Authority: §§ 58.1-638, 58.1-4023, Code of Virginia.

A.1. This appropriation is for distribution to counties, cities and towns a portion of net revenue from the state sales and use tax, in support of the Standards of Quality (Title 22.1, Chapter 13.2, Code of Virginia) (See the Attorney General's opinion of August 3, 1982).

2. Certification of payments and distribution of this appropriation shall be made by the State Comptroller.

3. The distribution of the Special State Revenue Sharing (Sales Tax) funds shall be made in equal bimonthly payments at the middle and end of each month.

B.1. This appropriation includes $401,729,184 the first year and $371,310,149 $396,402,668 the second year from the general fund as the state payment for the lottery profits, to be deposited into the general fund pursuant to § 3-1.01 G of this act.

2. Out of this appropriation, $243,527,213 the first year and $225,090,164 $240,299,297 the second year shall be used, together with funds appropriated in Item 147, to fund the state's share of Basic Aid Payments as determined in Item 147 C 2.

3.a) Out of this appropriation, an amount estimated at $143,159,712 the first year and $146,219,985 $156,103,371 the second year shall be disbursed by the Department of Education to local school divisions to support the state share of an estimated $221.75 per pupil the first year and $224.23 $239.41 per pupil the second year in adjusted average daily membership. These funds shall be matched by the local government, based on the composite index of local ability-to-pay. Further, in order to receive this funding, the locality in which the school division is located shall appropriate these funds solely for educational purposes and shall not use such funds to reduce total local operating expenditures for public education below the amount expended by the locality for such purposes in the year upon which the 2002-04 biennial Standards of Quality expenditure data were based; provided however, that no locality shall be required to maintain a per pupil expenditure which is greater than the per pupil amount expended by the locality for such purposes in the year upon which the 2002-04 biennial Standards of Quality expenditure data were based.

b.1) Out of this appropriation, an amount estimated at $15,042,259 the first year in additional lottery proceeds shall be disbursed by the Department of Education to local school divisions to support the state share of an estimated $23.30 per pupil the first year in adjusted daily membership. These funds shall be matched by the local government, based on the composite index of local ability-to-pay.

2) Further, in order to receive the funding, the locality in which the school division is located shall appropriate these funds solely for educational purposes and shall not use such funds to reduce total local operating expenditures for public education below the amount expended by the locality for purposes in the year upon which the 2002-2004 biennial Standards of Quality expenditure data were based; provided however, that no locality shall be required to maintain a per pupil expenditure which is greater than the per pupil amount expended by the locality for such purposes in the year upon which the 2002-2004 biennial Standards of Quality expenditure data were based.

4. Of the amounts listed in B 3 above, no more than 50 percent shall be used for recurring costs and at least 50 percent shall be spent on nonrecurring expenditures by the relevant school divisions. Nonrecurring costs shall include school construction, additions, infrastructure, site acquisition, renovations, technology, and other expenditures related to modernizing classroom equipment, and debt service payments on school projects completed during the last 10 years.

5. Any funds provided to school divisions in the first year from this Item that are unexpended as of June 30, 2003, shall be carried on the books of the locality to be appropriated to the school division in the second year.