(1) The department of state police shall compare the proposed rate, fare, charge, or tariff of any carrier by water that primarily transports vehicles directly between 2 state highways to the rates, fares, charges, or tariffs charged by comparable carriers by water. The department of state police shall automatically approve any proposed rate, fare, charge, or tariff of any carrier by water that primarily transports vehicles directly between 2 state highways that is less than the rates, fares, charges, or tariffs charged by comparable carriers by water. The department of state police shall not audit any carrier by water whose proposed rate, fare, charge, or tariff is less than the rates, fares, charges, or tariffs charged by comparable carriers by water. The department of state police may approve a proposed rate, fare, charge, or tariff of any carrier by water that primarily transports vehicles directly between 2 state highways that is more than the rates, fares, charges, or tariffs charged by comparable carriers by water if, based on justification submitted by the carrier by water, the department of state police finds the rate, fare, charge, or tariff is reasonable. If the department of state police determines that a rate, fare, charge, or tariff is not reasonable, the department of state police shall, within 15 days after that determination, meet with the carrier by water and explain the reasons for its determination. Any carrier by water that meets the criteria of this section is deemed an instrumentality of the state.

  (2) This section does not apply to a carrier by water that is operating within any municipality under an agreement with that municipality.