A project that is on the priority list may be constructed by a local agency prior to the time that it reaches a high enough priority for funding under this chapter. The project shall retain its eligibility for listing on subsequent priority lists established by the Public Utilities Commission pursuant to Section 2452 by applying the traffic, accident, and other conditions existing at the project location at the time immediately preceding the start of construction.

If the project subsequently reaches a high enough priority for funding under this chapter, funds shall be allocated and paid to the local agency in the same manner, and under the same terms and conditions, as any other project funded under this chapter on the basis of the cost of construction of the project. To be eligible for subsequent funding under this section, both of the following requirements shall be met:

(a) The work on the project shall be performed under terms and conditions established by the department.

(b) The project has received the prior approval of the California Transportation Commission.

(Added by Stats. 1984, Ch. 1354 (Sec. 1).)