Cal. Gov't Code § 8879.501

(a) A regional or local agency that is a lead applicant agency for a project that may be funded pursuant to Chapter 12.49 (commencing with Section 8879.20), other than a project that may be funded pursuant to paragraph (1) of subdivision (j) of Section 8879.23, may apply to the administrative agency for a letter of no prejudice for the project or a component of the project.The administrative agency may approve the letter of no prejudice for one or more projects or project components that the administrative agency has programmed or otherwise approved for funding. The letter of no prejudice shall reference the project or component thereof and the amount of bond funding that is programmed or otherwise approved for that project or project component or, in the case of a project or project component eligible for funding under subdivision (g) of Section 8879.23, the letter may reference the amount of bond funding targeted to be received by the regional or local agency pursuant to subdivision (f) of Section 8879.72. The administrative agency may approve a letter of no prejudice regardless of whether bond funding has been previously appropriated for purposes of the project or project component.
(b) Expenditures for the costs, up to the amount set forth in the letter of no prejudice, of a project or project component for which a letter of no prejudice has been issued shall be eligible for reimbursement from the applicable bond proceeds fund or account if all of the following apply:
1. (1) The project or project component for which the letter of no prejudice was requested has commenced and the regional or local expenditures have been incurred.
2. (2) The expenditures made by the regional or local agency are eligible for reimbursement in accordance with state and federal laws and procedures, and are permitted expenditures under the applicable provisions of Chapter 12.49 (commencing with Section 8879.20). If expenditures made are determined to be ineligible, then the state has no obligation to reimburse for those expenditures.
3. (3) The regional or local agency complies with all legal requirements for the project, including the requirements of the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code).
4. (4) The expenditures were incurred after the project or project component was programmed or otherwise approved for funding by the administrative agency.
5. (5) There is in the applicable bond proceeds fund or account under Chapter 12.49 (commencing with Section 8879.20) an appropriated amount sufficient to make the reimbursement payment. Nothing in this section requires any bond proceeds fund or account to be funded at any particular time or in any particular amount.
(c) The administrative agency and the regional or local agency may enter into an agreement or agreements governing reimbursement as described in this section.
(d) The administrative agency, in consultation with regional and local agencies, may develop guidelines to implement this section.
(e) Nothing in this section modifies any requirement under Chapter 12.49 (commencing with Section 8879.23).
(f) For purposes of this section, “letter of no prejudice” means an agreement between a regional or local agency and the administrative agency that makes eligible for future reimbursement from bond proceeds the expenditure of funds under the control of the regional or local agency, subject to availability of bond funds, as provided in this section. The timing and final amount of reimbursement is dependent on the terms of the agreement and the availability of bond funds. The final amount of reimbursement may be less than the amount stated in the letter of no prejudice.