California Code, Government Code - GOV § 14556.30

(a) After receiving an allocation, the lead applicant shall make diligent and timely progress toward completing the work as described in the submitted application.  If timely progress is not achieved, the commission may review the status of the project.  If the commission finds the lead applicant agency is not pursuing project work diligently, including use of funds under the agency's control committed to the project, the commission may reallocate those funds to another project or projects listed in Article 5 (commencing with Section 14556.40).

(b) If the commission and a lead applicant agency concur that a project is delayed by factors external to the control of the lead applicant agency and the factors are not likely to be removed within a reasonable time, the lead applicant agency may submit an application for an alternate or substitute project if the alternate project is designed to relieve congestion consistent with this act, is within the jurisdiction of the lead applicant agency, and meets all other project approval requirements.

(c) Notwithstanding Section 16304, funds allocated from the fund shall be available for encumbrance for three years after the date of allocation, and encumbered funds shall be available for liquidation for two additional years.  Any funds not expended by that time limit shall revert to the fund.

(d) The commission, with respect to any funds that revert to the fund pursuant to subdivision (c), may direct the department to reallocate those funds to the same project if the commission finds that the lead applicant agency is pursuing the project diligently and that the project has been delayed by factors external to the control of the lead applicant agency.  In no case may the amount made available for expenditure on a project exceed the amount specified for that project in that article.