---
kind: "section"
citation: "34 C.F.R. § 303.705"
title: "34"
number: "303.705"
heading: "Withholding funds."
url: "https://uscodex.org/cfr/34/303.705"
---

# §303.705. Withholding funds.

- (a) **Opportunity for hearing.** Prior to withholding any funds under part C of the Act, the Secretary provides reasonable notice and an opportunity for a hearing to the lead agency involved, pursuant to the procedures in [§§ 303.231 through 303.236](/cfr/34/303.231..303.236.md).
- (b) **Suspension.** Pending the outcome of any hearing to withhold payments under [paragraph (a)](#a) of this section, the Secretary may suspend payments to a recipient, suspend the authority of the recipient to obligate funds under part C of the Act, or both, after the recipient has been given reasonable notice and an opportunity to show cause why future payments or authority to obligate funds under part C of the Act should not be suspended.
- (c) **Nature of withholding.**
  - (1) **Limitation.** If the Secretary determines that it is appropriate to withhold further payments under section 616(e)(2) or (e)(3) of the Act, the Secretary may determine—
    - (i) That such withholding will be limited to programs or projects, or portions of programs or projects, that affected the Secretary's determination under [§ 303.703(b)(1)](/cfr/34/303.703.md?p=b-1); or
    - (ii) That the lead agency must not make further payments of funds under part C of the Act to specified State agencies, EIS programs or, if the lead agency does not provide part C funds to the EIS program, EIS providers that caused or were involved in the Secretary's determination under [§ 303.703(b)(1)](/cfr/34/303.703.md?p=b-1).
  - (2) **Withholding until rectified.** Until the Secretary is satisfied that the condition that caused the initial withholding has been substantially rectified—
    - (i) Payments to the State under part C of the Act must be withheld in whole or in part; and
    - (ii) Payments by the lead agency under part C of the Act must be limited to State agencies and EIS providers whose actions did not cause or were not involved in the Secretary's determination under [§ 303.703(b)(1)](/cfr/34/303.703.md?p=b-1).

## Notes

### Authority

Authority: 20 U.S.C. 1431 through 1444, unless otherwise noted.

### Source

Source: 76 FR 60244, Sept. 28, 2011, unless otherwise noted.