(1) An intercity bus system assistance program is hereby established to provide state assistance for the operation of intercity bus systems.

(2) Any municipality, county, transit authority, regional metropolitan transit authority, or qualified public-purpose organization shall be eligible to receive (a) financial assistance for the eligible operating costs of such system, whether the applicant directly operates the system or contracts for its operation, and (b) financial assistance to match federal funds available for the purchase of vehicles and equipment for the start of an intercity bus system or the replacement of vehicles used in the operation of an intercity bus system. The vehicles shall be titled to such municipality, county, transit authority, regional metropolitan transit authority, or qualified public-purpose organization.

(3) The department may contract for an intercity bus system with either a publicly owned provider or a provider owned by a qualified public-purpose organization.

(4) Any intercity bus system to be funded under this section shall be selected based on criteria established by the department.