(a) The department shall advance funds for an exclusive public mass transit guideway project to a public entity eligible for those funds when all of the following conditions exist:

(1) The commission has allocated the funds pursuant to Section 14533 of this code and in accordance with Section 99317 of the Public Utilities Code or Section 199 of the Streets and Highways Code.

(2) The financing plan and the schedule for the project have been approved by the department pursuant to Section 14085.

(3) The department and the public entity have entered into a fund transfer agreement which specifies the terms of the advance and the procedure for periodic reimbursement of actual costs incurred for the project.

(4) The public entity has demonstrated to the satisfaction of the department that the advance is required to pay current expenses on the project for which the allocation is authorized.

(5) The advance does not exceed 10 percent of the allocation authorized.

(6) The advance will not jeopardize the timely discharge of the other commitments against the account in the State Transportation Fund from which the advance is made.

(b) If, upon completion of the project, the advance of funds, together with interest on the advance of funds earned for the full period of the advance equivalent to the average rate earned by investments in the Pooled Money Investment Account during the same period, exceeds that portion of the actual reimbursable costs for which the public entity has not been reimbursed, the public entity shall repay the excess amount to the state for deposit in the account from which the advance was made.

(c) If the department encounters any substantial problems in carrying out this section, it shall promptly prepare and submit to the Legislature a report which summarizes the procedures adopted to carry out the section, identifies any problems encountered, and indicates the direct and indirect costs to the state incurred in carrying out the section.

(Amended by Stats. 1984, Ch. 117, Sec. 1.)