(1) The department shall use the funds in the Homeless Shelter Assistance Trust Fund to finance grants for projects or programs that provide for persons or families with special housing needs.

(2) Projects and programs to which funds shall be provided include eligible community, neighborhood-based, housing-assistance organizations, institutions, associations, and societies or corporations that:

(a) Are exempt from taxation under section 501(c)(3) of the Internal Revenue Code as defined in section 49-801.01;

(b) Do not discriminate on the basis of age, religion, sex, race, color, or national origin;

(c) Provide residential housing for at least eight hours of every twenty-four-hour period; and

(d) Operate a drug-free premises.

(3) The department shall establish an advisory committee consisting of individuals and groups involved with housing issues, in particular those pertaining to persons or families with special housing needs, to advise and assist the department in establishing criteria, priorities, and guidelines for eligibility requirements, application requirements and dates, public notification, and monitoring and shall assist the department in adopting and promulgating rules and regulations for providing grants from the fund.

(4) An application submitted by an organization representing a number of eligible applicants may be considered even though the representing organization may itself not qualify under this section.

(5) In making grants pursuant to the Homeless Shelter Assistance Trust Fund Act, the department shall consider, but not be limited to, the following factors:

(a) The number of night-lodging units provided by the applicant as measured by the number of persons housed per night;

(b) Participation by the applicant in community planning processes and activities aimed at preventing and alleviating homelessness;

(c) Other verifiable units of service provided by the applicant; and

(d) The geographic distribution of funds.