(a)      (1)      In this section the following words have the meanings indicated.

            (2)      "County" includes Baltimore City.

            (3)      "Elderly and handicapped person" means any person who, by reason of illness, injury, age, congenital malfunction, or other permanent or temporary incapacity or disability, is unable to use mass transit facilities and services as effectively as a person who is not so affected.

            (4)      "Transportation service" means any transportation option or mix of options that may include paratransit or fixed route service, established or employed by a county to accommodate the transportation needs of its elderly and handicapped residents.

      (b)      (1)      The Secretary shall identify separately within the Department's annual budget an amount that the Secretary deems necessary to be used for elderly and handicapped transportation service in each county.

            (2)      The amount the Secretary identifies, or such other amount as may be appropriated by the General Assembly for the provision of elderly and handicapped transportation service in each county, shall be distributed as provided in subsections (c), (d), and (e) of this section.

      (c)      (1)      Of the amount separately identified or otherwise appropriated under subsection (b) of this section, the Secretary shall:

                  (i)      Allocate 60 percent equally among the counties; and

                  (ii)      Allocate the remaining amount among the counties in proportion to their respective percentages of the State's combined elderly and handicapped population.

            (2)      Subject to the limitations provided in subsection (f) of this section, the Secretary shall distribute all such allocated amounts to those counties which file a written application with the Department in such form and detail as the Secretary requires.

            (3)      A written application submitted by a county under this subsection may not be accepted or considered by the Secretary unless the local area agency on aging certifies its approval of the project for the funding for which the application is made.

            (4)      The Secretary shall consult with the Department of Aging and the Department of Disabilities in distributing the funds available under this section.

      (d)      (1)      In determining local transportation needs, the counties shall take into account the elderly and handicapped transportation needs of the municipalities within their jurisdictions. Nothing in this section shall preclude a municipality from requesting the county to apply for part or all of the county's allocation of funds available under this section on behalf of the municipality.

            (2)      In the event a municipality believes it is not afforded a reasonable share of the funds available to the county under this section, the municipality may appeal the county's allocation decision directly to the Secretary.

      (e)      (1)      If any of the allocated funds described in subsection (c) of this section are not applied for by the counties within 6 months after the beginning of the fiscal year, the Secretary shall make those funds available to counties pursuant to application procedures and criteria developed by the Secretary, in consultation with the Department of Aging and the Department of Disabilities. The criteria shall provide that:

                  (i)      Such funds may be made available to counties in which the Secretary determines that additional funds for transportation service to the elderly and handicapped are most needed; and

                  (ii)      Local match requirements described in subsection (f) of this section shall apply to all disbursements.

            (2)      A written application submitted by a county under this subsection may not be accepted or considered by the Secretary unless the local area agency on aging certifies its approval of the project for the funding for which the application is made.

      (f)      (1)      The Department shall provide capital assistance with funds described in this section only on the basis of a 95 percent State, 5 percent county matching fund obligation.

            (2)      The Department shall provide operating assistance with funds described in this section only:

                  (i)      To fund operating deficits of the county's transportation service; and

                  (ii)      On the basis of a 75 percent State, 25 percent county matching fund obligation.

      (g)      The Secretary, in consultation with the Department of Aging and the Department of Disabilities, shall develop procedures for the proper enforcement of this section. The procedures shall provide that:

            (1)      A county shall use all amounts distributed to it under this section only for the acquisition or replacement of equipment or for the operating costs of the county's transportation service;

            (2)      A county, in consultation with the local area agency on aging, shall determine the most effective means of serving the transportation needs of its elderly and handicapped residents;

            (3)      Each county shall cooperate with the others to best serve the transportation needs of the State's elderly and handicapped residents; and

            (4)      A county administering a transportation service that receives funds under this section:

                  (i)      Shall provide trips for any purpose;

                  (ii)      Shall serve the elderly and handicapped citizens within the service areas identified in its application;

                  (iii)      May not restrict its transportation service to clients of social service agencies;

                  (iv)      May establish reasonable fares; and

                  (v)      May permit persons other than the elderly and handicapped to use or benefit from its transportation service to the extent capacity is available.

      (h)      The Secretary in consultation with the Department of Aging and the Department of Disabilities shall monitor the use of funds provided under this section.

      (i)      A county that receives funds under this section may not use such funds to replace any moneys it receives from other sources for transportation service for the elderly and handicapped.

      (j)      Federal funds provided to the State for use in connection with the provision of transportation service to the elderly and handicapped may not be diverted to other uses by the State.

      (k)      The Secretary shall encourage each county to:

            (1)      Continue to maximize use of existing funding programs for elderly and handicapped transportation service; and

            (2)      Enter into cooperative agreements with other local or State resource providers.

      (l)      Nothing in this section prohibits a county from:

            (1)      Contracting with nonprofit organizations, area agencies on aging, public transportation providers, or private carriers for the provision of transportation service to the elderly and handicapped;

            (2)      Modifying or expanding any existing local transportation system; or

            (3)      Developing a new transportation system with the use or assistance of subsidized volunteers.