Senator Seyarto's proposal to establish the Infrastructure Gap-Fund Program would create a new state grant mechanism enabling local agencies to secure up to 20% of funding for shovel-ready infrastructure projects, while requiring substantial local financial commitments.

The program, to be administered by the Office of Land Use and Climate Innovation, would support the development and construction of broadband networks, fire stations, schools, health and safety improvements, and road projects that reduce vehicle miles traveled. To qualify for funding, local agencies must independently secure at least 80% of a project's total cost, with a minimum of 10% derived from local tax revenue. Projects must also obtain all necessary entitlements, permits, and certifications before consideration.

The Office of Land Use and Climate Innovation would develop comprehensive guidelines for evaluating and funding grant applications under the program. These guidelines would establish specific criteria for project selection and outline the application process for local agencies seeking state support. The program would complement existing infrastructure financing options available to local agencies, including enhanced infrastructure financing districts.

The legislation, which would take effect January 1, 2030, requires an appropriation from the Legislature to fund the grant program. Local agencies, including counties and cities, would need to demonstrate both their ability to meet the local funding requirements and project readiness standards to access the state funding support.