Any state agency which is required or permitted by federal law or regulation to establish or alter a federal aid allocation formula to a local agency shall notify the Joint Legislative Budget Committee not less than 60 days prior to the effective date of the establishment or change in the federal aid allocation formula. The chairman of the Joint Legislative Budget Committee may grant a waiver of the 60-day notification period after receipt of the notification.

The chairman shall inform members of the Joint Legislative Budget Committee of his intention to waive the 60-day notification period after such notification. If no objection is received within 10 days, he shall proceed to grant the waiver of the 60-day notification period.

The notification shall contain the federal law or regulation necessitating or authorizing the establishment or change, a description of the proposed allocation formula to be established or changed, as the case may be, and an estimate of the resulting increase or decrease in federal aid allocated to the affected local agency.

When requested by the chairman or by any member of the committee, or when the Legislature is in session, when requested by the chairman of the committee, the Joint Legislative Budget Committee shall schedule a hearing on the proposed allocation formula to be established or changed, as the case may be.

“Local agency” as used in this section, means any city, county, city and county, special district, school district, community college district, and county office of education.

The establishment or changes in federal aid allocation formulas affecting less than one hundred thousand dollars ($100,000) in federal aid in any fiscal year shall be exempt from the provisions of this section.

The provisions of this section shall not apply to any reallocation of funds by a state agency from or to a local agency if the state agency finds that either of the following conditions, or both, exist:

(a) The local agency cannot spend its entire allocation within the period established by the federal government.

(b) The failure to spend the funds could lead to their recapture by the federal government or to a reduced allocation of federal funds in subsequent years.

(Added by Stats. 1979, Ch. 324.)