(1) DEFINITIONS. In this section: (ag) “Disabled persons” means individuals who, by reason of illness, injury, age, congenital malfunction, or other temporary or permanent incapacity or disability, are unable without special planning or design to use mass transit facilities and services as effectively as persons who are not so affected. (am) “Elderly persons” means individuals age 65 or over. (b) “Eligible applicant” means a local public body in an urban area which is served by an urban mass transit system incurring an operating deficit. (d) “Local public body” includes counties, municipalities or towns, or agencies thereof; transit or transportation commissions or authorities and public corporations established by law or by interstate compact to provide mass transportation services and facilities or 2 or more of any such bodies acting jointly under s. 66.0301 to 66.0303. (e) “Mass transit system” means transportation by bus, shared-ride taxicab, rail, or other conveyance, either publicly or privately owned, that provides the public with general or special service on a regular and continuing basis. (f) “Operating deficit” means the amount by which the total operating expenses incurred in the operation of an urban mass transit system exceeds the amount of operating revenue derived therefrom. (g) “Operating expenses” mean costs accruing to an urban mass transit system by virtue of its operations, including costs to subsidize fares paid by disabled persons for transportation within the urban area of the eligible applicant, and maintenance. “Operating expenses” do not include costs accruing to an urban mass transit system from services provided by a publicly owned urban mass transit system under a contract awarded on the basis of competitive bids unless the urban mass transit system’s bid used the fully allocated cost methodology described in sub. (8). For a publicly owned system, operating expenses do not include profit, return on investment or depreciation as costs. If a local public body contracts for the services of a privately owned system on the basis of competitive bids, operating expenses may include as costs depreciation on the facilities and equipment that the privately owned system acquired without benefit of public financial assistance, profit and return on investment. If a local public body contracts for the services of a privately owned system on the basis of negotiated procurement, operating expenses may include as costs depreciation on the facilities and equipment that the privately owned system acquired without benefit of public financial assistance. In an urban area which is served exclusively by shared-ride taxicab systems, operating expenses may include costs to subsidize reasonable fares paid by all users for transportation within the urban area of the eligible applicant. (h) “Operating revenues” mean income accruing to an urban mass transit system by virtue of its operations, but do not include income accruing from operations under a contract awarded on the basis of competitive bids to a publicly owned urban mass transit system that did not use the fully allocated cost methodology described in sub. (8). (hm) “Reasonable fare” means a charge for mass transit service which complies with rules of the department relating to the fairness of such charges for purposes of this section. (j) “Revenue passenger trip” means a trip taken on an urban mass transit system by any passenger who pays a fare to use an urban mass transit system, or by any passenger for whom a fare has been paid by another under a contract or other arrangement with an urban mass transit system. (k) “Urban area” means any area that includes a city or village having a population of 2,500 or more that is appropriate, in the judgment of the department, for an urban mass transit system or an area that includes 2 American Indian reservations and that is served by a mass transit system operated by a transit commission. (L) “Urban mass transit system” means a mass transit system operating within an urban area. (2) PURPOSE. The purpose of this section is to promote the general public good by preserving and improving existing urban mass transit systems in this state and encouraging their effective and efficient operation. (3) ADMINISTRATION. The department shall administer the urban mass transit operating assistance program and shall have all the powers necessary and convenient to implement this section, including the following powers: (a) To receive applications for aid under this section and to prescribe the form, nature and extent of information which shall be contained in applications. (b) To make and execute contracts with any eligible applicant to ensure the continuance and improvement of quality urban mass transit service at reasonable fares. No such contract may be effective for a period of more than one year in length and no such contract may be enforced against the state unless the following conditions are met: 1. The eligible applicant pays the operating deficit of the urban mass transit systems involved in accordance with a schedule approved by the department; 2. The participating urban mass transit system provides reduced fare programs for elderly and disabled persons during nonpeak hours. Such reduced fares may not exceed one-half of the full adult cash fare applicable during peak hours of operation; and 3. The eligible applicant establishes and maintains accounting procedures and documentation requirements as prescribed or approved by the department. 4. The eligible applicant complies with any applicable provisions of ss. 59.58 (2) (j) 2., (k) 2. and (L) and (3) (h) 2. and (j) and 66.1021 (10) (b), (11) (b) and (12) with respect to limitation on service. (c) Except as provided in par. (cm), to audit the operating revenues and expenses of all urban mass transit systems participating in the program in accordance with generally accepted accounting principles and practices. Except as provided in par. (cm), the audits shall be the basis for computing the maximum share of state and federal aids each eligible applicant can apply against operating deficits for each state aid contract period. (cm) To conduct an audit of a privately owned urban mass transit system with which a local public body contracts for services on the basis of competitive bids to determine that system’s compliance with the terms of that contract for services. An audit under this paragraph shall be the basis for computing the maximum share of state and federal aids that an eligible applicant that contracts with a privately owned urban mass transit system on the basis of competitive bids may apply against operating deficits for each state aid contract period. (cr) To conduct a management performance audit of all urban mass transit systems participating in the program at least once every 5 years. (d) To apply for and receive federal grants for the department or as requested on behalf of eligible recipients. (3m) USER-SIDE SUBSIDY PROGRAMS. (a) In this subsection, “user-side subsidy” means a voucher provided by an eligible applicant directly to a mass transit system user for use in full or partial payment of a mass transit system fare. (b) After June 30, 1991, if an eligible applicant’s urban mass transit system operates a user-side subsidy program, that system may include user contributions under the user-side subsidy program in its calculation of operating expenses for purposes of sub. (4m). (4m) STATE AIDS. Payments of state aids appropriated for this program shall be in accordance with the terms and conditions of contracts executed between the department and eligible applicants. State aid payments shall be subject to the following limitations: (a) The department shall pay annually to the eligible applicant described in subd. 6. cm. the amount of aid specified in subd. 6. cm. The department shall pay annually to the eligible applicant described in subd. 6. d. the amount of aid specified in subd. 6. d. The department shall allocate an amount to each eligible applicant described in subd. 6. e., 7., or 8. to ensure that the sum of state and federal aids for the projected operating expenses of each eligible applicant’s urban mass transit system is equal to a uniform percentage, established by the department, of the projected operating expenses of the mass transit system for the calendar year. The department shall make allocations as follows: 6. cm. From the appropriation under s. 20.395 (1) (hd), the department shall pay $32,738,900 for calendar year 2022, $65,477,800 for calendar year 2023, and $66,787,400 for each calendar year thereafter, to the eligible applicant that pays the local contribution required under par. (b) 1. for an urban mass transit system that has annual operating expenses of $80,000,000 or more. If the eligible applicant that receives aid under this subd. 6. cm. is served by more than one urban mass transit system, the eligible applicant may allocate the aid between the urban mass transit systems in any manner the eligible applicant considers desirable. d. From the appropriation under s. 20.395 (1) (he) , the department shall pay $8,602,700 for calendar year 2022, $17,205,400 for calendar year 2023, and $17,549,500 for each calendar year thereafter, to the eligible applicant that pays the local contribution required under par. (b) 1. for an urban mass transit system that has annual operating expenses in excess of $20,000,000 but less than $80,000,000. If the eligible applicant that receives aid under this subd. 6. d. is served by more than one urban mass transit system, the eligible applicant may allocate the aid between the urban mass transit systems in any manner the eligible applicant considers desirable. e. From the appropriation under s. 20.395 (1) (hf) , the department may pay the uniform percentage for each eligible applicant for a commuter or light rail system that has been enumerated under s. 85.062 (3). An eligible applicant may not receive aid under subd. 6. cm. or d., 7., or 8. for a commuter rail or light rail transit system. 7. a. From the appropriation under s. 20.395 (1) (hb), beginning with aid payable for calendar year 2002 and for each calendar year thereafter, the uniform percentage for each eligible applicant served by an urban mass transit system operating within an urbanized area having a population as shown in the 2010 federal decennial census of at least 50,000 or receiving federal mass transit aid for such area, and not specified in subd. 6. b. For the purpose of making allocations under subd. 7. a., the amounts for aids are $24,976,400 in calendar years 2020 to 2023 and $25,475,900 in each calendar year thereafter. These amounts, to the extent practicable, shall be used to determine the uniform percentage in the particular calendar year. 8. a. From the appropriation under s. 20.395 (1) (hc), beginning with aid payable for calendar year 2002 and for each calendar year thereafter, the uniform percentage for each eligible applicant served by an urban mass transit system operating within an area having a population as shown in the 2010 federal decennial census of less than 50,000 or receiving federal mass transit aid for such area. b. For the purpose of making allocations under subd. 8. a., the amounts for aids are $5,398,600 in calendar year 2025 and $6,898,600 in each calendar year thereafter. These amounts, to the extent practicable, shall be used to determine the uniform percentage in the particular calendar year. (b) 1. Except as provided in subd. 2., each eligible applicant shall provide a local contribution, exclusive of user fees, toward operating expenses in an amount equal to at least 20 percent of state aid allocations to that eligible applicant under this section. 2. Subdivision 1. does not apply to an eligible applicant that is served exclusively by a shared-ride taxicab system. (em) The sum of the state aid allocations made to each applicant under par. (a) may not exceed any of the following: 1. An amount equal to the same percentage of the audited operating expenses for the project year of the applicant’s urban mass transit system that is specified for allocations to the applicant under par. (a) 6. to 8. 2. The nonfederal share of the audited operating deficit for the project year of the applicant’s urban mass transit system. 3. Five times the amount of an eligible applicant’s required local contribution under par. (b) 1. (er) Eligible applicants shall repay the department any overpayments in state aids under this section which are made because of differences between projected financial data and audited financial data or because of differences between projected financial data and contract compliance audits. (f) If more than one local public body contributes assistance to the operation of an urban mass transit system, the state aids allocated under this section shall be distributed among the contributors in accordance with any cost-sharing agreement that is filed with the department. If no agreement is filed, the aids shall be distributed among the contributors in proportion to their contributions. (4r) EXPANSION OF SERVICE. An eligible applicant shall notify the department if the eligible applicant anticipates receiving new or expanded services provided by an urban mass transit system in a manner that will increase operating expenses. The eligible applicant shall provide the notice during the calendar year preceding the calendar year in which the new or expanded services will first be provided. The notice shall include an estimate of the projected annual operating expenses of the new or expanded services. (4s) PAYMENT OF AIDS UNDER THE CONTRACT. The contracts executed between the department and eligible applicants under this section shall provide that the payment of the state aid allocation under sub. (4m) (a) for the last quarter of the state’s fiscal year shall be provided from the following fiscal year’s appropriation under s. 20.395 (1) (hb), (hc), (hd), (he), or (hf). (5) REGULATION. For such time as any urban mass transit system participates in this program, it shall be exempt from regulation under ch. 194. (6) PLANNING REQUIREMENTS. As a condition of eligibility to receive state aids, an applicant is required to do all of the following: (a) Annually prepare and submit to the department a 4-year transit development program, in the form and manner prescribed by the department. The rules adopted to implement this paragraph and par. (b) shall be compatible with applicable federal regulations. (b) Establish multiyear service and performance goals and assess the effectiveness of its mass transit system in relation to those goals at intervals specified by the department by rule. (c) Disclose to the department the amount of federal aid over which the eligible applicant has spending discretion and that the eligible applicant intends to apply towards operating expenses for a calendar year. (6m) LOCAL SEGREGATED ACCOUNT REQUIRED. (a) Notwithstanding sub. (4m), the department may not pay state aid under this section to an eligible applicant unless the eligible applicant does all of the following: 1. Establishes and administers a separate segregated account from which moneys may be used only for purposes related to a mass transit system. 2. Deposits in the account established under subd. 1. all moneys received from this state and from the federal government for a mass transit system. (b) If an eligible applicant does not meet the requirements under par. (a) at the time that aid should be paid under this section, the aid payment may be forfeited. (c) Rules implementing this subsection may not require any eligible applicant to do any of the following: 1. Pay expenses related to law enforcement using moneys from an account established under this subsection. 2. Maintain separate checking accounts to implement this subsection, if the eligible applicant implements this subsection by segregating revenues and expenditures described in this subsection in the eligible applicant’s bookkeeping system. (7) COST-EFFICIENCY STANDARDS. (a) The department shall establish cost-efficiency standards for the urban mass transit system specified in sub. (4m) (a) 6. to 8. The contracts executed between the department and eligible applicants under this section for any period beginning on or after January 1, 1997, shall provide that the department may do any of the following if costs are incurred by the eligible applicant’s urban mass transit system which are inconsistent with the standards established under this subsection: 1. Exclude those costs from operating expenses for purposes of sub. (4m). 2. Reduce the amount of state aid allocation under sub. (4m) (a). (b) The department shall specify by rule the cost-efficiency standards under this subsection, including rules for the implementation of par. (a) 1. and 2. (c) Beginning with contracts for aid payable for calendar year 2000, the department may not enter into a contract for payment of state aids under sub. (4m) unless the rules promulgated under this subsection are in effect and unless the contract requires the urban mass transit system to comply with those rules as a condition of receiving aid under sub. (4m). (8) FULLY ALLOCATED COST BIDDING. If a local public body solicits bids to contract for services, the bids of a publicly owned urban mass transit system shall use a fully allocated cost method- ology established by the department by rule. The fully allocated cost methodology shall do all of the following: (a) Be based on generally accepted accounting principles. (b) Consider all shared costs and direct costs of the mass transit system that are related to and support the service being considered. A publicly owned urban mass transit system’s costs include all subsidies provided to the system, including operating subsidies, capital grants and the use of public facilities. (c) Assign each cost of a publicly owned urban mass transit system to one of the following categories: 1. Costs that depend on the number of vehicle hours operated, including operators’ salaries and fringe benefits. 2. Costs that depend on the number of vehicle miles traveled, including fuel costs, maintenance costs and maintenance personnel salaries and fringe benefits. 3. Costs that depend on the maximum number of vehicles that are in service during the day, including administrative and capital costs. (9) PROHIBITED EXPENDITURES. An eligible applicant may not use aids provided under this section for any purpose related to the operation of a rail fixed guideway transportation system, as defined in s. 85.066 (1), in a 1st class city.
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