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Applicable hold-harmless provisions.   

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(a) General. (1) Except as authorized under paragraph (c) of this section and Sec. 200.100(d)(2), an SEA may not reduce the allocation of an eligible LEA below the hold-harmless amounts established under paragraph (a)(4) of this section.

(2) The hold-harmless protection limits the maximum reduction of an LEA's allocation compared to the LEA's allocation for the preceding year.

(3) Except as provided in Sec. 200.100(d), an SEA must apply the hold-harmless requirement separately for basic grants, concentration grants, targeted grants, and education finance incentive grants as described in paragraph (a)(4) of this section.

(4) Under section 1122(c) of the ESEA, the hold-harmless percentage varies based on the LEA's proportion of formula children, as shown in the following table:

LEA's number of formula children ages 5 to 17, inclusive, as a percentage of Hold-harmless Applicable grant its total population of percentage formulas children ages 5 to 17, inclusive


(i) 30% or more................ 95 Basic Grants,

(ii) 15% or more but less than 90 Concentration Grants,

30%. 85 Targeted Grants, and

(iii) Less than 15%............ Education Finance

Incentive Grants.


(b) Targeted grants and education finance incentive grants. The number of formula children used to determine the hold-harmless percentage is the number before applying the weights described in section 1125 and section 1125A of the ESEA.

(c) Adjustment for insufficient funds. If the amounts made available to the State are insufficient to pay the full amount that each LEA is eligible to receive under paragraph (a)(4) of this section, the SEA must ratably reduce the allocations for all LEAs in the State to the amount available.

(d) Eligibility for hold-harmless protection. (1) An LEA must meet the eligibility requirements for a basic grant, targeted grant, or education finance incentive grant under Sec. 200.71 in order for the applicable hold-harmless provision to apply.

(2) An LEA not meeting the eligibility requirements for a concentration grant under Sec. 200.71 must be paid its hold-harmless amount for four consecutive years.

(Approved by the Office of Management and Budget under control numbers 1810-0620 and 1810-0622)

(Authority: 20 USC 6332(c))

(Added by Federal Register, Vol.67, No.231 December 2,2002 effective January 2,2003.)