BILL NUMBER: AB 1706 CHAPTERED 10/09/01 CHAPTER 597 FILED WITH SECRETARY OF STATE OCTOBER 9, 2001 APPROVED BY GOVERNOR OCTOBER 7, 2001 PASSED THE ASSEMBLY SEPTEMBER 14, 2001 PASSED THE SENATE SEPTEMBER 12, 2001 AMENDED IN SENATE SEPTEMBER 7, 2001 AMENDED IN SENATE SEPTEMBER 5, 2001 AMENDED IN SENATE AUGUST 27, 2001 AMENDED IN SENATE AUGUST 20, 2001 AMENDED IN SENATE JUNE 25, 2001 AMENDED IN ASSEMBLY APRIL 16, 2001 INTRODUCED BY Committee on Transportation (Dutra (Chair), Firebaugh, Florez, Havice, Kehoe, Liu, Longville, Nakano, Oropeza, Simitian, Strom-Martin, and Vargas) MARCH 7, 2001 An act to amend Section 13401.3 of the Corporations Code, to amend Sections 14036 and 65089 of, to repeal Sections 14529.5 and 14529.14 of, and to repeal Chapter 5 (commencing with Section 14560) of Part 5.3 of Division 3 of Title 2 of, the Government Code, to amend Section 39 of the Harbors and Navigation Code, to amend Sections 98005, 99317.1, 99317.8, 99317.9, 99317.10, 99318.1, and 99319 of, and to repeal Sections 99317.2 and 99318.4 of, the Public Utilities Code, and to amend Sections 182.7, 182.8, 319, 2108, and 2121 of, and to repeal Sections 172, 183.3, 188.6, and 2105.1 of, the Streets and Highways Code, relating to transportation. LEGISLATIVE COUNSEL'S DIGEST AB 1706, Committee on Transportation. Transportation: corporations: state contracting. (1) Existing law provides for public transit and streets and highways and funding for those purposes. This bill would make technical corrections and delete obsolete provisions in existing law relating to public transit and streets and highways. (2) Under the Moscone-Knox Professional Corporation Act, "professional services" is defined to include, among other things, services licensed, certificated, and registered under the Yacht and Ship Brokers Act. This bill would make a needed correction in that definition. (3) Existing law provides that a project subject to the jurisdiction of the Department of Boating and Waterways and governed by the Harbors and Navigation Code is subject to the State Contract Act. This bill would correct a cross-reference in that provision and delete obsolete language. (4) Existing law defines "transit" for purposes of provisions authorizing the formation of the Santa Cruz Metropolitan Transit District. This bill would revise the definition to specifically include rapid transit. (5) Existing law authorizes the California Transportation Commission to offer to exchange funds from the Traffic Congestion Relief Fund for regional surface transportation program and congestion mitigation and air quality program apportionments received as local assistance by regional transportation planning agencies. The Department of Transportation is required to repay to the fund all funds received as federal reimbursements for funds exchanged as they are received from the Federal Highway Administration. This bill instead would require the department to repay from the State Highway Account in the State Transportation Fund to the Traffic Congestion Relief Fund all funds received as federal reimbursements, as they are received, for funds exchanged under the exchange program, except that the repayments are not required to be made more frequently than on a quarterly basis. (6) Existing law requires the California Transportation Commission to relinquish to any city or county any portion of any state highway within the city or county that has been deleted from the state highway system by legislative enactment. Existing law authorizes the relinquishment to the City of Downey of the portion of Route 19 located between Gardendale Street and Telegraph Boulevard, upon terms and conditions the commission finds to be in the best interests of the state. This bill, instead, would authorize the relinquishment to the City of Downey of the portion of Route 19 located between Century Boulevard and Telegraph Road within that city, upon terms and conditions the commission finds to be in the best interests of the state and pursuant to the terms of a cooperative agreement between the city and the Department of Transportation. The bill would similarly authorize the relinquishment to the City of Bellflower of the portion of Route 19 located between the southerly city limit of the City of Bellflower near Rose Avenue and Foster Road within that city. Each relinquishment would become effective immediately following the county recorder's recordation of the relinquishment resolution containing the commission's approval of the terms and conditions of the relinquishment. (7) The bill would require the department, in consultation with the Office of Planning and Research, to conduct a statewide rail transportation assessment, that includes both a passenger and a freight rail systems portion. The bill would require, on or before October 1, 2002, the department to submit to the Legislature a report that includes, among other things, an estimate and documentation of statewide unfunded capital and operating needs over the next 10 years for each rail transportation agency. (8) This bill would incorporate changes to Section 182.7 of the Streets and Highways Code proposed to be made by AB 1705 that would become operative if both bills are enacted and this bill is enacted after AB 1705. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 13401.3 of the Corporations Code is amended to read: 13401.3. As used in this part, "professional services" also means any type of professional services that may be lawfully rendered only pursuant to a license, certification, or registration authorized by the Yacht and Ship Brokers Act (Article 2 (commencing with Section 700) of Chapter 5 of Division 3 of the Harbors and Navigation Code). SEC. 2. Section 14036 of the Government Code is amended to read: 14036. (a) The department shall prepare a 10-year State Rail Plan biennially for submission to the Legislature, the Governor, the Public Utilities Commission, and the California Transportation Commission. The plan shall be submitted to the California Transportation Commission on or before October 1, 1995, and on or before October 1 of each odd-numbered year thereafter, for its advice and consent, and to the Legislature, the Governor, and the Public Utilities Commission by the following March 1. The plan shall consist of a passenger rail element and a freight rail element. (b) The passenger rail element shall contain all of the following: (1) For capital and operating subsidies and costs, all actual encumbrances for the prior two fiscal years; and for state operations, all actual expenditures for the prior two fiscal years. All revenues shall be identified by source. (2) For capital and operating subsidies, estimated encumbrances and revenues for the current year; and for state operations, estimated expenditures for the current year. The department shall use the same format as is required for prior year expenditures pursuant to paragraph (1). (3) For the budget year and the nine following fiscal years, proposed encumbrances for capital and operating subsidies and costs shall be reported in the same format as is required for the prior year's expenditures. For state operations, proposed expenditures for the budget year shall be reported. (4) The identification and cost of capital facilities necessary to enhance competitiveness of rail passenger services, including, for each intercity route, a list of at least the three highest priority capital improvement projects, with cost estimates and a funding plan. (5) A performance evaluation of all services in operation for the two prior years, including performance trends, potential for efficiency and effectiveness, possible improvements, and strategies to achieve that potential. This shall include an evaluation of all feeder bus services, using, among other things, criteria based on ridership levels, break-even points, and levels of growth in service utilization. The number of daily feeder bus runs, if any, that failed to carry even one passenger shall be identified. (6) A recommendation of a level of and program for services over a 10-year period, including a list of service enhancements on existing and additional routes, with funding and priority recommendations. This shall include identification of feeder bus service improvements and a management and operating plan for achieving these improvements. (7) An evaluation of reports by regional planning agencies and county transportation commissions on commuter service alternatives in their regions, including presentation of their recommendations. (8) A map showing all existing intercity and commuter passenger rail routes and services, all proposed intercity and commuter passenger rail routes and services, and all intercity and commuter passenger rail routes and services that are the subject of feasibility studies. (9) A report on the expenditure of marketing activities funds for purchases of media advertising of rail passenger services. This report shall be prepared in consultation with the Public Utilities Commission and the National Rail Passenger Corporation. The department may consult with other agencies, organizations, and persons with expertise. The department shall employ realistic assumptions, using Public Utilities Commission cost data whenever possible, with respect to the level of services it can provide and the cost of these services when developing the program. (10) A discussion of the department's overall marketing strategy as it relates to the intercity rail passenger service, including feeder bus service, and a report on the expenditure of marketing activities funds for purchases of media advertising of rail passenger services. (11) A discussion of fare policies and practices, including all of the following: (A) The relationship of fare policies to ridership and yield, including the impact of (A) a variety of regular fares, including fares such as midweek and other off-peak discounts, (B) discount fare blackouts during certain holiday travel periods on yield and ridership, and (C) discount fares for small groups traveling together. (B) Lightly traveled route segments where current fares are too high for the demand, and where ridership or yield, or both, would increase with lower fares. (C) A potential fare policy that would maximize both ridership and yield. (D) A summary of discussions with Amtrak on the subject of fares. (c) The freight rail element shall contain all of the following: (1) Environmental aspects, which shall include air quality, land use, and community impacts. (2) Financing issues, which shall include a means to obtain federal and state funding. (3) Rail issues, which shall include regional, intrastate, and interstate issues. (4) Intermodal connections, which shall include seaports and intermodal terminals. (5) Current system deficiencies. (6) Service objectives, such as improving efficiency, accessibility, and safety. (7) New technology, which shall include logistics and process improvement. (8) Light density rail line analyses, which shall include traffic density, track characteristics, project selection criteria, and benefit-cost criteria. SEC. 3. Section 14529.5 of the Government Code is repealed. SEC. 4. Section 14529.14 of the Government Code is repealed. SEC. 5. Chapter 5 (commencing with Section 14560) of Part 5.3 of Division 3 of Title 2 of the Government Code is repealed. SEC. 6. Section 65089 of the Government Code is amended to read: 65089. (a) A congestion management program shall be developed, adopted, and updated biennially, consistent with the schedule for adopting and updating the regional transportation improvement program, for every county that includes an urbanized area, and shall include every city and the county. The program shall be adopted at a noticed public hearing of the agency. The program shall be developed in consultation with, and with the cooperation of, the transportation planning agency, regional transportation providers, local governments, the department, and the air pollution control district or the air quality management district, either by the county transportation commission, or by another public agency, as designated by resolutions adopted by the county board of supervisors and the city councils of a majority of the cities representing a majority of the population in the incorporated area of the county. (b) The program shall contain all of the following elements: (1) (A) Traffic level of service standards established for a system of highways and roadways designated by the agency. The highway and roadway system shall include at a minimum all state highways and principal arterials. No highway or roadway designated as a part of the system shall be removed from the system. All new state highways and principal arterials shall be designated as part of the system. Level of service (LOS) shall be measured by Circular 212, by the most recent version of the Highway Capacity Manual, or by a uniform methodology adopted by the agency that is consistent with the Highway Capacity Manual. The determination as to whether an alternative method is consistent with the Highway Capacity Manual shall be made by the regional agency, except that the department instead shall make this determination if either (i) the regional agency is also the agency, as those terms are defined in Section 65088.1, or (ii) the department is responsible for preparing the regional transportation improvement plan for the county. (B) In no case shall the LOS standards established be below the level of service E or the current level, whichever is farthest from level of service A. When the level of service on a segment or at an intersection fails to attain the established level of service standard, a deficiency plan shall be adopted pursuant to Section 65089.4. (2) A performance element that includes performance measures to evaluate current and future multimodal system performance for the movement of people and goods. At a minimum, these performance measures shall incorporate highway and roadway system performance, and measures established for the frequency and routing of public transit, and for the coordination of transit service provided by separate operators. These performance measures shall support mobility, air quality, land use, and economic objectives, and shall be used in the development of the capital improvement program required pursuant to paragraph (5), deficiency plans required pursuant to Section 65089.4, and the land use analysis program required pursuant to paragraph (4). (3) A travel demand element that promotes alternative transportation methods, including, but not limited to, carpools, vanpools, transit, bicycles, and park-and-ride lots; improvements in the balance between jobs and housing; and other strategies, including, but not limited to, flexible work hours, telecommuting, and parking management programs. The agency shall consider parking cash-out programs during the development and update of the travel demand element. (4) A program to analyze the impacts of land use decisions made by local jurisdictions on regional transportation systems, including an estimate of the costs associated with mitigating those impacts. This program shall measure, to the extent possible, the impact to the transportation system using the performance measures described in paragraph (2). In no case shall the program include an estimate of the costs of mitigating the impacts of interregional travel. The program shall provide credit for local public and private contributions to improvements to regional transportation systems. However, in the case of toll road facilities, credit shall only be allowed for local public and private contributions which are unreimbursed from toll revenues or other state or federal sources. The agency shall calculate the amount of the credit to be provided. The program defined under this section may require implementation through the requirements and analysis of the California Environmental Quality Act, in order to avoid duplication. (5) A seven-year capital improvement program, developed using the performance measures described in paragraph (2) to determine effective projects that maintain or improve the performance of the multimodal system for the movement of people and goods, to mitigate regional transportation impacts identified pursuant to paragraph (4). The program shall conform to transportation-related vehicle emission air quality mitigation measures, and include any project that will increase the capacity of the multimodal system. It is the intent of the Legislature that, when roadway projects are identified in the program, consideration be given for maintaining bicycle access and safety at a level comparable to that which existed prior to the improvement or alteration. The capital improvement program may also include safety, maintenance, and rehabilitation projects that do not enhance the capacity of the system but are necessary to preserve the investment in existing facilities. (c) The agency, in consultation with the regional agency, cities, and the county, shall develop a uniform data base on traffic impacts for use in a countywide transportation computer model and shall approve transportation computer models of specific areas within the county that will be used by local jurisdictions to determine the quantitative impacts of development on the circulation system that are based on the countywide model and standardized modeling assumptions and conventions. The computer models shall be consistent with the modeling methodology adopted by the regional planning agency. The data bases used in the models shall be consistent with the data bases used by the regional planning agency. Where the regional agency has jurisdiction over two or more counties, the data bases used by the agency shall be consistent with the data bases used by the regional agency. (d) (1) The city or county in which a commercial development will implement a parking cash-out program that is included in a congestion management program pursuant to subdivision (b), or in a deficiency plan pursuant to Section 65089.4, shall grant to that development an appropriate reduction in the parking requirements otherwise in effect for new commercial development. (2) At the request of an existing commercial development that has implemented a parking cash-out program, the city or county shall grant an appropriate reduction in the parking requirements otherwise applicable based on the demonstrated reduced need for parking, and the space no longer needed for parking purposes may be used for other appropriate purposes. (e) Pursuant to the federal Intermodal Surface Transportation Efficiency Act of 1991 and regulations adopted pursuant to the act, the department shall submit a request to the Federal Highway Administration Division Administrator to accept the congestion management program in lieu of development of a new congestion management system otherwise required by the act. SEC. 7. Section 39 of the Harbors and Navigation Code is amended to read: 39. Any construction or development authorized by this division that also constitutes a project within the definition of Section 10105 of the Public Contract Code, when performed by the state, shall be subject to the State Contract Act. SEC. 8. Section 98005 of the Public Utilities Code is amended to read: 98005. "Transit" means the transportation of passengers only and their incidental baggage by means other than by chartered bus, sightseeing bus, or any other motor vehicle not on an individual fare-paying basis, and includes rapid transit. Nothing in this section shall be construed to prohibit the district from leasing its buses to private certified public carriers or to prohibit the district from providing schoolbus service for the transportation of pupils between their homes and schools. SEC. 9. Section 99317.1 of the Public Utilities Code is amended to read: 99317.1. (a) Funds appropriated pursuant to subdivision (a) of Section 99317 shall, in addition to the purposes specified in that section, be available for short-line railroad rehabilitation projects, through the state transportation improvement program. (1) Projects eligible for funding pursuant to this subdivision shall be limited to railroad rehabilitation projects. (2) To be eligible for funding pursuant to this subdivision, a project proposal shall be submitted by a public entity. The public entity shall submit a project proposal only if it has made a finding, following a public hearing, that rail service on the affected railroad would be in imminent danger of being discontinued without the expenditure of public funds, and that continuation of the service serves a public purpose. (b) As used in this section, "short-line railroad" means any standard gauge railroad which is being, or is planned to be, used for passenger service, other than a class I railroad, as that term is used and applied in federal law. SEC. 10. Section 99317.2 of the Public Utilities Code is repealed. SEC. 11. Section 99317.8 of the Public Utilities Code is amended to read: 99317.8. (a) A public agency that has received an allocation for funding of an intermodal transfer station pursuant to subdivision (a) of Section 99317 shall provide for maintaining the station and its appurtenances, including, but not limited to, restroom facilities, in good condition and repair, and in accordance with high standards of cleanliness. As part of its duties in monitoring state-funded rail and bus services, the department shall, at least annually, conduct an unannounced inspection of each facility and make recommendations, if any, to the operating agency. Results of the department's inspections shall be included in the passenger rail element of the State Rail Plan required pursuant to Section 14036 of the Government Code. If appropriate remedial action is not taken, the department may recommend to the commission that future applications for transit capital funding be denied. (b) The Legislature finds and declares that regular inspections of intermodal stations are necessary to protect the state's capital investment in these essential transportation facilities and to avoid the problems resulting from deferred maintenance. SEC. 12. Section 99317.9 of the Public Utilities Code is amended to read: 99317.9. The department and the commission shall give reasonable priority to allocations pursuant to subdivision (a) of Section 99317 to station projects that improve access for visitors to state prisons. SEC. 13. Section 99317.10 of the Public Utilities Code is amended to read: 99317.10. (a) A public entity which has received an allocation for funding of an intermodal transfer station pursuant to subdivision (a) of Section 99317 shall, upon request of the department, authorize state-funded bus service to use the station without any charge to the department or its contractors, and shall assist the department in the placement of signs and informational material designed to alert the public to the availability of the state-funded bus service. (b) A public entity shall not be eligible to receive an allocation for funding of an intermodal transfer station pursuant to subdivision (a) of Section 99317 unless it first agrees that, upon any future request of the department, it will authorize a state-funded bus service to use the station without any charge to the department or its contractors and it will assist the department in the placement of signs and informational material designed to alert the public to the availability of the state-funded bus service. (c) For the purpose of this section, "state-funded bus service" means any bus service funded pursuant to Section 99316. SEC. 14. Section 99318.1 of the Public Utilities Code is amended to read: 99318.1. An intercity rail project nominated by the department shall be eligible to compete for funding pursuant to Section 99317 if it is recommended in the passenger rail element of the State Rail Plan prepared pursuant to Section 14036 of the Government Code, or an update to that plan. SEC. 15. Section 99318.4 of the Public Utilities Code is repealed. SEC. 16. Section 99319 of the Public Utilities Code is amended to read: 99319. (a) If a rail capital improvement project proposed for funding by the department or a local agency includes as an element the addition or improvement of rail passenger service boarding platforms, those platforms shall be constructed in conformity with applicable rules and orders of the Public Utilities Commission and in such a manner that the top of each platform is not less than eight inches above the adjacent rails, unless the department makes a finding that the circumstances in a particular case warrant otherwise and obtains approval from the Public Utilities Commission for any deviation from its applicable rules and orders. (b) The requirements of this section apply to all passenger service boarding platforms constructed with funds made available pursuant to Section 14031.6 of the Government Code, Sections 99234.5, 99234.9 and 99317 of this code, Section 164 of the Streets and Highways Code, and funds made available from the proceeds of state general obligation bonds issued for the purposes of rail capital improvements. SEC. 17. Section 172 of the Streets and Highways Code is repealed. SEC. 18. Section 182.7 of the Streets and Highways Code is amended to read: 182.7. (a) Notwithstanding Sections 182 and 182.5, Sections 188, 188.8, and 825 do not apply to the expenditure of an amount of federal funds equal to the amount of federal funds apportioned to the state pursuant to subsection (b)(2) of Section 104 of Title 23 of the United States Code. These funds shall be known as the congestion mitigation and air quality program funds and shall be expended in accordance with Section 149 of Title 23 of the United States Code. The department, the transportation planning agencies, and the metropolitan planning organizations may do all things necessary in their jurisdictions to secure and expend those federal funds in accordance with the intent of federal law and this chapter. (b) The congestion mitigation and air quality program funds, including any funds to which subsection (c) of Section 110 of Title 23 of the United States Code, as added by subdivision (a) of Section 1310 of Public Law 105-178, applies, shall be apportioned by the department to the metropolitan planning organizations designated pursuant to Section 134 of Title 23 of the United States Code and, in areas where none has been designated, to the transportation planning agency established by Section 29532 of the Government Code. The funds shall be apportioned to metropolitan planning organizations and transportation planning agencies responsible for air quality conformity determinations in federally designated air quality nonattainment and maintenance areas within the state in the manner and in accordance with the formula set forth in subsection (b)(2) of Section 104 of Title 23 of the United States Code. Funds apportioned under this subdivision shall remain available for three federal fiscal years, including the federal fiscal year apportioned. (c) Notwithstanding subdivision (b), where county transportation commissions have been created by Division 12 (commencing with Section 130000) of the Public Utilities Code, all congestion mitigation and air quality program funds shall be further apportioned by the metropolitan planning organization to the county transportation commission on the basis of relative population within the federally designated air quality nonattainment and maintenance areas after first apportioning to the nonattainment and maintenance areas in the manner and in accordance with the formula set forth in subsection (b) (2) of Section 104 of Title 23 of the United States Code. In the Monterey Bay region, all congestion mitigation and air quality improvement program funds shall be further apportioned, on the basis of relative population, by the metropolitan planning organization to the regional transportation planning agencies designated under subdivision (b) of Section 29532 of the Government Code. (d) The department shall notify each metropolitan planning organization, transportation planning agency, and county transportation commission receiving an apportionment under this section, as soon as possible each year, of the amount of obligational authority estimated to be available for expenditure from the federal apportionment. The metropolitan planning organizations, transportation planning agencies, and county transportation commissions, in cooperation with the department, congestion management agencies, cities and counties, and affected transit operators, shall select and program projects in conformance with federal law. Each metropolitan planning organization and transportation planning agency shall, not later than August 1 of each even-numbered year beginning in 1994, submit its transportation improvement program prepared pursuant to Section 134 of Title 23 of the United States Code to the department for incorporation into the state transportation improvement program. (e) Not later than July 1 of each year, the metropolitan planning organizations and the regional transportation planning agencies receiving obligational authority under this section, shall notify the department of the projected amount of obligational authority that each entity intends to use during the remainder of the current federal fiscal year, including, but not limited to, a list of projects that will use the obligational authority. Any federal obligational authority that will not be used shall be redistributed by the department to other projects in a manner that ensures that the state will continue to compete for and receive increased obligational authority during the federal redistribution of obligational authority. If the department does not have sufficient federal apportionments to fully use excess obligational authority, the metropolitan planning organization or transportation planning agency relinquishing obligational authority shall make sufficient apportionments available to the department to fund alternate projects, when practical, within the geographical areas relinquishing the obligational authority. Notwithstanding this subdivision, the department shall comply with subsection (f) of Section 133 of Title 23 of the United States Code. (f) The department shall be responsible for closely monitoring the use of federal transportation funds, including congestion management and air quality funds to assure full and timely use. The department shall prepare a quarterly report for submission to the commission regarding the progress in use of all federal transportation funds. The department shall notify the commission and the appropriate implementation agency whenever there is a failure to use federal funds within the three-year apportionment period established under subdivision (b). (g) The department shall provide written notice to implementing agencies when there is one year remaining within the three-year apportionment period established under subdivision (b). (h) Within six months of the date of notification required under subdivision (g), the implementing agency shall provide to the department a plan to obligate funds that includes, but need not be limited to, a list of projects and milestones. (i) If the implementing agency has not met the milestones established in the implementation plan required under subdivision (h), prior to the end of the three-year apportionment period established under subdivision (b), the commission shall redirect those funds for use on other transportation projects in the state. (j) Congestion mitigation and air quality program funds available under this section exchanged pursuant to Section 182.8 may be loaned to and expended by the department. The department shall repay to the Traffic Congestion Relief Fund all funds received as federal reimbursements for funds exchanged under Section 182.8 as they are received from the Federal Highway Administration. SEC. 18.5. Section 182.7 of the Streets and Highways Code is amended to read: 182.7. (a) Notwithstanding Sections 182 and 182.5, Sections 188, 188.8, and 825 do not apply to the expenditure of an amount of federal funds equal to the amount of federal funds apportioned to the state pursuant to subsection (b)(2) of Section 104 of Title 23 of the United States Code. These funds shall be known as the congestion mitigation and air quality program funds and shall be expended in accordance with Section 149 of Title 23 of the United States Code. The department, the transportation planning agencies, and the metropolitan planning organizations may do all things necessary in their jurisdictions to secure and expend those federal funds in accordance with the intent of federal law and this chapter. (b) The congestion mitigation and air quality program funds, including any funds to which subsection (c) of Section 110 of Title 23 of the United States Code, as added by subdivision (a) of Section 1310 of Public Law 105-178, applies, shall be apportioned by the department to the metropolitan planning organizations designated pursuant to Section 134 of Title 23 of the United States Code and, in areas where none has been designated, to the transportation planning agency established by Section 29532 of the Government Code. The funds shall be apportioned to metropolitan planning organizations and transportation planning agencies responsible for air quality conformity determinations in federally designated air quality nonattainment and maintenance areas within the state in the manner and in accordance with the formula set forth in subsection (b)(2) of Section 104 of Title 23 of the United States Code. Funds apportioned under this subdivision shall remain available for three federal fiscal years, including the federal fiscal year apportioned. (c) Notwithstanding subdivision (b), where county transportation commissions have been created by Division 12 (commencing with Section 130000) of the Public Utilities Code, all congestion mitigation and air quality program funds shall be further apportioned by the metropolitan planning organization to the county transportation commission on the basis of relative population within the federally designated air quality nonattainment and maintenance areas after first apportioning to the nonattainment and maintenance areas in the manner and in accordance with the formula set forth in subsection (b) (2) of Section 104 of Title 23 of the United States Code. In the Monterey Bay region, all congestion mitigation and air quality improvement program funds shall be further apportioned, on the basis of relative population, by the metropolitan planning organization to the regional transportation planning agencies designated under subdivision (b) of Section 29532 of the Government Code. (d) The department shall notify each metropolitan planning organization, transportation planning agency, and county transportation commission receiving an apportionment under this section, as soon as possible each year, of the amount of obligational authority estimated to be available for expenditure from the federal apportionment. The metropolitan planning organizations, transportation planning agencies, and county transportation commissions, in cooperation with the department, congestion management agencies, cities and counties, and affected transit operators, shall select and program projects in conformance with federal law. Each metropolitan planning organization and transportation planning agency shall, not later than August 1 of each even-numbered year beginning in 1994, submit its transportation improvement program prepared pursuant to Section 134 of Title 23 of the United States Code to the department for incorporation into the state transportation improvement program. (e) Not later than July 1 of each year, the metropolitan planning organizations and the regional transportation planning agencies receiving obligational authority under this section, shall notify the department of the projected amount of obligational authority that each entity intends to use during the remainder of the current federal fiscal year, including, but not limited to, a list of projects that will use the obligational authority. Any federal obligational authority that will not be used shall be redistributed by the department to other projects in a manner that ensures that the state will continue to compete for and receive increased obligational authority during the federal redistribution of obligational authority. If the department does not have sufficient federal apportionments to fully use excess obligational authority, the metropolitan planning organization or transportation planning agency relinquishing obligational authority shall make sufficient apportionments available to the department to fund alternate projects, when practical, within the geographical areas relinquishing the obligational authority. Notwithstanding this subdivision, the department shall comply with subsection (f) of Section 133 of Title 23 of the United States Code. (f) The department shall be responsible for closely monitoring the use of federal transportation funds, including congestion management and air quality funds to assure full and timely use. The department shall prepare a quarterly report for submission to the commission regarding the progress in use of all federal transportation funds. The department shall notify the commission and the appropriate implementation agency whenever there is a failure to use federal funds within the three-year apportionment period established under subdivision (b). (g) The department shall provide written notice to implementing agencies when there is one year remaining within the three-year apportionment period established under subdivision (b). (h) Within six months of the date of notification required under subdivision (g), the implementing agency shall provide to the department a plan to obligate funds that includes, but need not be limited to, a list of projects and milestones. (i) If the implementing agency has not met the milestones established in the implementation plan required under subdivision (h), prior to the end of the three-year apportionment period established under subdivision (b), the commission shall redirect those funds for use on other transportation projects in the state. (j) Congestion mitigation and air quality program funds available under this section exchanged pursuant to Section 182.8 may be loaned to and expended by the department. The department shall repay from the State Highway Account to the Traffic Congestion Relief Fund all funds received as federal reimbursements for funds exchanged under Section 182.8 as they are received from the Federal Highway Administration, except that those repayments are not required to be made more frequently than on a quarterly basis. SEC. 19. Section 182.8 of the Streets and Highways Code is amended to read: 182.8. (a) It is the intent of the Legislature that this program help increase flexibility in the use of state and federal funding to complete transportation improvements. The ability to exchange certain federal funds for state funds may enhance that flexibility. However, it is the intent of the Legislature that the commission make these exchanges only if the exchanges do not compromise other state funded projects or activities. (b) The commission shall propose guidelines and procedures to implement this section, hold a public hearing on the guidelines, and adopt the guidelines on or before February 1, 2001. The commission shall begin the exchange program on or before February 1, 2001, if it determines that funding is available for that purpose. The commission may amend its guidelines after holding a public hearing, but may not amend the guidelines between the time it notifies regional transportation planning agencies of the amount of state funds available for exchange and its approval of projects for exchange in any given year. (c) On or before January 5 of each year, the department shall report to the commission the amounts apportioned as federal local assistance in the regional surface transportation and congestion mitigation and air quality programs for the year, the Federal Obligation Authority for the year, and the amount of federal funds it expects to be able to obligate for work on projects in all programs on or before September 30 of that year, and the commission, in cooperation with the department, shall determine the amount of state funds from the Traffic Congestion Relief Fund that can be made available for exchange under this section. If the release of federal apportionments and obligational authority is delayed beyond November 1 in any year, all the dates specified in this section shall be extended by an equivalent time, however, all federal funds exchanged shall be obligated on or before September 30 of the current federal fiscal year. (d) The commission may exchange funds under this section if it determines all of the following: (1) Adequate state funds are available to accomplish the exchange without putting at risk other transportation activities or projects needing state funds. (2) Any exchange will be consistent with full implementation of the Traffic Congestion Relief Act of 2000. (3) Federal funds received in exchange can be readily and effectively used on other projects or activities by the state during the federal fiscal year. (e) After making the determinations set forth in subdivision (d) the commission may offer to exchange state funds from the Traffic Congestion Relief Fund for federal local assistance funds, subject to the limits imposed under this section. For the purpose of this section, "federal local assistance" funds means regional surface transportation program or congestion mitigation and air quality program apportionments received that federal fiscal year and apportioned as local assistance pursuant to Sections 182.6 and 182.7. (f) Not later than February 1 of each year, the commission shall notify the regional transportation planning agencies of the amount of state funds available for exchange for federal local assistance funds for that year. The maximum amount of state funds to be exchanged may not exceed 50 percent of the total amount of federal regional surface transportation program and congestion mitigation and air quality program funds apportioned for the current fiscal year as local assistance pursuant to subdivision (b) of Section 182.6 and subdivision (b) of Section 182.7, exclusive of state funds that may be exchanged pursuant to subdivision (g) of Section 182.6, paragraphs (1) and (2) of subdivision (h) of Section 182.6, or Section 182.7. Federal funds exchanged under this program shall be available for projects identified by the commission as ready to obligate during determination of the amount available for exchange. The amount of exchange may not exceed the department's ability to obligate all federal funds during the current federal fiscal year. The commission may not exchange state funds for regional surface transportation program funds required to be spent for transportation enhancements. This section does not affect the amount of exchange under subdivision (g) of Sections 182.6, or paragraphs (1) and (2) of subdivision (h) of Section 182.6. (g) Regional transportation planning agencies may submit applications for exchange of funds to the commission not later than March 15 of each year. Applications shall identify the proposed use for the exchange funds, including project descriptions, cost estimates, scopes of work, schedules for construction, schedules for expenditures, and any other information required by the commission. The commission may require a region to identify priorities among applications it submits. (h) If the commission receives applications for more exchange funds than the amount of state funds available, the commission shall select projects for exchange up to the amount of state funds available. The commission shall explain the criteria it uses to select projects, which shall include, but are not limited to, all of the following: (1) Removal of all federal funds from projects. (2) Assessment of projects that would benefit most from removal of federal funding because of size, type, location, agency capability, features, or federal requirements. (3) Approximate relative equity within the program among regions in receiving state exchange funds over a multiyear period. (i) The commission may exchange state funds for federal local assistance funds with agencies requesting exchanges. Agencies wishing to exchange their federal funds shall provide apportionments and obligation authority at the same rate the Federal Highway Administration distributes obligation authority. Agencies exchanging federal funds shall receive funds equal to 90 percent of the obligation authority exchanged. The commission shall approve exchanges of funds not later than its second regularly scheduled meeting following March 15 each year. (j) The commission shall determine an exchange payment schedule based on expenditure plans. The commission may suspend exchange payment schedules if it determines projects are not proceeding. (k) For financial display and reporting purposes, obligational authority received pursuant to this section shall be reported as a revenue accrual in the Traffic Congestion Relief Fund in the year in which the exchange is approved under subdivision (i). Funds approved for exchange shall be accrued as expenditures in the year in which the exchange is approved. Notwithstanding Section 16362 of the Government Code, the department shall repay from the State Highway Account to the Traffic Congestion Relief Fund all funds received as federal reimbursements for funds exchanged under this section as they are received from the Federal Highway Administration, except that those repayments are not required to be made more frequently than on a quarterly basis. (l) State funds provided through an exchange under this section shall be encumbered within one year and expended within three years. (m) Upon adoption of its implementing guidelines, the commission may consider requests for exchanges under this section. (n) Regional and local agencies shall use state exchange funds only for projects or purposes for which the federal local assistance funds being exchanged were originally intended, and may not supplant local funds on projects in order that those local funds can subsequently be used for nontransportation purposes. The commission may require agencies to certify that they are meeting this requirement. Agencies not meeting this maintenance of effort requirement may not be allowed to participate in the next exchange cycle. (o) The commission shall include a summary of exchanges made pursuant to this section in its annual report to the Governor and Legislature pursuant to Section 14556.36, including an assessment of progress in implementing projects funded by exchanges, and discussion of issues and recommendations related to implementation of the exchange program. (p) Not later than the effective date of the reauthorization of the federal surface transportation act, the commission shall submit a report to the Governor and the Legislature recommending any changes in the exchange program necessitated by that reauthorization. SEC. 19.5. Section 183.3 of the Streets and Highways Code is repealed. SEC. 20. Section 188.6 of the Streets and Highways Code is repealed. SEC. 21. Section 319 of the Streets and Highways Code, as amended by Section 1 of Chapter 172 of the Statutes of 1999, is amended to read: 319. (a) Route 19 is from Route 1 near Long Beach to Route 164 near Pico Rivera. (b) The portion of Route 19 that is between Del Amo Boulevard in the City of Long Beach and Route 1 in that city shall cease to be a state highway pursuant to the terms of a cooperative agreement between the City of Long Beach and the department providing for the relinquishment of that portion of the highway to that city. (c) (1) The commission may relinquish to the City of Downey the portion of Route 19 located between Century Boulevard and Telegraph Road within that city, upon terms and conditions the commission finds to be in the best interests of the state and pursuant to the terms of a cooperative agreement between the City of Downey and the department. (2) A relinquishment under this subdivision shall become effective immediately following the county recorder's recordation of the relinquishment resolution containing the commission's approval of the terms and conditions of the relinquishment. (d) (1) The commission may relinquish to the City of Bellflower the portion of Route 19 located between the southerly city limit of the City of Bellflower near Rose Avenue and Foster Road within that city, upon terms and conditions the commission finds to be in the best interests of the state and pursuant to the terms of a cooperative agreement between that city and the department. (2) A relinquishment under this subdivision shall become effective immediately following the county recorder's recordation of the relinquishment resolution containing the commission's approval of the terms and conditions of the relinquishment. (e) Any portion of Route 19 relinquished pursuant to subdivision (c) or (d) shall cease to be a state highway on the effective date of the relinquishment. (f) This section shall become inoperative on the effective date of the relinquishment described in subdivision (c) or (d), whichever date is later, and as of January 1 following that date is repealed. SEC. 22. Section 319 of the Streets and Highways Code, as added by Section 2 of Chapter 172 of the Statutes of 1999, is amended to read: 319. (a) Route 19 is from: (1) Del Amo Boulevard near Long Beach to the southerly city limit of the City of Bellflower near Rose Avenue in the City of Bellflower. (2) The Downey city limit at Telegraph Road to Route 164 (Galatin Road) near Pico Rivera. (b) This section shall become operative on the later date, as between the effective date of the relinquishment by the commission to the City of Downey of the portion of Route 19 located between Century Boulevard and Telegraph Road within the City of Downey, pursuant to subdivision (c) of Section 319, and the effective date of the relinquishment by the commission to the City of Bellflower of the portion of Route 19 located between the southerly city limit of the City of Bellflower near Rose Avenue and Foster Road within the City of Bellflower, pursuant to subdivision (d) of Section 319, as that section read on the day before it was repealed pursuant to the act that amended this section during the 2001-02 Regular Session. SEC. 23. Section 2105.1 of the Streets and Highways Code is repealed. SEC. 24. Section 2108 of the Streets and Highways Code is amended to read: 2108. The balance of the money in the Highway Users Tax Account in the Transportation Tax Fund, after making the apportionments or appropriations, as the case may be, pursuant to Sections 2104 to 2107.7, inclusive, shall be transferred to the State Highway Account in the State Transportation Fund for expenditure in accordance with Section 163. SEC. 25. Section 2121 of the Streets and Highways Code is amended to read: 2121. (a) In May of each year each county shall submit to the department any additions or exclusions from its mileage of maintained county highways, specifying the termini and mileage of each route added or excluded from its county maintained roads. The department shall either approve or disapprove each inclusion or exclusion. A county may appeal any disapproval as provided in Section 74. The department shall certify county mileage figures to the Controller, as required. No appeal shall affect any apportionment made by the Controller pending the determination of the appeal. If, on appeal, additional mileage is allowed the county, the department shall immediately certify the corrected figure to the Controller, and the same shall be used for subsequent apportionments. (b) Upon relinquishing any state highway or portion thereof to a county, the department shall immediately certify to the Controller the mileage so relinquished and the same shall immediately be added to the county's maintained mileage of county roads for purposes of subsequent apportionments. SEC. 26. (a) The Department of Transportation, in consultation with the Office of Planning and Research, shall conduct a statewide rail transportation assessment. The assessment shall be conducted in cooperation with regional and local transportation agencies and private freight railroads. The assessment shall incorporate both a passenger and a freight rail systems portion. The passenger rail systems portion of the assessment shall include intercity, commuter, and urban rail systems. (b) (1) Based on the assessment, the department shall prepare a report. The assessment and report shall do all of the following: (A) Examine how the different modes of rail transportation interconnect with each other and with other forms of transportation. The assessment shall investigate where there are gaps in connectivity between passenger rail systems. The report shall make recommendations for improving connectivity for passenger and freight rail. (B) Identify where there are currently high levels of freight and passenger rail track congestion and where agencies project future rail congestion problems. The report shall make recommendations for capital projects that would alleviate or prevent the onset of track congestion. (C) Report on plans for capital projects for each rail transportation agency, both public and private, over the next 10 years. Capital projects include improvements that enhance public safety, including, but not limited to, grade crossing separations, that increase track capacity, including, but not limited to, passing tracks or siding, and that increase passenger services, including, but not limited to, additional passenger cars and locomotives. The report shall identify where plans for capital improvements or services by one rail agency will conflict with plans for capital improvements or services with another rail agency. (D) Examine the cost effectiveness of current findings for rail projects. (2) Based on findings from the assessment described in subdivision (a), the report shall include an estimate, with documentation, of statewide unfunded capital and operating needs over the next 10 years for each rail transportation agency. (c) The department shall submit the report required under this section to the Legislature on or before October 1, 2002. SEC. 27. Section 18.5 of this bill incorporates amendments to Section 182.7 of the Streets and Highways Code proposed by both this bill and Assembly Bill 1705. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2002, (2) each bill amends Section 182.7 of the Streets and Highways Code, and (3) this bill is enacted after Assembly Bill 1705, in which case Section 182.7 of the Streets and Highways Code as amended by Assembly Bill 1705, shall remain operative only until the operative date of this bill, at which time Section 18.5 of this bill shall become operative, and Section 18 of this bill shall not become operative.