Sec. 8. Credit facility to support transit-oriented development
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In this section, the following definitions shall apply: The term eligible applicant means a State or local government. The term eligible area means the area within ½ mile of an existing or planned major public transportation facility. The term eligible borrower means— a governmental entity, authority, agency, or instrumentality; a corporation, partnership, joint venture, or trust on behalf of which an eligible applicant has submitted an application under subsection (c); or any other legal entity undertaking an infrastructure development project on behalf of which an eligible applicant has submitted an application under subsection (c).
The term major public transportation facility means— a fixed-guideway public transportation station; a high speed rail or intercity rail station connecting to public transportation; an intermodal facility connecting multiple public transportation lines; or a public transportation center located in an area other than an urbanized area. The term planned major public transportation facility means a major public transportation facility for which— appropriate environmental reviews have been completed; and funding for construction can be reasonably anticipated.
The term project means an infrastructure project that is used to support a transit-oriented development in an eligible area, including— property enhancement, including conducting environmental remediation, park development, and open space acquisition; improvement of mobility, including rehabilitating, or providing for additional, streets, public transportation stations, structured parking, walkways, and bikeways; utility development, including rehabilitating or relocating existing, or providing for new drinking water, wastewater, electric, and gas utilities; or community service facilities, such as child care centers.
The term public transportation has the meaning given that term in section 5302 of title 49, United States Code. The Secretary, in consultation with the Secretary of Transportation, may make or guarantee loans under this section to eligible borrowers for projects. An eligible applicant may submit to the Secretary an application for a loan or loan guarantee under this section— to fund a project carried out by the eligible applicant; or on behalf of an eligible borrower, to fund a project carried out by the eligible borrower.
The Secretary may make a loan or loan guarantee under this section for a project that— is part of a community-wide development plan, as defined by the Secretary; promotes sustainable development; and ensures that not less than 15 percent of any housing units constructed or substantially rehabilitated as part of transit-oriented development supported by the project are affordable over the long term to, and occupied at time of initial occupancy by— renters with incomes at or below 60 percent of the area median income; or homeowners with incomes at or below 100 percent of the area median income.
The Secretary, in consultation with the Secretary of Transportation, shall select the recipients of loans and loan guarantees under this section based on the extent to which— the transit-oriented development supported by the project will encourage increased use of transit; the transit-oriented development supported by the project will create or preserve long-term affordable housing units in addition to the housing units required to be made available under paragraph (1)(C) or will provide deeper affordability than required under paragraph (1)(C); the project will facilitate and encourage additional development or redevelopment in the overall public transportation station area; the local government has adopted policies that— promote long-term affordable housing; and allow high-density, mixed-use development near public transportation stations; the transit-oriented development supported by the project is part of a comprehensive regional plan; the eligible borrower has established a reliable, dedicated revenue source to repay the loan; the project is not financially viable for the eligible borrower without a loan or loan guarantee under this section; and a loan or loan guarantee under this section would be used in conjunction with non-Federal resources to fund the project.
A loan made or guaranteed under this section shall be repayable, in whole or in part, from dedicated revenue sources, which may include— user fees; property tax revenues; sales tax revenues; other revenue sources dedicated to the project by property owners and businesses; and a bond or other indebtedness backed by one of the revenue sources listed in this paragraph. The Secretary shall establish an interest rate for loans made or guaranteed under this section with reference to a benchmark interest rate (commonly known as a yield ) on marketable Treasury securities with a maturity that is similar to the loans made or guaranteed under this section.
The maturity of a loan made or guaranteed under this section may not exceed the lesser of— 35 years; or 90 percent of the useful life of any project to be financed by the loan, as determined by the Secretary. The guarantee rate on a loan guaranteed under this section may not exceed 75 percent of the amount of the loan. The Secretary shall establish a guarantee rate for loans to eligible borrowers that the Secretary determines pose a lower risk of default that is lower than the guarantee rate for loans to other eligible borrowers.
The Secretary shall establish fees for loans made or guaranteed under this section at a level that is sufficient to cover all or part of the costs to the Federal Government of making or guaranteeing a loan under this section. A loan made or guaranteed under this section may not be subordinated to the claims of any holder of an obligation relating to the project in the event of bankruptcy, insolvency, or liquidation. The scheduled repayment of principal or interest on a loan made or guaranteed under this section shall commence not later than 5 years after the date of substantial completion of a project.
If, at any time after the date of substantial completion of a project, the Secretary determines that dedicated revenue sources of an eligible borrower are insufficient to make the scheduled loan repayments of principal and interest on a loan made or guaranteed under this section, the Secretary may, subject to criteria established by the Secretary, allow the eligible borrower to add unpaid principal and interest to the outstanding balance of the loan. Any payment deferred under this section shall— continue to accrue interest until fully repaid; and be scheduled to be amortized over the remaining term of the loan.
There are authorized to be appropriated for the cost of loans and loan guarantees under this section $20,000,000 for each of fiscal years 2015 through 2019.