(a) Except as otherwise provided in subdivision (b), if the governing board of any district neglects or refuses to make a district budget as prescribed by the Office of the Chancellor, or fails to develop a budget by the deadline dates as specified in section 58305, the Chancellor may withhold any apportionment of state or local money to the particular district for the current fiscal year until the district makes a proper budget.

(b) No penalty shall be imposed upon a district pursuant to subdivision (a) if the Chancellor determines that unique circumstances make it impossible for the district to comply with its duties to adopt a budget, or if there are delays in the adoption of the annual Budget Act.