(a) If a qualified municipality wishes to apply for a grant under AS 29.60.600, the municipality shall apply for a grant for a fiscal year by submitting a form prescribed by the commissioner of health and social services before October 1 of the preceding fiscal year. The application must generally describe the services that are proposed to be funded with the grant and include the following information:

(1) a statement that each proposed service will meet the goals established under AS 47.75.010 and an explanation of why the service is necessary to prevent or alleviate serious mental or physical hardship; this explanation must be supported by a needs assessment carried out by the municipality;

(2) a description of the categories of individuals to whom the services are to be provided; and

(3) an estimate of the expenditures required for each of the services to be provided.

(b) A human services community matching grant shall be allotted in accordance with an agreement made between the grantee and the commissioner of health and social services on behalf of the state. The agreement may include any provision agreed upon by the parties and must include the following provisions:

(1) a statement by the grantee that the match requirement of AS 29.60.600 has been met by the grantee;

(2) estimates of reasonable costs of funding the services; and

(3) a requirement that no more than five percent of the grant money received under AS 29.60.600 may be used for municipal administrative costs connected with distributing the grant money to the private nonprofit agencies providing the services.