BILL NUMBER: SB 45	CHAPTERED
	BILL TEXT

	CHAPTER   622
	FILED WITH SECRETARY OF STATE   OCTOBER 3, 1997
	APPROVED BY GOVERNOR   OCTOBER 2, 1997
	PASSED THE SENATE   SEPTEMBER 12, 1997
	PASSED THE ASSEMBLY   SEPTEMBER 12, 1997
	AMENDED IN ASSEMBLY   SEPTEMBER 10, 1997
	AMENDED IN ASSEMBLY   AUGUST 28, 1997
	AMENDED IN ASSEMBLY   JULY 23, 1997
	AMENDED IN ASSEMBLY   JULY 7, 1997
	AMENDED IN ASSEMBLY   JUNE 23, 1997
	AMENDED IN SENATE   MAY 15, 1997
	AMENDED IN SENATE   APRIL 10, 1997
	AMENDED IN SENATE   APRIL 1, 1997
	AMENDED IN SENATE   MARCH 10, 1997
	AMENDED IN SENATE   FEBRUARY 24, 1997

INTRODUCED BY  Senator Kopp
   (Coauthor:  Assembly Member Papan)

                        DECEMBER 2, 1996

   An act to amend Sections 14523, 14524, 14525, 14526, 14527,
14530.1, 14531, 14536, 65081.1, 65082, 65083, and 65086 of, to add
Sections 14529.1, 14529.8, 14529.12, and 14529.15 to, to repeal and
add Sections 14520.3, 14529, 65080, and 65086.4 of, and to repeal
Sections 14524.5, 14529.01, 14529.2, 14529.6, 14530.5, 14555, 65071,
and 65081 of, the Government Code, to amend Sections 99310, 99312,
and 99315 of, and to repeal Sections 99315.5, 99315.6, 99318, and
99318.2 of, the Public Utilities Code, and to amend Sections 164.3,
167, 188, and 188.8 of, to amend and repeal Sections 2601, 2602, and
2602.1 of, to add Sections 164.6 and 188.10 to, to repeal and add
Sections 163, 164, and 182.5 of, and to repeal Sections 164.2, 164.4,
164.35, 164.50, 164.51, 164.52, 164.55, 164.57, 168, 182.4, 182.8,
188.9, 199, 199.1, 199.2, 199.3, 199.4, 199.6, 199.7, 199.8, 199.9,
199.10, 199.11, and 2600 of, the Streets and Highways Code, relating
to transportation.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 45, Kopp.  Transportation funding.
   Existing law prescribes a process for estimating the amount of
state and federal funds to be available for transportation projects
in the state, and for appropriating and allocating the available
funds to those projects.
   This bill would substantially revise that process, by changing the
7-year state transportation improvement program to a 4-year program,
changing the components of the regional and state transportation
improvement programs, changing the name of the Transportation
Planning and Development Account to the Public Transportation
Account, and making changes in the way funds are allocated from that
account.  The bill would declare the Legislature's intent regarding
budget estimates by the Department of Transportation and the
California Transportation Commission based on specified factors.  The
bill would eliminate various transportation-related programs,
including traffic systems management, flexible congestion relief,
commuter and urban rail transit, and the state-local transportation
partnership program.  The bill would provide that the department is
continued as the responsible agency for the state highway system, as
specified.
   This bill would provide that by the enactment of this bill, the
Legislature intends that nothing contained in this bill shall be
construed to expand or restrict the authority or responsibility of
the department to perform the components developed in the state
transportation improvement program.  The bill would make related
changes.
   This bill would incorporate additional changes in Section 14524 of
the Government Code proposed by AB 87, to be operative only if AB 87
and this bill are both enacted and become effective on or before
January 1, 1998, and this bill is enacted last.
   This bill would incorporate additional changes in Section 14525 of
the Government Code proposed by AB 87, to be operative only if AB 87
and this bill are both enacted and become effective on or before
January 1, 1998, and this bill is enacted last.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 14520.3 of the Government Code is repealed.
  SEC. 1.1.  Section 14520.3 is added to the Government Code, to
read:
   14520.3.  (a) The Legislature, through the enactment of Senate
Bill 45 during the 1997-98 Regular Session, intends to establish
priorities and processes for the programming and expenditure of state
transportation funds that are at the discretion of the Legislature
and the Governor.
   (b) The department is responsible for the planning, design,
construction, maintenance, and operation of the state highway system
and Senate Bill 45 is not intended to alter that responsibility.
   (c) In addition to other responsibilities established by law, the
department is the responsible agency for performing all state highway
project components specified in subdivision (b) of Section 14529 of
the Government Code except for construction.
   (d) The Legislature, through the enactment of this section,
intends that nothing in subdivision (b) of Section 14529 of the
Government Code or any other provision in the act that added this
section to the Government Code shall be construed to expand or
restrict the authority or responsibility of the department, as
provided by statute or the California Constitution, to perform the
components described in subdivision (b) of Section 14529 of the
Government Code on state highways.
  SEC. 2.  Section 14523 of the Government Code is amended to read:
   14523.  The commission may prepare an independent evaluation of
the department's budget regarding the adequacy of funding levels and
the relative needs of program categories as defined in Section 167 of
the Streets and Highways Code and submit its recommendations to the
Legislature not later than April 1 of each year.  The report shall
reflect the commission's judgment regarding the overall funding
levels for each program category and shall not duplicate the
item-by-item analysis conducted by the Legislative Analyst.
  SEC. 3.  Section 14524 of the Government Code is amended to read:
   14524.  (a) Not later than January 5, 1998, and July 15 of each
odd-numbered year thereafter, the department shall submit to the
commission a four-year estimate pursuant to Section 164 of the
Streets and Highways Code, in annual increments, of all federal and
state funds reasonably expected to be available during the following
four fiscal years.
   (b) The estimate shall specify the amount that may be programmed
in each county for regional improvement programs pursuant to
paragraph (2) of subdivision (a) of Section 164 of the Streets and
Highways Code and shall identify any statutory restriction on the use
of particular funds.
   (c) For the purpose of estimating revenues, the department shall
assume that there will be no changes in existing state and federal
statutes.
   (d) The method by which the estimate is determined shall be
determined by the commission, in consultation with the department,
transportation planning agencies, and county transportation
commissions.
  SEC. 3.5.  Section 14524 of the Government Code is amended to read:

   14524.  (a) Not later than  January 5, 1998, and July 15 of each
odd-numbered year thereafter, the department shall submit to the
commission a four-year estimate pursuant to Section 164 of the
Streets and Highways Code, in annual increments, of all federal and
state funds reasonably expected to be available during the following
four fiscal years.
   (b) The estimate shall specify the amount that may be programmed
in each county for regional improvement programs pursuant to
paragraph (2) of subdivision (a) of Section 164 of the Streets and
Highways Code, and for the California Transportation Finance Bank
program established in Division 2 (commencing with Section 64000) of
Title 6.7, and shall identify any statutory restriction on the use of
particular funds.
   (c) For the purpose of estimating revenues, the department shall
assume that there will be no changes in existing state and federal
statutes.
   (d) The method by which the estimate is determined shall be
determined by the commission, in consultation with the department,
transportation planning agencies, and county transportation
commissions.
  SEC. 4.  Section 14524.5 of the Government Code is repealed.
  SEC. 5.  Section 14525 of the Government Code is amended to read:
   14525.  (a) Not later than January 5, 1998, and August 15 of each
odd-numbered year thereafter, the commission shall adopt a four-year
estimate pursuant to Section 164 of the Streets and Highways Code, in
annual increments, of all state and federal funds reasonably
expected to be available during the following four fiscal  years.
   (b) The estimate shall specify the amount that may be programmed
in each county for regional improvement programs under paragraph (2)
of subdivision (a) of Section 164 of the Streets and Highways Code
and shall identify any statutory restriction on the use of particular
funds.
   (c) For the purpose of estimating revenues, the commission shall
assume that there will be no change in existing state and federal
statutes.
   (d) If the commission finds that legislation pending before the
Legislature or the United States Congress may have a significant
impact on the fund estimate, the commission may postpone the adoption
of the fund estimate for no more than 90 days.  Prior to March 1 of
each even-numbered year, the commission may amend the estimate
following consultation with the department, transportation planning
agencies, and county transportation commissions to account for
unexpected revenues or other unforeseen circumstances.  In the event
the fund estimate is amended, the commission shall extend the dates
for the submittal of improvement programs as specified in Sections
14526 and 14527 and for the adoption of the state transportation
improvement program pursuant to Section 14529.
  SEC. 5.5.  Section 14525 of the Government Code is amended to read:

   14525.  (a) Not later than  January 5, 1998, and August 15 of each
odd-numbered year thereafter, the commission shall adopt a four-year
estimate pursuant to Section 164 of the Streets and Highways Code,
in annual increments, of all state and federal funds reasonably
expected to be available during the following four fiscal years, and
for the California Transportation Finance Bank program established by
Division 2 (commencing with Section 64000) of Title 6.7.
   (b) The estimate shall specify the amount that may be programmed
in each county for regional improvement programs under paragraph (2)
of subdivision (a) of Section 164 of the Streets and Highways Code
and shall identify any statutory restriction on the use of particular
funds.
   (c) For the purpose of estimating revenues, the commission shall
assume that there will be no change in existing state and federal
statutes.
   (d) If the commission finds that legislation pending before the
Legislature or the United States Congress may have a significant
impact on the fund estimate, the commission may postpone the adoption
of the fund estimate for no more than 90 days.  Prior to March 1 of
each even-numbered year, the commission may amend the estimate
following consultation with the department, transportation planning
agencies, and county transportation commissions to account for
unexpected revenues or other unforeseen circumstances.  If the fund
estimate is amended, the commission shall extend the dates for the
submittal of improvement programs as specified in Sections 14526 and
14527 and for the adoption of the state transportation improvement
program pursuant to Section 14529.
  SEC. 6.  Section 14526 of the Government Code is amended to read:
   14526.  (a) Not later than March 1, 1998, and December 15 of each
odd-numbered year thereafter, and after consulting with the
transportation planning agencies, county transportation commissions,
and transportation authorities, the department shall submit to the
commission its interregional improvement program consisting of all of
the following:
   (1) Projects to improve state highways, pursuant to subdivision
(b) of Section 164 of the Streets and Highways Code.
   (2) Projects to improve the intercity passenger rail system.
   (3) Projects to improve interregional movement of people,
vehicles, and goods.
   (b) Projects may not be included in the interregional improvement
program without a project study report or major investment study.
   (c) Major projects shall include current costs updated as of
November 1 of the year of submittal and escalated to the appropriate
year, and shall be consistent with, and provide the information
required in, subdivision (b) of Section 14529.
   (d) Projects included in the interregional improvement program
shall be consistent with the adopted regional transportation plan.
  SEC. 7.  Section 14527 of the Government Code is amended to read:
   14527.  (a) After consulting with the department, the regional
transportation planning agencies and county transportation
commissions shall adopt and submit to the commission and the
department, not later than March 1, 1998, and December 15 of each
odd-numbered year thereafter, a four-year regional transportation
improvement program in conformance with Section 65082.  In counties
where a county transportation commission or authority has been
created pursuant to Chapter 2 (commencing with Section 130050) of
Division 12 of the Public Utilities Code, the commission or the
authority shall adopt and submit the county transportation
improvement program, in conformance with Sections 130303 and 130304
of that code, to the multicounty designated transportation planning
agency.  Other information, including a program for expenditure of
local or federal funds, may be submitted for information purposes
with the program, but only at the discretion of the transportation
planning agencies or the county transportation commissions.
   (b) The regional transportation improvement program shall include
all projects to be funded with regional improvement funds under
paragraph (2) of subdivision (a) of Section 164 of the Streets and
Highways Code.  The regional programs shall be limited to projects to
be funded in whole or in part with regional improvement funds which
shall include all projects to receive allocations by the commission
during the following four fiscal years.  For each project, the total
expenditure for each project component and the total amount of
commission allocation and the year of allocation shall be stated.
The total cost of projects to be funded with regional improvement
funds shall not exceed the amount specified in the fund estimate made
by the commission pursuant to Section 14525.
   (c) The regional transportation planning agencies and county
transportation commissions may recommend projects to improve state
highways with interregional improvement funds pursuant to subdivision
(b) of Section 164 of the Streets and Highways Code.  The
recommendations shall be separate and distinct from the regional
transportation program.  A project recommended for funding pursuant
to this subdivision shall constitute a usable segment and shall not
be a condition for inclusion of other projects in the regional
transportation improvement program.
   (d) Major projects shall include current costs updated as of
November 1 of the year of submittal and escalated to the appropriate
year, and shall be consistent with, and provide the information
required in, subdivision (b) of Section 14529.
   (f) The regional transportation improvement program may not change
the project delivery milestone date of any project as shown in the
prior adopted state transportation improvement program without the
consent of the department or other agency responsible for the project'
s delivery.
   (g) Projects may not be included in the regional transportation
improvement program without a complete project study report or, for a
project that is not on a state highway, a project study report
equivalent or major investment study.
   (h) The transportation planning agencies and county transportation
commissions may request and receive an amount not to exceed one-half
of 1 percent of their regional improvement fund expenditures for the
purposes of project planning, programming, and monitoring.  A
transportation planning agency or county transportation commission
not receiving federal metropolitan planning funds may request and
receive an amount not to exceed 2 percent of its regional improvement
fund expenditures for the purposes of project planning, programming,
and monitoring.
  SEC. 8.  Section 14529 of the Government Code is repealed.
  SEC. 9.  Section 14529 is added to the Government Code, to read:
   14529.  (a) The state transportation improvement program shall
include a listing of all capital improvement projects that are
expected to receive an allocation of state transportation funds under
Section 164 of the Streets and Highways Code, including revenues
from transportation bond acts, from the commission during the
following four fiscal years.  It shall include, and be limited to,
the projects to be funded with the following:
   (1) Interregional improvement funds.
   (2) Regional improvement funds.
   (b) For each project, the program shall specify the allocation or
expenditure amount and the allocation or expenditure year for each of
the following project components:
   (1) Completion of all permits and environmental studies.
   (2) Preparation of plans, specifications, and estimates.
   (3) The acquisition of rights-of-way.
   (4) Construction and construction management and engineering,
including surveys and inspection.
   (c) Funding for right-of-way acquisition and construction for a
project may be included in the program only if the commission makes a
finding that the sponsoring agency will complete the environmental
process and can proceed with right-of-way acquisition or construction
within the four-year period.  No allocation for right-of-way
acquisition or construction shall be made until the completion of the
environmental studies and the selection of a preferred alternative.

   (d) The commission shall adopt and submit to the Legislature and
the Governor, not later than June 1, 1998, and April 1 of each
even-numbered year thereafter, a state transportation improvement
program.  The program shall cover a period of four years, beginning
July 1 of the year it is adopted, and shall be a statement of intent
by the commission for the allocation or expenditure of funds during
those four years.  The program shall include projects which are
expected to receive funds prior to July 1 of the year of adoption,
but for which the commission has not yet allocated funds.
   (e) The projects included in the adopted state transportation
improvement program shall be limited to those projects submitted or
recommended pursuant to Sections 14526 and 14527.  The total amount
programmed in each fiscal year for each program category shall not
exceed the amount specified in the fund estimate adopted under
Section 14525.
   (f) The state transportation improvement program is a resource
management document to assist the state and local entities to plan
and implement transportation improvements and to utilize available
resources in a cost-effective manner.  It is a document for each
county and each region to declare their intent to use available state
and federal funds in a timely and cost-effective manner.
   (g) Prior to the adoption of the state transportation improvement
program, the commission shall hold not less than one hearing in
northern California and one hearing in southern California to
reconcile any objections by any county or regional agency to the
department's program or the department's objections to any regional
program.
   (h) The commission shall incorporate projects that are included in
the regional improvement program and are to be funded with regional
improvement funds, unless the commission finds that the regional
transportation improvement program is not consistent with the
guidelines adopted by the commission or is not a cost-effective
expenditure of state funds, in which case the commission may reject
the regional transportation improvement program in its entirety.  The
finding shall be based on an objective analysis, including, but not
limited to, travel forecast, cost, and air quality.  The commission
shall hold a public hearing in the affected county or region prior to
rejecting the program, or not later than 60 days after rejecting the
program.  When a regional transportation improvement program is
rejected, the regional entity may submit a new regional
transportation improvement program for inclusion in the state
transportation improvement program.  The commission shall not reject
a regional transportation improvement program unless, not later than
60 days after the date it received the program, it provided notice to
the affected agency that specified the factual basis for its
proposed action.
   (i) A project may be funded with more than one of the program
categories listed in Section 164 of the Streets and Highways Code.
   (j) Notwithstanding any other provision of law, no local or
regional matching funds shall be required for projects that are
included in the state transportation improvement program.
   (k) The commission may include a project recommended by a regional
transportation planning agency or county transportation commission
pursuant to subdivision (c) of Section 14527, if the commission makes
a finding, based on an objective analysis, that the recommended
project is more cost-effective than a project submitted by the
department pursuant to Section 14526.
  SEC. 10.  Section 14529.01 of the Government Code is repealed.
  SEC. 11.  Section 14529.1 is added to the Government Code, to read:

   14529.1.  The commission shall establish guidelines for the
allocation of funds to an entity for a project to verify that the
entity has the resources and capabilities to implement the project in
a timely manner and may establish a process for monitoring the
progress being made and proper use of funds.  The guidelines and
process shall be kept to the minimum needed to protect state funds
and provide for a timely use of those funds.  The commission shall
request that the entity receiving funds accept an audit of funds
allocated to it by the commission if an audit is deemed necessary.
  SEC. 12.  Section 14529.2 of the Government Code is repealed.
  SEC. 13.  Section 14529.6 of the Government Code is repealed.
  SEC. 14.  Section 14529.8 is added to the Government Code, to read:

   14529.8.  (a) Funds may be allocated by the commission for each
project element during the fiscal year that is identified in the
state transportation improvement program and the funds shall be
available for expenditure during that fiscal year and the following
two fiscal years.  Any funds not allocated, or allocated but not
encumbered, during the period specified in this section, shall remain
in the account, or be returned to the account, as the case may be.
   (b) Upon a finding that an unforeseen and extraordinary
circumstance beyond the control of the responsible agency has
occurred that justifies an extension, the commission may extend the
deadlines specified in subdivision (a).  The deadline extensions
shall not exceed the period of delay directly attributed to the
extraordinary circumstance and in no event be more than 20 months.
The commission shall not grant more than one extension.
  SEC. 15.  Section 14529.12 is added to the Government Code, to
read:
   14529.12.  (a) The department and the regional planning agencies
shall consult and seek consensus on state highway projects to be
proposed for inclusion in the state transportation improvement
program under Sections 14526 and 14527.
   (b) Agreements between the state and transportation planning
agencies or county transportation commissions relating to program
approvals or federal or state fund transfers and the expenditure of
funds pursuant to those agreements shall comply with all applicable
federal and state laws and regulations and be subject to the
administrative operating procedures set forth in Federal Office of
Management and Budget Circulars A-87, A-102, and A-128, but not to
any other state agency procedures or requirements.
  SEC. 16.  Section 14529.15 is added to the Government Code, to
read:
   14529.15.  (a) The commission shall make a report to the
Legislature on or before February 1, 1999, and on or before February
1, 2001, assessing the relative success of the provisions of Senate
Bill 45, as enacted during the 1997-98 Regular Session, in achieving
the Legislature's intent for reform of the state transportation
improvement program, and assessing program delivery, expenditure of
funds at both regional and statewide levels, and program performance.

   (b) The Legislature intends that the 1998 State Transportation
Improvement Program conform with the requirements of Senate Bill 45,
as enacted during the 1997-98 Regular Session, to the maximum degree
feasible, taking into account the limited time allowed between
enactment of that bill and adoption of that program.  The commission
shall comply fully with all procedures and requirements of Senate
Bill 45, as enacted during the 1997-98 Regular Session, in the
preparation and adoption of the subsequent state transportation
improvement programs.
   (c) The 1998 State Transportation Improvement Program shall cover
a period of six years as a transition into a four-year programming
period.
  SEC. 17.  Section 14530.1 of the Government Code is amended to
read:
   14530.1.  (a) The department, in cooperation with the commission,
transportation planning agencies, and county transportation
commissions and local governments, shall develop guidelines for the
development of the state transportation improvement program and the
incorporation of projects into the state transportation improvement
program.
   (b) The guidelines shall include, but not be limited to, all of
the following:
   (1) Standards for project deliverability.
   (2) Standards for identifying projects and project components.
   (3) Standards for cost estimating.
   (4) Programming methods for increases and schedule changes.
   (5) Objective criteria for measuring system performance and
cost-effectiveness of candidate projects.
   (c) The guidelines shall be submitted to the commission by
September 15, 1998.  After conducting at least one hearing in
northern California and one in southern California, the commission
shall adopt the guidelines by  December 31, 1998.
   (d) The guidelines shall be the complete and full statement of the
policy, standards, and criteria that the commission intends to use
in selecting projects to be included in the state transportation
improvement program.
   (e) The commission may amend the adopted guidelines after
conducting at least one public hearing.  The commission shall make a
reasonable effort to adopt the amended guidelines prior to its
adoption of the fund estimate pursuant to Section 14525.  In no event
shall the adopted guidelines be amended, or otherwise revised,
modified, or altered during the period commencing 30 days after the
adoption of the fund estimate pursuant to Section 14525 and before
the adoption of the state transportation improvement program pursuant
to Section 14529.
  SEC. 18.  Section 14530.5 of the Government Code is repealed.
  SEC. 19.  Section 14531 of the Government Code is amended to read:

   14531.  (a) The commission may amend the state transportation
improvement program if the amendment meets both of the following
conditions:
   (1) The request for the amendment is made by the entity that
submitted the project or projects that are in the program and are to
be changed by the amendment.
   (2) The total amount programmed in each county for regional
improvements does not exceed the county's share prior to the
amendment, or the total amount programmed in each county is treated
as an adjustment to the share pursuant to Section 188.10 of the
Streets and Highways Code.
   (b) Public notice of the proposed amendments to the program or the
plan shall be made at least 30 days before the commission takes
formal action on the proposed amendments.  The notice shall include
the text and complete description of the proposed amendments.
  SEC. 20.  Section 14536 of the Government Code is amended to read:

   14536.  (a) The annual report shall include an explanation and
summary of major policies and decisions adopted by the commission
during the previously completed state and federal fiscal year, with
an explanation of any changes in policy associated with the
performance of its duties and responsibilities over the past year.
   (b) The annual report may also include a discussion of any
significant upcoming transportation issues anticipated to be of
concern to the public and the Legislature.
  SEC. 21.  Section 14555 of the Government Code is repealed.
  SEC. 22.  Section 65071 of the Government Code is repealed.
  SEC. 23.  Section 65080 of the Government Code is repealed.
  SEC. 24.  Section 65080 is added to the Government Code, to read:
   65080.  (a) Each transportation planning agency designated under
Section 29532 or 29532.1 shall prepare and adopt a regional
transportation plan directed at achieving a coordinated and balanced
regional transportation system, including, but not limited to, mass
transportation, highway, railroad, maritime, bicycle, pedestrian,
goods movement, and aviation facilities and services.  The plan shall
be action-oriented and pragmatic, considering both the short-term
and long-term future, and shall present clear, concise policy
guidance to local and state officials.  The regional transportation
plan shall consider factors specified in Section 134 of Title 23 of
the United States Code.  Each transportation planning agency shall
consider and incorporate, as appropriate, the transportation plans of
cities, counties, districts, private organizations, and state and
federal agencies.
   (b) The regional transportation plan shall include all of the
following:
   (1) A policy element that describes the transportation issues in
the region, identifies and quantifies regional needs, and describes
the desired short-range and long-range transportation goals, and
pragmatic objective and policy statements.  The objective and policy
statements shall be consistent with the funding estimates of the
financial element.
   (2) An action element that describes the programs and actions
necessary to implement the plan and assigns implementation
responsibilities.  The action element may describe all projects
proposed for development during the
          20-year life of the plan.
   The action element shall consider congestion management
programming activities carried out within the region.
   (3) A financial element that summarizes the cost of plan
implementation constrained by a realistic projection of available
revenues.  The financial element shall also contain recommendations
for allocation of funds.   A county transportation commission created
pursuant to Section 130000 of the Public Utilities Code shall be
responsible for recommending projects to be funded with regional
improvement funds, if the project is consistent with the regional
transportation plan.  The first four years of the financial element
shall be based on the four-year estimate of funds developed pursuant
to Section 14524.  The financial element may recommend the
development of specified new sources of revenue, consistent with the
policy element and action element.
   (c) Each transportation planning agency shall adopt and submit,
biennially, an updated regional transportation plan to the California
Transportation Commission and the Department of Transportation.  The
plan shall be consistent with federal planning and programming
requirements.  A transportation planning agency that does not contain
an urbanized area may at its option adopt and submit a regional
transportation plan once every four years beginning with December 1,
1997.  Prior to adoption of the regional transportation plan, a
public hearing shall be held, after the giving of notice of the
hearing by publication in the affected county or counties pursuant to
Section 6061.
  SEC. 25.  Section 65081 of the Government Code is repealed.
  SEC. 26.  Section 65081.1 of the Government Code is amended to
read:
   65081.1.  (a) After consultation with other regional and local
transportation agencies, each transportation planning agency whose
planning area includes a primary air carrier airport shall, in
conjunction with its preparation of an updated regional
transportation plan, include an airport ground access improvement
program.
   (b) The program shall address the development and extension of
mass transit systems, including passenger rail service, major
arterial and highway widening and extension projects, and any other
ground access improvement projects the planning agency deems
appropriate.
   (c) Highest consideration shall be given to mass transit for
airport access improvement projects in the program.
   (d) If federal funds are not available to a transportation
planning agency for the costs of preparing or updating an airport
ground access improvement program, the agency may charge the
operators of primary air carrier airports within its planning area
for the direct costs of preparing and updating the program.  An
airport operator against whom charges are imposed pursuant to this
subdivision shall pay the amount of those charges to the
transportation planning agency.
  SEC. 27.  Section 65082 of the Government Code is amended to read:

   65082.  (a) A four-year regional transportation improvement
program shall be prepared, adopted, and submitted to the California
Transportation Commission on or before January 5, 1998, and December
15 of each odd-numbered year thereafter, updated every two years,
pursuant to Sections 65080 and 65080.5 and the guidelines adopted
pursuant to Section 14530.1, to include regional transportation
improvement projects and programs proposed to be funded, in whole or
in part, in the state transportation improvement program.
   Major projects shall include current costs updated as of November
1 of the year of submittal and escalated to the appropriate year, and
be listed by relative priority, taking into account need, delivery
milestone dates, as defined in Section 14525.5, and the availability
of funding.
   (b) Except for those counties that do not prepare a congestion
management program pursuant to Section 65088.3, congestion management
programs adopted pursuant to Section 65089 shall be incorporated
into the regional transportation improvement program submitted to the
commission by December 15 of each odd-numbered year.
   (c) Local projects not included in a congestion management program
shall not be included in the regional transportation improvement
program.  Projects and programs adopted pursuant to subdivision (a)
shall be consistent with the capital improvement program adopted
pursuant to paragraph (5) of subdivision (b) of Section 65089, and
the guidelines adopted pursuant to Section 14530.1.
   (d) Other projects may be included in the regional transportation
improvement program if listed separately.
   (e) Unless a county not containing urbanized areas of over 50,000
population notifies the Department of Transportation by July 1 that
it intends to prepare a regional transportation improvement program
for that county, the department shall, in consultation with the
affected local agencies, prepare the program for all counties for
which it prepares a regional transportation plan.
   (f) The requirements for incorporating a congestion management
program into a regional choice program specified in this section do
not apply in those counties that do not prepare a congestion
management program in accordance with Section 65088.3.
  SEC. 28.  Section 65083 of the Government Code is amended to read:

   65083.  As part of implementation of the demonstration program
established pursuant to Section 14045 of the Government Code, the
regional transportation planning agency preparing the four-year
regional transportation improvement program pursuant to Section 65082
shall consider those exclusive mass transit guideway projects where
the applicant and the local entity responsible for land use decisions
have entered into a binding agreement to promote high density
residential development within one-half mile of a mass transit
guideway station.  Any project selected by the agency which is
located in a demonstration site shall be considered for inclusion in
the regional transportation improvement program.  This section shall
not preclude the agency from applying the criteria for making awards
which may be required or permitted pursuant to other provisions of
law.
  SEC. 29.  Section 65086 of the Government Code is amended to read:

   65086.  The Department of Transportation, in consultation with
transportation planning agencies, county transportation commissions,
counties, and cities, shall carry out long-term state highway system
planning to identify future highway improvements.
  SEC. 30.  Section 65086.4 of the Government Code is repealed.
  SEC. 31.  Section 65086.4 is added to the Government Code, to read:

   65086.4.  Projects on the state highway system shall comply with
applicable state and federal standards to ensure systemwide
consistency with operational, safety, and maintenance needs.  The
department may approve exceptions to this requirement that it
determines to be appropriate.
  SEC. 32.  Section 99310 of the Public Utilities Code is amended to
read:
   99310.  (a) The Transportation Planning and Development Account in
the State Transportation Fund, hereafter referred to as the "account"
in this article, is hereby continued in existence as the Public
Transportation Account in the fund.
   (b) Any reference in any law or regulation to the Transportation
Planning and Development Account in the State Transportation Fund is
a reference to the Public Transportation Account.
  SEC. 33.  Section 99312 of the Public Utilities Code is amended to
read:
   99312.  From the funds transferred to the account pursuant to
Section 7102 of the Revenue and Taxation Code, the Legislature shall
appropriate funds for the following purposes:
   (a) To the department, 50 percent for purposes of Section 99315.
   (b) To the Controller, 25 percent for allocation to transportation
planning agencies, county transportation commissions, and the San
Diego Metropolitan Transit Development Board pursuant to Section
99314.
   (c) To the Controller, 25 percent for allocation to transportation
agencies, county transportation commissions, and the San Diego
Metropolitan Transit Development Board for purposes of Section 99313.

  SEC. 34.  Section 99315 of the Public Utilities Code is amended to
read:
   99315.  Funds made available pursuant to subdivision (a) of
Section 99312, shall be available for all of the following purposes:

   (a) Bus and passenger rail services pursuant to Sections 14035,
14035.5, and 14038 of the Government Code.
   (b) Funding of public transit capital improvement projects in the
state transportation improvement program, pursuant to Section 14529
of the Government Code.
   (c) To the department for its planning activities not payable from
the State Highway Account in the State Transportation Fund, its mass
transportation responsibilities, and its assistance in regional
transportation planning.
   (d) To the director for allocation to the Institute of
Transportation Studies of the University of California for training
and research in public transportation systems engineering and
management and coordination with other transportation modes.
   (e) To the commission for its activities not payable from the
State Highway Account.
   (f) To the Public Utilities Commission for its passenger rail
safety responsibilities specified in statute on commuter rail,
intercity rail, and urban rail transit lines.
  SEC. 35.  Section 99315.5 of the Public Utilities Code is repealed.

  SEC. 36.  Section 99315.6 of the Public Utilities Code is repealed.

  SEC. 37.  Section 99318 of the Public Utilities Code is repealed.

  SEC. 38.  Section 99318.2 of the Public Utilities Code is repealed.

  SEC. 39.  Section 163 of the Streets and Highways Code is repealed.

  SEC. 40.  Section 163 is added to the Streets and Highways Code, to
read:
   163.  The Legislature, through the enactment of this section,
intends to establish a policy for the use of all transportation funds
that are available to the state, including the State Highway
Account, the Public Transportation Account, and federal funds.  The
department and the commission shall prepare fund estimates pursuant
to Sections 14524 and 14525 of the Government Code based on the
following:
   (a) Annual expenditures for the administration of the department
shall be the same as the most recent Budget Act, adjusted for
inflation.
   (b) Annual expenditures for the maintenance and operation of the
state highway system shall be the same as the most recent Budget Act,
adjusted for inflation and inventory.
   (c) Annual expenditure for the rehabilitation of the state highway
system shall be the same as the most recent Budget Act, or, if a
long-range rehabilitation plan has been enacted pursuant to Section
164.6, it shall be based on planned expenditures in a long-range
rehabilitation plan prepared by the department pursuant to Section
164.6.
   (d) Annual expenditures for local assistance shall be the amount
required to fund local assistance programs required by state or
federal law or regulations, including, but not limited to, railroad
grade crossing maintenance, bicycle lane account, congestion
mitigation and air quality, regional surface transportation programs,
local highway bridge replacement and rehabilitation, local seismic
retrofit, local hazard elimination and safety, local federal
demonstration projects, and local emergency relief.
   (e) After deducting expenditures for administration, operation,
maintenance, local assistance, safety, and rehabilitation pursuant to
subdivisions (a), (b), (c), and (d), and for expenditures pursuant
to Section 164.56, the remaining funds shall be available for capital
improvement projects to be programmed in the state transportation
improvement program.
  SEC. 41.  Section 164 of the Streets and Highways Code is repealed.

  SEC. 42.  Section 164 is added to the Streets and Highways Code, to
read:
   164.  (a) Funds made available for transportation capital
improvement projects under subdivision (e) of Section 163 shall be
programmed and expended for the following program categories:
   (1) Twenty-five percent for interregional improvements.
   (2) Seventy-five percent for regional improvements.
   (b) Sixty percent of the funds available for interregional
improvements under paragraph (1) of subdivision (a) shall be
programmed and expended for improvements to state highways that are
specified in Sections 164.10 to 164.20, inclusive, and that are
outside the boundaries of an urbanized area with a population of more
than 50,000, and for intercity rail improvements.
   (c) Not less than 15 percent of the amount of funds programmed
under subdivision (b) shall be programmed for intercity rail
improvement projects, including separation of grade projects.
   (d) Funds made available under paragraph (1) of subdivision (a)
shall be used for transportation improvement projects that are needed
to facilitate interregional movement of people and goods.  The
projects may include state highway, intercity passenger rail, mass
transit guideway, or grade separation projects.
   (e) Funds made available under paragraph (2) of subdivision (a)
shall be used for transportation improvement projects that are needed
to improve transportation within the region.  The projects may
include, but shall not be limited to, improving state highways, local
roads, public transit, intercity rail, pedestrian, and bicycle
facilities, and grade separation, transportation system management,
transportation demand management, soundwall projects, intermodal
facilities, and safety.
  SEC. 43.  Section 164.2 of the Streets and Highways Code is
repealed.
  SEC. 44.  Section 164.3 of the Streets and Highways Code is amended
to read:
   164.3.  The interregional road system shall include, and shall be
limited to, those routes that are specified in Sections 164.10 to
164.20, inclusive.
  SEC. 45.  Section 164.4 of the Streets and Highways Code is
repealed.
  SEC. 46.  Section 164.6 is added to the Streets and Highways Code,
to read:
   164.6.  (a) The department shall prepare a 10-year state
rehabilitation plan for the rehabilitation and reconstruction, or the
combination thereof, of all state highways and bridges owned by the
state.  The plan shall identify all rehabilitation needs for the
10-year period beginning on July 1, 1998, and ending on June 30,
2008, and shall include a schedule of improvements to complete all
needed rehabilitation not later than June 30, 2008.  The plan shall
be updated every two years beginning in 2000.  The plan shall include
specific milestones and quantifiable accomplishments, such as miles
of highways to be repaved and number of bridges to be retrofitted.
The plan shall contain strategies to control cost and improve the
efficiency of the program, and include a cost estimate for at least
the first four years of the program.
   (b) The plan shall be submitted to the commission for review and
comments and shall be transmitted to the Governor and the Legislature
not later than May 1, 1998.
   (c) The plan shall be the basis for the department's budget
request and for the adoption of fund estimates pursuant to Section
163.
  SEC. 47.  Section 164.35 of the Streets and Highways Code is
repealed.
  SEC. 48.  Section 164.50 of the Streets and Highways Code is
repealed.
  SEC. 49.  Section 164.51 of the Streets and Highways Code is
repealed.
  SEC. 50.  Section 164.52 of the Streets and Highways Code is
repealed.
  SEC. 51.  Section 164.55 of the Streets and Highways Code is
repealed.
  SEC. 52.  Section 164.57 of the Streets and Highways Code is
repealed.
  SEC. 53.  Section 167 of the Streets and Highways Code is amended
to read:
   167.  (a) Funds in the State Highway Account in the State
Transportation Fund shall be programmed, budgeted subject to Section
163, and expended to maximize the use of federal funds and shall be
based on the following sequence of priorities:
   (1) Operation, maintenance, and rehabilitation of the state
highway system.
   (2) Safety improvements where physical changes, other than adding
additional lanes, would reduce fatalities and the number and severity
of injuries.
   (3) Transportation capital improvements that expand capacity or
reduce congestion, or do both.
   (4) Environmental enhancement and mitigation programs.
   (b) With respect to the funds in the State Highway Account, in the
Public Transportation Account, and in the Passenger Rail Bond Fund,
the proposed budget shall be organized on a program basis.  The
proposed budget shall list the proposed expenditures for the
transportation program under the following program elements:
   (1) Administration.
   (2) Program development.
   (3) Maintenance.
   (4) State highway operation and protection.
   (5) Local assistance.
   (6) Interregional improvements.
   (7) Regional  improvements.
   (8) Environmental enhancement and mitigation programs.
   (c) State operations expenditure amounts of the department for
interregional and regional transportation improvement projects shall
be listed as required by subdivision (b) of Section 14529 of the
Government Code, but those amounts other than those for the
acquisition of rights-of-way and construction shall not be subject to
allocation by the commission.
   (d) To align the annual budget with the adopted state
transportation improvement program, the department may submit to the
Department of Finance revised capital outlay support and capital
outlay budget estimates as part of its May revision process.
   (e) The budget shall not include specific appropriations for
specific transportation improvement projects, and the Legislature
shall not enact legislation containing specific individual
transportation projects.
   (f) The basis for defining major and minor capital outlay projects
shall be established by the commission.
   (g) The Legislative Analyst shall prepare an analysis of the
proposed expenditures for each program element as a part of the
budget analysis.
  SEC. 54.  Section 168 of the Streets and Highways Code is repealed.

  SEC. 55.  Section 182.4 of the Streets and Highways Code is
repealed.
  SEC. 56.  Section 182.5 of the Streets and Highways Code is
repealed.
  SEC. 57.  Section 182.5 is added to the Streets and Highways Code,
to read:
   182.5.  (a) It is the intent of the Legislature that the
transition to the new programs and procedures established in the bill
enacting this section shall be fair and equitable and minimize
disruptions in the delivery of projects.  With specific reference to
the transition from county minimums to county shares for regional
improvement, no project should be counted twice, no project that
would be counted under either the old or new procedures should escape
being counted in the transition, shares should be sufficient to fund
projects programmed in the 1996 State Transportation Improvement
Program for the same period, no incentive or reward should be
provided for delaying a project, and no incentive or reward should be
provided for allocating funds to a project earlier than the year in
which the funds are needed for the project.
   (b) At the end of the fiscal year ending June 30, 1998, the county
minimums and county minimum deficits shall be recalculated under the
law as it existed prior to the enactment of the bill adding this
section.
   (c) Notwithstanding Section 164, there shall be set aside
sufficient funding for every project that is included in the 1996
State Transportation Improvement Program.  This funding shall be set
aside in the fund estimate prior to and in addition to the
distribution of funding between programs pursuant to Section 164.
   (d) The amount of the cumulative county minimum deficit calculated
for any county pursuant to subdivision (b) shall be carried forward
as a county share for the 1998 State Transportation Improvement
Program, prior to and in addition to the computation of county shares
pursuant to subdivision (a) of Section 188.8.
   (e) The commission shall not allocate funds for any project unless
the commission has programmed the state transportation improvement
program in a manner that complies with the requirements of Sections
188, 188.8, and 188.10.
   (f) Notwithstanding subdivision (a), for a county within the
region defined by Section 66502 of the Government Code where funds
were traded in the 1996 State Transportation Improvement Program to
another county in that region, the county share for that county for
the 1998 State Transportation Improvement Program shall be increased
by the amount of the trade in the 1996 State Transportation
Improvement Program, as if the share were a county minimum deficit
under subdivision (d).
   (g) In adopting the 1998 State Transportation Improvement Program,
the commission shall, at a minimum, fund all intercity rail projects
that are included in the adopted 1996 State Transportation
Improvement Program.  The amount of funds programmed for each project
shall not be less than the amount in the 1996 State Transportation
Improvement Program.
   (h) The commission, after consulting with the department and the
regional planning agencies, shall adopt interim guidelines and
procedures relative to fund estimates and project selection in a
manner that the first state transportation improvement program,
pursuant to the provisions of the act adding this section, is adopted
not later than June 1, 1998.
  SEC. 58.  Section 182.8 of the Streets and Highways Code is
repealed.
  SEC. 59.  Section 188 of the Streets and Highways Code is amended
to read:
   188.  (a) All federal and state funds to be allocated by the
commission, or expended by the department, for transportation
improvements under Section 164, except for purposes of subdivisions
(b) and (c) of that section, shall be programmed during the period
commencing on July 1, 1997, and ending on June 30, 2004, and for each
four-year period thereafter, 40 percent in County Group No.  1 and
60 percent in County Group No. 2.
   (b) This section shall be known and may be cited as the
Barnes-Mills-Walsh formula.
  SEC. 60.  Section 188.8 of the Streets and Highways Code is amended
to read:
   188.8.  (a) From the funds programmed pursuant to Section 188 for
regional improvement projects, the commission shall approve programs
and program amendments, so that funding is distributed to each county
of County Group No. 1 and in each county of County Group No. 2
during the county share periods commencing July 1, 1997, and ending
June 30, 2004, and each period of four years thereafter.  The amount
shall be computed as follows:
   (1) The commission shall compute, for the county share periods all
of the money to be expended for regional improvement projects in
County Groups Nos.  1 and 2, respectively, as provided in Section
188.
   (2) From the amount computed for County Group No. 1 in paragraph
(1) for the county share periods the commission shall determine the
amount of programming for each county in the group based on a formula
which is based 75 percent on the population of the county to the
total population of County Group No. 1 and 25 percent on state
highway miles in the county to the total state highway miles in
County Group No. 1.
   (3) From the amount computed for County Group No. 2 in paragraph
(1) for the county share periods the commission shall determine the
amount of programming for each county in the group based on a formula
which is based 75 percent on the population of the county to the
total population of County Group No. 2 and 25 percent on state
highway miles in the county to the total state highway miles in
County Group No. 2.
   (b) Notwithstanding subdivision (a), that portion of the county
population and state highway mileage in El Dorado and Placer Counties
that is included within the jurisdiction of the Tahoe Regional
Planning Agency shall be counted separately toward the area under the
jurisdiction of the Tahoe Regional Transportation Agency and shall
not be included in El Dorado and Placer Counties.  The commission
shall approve programs, program amendments, and fund reservations for
the area under the jurisdiction of the Tahoe Regional Transportation
Agency which shall be calculated using the formula described in
paragraph (2) of subdivision (a).
   (c) A transportation planning agency designated pursuant to
Section 29532 of the Government Code, or a county transportation
commission created by Division 12 (commencing with Section 130000) of
the Public Utilities Code, may adopt a resolution to pool its county
share programming with any county or counties adopting similar
resolutions to consolidate its county shares for two consecutive
county share periods into a single share covering both periods.  A
multicounty transportation planning agency with a population of less
than three million may also adopt a resolution to pool the share of
any county or counties within its region.  The resolution shall
provide for pooling the county  share programming in any of the
pooling counties for the new single  share period and shall be
submitted to the commission not later than May 1 immediately
preceding the commencement of the county share period.
   (d) For the purposes of this section, funds programmed shall
include the following costs pursuant to subdivision (b) of Section
14529 of the Government Code:
   (1) The amounts programmed or budgeted for both components of
project development in the original programmed year.
   (2) The amount programmed for right-of-way in the year programmed
in the most recent state transportation improvement program.  If the
final estimate is greater than 120 percent of the amount originally
programmed, the amount shall be adjusted for final expenditure
estimates at the time of right-of-way certification.
   (3) The engineer's final estimate of project costs, including
construction engineering, presented to the commission for approval
pursuant to Section 14533 of the Government Code in the year
programmed in the most recent state transportation improvement
program.
   (4) Project costs shown in the program, as amended, where project
allocations have not yet been approved by the commission, escalated
to the date of scheduled project delivery.
   (e) Project costs shall not be changed to reflect any of the
following:
   (1) Differences that are within 20 percent of the amount
programmed for actual project development cost.
   (2) Actual right-of-way purchase costs.
   (3) Construction contract award amounts.
   (4) Changes in construction expenditures.
   (f) For the purposes of this section, the population in each
county is that determined by the last preceding federal census, or a
subsequent census                                           validated
by the Population Research Unit of the Department of Finance, at the
beginning of each county share period.
   (g) For the purposes of this section, "state highway miles" means
the miles of state highways open to vehicular traffic at the
beginning of each county share period.
   (h) It is the intent of the Legislature that there is to be
flexibility in programming under this section and Section 188 so
that, while ensuring that each county will receive an equitable share
of state transportation improvement program funding, the types of
projects selected and the programs from which they are funded may
vary from county to county.
   (i) Commencing with the four-year period commencing on July 1,
2004, individual county share shortfalls and surpluses at the end of
each four-year period, if any, shall be carried forward and credited
or debited to the following four years.
   (j) The commission, with the consent of the department, may
consider programming projects in the state transportation improvement
program in a region with a population of not more than 1,000,000 at
a level higher or lower than a county share, when the regional agency
either asks to reserve part or all of its share until a future
programming year, to build up a larger share for a higher cost
project, or asks to advance an amount of the share, in an amount not
to exceed 200 percent of its current share, for a larger project, to
be deducted from shares for future programming years.  After
consulting with the department, the commission may adjust the level
of programming in the regional program in the affected region against
the level of interregional programming in the improvement program to
accomplish the reservation or advancement, for the current state
transportation improvement program.  The commission shall keep track
of any resulting shortfalls or surpluses in county shares.
   (k) Notwithstanding subdivision (a), in a region defined by
Section 66502 of the Government Code, the transportation planning
agency may adopt a resolution to pool the county share of any county
or counties within the region, provided that each county shall
receive no less than 85 percent and not more than 115 percent of its
county share for a single county share period and 100 percent of its
county share over two consecutive county share periods.  The
resolution shall be submitted to the commission not later than May 1,
immediately preceding the commencement of the county share period.
   (l) Federal funds used for federal demonstration projects that use
federal funds that would otherwise be available to the state shall
be subtracted from the county share of the county where the project
is located.
  SEC. 61.  Section 188.9 of the Streets and Highways Code is
repealed.
  SEC. 62.  Section 188.10 is added to the Streets and Highways Code,
to read:
   188.10.  (a) The commission, with assistance from the department
and regional agencies, shall maintain a long-term balance of shares,
shortfalls, and surpluses for regional improvement programs.
   (b) The balance shall include all of the following:
   (1) Shares from the fund estimate for each state transportation
improvement program pursuant to Section 14525 of the Government Code.

   (2) Amounts programmed in each state transportation improvement
program pursuant to Section 14529 of the Government Code.
   (3) Surpluses or shortfalls due to reservations or advancements
pursuant to subdivision (i) of Section 188.8.
   (4) Amounts deducted or added because of changes in project
development costs or a cost increase or savings in the final
engineering estimate or the final right-of-way certification estimate
at the time of allocation for construction, pursuant to subdivisions
(d) and (e) of Section 188.8.
   (5) Any supplemental project allocations during or following
construction.
   (6) Amounts deducted or added because of amendments to the state
transportation improvement program that add, delete, or change the
scope and cost of regional improvement projects, pursuant to Section
14531 of the Government Code.
   (c) The balance through the preceding fiscal year shall be made
available for review by all regional agencies at the time of each
fund estimate, and by not later than August 15 of each year.
   (d) The commission, through the fund estimate, shall restore for
the next state transportation improvement program the interregional
improvement program level specified in subdivision (a) of Section
164.
  SEC. 63.  Section 199 of the Streets and Highways Code is repealed.

  SEC. 64.  Section 199.1 of the Streets and Highways Code is
repealed.
  SEC. 65.  Section 199.2 of the Streets and Highways Code is
repealed.
  SEC. 66.  Section 199.3 of the Streets and Highways Code is
repealed.
  SEC. 67.  Section 199.4 of the Streets and Highways Code is
repealed.
  SEC. 68.  Section 199.6 of the Streets and Highways Code is
repealed.
  SEC. 69.  Section 199.7 of the Streets and Highways Code is
repealed.
  SEC. 70.  Section 199.8 of the Streets and Highways Code is
repealed.
  SEC. 71.  Section 199.9 of the Streets and Highways Code is
repealed.
  SEC. 72.  Section 199.10 of the Streets and Highways Code is
repealed.
  SEC. 73.  Section 199.11 of the Streets and Highways Code is
repealed.
  SEC. 74.  Section 2600 of the Streets and Highways Code is
repealed.
  SEC. 75.  Section 2601 of the Streets and Highways Code is amended
to read:
   2601.  (a) For purposes of this chapter:
   (1) "Applicant" means a city, a county, or any local entity that
is authorized to impose taxes or fees and that has responsibility for
constructing highways or exclusive public mass transit guideways.
   (2) "Eligible project" means a local road, a state highway, or an
exclusive public mass transit guideway improvement project that meets
all of the following conditions:
   (A) Upon completion of the project, it would constitute a usable
segment that would increase the capacity of the highway or guideway
or would extend service to new areas, or, in the case of a local road
rehabilitation project, it would extend the useful life of the
roadway by at least 10 years.
   (B) The applicant has committed, or is capable of committing, to
pay the local share from its local fund to complete the project.
   (C) The project is not receiving any other state funds.
   (D) The applicant has completed, or is capable of completing, all
project development work so that the contracts for the project can be
awarded within two years of the date that the project was submitted
to the department pursuant to subdivision (a) of Section 2602.
   (E) Improvements to state highways are consistent with state and
federal standards, are designed to minimize long-term maintenance
costs, and are approved by the department.
   (3) "Local fund" means revenues from any locally imposed tax or
fee.
   (4) "Local share" means the total cost of completing the project,
less any state matching funds applied for through this partnership
program and any federal funds.
   (5) "State share" means the amount of state funds applied for and
in no case shall it exceed local share.  The state share is not
subject to the requirements of Sections 188 and 188.8.
   (b) This section shall remain in effect only until July 1, 1999,
and as of that date is repealed, unless a later enacted statute,
which is enacted on or before July 1, 1999, deletes or extends that
date.
  SEC. 76.  Section 2602 of the Streets and Highways Code is amended
to read:
   2602.  (a) The state-local transportation partnership program
shall be implemented by the department and the applicants under the
following procedures:
   (1) Applicants shall submit applications for eligible projects to
the department not later than June 30.
   (2) The department shall review the applications for consistency
with the requirements of this chapter and shall compile a preliminary
list of all eligible projects not later than September 30 of the
year in which the application was submitted.
   (3) (A) If the total state share for eligible projects exceeds the
amount specified in the Governor's proposed budget, the department
shall compute the preliminary pro rata share of state funds to be
available so that each eligible project would receive the same ratio
of state share to local share.  Not later than April 1 of the
following year, the department shall advise the applicants of the
preliminary pro rata share of state funds to be available.
   (B) Not later than June 15 of the following year, each applicant
shall inform the department whether or not it can proceed with the
project with the lower state share and meet the project development
completion requirements specified in subparagraph (D) of paragraph
(2) of subdivision (a) of Section 2601.
   (C) Upon the enactment of the annual Budget Act, the department
shall compile a new list of eligible projects consisting of those
projects that were included in the original list that the applicant
has indicated it can proceed with a lower state share and for which
the applicant has indicated it can still meet the delivery
requirements pursuant to subparagraph (D) of paragraph (2) of
subdivision (a) of Section 2601.
   (D) Based on the amount of the appropriation contained in the
annual Budget Act, the department shall compute the final pro rata
state share so that each project on the new list would receive the
same ratio of state share to local share.
   (E) Within 30 days of the enactment of the annual Budget Act, the
department shall report to the Legislature on the projects being
funded through this program and the ratio of state share to local
share.
   (4) The Legislature intends to appropriate two hundred fifty
million dollars ($250,000,000) by June 30, 1990, two hundred fifty
million dollars ($250,000,000) by June 30, 1991, and two hundred
million dollars ($200,000,000) by June 30 of each year thereafter for
this program.
   (5) Construction contracts for projects on the eligibility list
established pursuant to paragraph (2) or (3) shall be let not later
than June 30 of the fiscal year for which funds are appropriated
pursuant to paragraph (4).
   (6) Beginning with projects funded through appropriations made by
the Budget Act of 1992, applications shall not be accepted for any
project within the boundaries of a project subject to, but for which
contracts were not let in accordance with,  paragraph (5), for a
period of three fiscal years following the fiscal year in which the
applicant's notification of intent to proceed under subparagraph (B)
of paragraph (3) was submitted.
   (7) The funds appropriated shall be expended not later than June
30 of the fourth year following the appropriation.
   (8) Notwithstanding  paragraphs (5) and (6), any project in Orange
County for which a construction contract would otherwise have been
required to be let by June 30, 1995, may be let until, but not later
than, June 30, 1996.
   (9) Notwithstanding  paragraphs (5) and (6), any project in Santa
Barbara County for which a construction contract would otherwise have
been required to be let by June 30, 1995, may be let until, but not
later than, December 31, 1996.
   (10) The Lakeville Highway widening project (State Route 116 from
Caulfield Lane to the Petaluma city limit), and the Mare Island
Way/Wilson Avenue Cycle 6 improvement project in the City of Vallejo,
for which a construction contract would otherwise have been required
to be let by June 30, 1996, may be let until, but not later than,
June 30, 1997.
   (11) Notwithstanding paragraphs (5) and (6), any project in
Siskiyou County for which a construction contract would otherwise
have been required to be let by June 30, 1997, may be let until, but
not later than, June 30, 1999.
   (b) This section shall remain in effect only until July 1, 1999,
and as of that date is repealed, unless a later enacted statute,
which is enacted on or before July 1, 1999, deletes or extends that
date.
  SEC. 77.  Section 2602.1 of the Streets and Highways Code is
amended to read:
   2602.1.  (a) Notwithstanding Section 2602, for the 1990-91 fiscal
year only, funding for the state-local transportation partnership
program shall be implemented as follows:
   (1) Any project which was included in the list of eligible
projects compiled by the department as of April 1, 1990, may be
withdrawn by the applicant for funding during the 1990-91 fiscal year
and resubmitted not later than July 31, 1990, for funding in the
1991-92 fiscal year.
   (2) The department shall recompute the pro rata share of state
funding for projects that remain on the list on August 1, 1990, based
upon the amount appropriated for the program for the 1990-91 fiscal
year, so that each eligible project will receive the same ratio of
state share to local share.
   (3) Not later than September 1, 1990, the department shall notify
the Legislature of the ratio of state share to local share computed
pursuant to paragraph (2).
   (4) With respect to any project which was withdrawn and
resubmitted by July 31, 1990, pursuant to paragraph (1), the
department shall, as nearly as possible, administer and implement the
program for the 1990-91 fiscal year in accordance with the procedure
prescribed by this section, as if this section had been in effect on
that date.
   (b) This section shall remain in effect only until January 1,
1999, and as of that date is repealed, unless a later enacted
statute, which is enacted on or before January 1, 1999, deletes or
extends that date.
  SEC. 78.  Section 3.5 of this bill incorporates amendments to
Section 14524 of the Government Code proposed by both this bill and
AB 87.  It shall only become operative if (1) both bills are enacted
and become effective on or before January 1, 1998, (2) each bill
amends Section 14524 of the Government Code, and (3) this bill is
enacted after AB 87, in which case Section 3 of this bill shall not
become operative.
  SEC. 79.  Section 5.5 of this bill incorporates amendments to
Section 14525 of the Government Code proposed by both this bill and
AB 87.  It shall only become operative if (1) both bills are enacted
and become effective on or before January 1, 1998, (2) each bill
amends Section 14525 of the Government Code, and (3) this bill is
enacted after AB 87, in which case Section 5 of this bill shall not
become operative.