Equitable Transit Oriented Development Support Act
- Sponsor
- Rep. DeSaulnier, Mark [D-CA-10]
- Committees
- Transportation and Infrastructure Committee (primary)
- Last action
- Apr 30, 2026
Bottom line
This bill aims to leverage federal transportation infrastructure financing to promote equitable transit-oriented development by empowering CDFIs to fund projects in low-income areas.
What it actually does
This bill amends Title 23, U.S. Code, to integrate Community Development Financial Institutions (CDFIs) into the Transportation Infrastructure Finance and Innovation Act (TIFIA) program. It creates a new mechanism, the "CDFI TOD account," to allow CDFIs to receive TIFIA secured loans for financing transit-oriented development (TOD) projects that specifically benefit low-income communities and persons.
Proponents argue
Proponents argue that the bill addresses a critical gap in financing for equitable TOD projects, particularly in low-income communities, by allowing CDFIs to access TIFIA funds. This would stimulate economic development, create affordable housing, and improve access to transit for underserved populations, aligning transportation investments with community development goals.
Opponents contend
Opponents might express concerns about expanding the TIFIA program's scope beyond traditional transportation infrastructure, potentially diluting its focus or increasing administrative complexity. They might also question the financial risk associated with lending to CDFIs for TOD projects, or whether CDFIs have the necessary expertise in large-scale infrastructure financing, despite the Treasury's involvement.
The bill is relatively short and clearly structured, making it accessible for a reader to understand its core changes within a reasonable timeframe.
Section 2(a) amending Section 601(a) of title 23, and Section 2(f) adding Section 611(a)
Establishes CDFI TOD Account and Related Definitions
This provision defines key terms for the new program, including "CDFI" (Community Development Financial Institution), "CDFI TOD account" (an account within a CDFI capitalized by TIFIA loans for TOD projects), and "CDFI TOD project." A CDFI TOD project is specifically defined as one located near a transit facility that supports commercial facilities, community facilities, or housing principally for low-income persons or communities.
Supporters argue
Supporters argue that these definitions are essential for clarity and for precisely targeting TIFIA funds to specific community development and social equity goals, ensuring that the program's intent is met.
Critics contend
No specific opposition is typically raised against these definitional provisions, as they are foundational to the bill's structure, though broader concerns about the program's scope might encompass them.
Tradeoffs
The definitions ensure precise targeting of funds but add new layers of complexity to an existing federal program, requiring careful interpretation and implementation.
Section 2(b) amending Section 602 of title 23
CDFI Eligibility and Credit Assessment Modifications
This provision makes CDFIs eligible applicants for TIFIA Federal credit instruments. It allows the Secretary of Transportation to rely on a credit assessment from the Secretary of Treasury for CDFIs, instead of requiring traditional investment grade ratings. It also permits the unconditional promissory obligation of a CDFI as security for the loan and deems CDFI TOD accounts to inherently generate beneficial effects, streamlining the application process.
Section 2(c) amending Section 603 of title 23
TIFIA Loan Terms and Revenue Sources for CDFI TOD Accounts
This provision sets a maximum eligible project cost for projects capitalizing a CDFI TOD account at $100,000,000. It also expands the eligible revenue sources that can secure a TIFIA loan to a CDFI, specifically including repayments from loans that the CDFI makes for CDFI TOD projects in accordance with the new Section 611.
Section 2(d) amending Section 605 of title 23
Interagency Consultation and Program Implementation Mandate
This provision requires the Secretary of Transportation to consult with the Secretary of Treasury when assessing CDFI creditworthiness and to enter into a Memorandum of Understanding (MOU) for Treasury to assist with credit underwriting, servicing, and monitoring of TIFIA loans to CDFIs. It also mandates that the Secretary of Transportation release program guidance and solicit applications within 180 days of Section 611's enactment.
Section 2(e) amending Section 608(a) of title 23
TIFIA Funding Set-Aside for CDFI TOD Accounts and Reimbursements
This provision establishes a set-aside of "not more than 10 percent" of the total TIFIA program funds for CDFI TOD accounts for each fiscal year. Any amounts from this set-aside that remain unobligated by June 1 of the fiscal year can be reobligated for other TIFIA projects. Additionally, it allows the Secretary of Transportation to use up to 10 percent of TIFIA's administrative funds to reimburse the Secretary of Treasury for assistance provided under the interagency MOU.
Section 2(f) adding Section 611(c) and (e) to title 23
CDFI TOD Account Operations and Delegated Lending Model
This provision details how CDFI TOD accounts will operate. It specifies that loan repayments and investment income within the account are to be used for new loans and for repaying the CDFI's secured TIFIA loan, fostering a revolving fund. It sets loan terms for project sponsors, including a maximum of 80% of eligible project costs, repayment commencing within 5 years of completion, and a final maturity of 30 years. Crucially, it authorizes a "delegated lending model," allowing CDFIs to establish the specific terms and conditions of loans to project sponsors.
Section 2(f) adding Section 611(g) and (h) to title 23
Applicability of Federal Law and Non-Obligation of United States
This provision clarifies that existing Title 23 and Title 49 requirements generally apply to CDFI TOD projects, but with a crucial exception: the Secretary can determine that a requirement is "not applicable or is not consistent with the objectives of this section." It also explicitly states that the deposit of federal funds into a CDFI does not constitute a commitment, guarantee, or obligation of the United States to any third party, limiting federal liability.
This provision states that requirements of Title 23 and Title 49 that would normally apply to federally funded projects will apply to CDFI TOD projects, "except to the extent the Secretary determines that any requirement of such title is not applicable or is not consistent with the objectives of this section."
Section 2(f), adding Section 611(g) to title 23
Why it matters:This is a common legislative technique to provide administrative flexibility in new programs, allowing the implementing agency to adapt existing regulations to the specific context of the new initiative. It avoids having to enumerate every single potential conflict upfront.
Case for: Supporters would argue this flexibility is crucial for the successful implementation of CDFI TOD projects, which may have different characteristics and needs than traditional large-scale transportation infrastructure. It allows the Secretary to streamline processes and avoid unnecessary burdens.
Case against: Critics might argue that this broad waiver authority could lead to inconsistent application of federal standards, potentially undermining environmental protections, labor standards, or other important safeguards that typically apply to federally assisted projects.
Estimated impact: Potentially significant, as it could alter the regulatory landscape for all projects funded through CDFI TOD accounts, affecting costs, timelines, and compliance requirements.
In the case of a project capitalizing a CDFI TOD account, the CDFI must demonstrate to the Secretary, within two years of the secured loan obligation, that it has executed a loan agreement with a project sponsor. Only after this demonstration can the CDFI draw upon the secured loan. If the loan commitment is not used within the 2-year period, the Secretary may extend the period or withdraw the commitment.
Section 2(b)(1)(G) amending Section 602(a)(10) of title 23
Why it matters:This is a technical detail designed to ensure efficient use of federal funds and prevent commitments from languishing. It's a standard mechanism for managing federal loan programs.
Case for: Supporters would argue this provision ensures accountability and timely deployment of TIFIA funds. It prevents CDFIs from holding onto loan commitments without actively deploying capital into projects, thus maximizing the program's impact.
Case against: Critics might argue that a two-year window, while seemingly reasonable, could be challenging for some CDFIs, especially those new to large-scale infrastructure financing or operating in particularly complex development environments. It could create pressure to commit funds quickly rather than strategically.
Estimated impact: Ensures that up to 10% of TIFIA funds set aside for CDFIs are deployed efficiently or reallocated if not used, impacting the overall pace and effectiveness of the program.