California Code, Public Utilities Code - PUC § 160006

(a) If the district acquires stations, facilities, and passenger equipment owned or leased by the Department of Transportation for the passenger rail service provided by the Southern Pacific Transportation Company between San Francisco and San Jose and points in between, and if the district acquires from the Department of Transportation the right-of-way between San Francisco and San Jose presently owned by the Southern Pacific Transportation Company, the district may own, operate, construct, manage, and maintain rights-of-way, stations, facilities, and equipment necessary for the operation of rail passenger and freight services between San Francisco and Alma and points in between, and may contract with any railroad corporation for the purchase of, or to subsidize, service between San Francisco and Alma and points in between. Upon completion of the conditions specified in subdivision (a) of Section 14035.4 of the Government Code, the district may provide commuter rail service between San Jose and Gilroy.

(b) Any assets transferred from the Department of Transportation to the district without compensation shall be transferred with all attendant obligations, liabilities, debts, and grant conditions established by the department, including Urban Mass Transportation Administration grants and sale and leaseback contracts.