(a) A public transportation provider that on September 1, 1994, was not receiving public transportation money through the department may contract with the department to provide small urban public transportation services and receive state or federal public transportation money through the department, the Federal Transit Administration, or the administration’s successor only if the provider becomes an urban transit district as provided by this section.
(b) The public transportation provider must be:
(1) a local governmental body created under Chapter 791, Government Code; or
(2) a political subdivision of this state.