(a)  Subject to the appropriation of funds for this purpose, the Transportation Agency, in consultation with the Department of Transportation, shall develop and administer contracts, grants, or other funding mechanisms to invest in port-specific high-priority projects that increase goods movement capacity on rail and roadways serving ports and at port terminals.

(b) It is the intent of the Legislature that funds appropriated for this section achieve the following goals:

(1) Improve the capacity of California ports to manage increasing volumes of freight and improve the efficiency of goods movement to, from, and through California ports.

(2) Reduce greenhouse gas emissions and freight-related air pollution.

(3) Promote transportation equity.

(4) Maintain, enhance, and modernize the multimodal freight transportation system.

(5) Grow the economic competitiveness of California’s freight sector through increased system efficiency and productivity.

(6) Reduce freight-related deaths and injuries.

(7) Improve system resilience by addressing infrastructure vulnerabilities associated with security threats, climate change, and natural disasters.

(c) Of the funds appropriated for this section, no more than 2 percent may be used for state operations and other administrative costs, with the remaining funding to be used for investments in eligible projects.

(d) Projects eligible for funding include, but are not limited to, the following:

(1) Port-specific high-priority projects.

(2) Intermodal railyard expansion and electrification.

(3) Goods movement railway corridor capacity projects.

(4) High-priority grade separations.

(5) Zero-emission goods movement demonstration projects.

(e) Funding for projects eligible pursuant to subdivision (a) shall be allocated to public agencies that administer or operate the projects as follows:

(1) Seventy percent for infrastructure projects, each supporting goods movement related to the Port of Los Angeles, the Port of Long Beach, or both.

(2) Thirty percent for other high-priority projects supporting ports and goods movement infrastructure in the rest of the state, including inland ports.

(f) Public agencies may partner with private operators of projects, such as freight railroads, to implement an eligible project.

(g) Funds awarded under this section shall not be used for the purchase of fully automated cargo handling equipment nor for infrastructure that is used to support fully automated cargo handling equipment.

(h) (1) The Transportation Agency shall develop guidelines for project selection in consultation with the ports and other stakeholders consistent with the goals listed in subdivision (b). The guidelines shall be exempt from the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code).

(2) In developing the guidelines pursuant to paragraph (1), and consistent with the goal of leveraging as much matching funding as possible as stated in subdivision (i), program guidelines may prioritize projects for which local, federal, or private match funding is available.

(i) (1) It is the intent of the Legislature that the allocation of funding described in this section be used to leverage the maximum amount of federal funding and financing available to California from federal infrastructure credit programs through the Transportation Agency and the United States Department of Transportation Emerging Projects Agreement, from the federal Infrastructure Investment and Jobs Act 2021 (Public Law 117-58), and from other subsequent federal actions.

(2) In developing the guidelines pursuant to paragraph (1) of subdivision (h), and consistent with the goal of leveraging as much matching funding as possible, the Transportation Agency may prioritize projects for which local, federal, or private match funding is available.

(j) Notwithstanding subdivision (d), allocations pursuant to this section shall comply with the requirements of paragraph (3) of subdivision (c) of Section 2192.

(k) The Transportation Agency shall, as part of the annual budget process, report to the Legislature on the implementation of this section. The report shall include, but not be limited to, the following information:

(1) The number of grants awarded, the dollar value of those awards, and the location of those awards.

(2) A description of the projects funded under this section, including the specific improvements funded and the likely impact of those projects on the port with which they are associated.

(3) Any lessons learned from the implementation of this section, including opportunities for additional investments in California’s multimodal freight transportation system.

(Added by Stats. 2022, Ch. 71, Sec. 13. (SB 198) Effective June 30, 2022.)