2.__Transition and scope.__The appropriation and assessment limit established in subsection 1 becomes effective for a school administrative unit for its first full fiscal year following the effective date of this section.

A.__For purposes of determining the assessment limit for the first fiscal year for which this section is effective, the limit must be set at the amount appropriated of assessed by the school administrative unit during the prior fiscal year multiplied by the following sum: one plus the income growth factor set forth in subsection 3 plus the annual property growth factor for the member municipality or municipalities set forth in subsection 1.

B.__Beginning with fiscal year 2006-07, the limits established by this subchapter do not apply to the budget of any school administrative unit that appropriates a combination of state and local resources that does not exceed the total budget identified as reasonably necessary for that school administrative unit according to chapter 606-B, as divided by its base-year factor.__For the purposes of this subsection, a school administrative unit's base-year factor is calculated with the numerator being the total budget identified as reasonably necessary for that school administrative unit according to this subchapter for the 2005-2006 school year and the denominator being the actual amount of state and local resources appropriated for the school administrative unit by its legislative body for that same fiscal year, except that the base-year factor may not exceed 1.0.__The limits established by this subchapter do apply if the school budget proposed by the governing body of a school administrative unit exceeds the adjusted budget as described in this subsection, and the adoption of that school budget must be approved according to the procedures established in subsection 5.

C.__If the prior year's assessment reflects the effect of extraordinary, nonrecurring events, the school administrative unit may submit a written notice to the commissioner requesting an adjustment in the assessment calculation, which adjustment must be determined in a reasonable amount of time.

3.__Income growth factor.__The income growth factor applicable to fiscal years following the effective date of this section is the base growth factor, which for purposes of this section means the average real personal income growth rate as