(b) When appropriated by the Legislature for grants and cooperative agreements, available funds shall be awarded in accordance with the following categories:

1. (1) Operation and maintenance.

   1. (A) Fifty percent of the funds appropriated by the Legislature pursuant to subdivision (a) of Section 5090.61 shall be expended solely for grants and cooperative agreements for the acquisition, maintenance, operation, planning, development, or conservation of authorized trails and facilities associated with the use of off-highway motor vehicles for recreation or motorized access to nonmotorized recreation.

   2. (B) Guidelines developed to implement this paragraph, pursuant to subdivision (d), shall at a minimum:

      1. (i) Give preference to applications that sustain existing authorized off-highway motor vehicle recreation opportunities.
      2. (ii) Give additional consideration to applications that improve facilities that provide motorized access to nonmotorized recreation opportunities.

   3. (C) Applications that would affect lands identified as inventoried roadless areas by the Forest Service of the United States Department of Agriculture are eligible for cooperative agreements under paragraph (1) if the application is for a project that does any of the following:

      1. (i) Realigns a forest system road or trail to prevent irreparable resource damage that arises from the design, location, use, or deterioration of a classified route and that cannot be mitigated by route maintenance.
      2. (ii) Reconstructs a national forest system road or trail to implement a route safety improvement project on a classified route determined to be hazardous on the basis of accident experience or accident potential on that route.
      3. (iii) Maintains a road or trail that is included in the National Forest System Roads and Trails on or before January 1, 2009.
   4. (D) Any unencumbered funds under this paragraph shall only be used in future grant cycles for purposes consistent with this paragraph.

2. (2) Restoration.

   1. (A) Twenty-five percent of the funds appropriated by the Legislature pursuant to subdivision (a) of Section 5090.61 shall be expended solely for grants and cooperative agreements for projects that restore or repair habitat damaged by either legal or illegal off-highway motor vehicle use.
   2. (B) The division shall develop and implement, in consultation with the Wildlife Conservation Board, a competitive grant and cooperative agreement program which shall be administered in accordance with this paragraph.
   3. (C) Funds identified in this paragraph shall be available for grants and cooperative agreements for projects that restore or repair habitat damaged by both legal and illegal off-highway motor vehicle use.

   4. (D) Eligible projects include:

      1. (i) Removal of a road or trail or restoration of an area associated with the rerouting and subsequent closure of a designated road or trail.
      2. (ii) Removal of roads or trails and the restoration of damaged habitats in any area that is not designated for motorized vehicle use.
      3. (iii) The removal of closed roads or trails, or a portion of a closed road or trail, that will help to prevent off-highway motor vehicle access to closed areas.
      4. (iv) Scientific and cultural studies regarding the impact of off-highway motor vehicle recreation not otherwise required by state or federal laws.
      5. (v) Planning to identify appropriate restoration techniques, strategies, and project implementation, including planning associated with environmental review.
      6. (vi) Restoration projects that generally improve and restore the function of natural resource systems damaged by motorized activities.
   5. (E) Eligible applicants include local, state, and federal agencies, federally or state recognized Native American tribes, educational institutions, certified community conservation corps, resource conservation districts, and other eligible nonprofit organizations.

   6. (F) Guidelines developed to implement this paragraph shall at a minimum do all of the following:

      1. (i) Give additional consideration to applications for projects that will restore areas that have experienced the most damage from motorized use or face the highest threat of significant environmental damage from motorized use.
      2. (ii) Guarantee that no grant will be used for the development or maintenance of trails for motorized use.
      3. (iii) Encourage public agencies managing lands to prepare and implement a management and enforcement plan to prevent reoccurring damage from unauthorized use.
   7. (G) Any unencumbered funds under this paragraph shall be used only in future grant cycles for purposes consistent with this paragraph.

3. (3) Law enforcement.

   1. (A) Twenty percent of the funds appropriated by the Legislature pursuant to subdivision (a) of Section 5090.61 shall be available for law enforcement grants and cooperative agreements and shall be allocated to local and federal law enforcement entities for peace officers or other personnel who have authority to issue citations or take other official law enforcement action, and related equipment. The amount of the grant or cooperative agreement shall be proportionate to the off-highway motor vehicle enforcement needs under each entity’s jurisdiction.
   2. (B) The division shall develop a method to determine the law enforcement needs for each applicant. Forty percent of law enforcement grants and cooperative agreements shall be given to local law enforcement entities, 30 percent to units of the United States Bureau of Land Management, and 30 percent to units of the United States Forest Service.

   3. (C) The division shall develop eligibility guidelines for law enforcement projects. The guidelines, at a minimum, shall require the applicant to do all of the following:

      1. (i) Specify formal and informal cooperation with other appropriate law enforcement entities, including any applicable federal entities.
      2. (ii) Establish a policy on how violations of off-highway motor vehicle laws and regulations will be enforced on federal land, if the applicant is a local law enforcement entity.
      3. (iii) Identify areas with high priority law enforcement needs because of public safety, cultural resources, and sensitive environmental habitats, including wilderness areas and areas of critical environmental concern.
      4. (iv) Explain whether the applicant is recovering a portion of law enforcement costs directly associated with privately sponsored events where sponsors have obtained a local permit.
      5. (v) Establish a public education program that includes information regarding safety programs offered in the area and how to report off-highway motor vehicle operation violations.
      6. (vi) Specify how personnel is trained and educated regarding off-highway motor vehicle safety and resource and cultural protection.
   4. (D) Notwithstanding subdivision (h), law enforcement entities that receive funds allocated pursuant to this paragraph shall be subject to a financial and performance audit at least once every five years. The audits may be conducted in a random order. As part of the audit, the department shall consider whether the law enforcement entity has spent the grant money in accordance with its application.
   5. (E) Any unencumbered funds under this paragraph shall be used only in future grant cycles for purposes consistent with this paragraph.

4. (4) Education and safety.

   1. (A) Five percent of the funds appropriated by the Legislature pursuant to subdivision (a) of Section 5090.61 shall be available for grants and cooperative agreements that either provide comprehensive education that teaches off-highway motor vehicle safety, environmental responsibility, and respect for private property, or provide safety programs associated with off-highway motor vehicle recreation.
   2. (B) Any unencumbered funds under this paragraph shall be used only in future grant cycles for purposes consistent with this paragraph.

(c) Eligible grant and cooperative agreement applicants include:

1. (1) Cities, counties, and districts that have approval to apply for grant funds, in the form of a resolution from their governing body.
2. (2) State agencies for projects under paragraph (2) of subdivision (b).
3. (3) Agencies of the United States.
4. (4) Federally and state recognized Native American tribes.
5. (5) Educational institutions, certified community conservation corps, resource conservation districts, and other eligible nonprofit organizations for eligible projects described in subdivision (f).

(d) Guidelines developed to implement this program shall at a minimum do all of the following:

1. (1) Distribute grants and cooperative agreements on a competitive basis, except for law enforcement grants allocated in accordance with paragraph (3) of subdivision (b).
2. (2) Be developed with public input, including focus groups.
3. (3) Require applications to be in accordance with local or federal plans and the strategic plan for off-highway motor vehicle recreation prepared by the division.
4. (4) Require grant applicants to comply with the California Environmental Quality Act (Division 13 (commencing with Section 21000)). Applicants for cooperative agreements shall complete environmental review procedures that are at least comparable to those of the California Environmental Quality Act (Division 13 (commencing with Section 21000)).
5. (5) Require the applicant to agree to provide matching funds or the equivalent value of services or material used, in an amount not less than 25 percent of the total project cost, except for the category of restoration, which shall not be less than 10 percent of the total project cost.
6. (6) Require the applicant, if it is a city or county, to disclose how fees collected pursuant to Section 38230 of the Vehicle Code are being used and whether the use of these fees complements the applicant’s project.
7. (7) Fund all eligible applications to the extent feasible.

(f) Grants may be awarded to educational institutions and nonprofit organizations. Eligible projects shall be limited to scientific research, natural resource conservation activities, trail and facility maintenance, restoration, and programs involving off-highway motor vehicle safety or education. If the application for grant funds involves activities on any public lands, all of the following shall apply:

1. (1) The applicant shall include a work plan for the project.
2. (2) The applicant shall provide written permission from the appropriate land manager to conduct a project, including a description of how the project fits with the land management goals of the area.
3. (3) The applicant shall provide matching funds or the equivalent value of volunteer services or material used, in an amount not less than 25 percent of the total project cost, except for the category of restoration, which shall not be less than 10 percent of the total project cost.
4. (4) The applicant shall be fiscally responsible for adhering to the terms and conditions of the grants.

(i) The division shall establish an administrative appeal process as part of the grants and cooperative agreements program. At a minimum, this process shall do all of the following:

1. (1) Give applicants the right to appeal on the following grounds:

   1. (A) The division failed to follow regulations established for the award of grants and cooperative agreements.
   2. (B) The division lacked sufficient factual evidence to support or deny the award of a grant or cooperative agreement.
2. (2) Require the applicant to first appeal to the deputy director of the division. If that appeal is denied, the applicant may then appeal to the director of the division, or the director’s appointee.
3. (3) Require applicants to file their first appeal within 30 calendar days following the notice of award or denial of a grant or cooperative agreement. Notice of the decision or the rejection of the appeal shall be issued within 60 days following the filing of an appeal.
4. (4) Require applicants to exhaust these appeal rights prior to seeking other legal remedies through the courts.