(a) A regional or local entity that is the sponsor of, or is eligible to receive funding for, a project contained in the state transportation improvement program may expend its own funds for any component of a transportation project within its jurisdiction that is included in an adopted state transportation improvement program and for which the commission has not made an allocation. It is the intent of the Legislature that local funds expended to advance eligible projects programmed in the state transportation improvement program shall be reimbursed if the requirements of this section are satisfied.

(b) No later than the time of the first expenditure, the regional or local entity shall request an allocation for the project, which shall include a notice to the commission of its intent to expend its own funds in accordance with this section.

(c) The amount expended under subdivision (a) shall be reimbursed by the state, subject to annual appropriation by the Legislature, if all of the following conditions are met:

(1) The commission makes an allocation for, and the department executes an agreement to transfer funds for, the project.

(2) Expenditures made by the regional or local entity are eligible for reimbursement in accordance with state and federal laws and procedures. In the event expenditures made by the regional or local entity are determined to be ineligible, the state has no obligation to reimburse those expenditures.

(3) The regional or local entity complies with all legal requirements for the project, including, but not limited to, authorization by the federal government, if required, Section 14520.3, and the requirements of the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code).

(d) Upon the execution of an agreement with the department to transfer reimbursement funds for a project described in subdivision (a), the commission may delay reimbursement pursuant to this section only if programming or cash-management issues prevent immediate repayment.

(e) This section shall be limited to projects advanced for expenditure by an eligible regional or local entity programmed in the current fiscal year of the state transportation improvement program.

(f) Nothing in this section shall establish a priority for allocations made by the commission.

(g) Nothing in this section shall allow for the establishment of a timeframe limiting reimbursement to a regional or local entity so long as the regional or local entity has requested an allocation under the timeline established in subdivision (b) and the project is included in the adopted state transportation improvement program when the allocation reimbursement is approved by the commission.

(h) Unless otherwise agreed in advance by the commission and the department, the funds appropriated for the purposes of reimbursement under this section shall be federal funds and state matching funds.

(Amended by Stats. 2007, Ch. 462, Sec. 1. Effective January 1, 2008.)