(a) For purposes of this section, all of the following definitions apply: (1) âDepartmentâ means the Department of Housing and Community Development. (2) âOfficeâ means the Office of Land Use and Climate Innovation. (3) âRegionâ means the territory of the metropolitan planning organization within which a project is located, or the territory of the regional transportation planning agency within which a project is located if the project is located outside of the boundaries of a metropolitan planning organization. (4) âTransit-Oriented Development Implementation Fundâ means the fund created pursuant to Section 53561 of the Health and Safety Code. (5) âTransit-Oriented Development Implementation Programâ means the program established pursuant to Part 13 (commencing with Section 53560) of Division 31 of the Health and Safety Code. (b) (1) (A) If a lead agency determines that a project will have a significant transportation impact pursuant to the metrics adopted pursuant to paragraph (1) of subdivision (b) of Section 21099, the lead agency may mitigate the transportation impact to a less than significant level by helping to fund or otherwise facilitating vehicle miles traveled-efficient affordable housing or related infrastructure projects, provided the projects meet the requirements of mitigation measures contained within this division and Chapter 3 of Division 6 of Title 14 of the California Code of Regulations, including by contributing an amount, to be determined pursuant to the officeâs guidance issued pursuant to subdivision (d), to the Transit-Oriented Development Implementation Fund for purposes of the Transit-Oriented Development Implementation Program. (B) This section shall not preclude the lead agencyâs use of other mitigation strategies, including, but not limited to, transportation demand management, transit improvements, active transportation infrastructure, road diets, or utilizing local or regional mitigation banks and exchanges. (2) Moneys may be deposited into the Transit-Oriented Development Implementation Fund pursuant to paragraph (1) beginning on or before July 1, 2026, as determined by the department. (3) Consistent with paragraph (1), a project applicant may use the Transit-Oriented Development Implementation Fund as one optional strategy to mitigate a significant transportation impact under this division. The ultimate use of this mitigation option is subject to the discretion of the lead agency that retains full authority to determine the sufficiency of any proposed mitigation consistent with this division. (c) (1) Moneys deposited into the Transit-Oriented Development Implementation Fund pursuant to subdivision (b) shall be available to the department, upon appropriation by the Legislature, for the purpose of awarding funding for affordable housing or related infrastructure projects, including infrastructure necessary for higher density uses, under the Transit-Oriented Development Implementation Program in the following priority order: (A) First priority to affordable housing or related infrastructure projects in location-efficient areas, as defined in the officeâs guidance issued pursuant to subdivision (d), within the same region as the project. (B) Second priority to affordable housing or related infrastructure projects within the same region as the project. (C) (i) Third priority to affordable housing or related infrastructure projects in location-efficient areas that are outside of the originating region but within an adjacent region, provided the project site is located within a defined proximity radius established by the office issued pursuant to clause (ii). (ii) The proximity radius shall be specified in the officeâs guidance and may vary based on regional characteristics such as population density and travel patterns. The intent of this provision is to support projects in neighboring regions that offer similar vehicle miles traveled-reducing benefits due to the project
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