(a) Application for a grant hereunder may be made to the advisory committee and accompanied by an application to the primary financial source and processed by the Department of Health and Environmental Control. The Department of Health and Environmental Control, on approval of the advisory committee, shall make the necessary rules and regulations for the consideration and processing of all State grant requests appropriated under this chapter, which shall generally conform to those used by Federal grant and loan agencies, which rules shall be filed in the office of the Secretary of State. The rules shall contain, but shall not be limited to the following criteria:

(1) Preliminary engineering costs study;

(2) Bonded indebtedness of the district, authority or community;

(3) Financial conditions of the district, authority or community;

(4) Costs per connection;

(5) Economic level in the district, area or community;

(6) Ratio of contracted users to potential users which shall not be less than sixty-seven percent;

(7) Conformity to overall State, regional or local plans;

(8) Operation and maintenance costs identified and proper replacement costs;

(9) Amount of connection charges and minimum user charges; and

(10) Sustaining costs of rural water and sewer systems.

(b) No funds shall be dispensed until the applicant furnishes evidence of a commitment from the primary financial source.