(a) Notwithstanding § 300.808, allocations under that section are subject to the following:

1. (1) No State's allocation may be less than its allocation under section 619 of the Act for the preceding fiscal year.

2. (2) No State's allocation may be less than the greatest of—

   1. (i) The sum of—

      1. (A) The amount the State received under section 619 of the Act for fiscal year 1997; and
      2. (B) One-third of one percent of the amount by which the amount appropriated under section 619(j) of the Act for the fiscal year exceeds the amount appropriated for section 619 of the Act for fiscal year 1997;

   2. (ii) The sum of—

      1. (A) The amount the State received under section 619 of the Act for the preceding fiscal year; and
      2. (B) That amount multiplied by the percentage by which the increase in the funds appropriated under section 619 of the Act from the preceding fiscal year exceeds 1.5 percent; or

   3. (iii) The sum of—

      1. (A) The amount the State received under section 619 of the Act for the preceding fiscal year; and
      2. (B) That amount multiplied by 90 percent of the percentage increase in the amount appropriated under section 619 of the Act from the preceding fiscal year.

(b) Notwithstanding paragraph (a)(2) of this section, no State's allocation under § 300.808 may exceed the sum of—

1. (1) The amount the State received under section 619 of the Act for the preceding fiscal year; and
2. (2) That amount multiplied by the sum of 1.5 percent and the percentage increase in the amount appropriated under section 619 of the Act from the preceding fiscal year.

(c) If the amount available for allocation to States under § 300.808 and paragraphs (a) and (b) of this section is insufficient to pay those allocations in full, those allocations are ratably reduced, subject to paragraph (a)(1) of this section.

(Authority: 20 U.S.C. 1419(c)(2)(B) and (c)(2)(C))