Be it enacted by the General Assembly of Virginia:

1.  That §§53.1-84 and 53.1-86 of the Code of Virginia is amended and reenacted as follows:

§53.1-84. State funds available to local correctional facilities for operating costs.

The Compensation Board shall apportion among local correctional facilities moneys appropriated in the general appropriation act for the purpose of financial assistance for the confinement of persons in local facilities in accordance with reports of prisoner days provided by the Department.

The county or city receiving such funds or a combination of counties or cities or both receiving such funds on behalf of a regional facility shall pay therefrom the operating costs of its local adult correctional facilities and programs. Criminal costs prior to confinement shall be paid out of funds appropriated pursuant to §19.2-332.

Such funds may also be used to pay for alternative punishment or alternative to incarceration programs for prisoners that would otherwise be housed in a local correctional facility provided that such programs operate under the authority or supervision of the sheriff or local jail board and have been approved by the Department of Corrections or the Department of Criminal Justice Services.

Regulations adopted by the Board to implement the provisions of §§53.1-84 through 53.1-86 shall not be subject to legislative review as provided in §2.2-4014. In the adoption of such regulations, the Board shall comply with all other requirements of the Administrative Process Act (§ 2.2-4000 et seq.), and in any subsequent amendments thereto shall comply with all the provisions of §2.2-4012.

§53.1-86. Limitation on use of state funds; records of receipts and disbursements.

No locality receiving state funds under §53.1-85 shall use such funds for any purpose other than for paying expenses incurred as the result of the confinement of persons in local correctional facilities or participation in local alternative incarceration programs. The Department shall require a locality to return any portion of state funds expended in violation of this provision to the state treasury. Should an unexpended balance of state funds exist at the end of the apportionment year, the unencumbered funds in such balance may be reverted to the local treasury and subsequently shall be expended for operating expenses of local correctional facilities. In the case of regional correctional facilities, the unexpended balance of state funds shall be apportioned by the regional facility's governing body to the participating localities based on the number of prisoner days of persons confined in the facility from each jurisdiction.

Each locality shall keep records of receipts and disbursements of state funds received pursuant to §53.1-85. Such records shall be open for evaluation by the Department and audit by the Auditor of Public Accounts.