5.__Commissioner's reserve fund.__One-half of one percent of the amount appropriated under this section plus subsidy reductions under subsection 2 must be held by the commissioner in a reserve fund that the commissioner may expend during the year of funding to make adjustments resulting from audits or necessary corrections to subsidy entitlements under this chapter.__In the 12th month of the year of funding, any balance then remaining in the reserve fund must be distributed to all units eligible for subsidy under subsection 2 in proportion to each unit's operating cost subsidy level.

§15664.__Program cost subsidy

By March 31st of each year, the Legislature shall appropriate funds to subsidize program costs for all eligible units for the ensuing fiscal year.

1.__Default appropriation.__In the absence of timely legislative action, the program cost subsidy for the ensuing year must be calculated and paid by the commissioner based on the program appropriation and the program millage limit in effect for the current year.

2.__How calculated.__The program cost subsidy for each unit is the product of that unit's program costs times the state share percentage for that unit.

3.__Appropriation less than subsidy.__If the appropriation for program costs is insufficient to pay the subsidies calculated in accordance with subsection 2, then the subsidy to each unit eligible to receive a program cost subsidy must be reduced in proportion to each unit's average pupil count.

4.__Appropriation exceeding subsidy.__If the appropriation for program costs exceeds the amount necessary to pay the subsidies calculated in accordance with subsection 2, then the excess must be distributed to pay that portion of each unit's program costs that exceeds its program circuit breaker.__A unit's "program circuit breaker" is the amount calculated by multiplying the program millage limit times the fiscal capacity of that unit.

5.__Program millage limit.__For purposes of this section, "program millage limit" means a single statewide property tax