(1) This act does not apply to a motor carrier that is any of the following:

    (a) A county, city, township, or village as provided by law, or other authority incorporated under 1963 PA 55, MCL 124.351 to 124.359.

    (b) An authority incorporated under the metropolitan transportation authorities act of 1967, 1967 PA 204, MCL 124.401 to 124.426, or that operates a transportation service under an interlocal agreement under the urban cooperation act of 1967, 1967 (Ex Sess) PA 7, MCL 124.501 to 124.512.

    (c) Operating under a contract entered into under 1967 (Ex Sess) PA 8, MCL 124.531 to 124.536, or 1951 PA 35, MCL 124.1 to 124.13.

    (d) An authority incorporated under the public transportation authority act, 1986 PA 196, MCL 124.451 to 124.479.

    (e) A regional transit authority created under the regional transit authority act, 2012 PA 387, MCL 124.541 to 124.558.

    (f) A nonprofit corporation organized under the nonprofit corporation act, 1982 PA 162, MCL 450.2101 to 450.3192, and as defined by sections 501(c)(3), (4), (19), or (23) of the internal revenue code of 1986, that provides 1 or both of the following transportation services:

    (i) Services that are restricted only to registered members of the nonprofit corporation.

    (ii) Services that are funded under 1951 PA 51, MCL 247.651 to 247.675, through programs administered by the department.

    (g) An authority financing public improvements to transportation systems under the revenue bond act of 1933, 1933 PA 94, MCL 141.101 to 141.140.

    (h) A motor carrier that operates motor vehicles only for the purpose of transporting passengers to and from funerals.

    (i) A motor carrier that operates a motor vehicle that is owned or leased by or on behalf of an employer to transport its employees to and from their place of employment.

    (j) A public or private school or a unit of government that owns or operates a school bus, or a privately owned school bus that is under contract with a school district, an independent school district, or a private or charter school, when that bus is used solely for the transportation of pupils to or from school, school-related events, or other uses as provided under the pupil transportation act, 1990 PA 187, MCL 257.1801 to 257.1877.

    (k) A vehicle operated by a canoe or other watercraft, bicycle, or horse livery that is used only to transport clients between their primary business location and the launch or disembarkment location.

    (l) An interstate motor carrier of passengers operating under a United States Department of Transportation, Federal Motor Carrier Safety Administration (USDOT-FMCSA) certificate of authority that is providing a multistate regular route service that passes through this state, unless required by the department as a condition of financial assistance.

    (2) A motor carrier that is exempt under subsection (1) shall operate under the requirements of this act when operating outside of the exemptions described in subsection (1).