project that receives assistance under the program under subsection (a) shall not be required to have an investment-grade rating. (d) Regulations Not later than 180 days after the date of enactment of this section, the Secretary shall promulgate regulations to carry out this section, including— (1) requirements for qualified originators-servicers to assume responsibilities of the Secretary under the TIFIA program with respect to origination, underwriting, and servicing, including requirements that a qualified originator-servicer shall— (A) originate, underwrite, and service a loan under the TIFIA program for the life of the loan; (B) be in good standing with, and not have been assessed any fine related to lending activity by the Department of Housing and Urban Development during the previous 5 years; and (C) demonstrate expertise in providing financing for a variety of project types that align with projects described in subsection (a), such as commercial and mixed use projects; (2) procedures for qualified originators-servicers to assess creditworthiness; (3) oversight procedures; and (4) other provisions necessary for the implementation of this section. (e) Interagency agreement In carrying out this section, the Secretary shall enter into an interagency agreement with the Secretary of Housing and Urban Development— (1) to assist the Secretary in leveraging lenders and lender approval processes used in the Multifamily Accelerated Processing system established by the Department of Housing and Urban Development, including by helping to develop an expedited path to approval as a qualified originator-servicer under this section for lenders operating under that section; and (2) to provide guidance and assistance to the Secretary on ways, through the use of this section— (A) to reduce the overall processing time and administrative burden required to deliver credit assistance under the TIFIA program; and (B) to preserve the ability of the Secretary to maintain thorough oversight of originating, underwriting, and servicing loans provided under the TIFIA program.. (2) Clerical amendment The analysis for chapter 6 of title 23, United States Code, is amended by adding at the end the following: 612. Delegated origination and underwriting program for TOD projects..