(1) The department shall establish a rural mobility grant program. The purpose of the grant program is to aid small cities and rural areas, as identified in the "Summary of Public Transportation - 2008" published by the department or subsequent versions published by the department.

(a) Fifty percent of the money appropriated for the rural mobility grant program must go to noncompetitive grants that must be distributed to the transit systems serving small cities and rural areas in a manner similar to past disparity equalization programs.

(b) Fifty percent of the money appropriated for the rural mobility grant program must go to competitive grants to providers of rural mobility service in areas not served or underserved by transit agencies.

(2) The department may establish an advisory committee to carry out the mandates of this section.

(3) The department must report annually to the transportation committees of the legislature on the status of any grants projects funded by the program created under this section.

(4) During the 2011-2013 fiscal biennium, the department shall, with money appropriated for the competitive grants program under subsection (1)(b) of this section, implement a pilot project to provide agricultural workers with enhanced transit opportunities through the establishment of one or more vanpool programs. The pilot project must, at a minimum, provide appropriate vehicles, insurance, and maintenance, and may charge an appropriate fee, as determined by the department, to the riders in a vanpool.