(1) The department shall establish a paratransit and special needs grant program to sustain and expand transit service to people with disabilities.

(2) Of the amounts appropriated to the program, 23 percent shall be provided solely for grants to nonprofit providers of special needs transportation. Grants for nonprofit providers must be based on need, including the availability of other providers of service in the area, efforts to coordinate trips among providers and riders, and the cost-effectiveness of trips provided.

(3) The remaining 77 percent of amounts appropriated to the program shall be provided solely for grants to transit agencies to support persons with special transportation needs. To receive a grant, the transit agency must, to the greatest extent practicable, have a maintenance of effort for special needs transportation, in the latest calendar year for which the department publishes data in the most recent “Summary of Public Transportation” report, that is no less than the previous year’s maintenance of effort for special needs transportation as shown in the report. Grants for transit agencies must be prorated based on the amount expended for demand response service and route deviated service for the latest calendar year as published in the most recent “Summary of Public Transportation” report. No transit agency shall receive more than 30 percent of the distribution.