(a) If a State repeals or amends distribution legislation, the State must immediately notify the Department in writing of this fact and send the Department a copy of the new law.

(b) When the Department receives a notification under paragraph (a) of this section, it must:

(1) Determine if the State's process complies with 31 U.S.C. 6907. If the Department determines that it does not, we must notify the designated State government office that the Department will disburse payment directly to the eligible local governments; and

(2) Start the payments:

(i) In the current Federal fiscal year, if the Department receives a copy of the State's amendatory legislation before July 1; or

(ii) Start the payments in the next Federal fiscal year, if the Department receives a copy of the State's amendatory legislation after July 1.