13-522.

Budget documents; noncompliance with budget limitations; withhold or forfeit state aid; Auditor of Public Accounts; State Treasurer; duties.

(1) The Auditor of Public Accounts shall prepare budget documents to be submitted by governmental units which calculate the restricted funds authority for each governmental unit. Each governmental unit shall submit its calculated restricted funds authority with its budget documents at the time the budgets are due to the Auditor of Public Accounts. If the Auditor of Public Accounts determines from the budget documents that a governmental unit is not complying with the budget limits provided in sections 13-518 to 13-522, he or she shall notify the governing body of his or her determination and notify the State Treasurer of the noncompliance.

(2)(a) Upon receiving notice from the Auditor of Public Accounts, the State Treasurer shall then suspend distribution of state aid allocated to the governmental unit until such sections are complied with. The funds shall be held for six months until the governmental unit complies, and if the governmental unit complies within the six-month period, it shall receive the suspended funds, but after six months, if the governmental unit fails to comply, the suspended funds shall be forfeited and shall be (i) redistributed to other recipients of the state aid in the county where such noncompliant governmental unit is located or returned to the Highway Allocation Fund if there is no eligible recipient or (ii) in the case of a homestead exemption reimbursement, returned to the General Fund.

(b) The governmental unit shall continue to forfeit state aid until the governmental unit reaches compliance and the State Treasurer has received notification of such compliance from the Auditor of Public Accounts. All state aid that was forfeited shall remain forfeited and redistributed according to subdivision (a)(i) of this subsection.

(3) If any governmental unit fails to reach compliance within twelve months after the time of the order and notice of delinquency given by the Auditor of Public Accounts to the State Treasurer, such governmental unit shall be ineligible for future distributions of state aid. Upon reaching compliance, the governmental unit shall be eligible for future distributions of state aid.