(a) Tennessee BEP funds shall be distributed by the commissioner periodically throughout the school year according to a schedule established by the commissioners of education and finance and administration, subject to all restrictions prescribed by law.

(b) BEP funds that are earned in classroom components, which include pupil contact and classroom support as defined by the state board, must be spent in the classroom.

(c) Tennessee foundation program appropriations to LEAs for the 1990-1991 school year shall be a base, and no LEA shall receive in subsequent years from the BEP a lesser amount of funds, adjusted for changes in student enrollment, than it received in the 1990-1991 school year under the Tennessee foundation program.

(d) Before a full and complete settlement is made with any system for any year, all records and reports required by the commissioner shall be filed with the commissioner by the system.

(e) If state funds available for distribution are insufficient to meet the local public school systems' entitlements, the commissioner shall apply a pro rata reduction to the amount for which each system is eligible. The pro rata reduction shall be applied to the state increased amount needed to fully fund the BEP compared to the base year.

(f) In any year in which state funds available for distribution must be prorated under subsection (e), the BEP formula shall be calculated for each LEA on the basis of prior year ADM or FTEADM or identified and served special education students (I&S) with the following exception: if the LEA's current year ADM, FTEADM, and I&S, taken as a whole, exceeds by more than two percent (2%) the prior year ADM, FTEADM, and I&S, taken as a whole, then that LEA's allocation of state funds shall be calculated on the basis of the current year ADM, FTEADM, and I&S less the first two percent (2%) by which it exceeds the prior year ADM, FTEADM, and I&S. The increased amount so calculated shall be distributed to the extent funds are appropriated for that specific purpose. If the funds appropriated for that purpose are insufficient to provide for the LEA's increased allocations, the commissioner shall apply a pro rata reduction to the increased amount each LEA is otherwise eligible to receive.

(g) If such action is necessary, the commissioner, with the approval of the state board, may waive any requirements prescribed by law, rule, regulation or otherwise until the state provides the required funding.

(h) Funds shall be distributed pursuant to the BEP.