7-14-4401. Provision of bus service. (1) Whenever a city or town is not being served by a bus company or operator operating on a regular schedule and under the jurisdiction of the public service commission or if the service is likely to be discontinued in the immediate future, the city or town council of the incorporated city or town:

(a) may contract an indebtedness of the city or town on the credit of the city or town by borrowing money or issuing bonds for the purchase, development, operation, or leasing of motorbuses and buslines for the transportation of passengers within the corporate limits of the cities and towns and to operate the same to any point or points beyond these limits not to exceed 8 miles measured along the route of the busline; and

(b) must have the power to enter into a contract or contracts or to enter into a lease or a lease and operating agreement with an independent carrier or independent carriers for the transportation of passengers by bus within the corporate limits of the city or town and to and from any point or points beyond the limits not to exceed 8 miles measured along the route of the busline or buslines.

(2) The 8-mile limitation imposed by this section may be exceeded if funded by an external funding source, such as the federal or state government or a nonprofit corporation, or to fulfill an interlocal agreement for bus service.