Office of Land Use and Climate Innovation: Infrastructure Gap-Fund Program.

Senator Seyarto's Infrastructure Gap-Fund Program legislation establishes a new state grant mechanism to address cost overruns on local infrastructure projects that have already begun construction. The program, to be administered by the Office of Land Use and Climate Innovation, would provide grants covering up to 20 percent of additional projected costs for qualifying broadband, fire station, school, health and safety improvement, and road projects.

Local agencies seeking funding must meet specific eligibility requirements, including having allocated local tax revenue for at least 45 percent of the project's initial budget. Applicants must document unforeseen cost increases related to labor, materials, or permits, and demonstrate how their project advances state and local objectives. The Office must develop formal guidelines establishing criteria for evaluating and funding grant applications.

The program becomes operative January 1, 2030, contingent upon legislative appropriation. This timing allows the Office to develop implementation protocols while providing local agencies a framework to plan for potential cost overruns on infrastructure projects. The legislation adds to existing infrastructure financing options available to local governments without modifying current programs.