(1)    Legislative findings. The legislature finds that private capital and local governmental financial and technical resources are unable to fully meet the transportation needs of all citizens. It is determined that the programs authorized under this section are legitimate governmental functions serving proper public purposes.

   (2)   General powers. The department shall administer the programs of financial and technical assistance under this section for the purpose of assistance to or restoration of freight railroad service and shall maximize the use of available federal aid in conjunction with the allocation of state aid. The department may exercise those powers necessary to establish freight railroad assistance programs, including authority:

      (b)    To plan, promote and engage in financial and technical assistance programs for continuing, restoring and operating rail branch line transportation services.

      (c)    To maintain adequate programs of investigation, research, promotion and development in connection with transportation programs authorized under this section and to provide for public participation in these programs.

      (d)    To comply with federal regulations affecting federal transportation service continuation or restoration, or operating assistance programs.

      (e)    To enter into joint service agreements or other agreements providing for mutual cooperation related to transportation services and projects, including joint applications for federal aids with any county or other body public and corporate.

      (f)    To receive, use or reallocate federal funds, grants, gifts and aids.

      (g)    To adopt rules necessary to effectuate and enforce this section and to prescribe conditions and procedures, including auditing and accounting methods and practices, to assure compliance in carrying out the purposes for which state financial and technical assistance is made.

      (i)    To make and execute contracts with the federal government, any other state or any county, city, village, town, railroad, or any transit commission organized under s. 59.58 (3), 66.0301 or 66.1021, to ensure the continuance and improvement of quality transportation service at reasonable rates or to provide for rail service on rail property owned by the state.

      (j)    To audit the operating revenues and expenditures of all transportation systems participating in the aids program under this section in accordance with accounting methods and practices prescribed by the department.

      (k)    To allow other uses of rail corridors owned by the state that are being used for freight rail service when such uses serve the purpose of providing assistance to or restoration of freight rail service, and to regulate the safety and compatibility of such uses with the provision of freight rail service by issuing a permit for any such use.

      (L)    To acquire rail property for the purpose of preserving freight rail service or improving the efficiency of freight rail service if, in the department’s judgment, the public interest requires acquisition of the rail property.

   (3)   Coordination and cooperation.

      (b)    The department may cooperate with other states in connection with the acquisition, rehabilitation, construction or operation of any transportation properties within this state or in other states in order to carry out the purposes of this section. The department may enter into contractual arrangements for such purposes, including joint acquisition of transportation properties with other states and entering into leases jointly with other states affected thereby.

   (4)   Rail planning and technical assistance grants. Upon its own initiative or upon application by a government agency, the department may make grants of financial assistance and provide technical assistance for rail system, service and technical studies.

   (4m)   Freight railroad loans and grants.

      (b)    Definitions. In this subsection:

         1.    “Eligible applicant” means a county, municipality or town or agency thereof, a railroad, a current or potential user of freight rail service or a transit commission organized under s. 59.58 (3), 66.0301 or 66.1021.

         3.    “Rail service” means a level of rail service which the department determines to be an acceptable level of service.

      (c)    Railroad facilities acquisition grants and loans. The department may make grants to eligible applicants for the purpose of preserving freight rail service through the acquisition of rail property. The grant may be composed of state funds, federal funds, state property, the use of state property, or any combination of state funds, federal funds, state property, and the use of state property. No grant for the acquisition of rail property improvements may exceed 80 percent of the acquisition cost. No grant for the acquisition of rail property exclusive of rail property improvements may exceed 100 percent of the acquisition cost. The department shall give priority in awarding grants to those projects for which the applicant agrees to pay greater than 20 percent of the cost of the acquisition of rail property improvements. A grant may be made to an eligible applicant before or after abandonment of a railroad line as defined in s. 85.09 (3). The department may permit an eligible applicant’s share of an increase in the acquisition cost of rail property or rail property improvements to be paid in installments if the increase in acquisition cost is caused by negotiation or litigation. No grant may be made under this paragraph for the acquisition of rail property if the acquisition price exceeds an amount deemed reasonable by the department. If a grant is made to an eligible applicant under this paragraph, the department may award a loan to the eligible applicant for not more than 15 percent of the acquisition cost. A grant of money or a loan made under this paragraph shall be paid from the appropriation under s. 20.395 (2) (bq), (bu), or (bx) or 20.866 (2) (uw). The department shall administer this program and shall have all powers necessary and convenient to implement this paragraph and par. (d), including the following powers:

         1.    To develop the specifications and provisions of the grants and loans which are made to eligible applicants.

         2.    To receive and review applications for grants and loans and to prescribe the form, nature and extent of the information which shall be contained in applications.

         3.    To determine whether the proposed rail service to be provided on the rail property acquired, rehabilitated or constructed with financial assistance under this paragraph or par. (d) has a likelihood of attaining and sustaining economic self-sufficiency and to employ such findings in the awarding of grants and loans.

         4.    To determine whether the rail property to be acquired with financial assistance under this paragraph offers satisfactory opportunity for alternate public use or recovery of public funds and to employ such findings in the awarding of grants and loans.

         5.    To make and execute agreements with eligible applicants for grants and loans. These agreements shall ensure that any public purpose served by the financial assistance is appropriately maintained by the eligible applicant, that rail service on the line is adequately continued and that the required corridor preservation, maintenance, rehabilitation and improvement activities are performed.

         6.    To determine whether rail service is being adequately continued and the grantee or, if applicable, the railroad providing service on the affected rail line is performing any corridor preservation, maintenance or improvement activities that are required by the department on a rail line for which a grant is made under this paragraph or par. (d). If, without the approval of the department, rail service is discontinued or the grantee disposes of any portion of the rail property for which financial assistance was obtained under this paragraph or par. (d), or if corridor preservation, maintenance or improvement activities are inadequate, including failing to meet any federal or state safety or performance standards specified in the agreement with the department or established by departmental rule, the rail property for which financial assistance was obtained shall revert to the ownership and control of the department unless the department elects to accept repayment from the grantee of the full amount of all grants and loans received from the department for the line, including any interest accrued on loans.

         7.    To provide technical assistance to the eligible applicant and any railroad using the rail property in a manner deemed necessary by the department.

      (d)    Railroad rehabilitation and construction grants and loans. The department may make grants to eligible applicants for the purpose of rehabilitating or constructing rail property improvements. Construction shall be limited to that which is required to continue rail service on a particular line or to provide alternative rail service when a line has been abandoned. A grant under this paragraph may be composed of state funds, federal funds, state property, the use of state property, technical assistance, or any combination of state funds, federal funds, state property, the use of state property, and technical assistance. The value of a grant may not exceed 80 percent of the costs of rehabilitation or construction. The department shall give priority in awarding grants to those projects for which the applicant agrees to pay greater than 20 percent of the costs of rehabilitation or construction. If a grant is made to an eligible applicant under this paragraph, the department may award a loan to the eligible applicant for not more than 15 percent of the rehabilitation or construction costs. A grant may be made before or after abandonment of a railroad line as defined in s. 85.09 (3). A grant or loan made under this paragraph shall be paid from the appropriation under s. 20.395 (2) (bq), (bu), or (bx) or 20.866 (2) (uw).

      (e)    Freight rail infrastructure improvement loans.

         2.    Projects for which a loan made under this paragraph may be used include all of the following:

            a.    Line upgrades that will expand the use of a rail line for the public benefit, including increased passenger service and increased use of double-stack technology and piggyback service.

            b.    Rail branch line stabilization or upgrading.

            c.    Projects associated with rail intermodal facilities, such as terminals, team tracks, docks, conveyers and other loading and unloading facilities.

            d.    Relocation of a freight rail off-loading facility that has been agreed to by the owner of the facility; the city, village or town in which the facility is located; and the city, village or town in which the facility will be relocated.

            e.    Rail line relocation or consolidation.

         3.    Loans made under this paragraph shall be allocated by the department on bases that protect the public interest, including a cost-benefit analysis. A loan made under this paragraph may cover up to 100 percent of a project’s cost.

         4.    The department shall administer this program and shall have all powers necessary and convenient to implement this paragraph, including the following powers:

            a.    To establish standards and schedules for railroad infrastructure improvement projects and to establish the specifications and provisions of a loan that is made to an eligible applicant.

            b.    To establish the level and period of rail service to be provided by the railroad in any loan agreement.

            c.    To negotiate and establish the financial participation required of an eligible applicant in any loan agreement.

            d.    To provide technical assistance to an eligible applicant.

         5.    An application for a loan under this paragraph may not be made if an abandonment or discontinuance application is pending on the line or portion of line, or the line or portion of line on which the rail property improvements are located has been designated by the railroad to the federal surface transportation board on its system diagram map as anticipated to be the subject of an abandonment or discontinuance application within a 3-year period following the date of the application or the date on which the loan is scheduled, unless the secretary determines that this restriction may be waived for a particular application.

      (g)    Exemption from bond requirements. The secretary may exempt contracts involving the performance of labor or furnishing of materials for any public improvement or public work under the railroad rehabilitation and construction program of par. (d) or the loan program for freight rail infrastructure improvements under par. (e) from the performance and payment bond requirements of s. 779.14 if the secretary determines that:

         1.    Adequate guarantees or warranties are provided for by contract;

         2.    Adequate safeguards are provided by accounting and payment controls;

         3.    Adequate security is available;

         4.    Public benefits of proceeding with the project substantially outweigh the risk of waiving the performance and payment bond requirements of s. 779.14; and

         5.    The project cannot proceed in a timely and efficient manner unless the performance and payment bond requirements of s. 779.14 are waived in whole or in part.

   (5)   Assistance to rural areas.

         1.    A city, town or village with a population of 4,000 or less.

         2.    A city, town or village that is located in a county with a population density of less than 150 persons per square mile.

      (b)    In awarding assistance under this section, the department shall make a good faith effort to select eligible applicants that represent or will benefit various geographical regions and populations of this state, including rural municipalities.