1. Any group of persons desiring to establish a sheltered workshop which will be eligible for state aid shall request a certificate of approval from the department. The request shall be in writing on forms provided by the department, and shall contain such information as the department may reasonably require.

2. Within sixty days after receipt of the request, the department shall hold a hearing to determine suitability of the proposed sheltered workshop to provide appropriate supervised employment and rehabilitation for handicapped persons.

3. If, after hearing, the department determines that the proposed sheltered workshop will be a proper agent of the state for the purpose of employment and rehabilitation of handicapped persons, it shall notify the persons requesting the certificate that they will be issued a certificate of approval upon filing with the department the applicant’s certificate of incorporation as a not-for-profit corporation and a copy of its charter and bylaws. No provision of the charter or bylaws shall conflict with the rules and regulations of the department.

4. The department may refuse to issue a certificate of authority if it finds that a proposed sheltered workshop will not be a proper agency of the state for the purpose of employment and rehabilitation of handicapped persons and it may, after notice and hearing, revoke the certificate of authority of any sheltered workshop which is no longer qualified because the need for the workshop no longer exists or for violation of any rule or regulation of the department.