(1) The state board shall promulgate rules in accordance with the "State Administrative Procedure Act", article 4 of title 24, C.R.S., for the implementation of the dropout prevention activity grant program. At a minimum, the rules shall specify the procedures for applying for a grant, the form of the grant application, the information to be provided by the applicant, and the criteria for awarding grants.

(2) The department shall review each grant application received from a facility school, a qualified school, or a qualified community organization pursuant to section 22-27.5-103 and shall make recommendations to the state board concerning whether the grant should be awarded and the amount of the grant. If the department determines an application is missing any information required by rules to be included with the application, the department may contact the applicant to obtain the missing information. In making its recommendations, in addition to any criteria identified by rule of the state board, the department shall:

(a) Give first priority to applications to fund arts-based or vocational activity programs at qualified schools that experience high dropout rates for the three school years preceding the year in which the application is submitted and to fund arts-based or vocational activity programs at facility schools;

(b) Consider the percentage of students enrolled at the affected qualified school or facility school who are minority students or students who qualify for free or reduced-cost lunch pursuant to the provisions of the federal "Richard B. Russell National School Lunch Act", 42 U.S.C. sec. 1751 et seq., with the goal of funding arts-based and vocational activity programs at qualified schools and facility schools that enroll high percentages of minority students and students who qualify for free or reduced-cost lunch;

(c) Consider the format of the arts-based or vocational activity program for which funding is requested and determine the cost-effectiveness of the program, the number of students who will be able to participate, and the quality of the participatory experience offered, with the goal of funding arts-based and vocational activity programs that provide a large number of students the opportunity to directly participate in and experience an arts-based or vocational activity;

(d) Consider whether the arts-based or vocational activity program for which funding is requested includes a partnering relationship with businesses in the community or a component of community service, with the goal of funding those arts-based and vocational activity programs that demonstrate a connection with the community outside the school or facility school and provide a benefit to that community.

(3) In each year in which moneys are credited to the fund, the state board shall award grants to applicants through the dropout prevention activity grant program. The state board shall take into consideration the recommendations received from the department. In addition to any criteria adopted by rule, the state board in awarding grants shall apply the priority and considerations specified in subsection (2) of this section. A grant awarded pursuant to this article shall be valid for one year.