(1) Funds authorized for this program must not be used to cover administrative costs or the costs of test boring or core sampling.

(2) The department shall to the extent practicable establish a formula for allocating funds among eligible small operator permit applicants if available funds are less than those required to provide the services. This formula must include such factors as the applicant's:

(a) anticipated date of filing a permit application;

(b) anticipated date for commencing mining; and

(c) performance history.

(3) Funding must not be given unless it is clear that the applicant would not be restricted in any manner from receiving a permit.