(a) A sum of one million dollars ($1,000,000) from the amount appropriated in the act of May 28, 1993 (P.L. 589, No. 1A), known as the General Appropriation Act of 1993, for the equity supplement, and any remainder if the sum appropriated for the 1993-1994 fiscal year for payments in section 2502.20¹ exceeds the amounts to which all qualifying school districts are entitled, shall be set aside as discretionary funds to assist school districts that have been declared distressed pursuant to section 691² and/or school districts in need of additional support because of extreme financial difficulties. The Secretary of Education shall establish guidelines for school districts' applications for these funds, department approval of applications for funds, department distribution of funds and school districts' expenditure of these funds. The Secretary of Education shall report to the General Assembly on such expenditures.

(b) For the 1996-1997 fiscal year, the sum of one million four hundred fifty thousand dollars ($1,450,000) shall be allocated by the Secretary of Education to school districts which previously received payments under subsection (a) and which do not receive funding under section 2502.30 of this act. The allocation shall be made from undistributed funds not expended, encumbered or committed from appropriations for any fiscal year from grants and subsidies made to the Department of Education. The school districts shall receive an amount equal to the amount previously received pursuant to subsection (a).

(c) Payments made pursuant to subsection (b) shall be paid from a restricted receipt account, which is hereby established, for such payments. Funds shall be transferred by the Secretary of the Budget to the restricted account only to the extent necessary to make the payments authorized by this section. The money in the restricted account is hereby appropriated from the account for purposes of this section.