(1)    In this section:

      (a)    “Commuter rail” means rail passenger service, operating primarily on a dedicated right-of-way on existing railroad tracks used for rail freight service or intercity rail passenger service between and within metropolitan and suburban areas, connecting these areas with large business or urban centers in this state or another. Commuter rail usually operates during peak travel times with limited stops and in conjunction with other transit modes as part of a regional transit system.

      (b)    “Political subdivision” means any city, village, town, county, or transit commission organized under s. 59.58 (2) or 66.1021 or recognized under s. 66.0301 within this state.

   (2)   

      (a)    The department shall administer a commuter rail transit system development grant program. From the appropriations under s. 20.395 (2) (ct) and (cu), the department may award grants to political subdivisions for the development or extension of commuter rail transit systems in this state.

      (b)    Upon completion of a planning study to the satisfaction of the department, any political subdivision may apply to the department for a grant for the purpose specified in par. (a). No grant may be awarded under this section for a project unless the project meets the eligibility criteria established by the department under sub. (3).

      (c)    The amount of a grant awarded under this section shall be limited to an amount equal to 50 percent of the portion of the project cost in excess of the federal aid funding for the project or 25 percent of the total project cost, whichever is less.

   (3)   The department shall prescribe the form, nature, and extent of information that shall be contained in applications for grants under this section and shall establish criteria for evaluating applications and determining eligibility for the award of grants under this section.