Article 3. Selection Of Projects of California Government Code >> Division 3. >> Title 2. >> Part 5.3. >> Chapter 4. >> Article 3.

(a) The commission may from time to time select and designate eligible projects to be funded from the proceeds of notes, if financing of the project from the proceeds of notes has been approved by the Federal Highway Administration and the regional transportation planning agency, and the project has completed environmental clearance and project design.
  (b) Notwithstanding Section 7550.5 of the Government Code, on or before April 1 of each year, the commission, in conjunction with the Treasurer's office, shall prepare an annual analysis of the bonding capacity of federal transportation funds deposited in the State Highway Account in the State Transportation Fund.

The commission, in cooperation with the department and regional transportation planning agencies, shall establish guidelines for eligibility for funding allocations under this chapter. The guidelines shall be nondiscriminatory and shall be designed to allow as many counties as possible to establish eligibility for funding allocations under this chapter, regardless of the population or geographic location of the county.

The Treasurer may not authorize the issuance of notes if the annual repayment obligations of all outstanding notes in any fiscal year would exceed 15 percent of the total amount of federal transportation funds deposited in the State Highway Account in the State Transportation Fund for any consecutive 12-month period within the preceding 24 months.

Funds allocated to a State Transportation Improvement Program project under this chapter, including cost overruns and financing costs, shall be counted against the interregional improvement program share in the case of a project in the interregional improvement program and the county share for the county in which the project is located in the case of a project in a regional improvement program.

In order to provide security for repayment of the notes, the commission shall adopt a resolution dedicating and pledging any future receipts of federal transportation funds received by the state to the payment of principal of, and interest and premium on the notes, for as long as any notes remain outstanding. That action shall constitute a pledge or receipt of those moneys as collateral within the meaning of subdivision (b) of Section 5450. The pledge shall be governed under Chapter 5.5 (commencing with Section 5450) of Division 6 of Title 1 of the Government Code. The commission shall be deemed a "public body" for purposes of Section 5451, as defined in Section 5450.

Before notes are issued under this chapter, the commission, in cooperation with the department and the Department of Finance, shall consider and determine the appropriateness of the mechanism authorized by this chapter in comparison to other funding mechanisms, including, but not limited to, pay-as-you-go, federal advance construction, federal incremental advance construction, or other funding methods authorized under federal law to achieve maximum efficiency from the state's federal allocation of transportation funds.

(a) Upon taking the actions authorized under this article, the commission may request the Treasurer to issue notes to provide funds for the eligible projects.
  (b) Notwithstanding Section 7550.5 of the Government Code, on or before April 1 of each year, the commission shall prepare and submit an annual report regarding the preceding calendar year to the Governor and the Legislature. Each report shall compile and detail the total amount of outstanding debt issued pursuant to this chapter and the projects funded by that outstanding debt.

On or before October 1 of each year, the commission shall report to the Governor, the Department of Finance, the Legislative Analyst, and the Chairs of the transportation committees in the Assembly and Senate on the amount of notes that the commission intends to issue for the subsequent fiscal year.