In 2014, the California Legislature passed Senate Bill 862, which established the Transit & Intercity Rail Capital Program. The program was then amended in 2015 by Senate Bill 9. It is
one of several programs charged with using cap-and-trade auction proceeds to help the state reduce greenhouse gas emissions and combat climate change.

The goals of the Transit and Intercity Rail Capital Program are to provide monies to fund capital improvements and operational investments that will reduce greenhouse gas emissions, modernize California’s intercity rail, bus, and rail transit systems to achieve all of the following objectives:  
1. Reduce greenhouse gas emissions;  
2. Expand and improve rail service to increase ridership;
3. Integrate the rail service of the state’s various rail operations, including integration with the high‐speed rail system; and
4. Improve safety.

In order to be eligible for funding under this program, a project must demonstrate that it will achieve a reduction in greenhouse gas emissions.

Eligible applicants are public agencies, including joint powers agencies, that operate or have planning responsibility for existing or planned regularly scheduled intercity rail service and associated feeder bus service, commuter rail, commuter bus service, or bus, ferry, or rail transit service. Eligible applicants include construction authorities, transportation authorities, and other similar public entities create by statute.