Notwithstanding any provision of law to the contrary, whenever in any fiscal year, pursuant to Chapter 5, Part 9, Division 1 of the Revenue and Taxation Code, a refund is made or a judgment rendered, as the case may be, for the return of an amount collected as school district taxes levied during a previous year upon secured or unsecured personal property, because it was determined that the property was exempt from taxation, and the property so determined to be exempt equals 1 percent, or more, of the assessed valuation in the school district upon which school district taxes for the previous year were levied, the Controller shall reduce the annual repayment of the district and the amount deducted from the State School Fund apportionment of the district for the fiscal year next succeeding that in which the refund was made or judgment rendered, by that amount by which the annual repayment and deduction of the district would have been reduced for the fiscal year next succeeding that in which the taxes were levied had the assessed valuation upon which the annual repayment was computed not included an amount of assessed valuation equal to the amount of assessed valuation of the property so determined to be exempt.

The amount of annual repayment and deduction, reduced as required by this section, shall be the amount deducted by the Controller for the purposes of Sections 15735, 15741, and 15742 for the fiscal year in which the reduction is made.

(Repealed and added by Stats. 1996, Ch. 277, Sec. 2. Effective January 1, 1997. Operative January 1, 1998.)