(1) The governing body of any town, city, village or county may by ordinance provide for the use of flashing red or amber warning lights by school bus operators in a residence or business district when pupils or other authorized passengers are to be loaded or unloaded at a location at which there are no traffic signals and such persons must cross the street or highway before being loaded or after being unloaded.
(2) The governing body of any town, city, village or county may, by ordinance, prohibit the use of flashing red or amber warning lights by school bus operators when pupils or other authorized passengers are loaded or unloaded directly from or onto the school grounds or that portion of the right-of-way between the roadway and the school grounds in a zone designated by “school” warning signs as provided in s. 118.08 (1) in which a street or highway borders the grounds of a school.