(1) The Coal Board must adopt rules governing its proceedings, prescribe forms for grant applications, receive and consider applications for grants, and award grants to local governmental units, federally-recognized Indian tribes, school districts, and state agencies to assist local governmental units in meeting the local impact of coal development or decline by enabling them to adequately provide governmental services and facilities which are needed as a direct consequence of coal development or decline.

(2) Applications will be judged on the following five main guidelines:

(a) Demonstration of need:

(i) What assistance is required to eliminate or reduce a direct and obvious threat to the public health, safety or welfare that has been caused as a direct result of coal development or decline.

(b) Severity of impact:

(i) What has been the rapidity of growth or decline and subsequent development of the problem and the number of people affected.

(c) Degree of local effort:

(i) As applicable, what bonding, millage effort, or user charge has been made in the past, those currently being made, and what effort has been made to secure funds from other sources to answer needs.

(d) Availability of funds:

(i) What amount of funds is available in light of the total request submitted.

(e) Planning:

(i) How does the application fit into an overall plan for the orderly management of the existing or contemplated growth or decline problems.