Chapter 29 of the General Laws is hereby amended by inserting, after section 2JJJJJJ, the following section:-

Section 2KKKKKK. (a) For the purposes of section, the following words shall, unless the context clearly requires otherwise, have the following meanings:

“Department”, the Massachusetts Department of Transportation.

“Fair share funds”, revenues generated under the fair share amendment designated for education and transportation.

“Frequent bus service”, fixed-route bus operations, including routes that operate a minimum of 15-minute frequency between the hours of 7AM to 7 PM, Monday through Sunday.

“Microtransit”, technology-driven, demand-responsive shared transportation services with flexible routes and schedules.

“Regional Transit Authorities”, public transportation agencies operating outside the Massachusetts Bay Transportation Authority service area.

“Secretary”, the secretary of the Massachusetts Department of Transportation.

(b) There shall be established and set up on the books of the commonwealth a separate fund known as the Microtransit Fund, hereinafter referred to as the fund. The purpose of the fund shall be to: (i) establish a dedicated funding stream for microtransit projects statewide; (ii) promote regional equity in transit services; (iii) reduce greenhouse gas emissions through sustainable transit solutions; and (iv) support and expand existing microtransit operations without disrupting current programs. The fund shall be administered by the secretary.

(c) The fund shall be credited with: (i) revenue from appropriations or other money authorized by the general court and specifically designated to be credited to the fund;

(ii) interest earned on money in the fund; (iii) contributions from private sector entities, including technology firms, foundations and other organizations; (iv) federal grants and other gifts, grants and donations for the establishment and support of microtransit projects; and (v) a minimum of 3 per cent of annual fair share funds to support microtransit projects. Amounts credited to the fund shall not be subject to further appropriation and any money remaining in the fund at the end of a fiscal year shall not revert to the General Fund.

(d) The secretary shall make expenditures from the fund including, but not limited to, the following purposes: (i) creating a dedicated funding stream for microtransit services, addressing transportation inequities in rural and underserved communities across the commonwealth; (ii)

prioritizing and improving first-mile/last-mile connectivity in underserved communities in the commonwealth; (iii) partnering with other microtransit programs already operating in the commonwealth, such as the south county connector, Quaboag connector and Franklin county’s access program, to provide reliable access to essential services for residents in rural areas; (iv) promoting the adoption of electric and hybrid vehicle fleets to reduce emissions; and (v) providing resources for driver recruitment, training and retention to address operational challenges.

(e) The secretary shall make expenditures from the fund to rural or low-density arenas in the commonwealth that do not have access to rapid transit or frequent bus service. Rural or low-density areas shall be municipalities located outside of urbanized areas as defined by the Federal Transit Administration’s urbanized area formula grants pursuant to 49 U.S.C. 5307.

(f) Up to 5 per cent of the fund may be allocated for public awareness campaigns to educate residents of the commonwealth on accessing and benefiting from microtransit services.

(g) All funded projects shall align with the commonwealth’s 2050 decarbonization roadmap to: (i) promote equity, sustainability and cost-effective transit solutions; and (ii) include measures to reduce greenhouse gas emissions with clear benchmarks and transparency.

(h) The department shall: (i) develop application guidelines and award funds within 90 days of the fund’s effective date; (ii) monitor benchmarks, including: (A) a 30 per cent increase in transit access in underserved areas within 5 years; (B) a cost per revenue hour of below $60, inflation-adjusted; (C) an annual average vehicle ride-share rate of at least 15 per cent; and (D) 25 per cent adoption of electric or hybrid vehicles; (iii) collect annual project reports and equity impact assessments from fund recipients to demonstrate progress in improving access for underserved populations; and (iv) publish annual reports and conduct independent audits to ensure transparency.

(i) The department shall annually, not later than December 31, report on the activity of the fund to the: (i) chairs of the joint committee on transportation; (ii) the chairs of the house and senate committees on ways and means; and (iii) the clerks of the house of representatives and senate.