---
kind: "section"
citation: "45 C.F.R. § 261.53"
title: "45"
number: "261.53"
heading: "May a State correct the problem before incurring a penalty?"
url: "https://uscodex.org/cfr/45/261.53"
---

# §261.53. May a State correct the problem before incurring a penalty?

- (a) **Yes.** A State may enter into a corrective compliance plan to remedy a problem that caused its failure to meet a participation rate, as specified at [§ 262.6](/cfr/45/262.6.md) of this chapter.
- (b) To qualify for a penalty reduction under [§ 262.6(j)(1)](/cfr/45/262.6.md?p=j-1) of this chapter, based on significant progress towards correcting a violation, a State must reduce the difference between the participation rate it achieved in the year for which it is subject to a penalty and the rate applicable during the penalty year (adjusted for any caseload reduction credit determined pursuant to [subpart D](/cfr/45/subpartD.md) of this part) by at least 50 percent.

## Notes

### Authority

Authority: 42 U.S.C. 601, 602, 607, and 609; Pub. L. 109-171.

### Source

Source: 64 FR 17884, Apr. 12, 1999, unless otherwise noted.