(a) A transportation planning agency, county transportation commission, or local transportation authority may, with the concurrence of the commission, request the department to make a portion of the cost of any project funded by a local entity that is included in the state transportation improvement program eligible for reimbursement by the federal government pursuant to Section 115 of Title 23 of the United States Code. The transportation planning agency, county transportation commission, or local transportation authority shall be responsible for the cost the department incurs in making the project’s cost eligible for federal reimbursement.

(b) The transportation planning agency, county transportation commission, or local transportation authority and the department shall specify by agreement whether reimbursements for project costs received from the federal government pursuant to Section 115 of Title 23 of the United States Code shall be returned to the local funding entity for transportation projects or allocated to additional projects in the state transportation improvement program. For purposes of Sections 188 and 188.8 of the Streets and Highways Code, reimbursements to local entities shall be considered expenditures from the State Highway Account in the year the reimbursement occurs.

(c)  For reimbursements which a local funding entity specifies are to be allocated to additional projects in the state transportation improvement program, the transportation planning agency, county transportation commission, or local transportation authority and the department, in making their recommendations, and the commission, in adopting the state transportation improvement program, shall consider the recommendations of the local funding entity for projects to be funded from federal reimbursements received for a project the entity has funded. The reimbursements may not be used as substitute funding for projects the commission has included in the adopted state transportation improvement program and programmed to receive state and federal funds, other than those provided as reimbursement pursuant to Section 115 of Title 23 of the United States Code.

(d) The department, in its recommended funding estimate, shall identify the amount of project costs that can be made eligible for reimbursement pursuant to Section 115 of Title 23 of the United States Code. The department shall also estimate the amount of federal funds available for reimbursement in each year of the state transportation improvement program.

(e) Each year the department shall determine the actual amount of federal funds available for reimbursement pursuant to Section 115 of Title 23 of the United States Code and shall notify the commission and regional transportation planning agencies.

(f) In any federal fiscal year in which the department determines funding is available for reimbursement pursuant to Section 115 of Title 23 of the United States Code, the department shall seek reimbursement for locally funded projects in the order in which the projects were made eligible pursuant to subdivision (a). If the funds available are not sufficient to fully reimburse a locally funded project, the department shall seek reimbursment for the next project whose amount can be fully reimbursed. Projects bypassed for reimbursement in one fiscal year shall retain their priority in the next fiscal year in which funding is available.

(g)  The commission shall not make a reimbursement pursuant to this section unless the department finds that implementation of advance construction of projects results in the state receiving federal funds in addition to those which would be received in the absence of advanced construction agreements under this section. Reimbursement shall only be made when the commission determines that all county minimum expenditures pursuant to Section 188.8 of the Streets and Highways Code can be reasonably met, that the minimum expenditures cannot be met for reasons not related to advance construction reimbursements, or when the county in which a reimbursement would be made is below its minimum expenditure amount pursuant to that section. A project bypassed for reimbursement under this subdivision in one fiscal year shall retain its priority in the next fiscal year in which funding is available.

(h) The department shall notify the commission within 30 days of applying for reimbursement by the federal government for locally funded projects.

(Added by Stats. 1987, Ch. 1475, Sec. 3.)