The Secretary may, after notice and opportunity for a hearing, withhold from an eligible agency all, or a portion, of the eligible agency’s allotment under paragraphs (2) and (3) of section 2322(a) of this title if the eligible agency—

(1) Plan If a State fails to meet at least 90 percent of the State determined level of performance for any of the core indicators of performance described in 2323(b)(2) [1] of this title for all CTE concentrators, the eligible agency shall develop and implement a program improvement plan (that includes an analysis of the performance disparities or gaps identified under section 2323(b)(3)(C)(ii)(II) of this title, and actions that will be taken to address such gaps) in consultation with the appropriate agencies, individuals, and organizations during the first program year succeeding the program year for which the eligible agency failed to so meet the State determined level of performance for any of the core indicators of performance.

(2) Technical assistance If the Secretary determines that an eligible agency is not properly implementing the eligible agency’s responsibilities under section 2342 of this title, or is not making substantial progress in meeting the purposes of this section, including after implementation of the improvement plan described in paragraph (1),,[2] based on the State determined levels of performance, the Secretary shall work with the eligible agency to implement the improvement activities consistent with the requirements of this chapter.

The Secretary may, after notice and opportunity for a hearing, withhold from an eligible agency all, or a portion, of the eligible agency’s allotment under paragraphs (2) and (3) of section 2322(a) of this title if the eligible agency—

(A) In generalThe Secretary may, after notice and opportunity for a hearing, withhold from an eligible agency all, or a portion, of the eligible agency’s allotment under paragraphs (2) and (3) of section 2322(a) of this title if the eligible agency— (i) fails to implement an improvement plan as described in paragraph (1); or (ii) with respect to any specific core indicator of performance that was identified in a program improvement plan under paragraph (1), fails to meet at least 90 percent of a State determined level of performance for such core indicator for 2 consecutive years after the eligible agency has been identified for improvement under such paragraph.

(B) Waiver for exceptional circumstances The Secretary may waive the sanction in subparagraph (A) due to exceptional or uncontrollable circumstances, such as a natural disaster or a precipitous and unforeseen decline in the financial resources of the State.

(4) Funds resulting from reduced allotments The Secretary shall use funds withheld under paragraph (3) for a State served by an eligible agency to provide technical assistance, to assist in the development of an improved State improvement plan, or for other improvement activities consistent with the requirements of this chapter for such State.

(5) Adjustments prohibited An eligible agency shall not be eligible to adjust performance levels while executing an improvement plan under this section.

The eligible agency may, after notice and opportunity for a hearing, withhold from the eligible recipient all, or a portion, of the eligible recipient’s allotment under this subchapter if the eligible recipient—

(1) Local evaluation Each eligible agency shall evaluate annually, using the local levels of performance described in section 2323(b)(4) of this title, the career and technical education activities of each eligible recipient receiving funds under this subchapter.

(2) Plan If, after reviewing the evaluation in paragraph (1), the eligible agency determines that an eligible recipient failed to meet at least 90 percent of an agreed upon local level of performance for any of the core indicators of performance described in section 2323(b)(4) of this title for all CTE concentrators, the eligible recipient shall develop and implement a program improvement plan (that includes an analysis of the performance disparities or gaps identified under section 2323(b)(3)(C)(ii)(II) of this title, and actions that will be taken to address such gaps) in consultation with local stakeholders described in section 2354(d)(1) of this title, the eligible agency, and appropriate agencies, individuals, and organizations during the first program year succeeding the program year for which the eligible recipient failed to so meet any of the local levels of performance for any of the core indicators of performance.

(3) Technical assistance If the eligible agency determines that an eligible recipient is not properly implementing the eligible recipient’s responsibilities under section 2354 of this title, or is not making substantial progress in meeting the purposes of this chapter, based on the local levels of performance, the eligible agency shall work with the eligible recipient to implement improvement activities consistent with the requirements of this chapter.

The eligible agency may, after notice and opportunity for a hearing, withhold from the eligible recipient all, or a portion, of the eligible recipient’s allotment under this subchapter if the eligible recipient—

(A) In generalThe eligible agency may, after notice and opportunity for a hearing, withhold from the eligible recipient all, or a portion, of the eligible recipient’s allotment under this subchapter if the eligible recipient— (i) fails to implement an improvement plan as described in paragraph (2); or (ii) with respect to any specific core indicator of performance that was identified in a program improvement plan under paragraph (2), fails to meet at least 90 percent of the local level of performance for such core indicator for 2 consecutive years after the eligible recipient has been identified for improvement under such paragraph.

(B) Waiver for exceptional circumstancesIn determining whether to impose sanctions under subparagraph (A), the eligible agency may waive imposing sanctions— (i) due to exceptional or uncontrollable circumstances, such as a natural disaster or a precipitous and unforeseen decline in the financial resources of the eligible recipient; (ii) based on the impact on the eligible recipient’s reported performance of the small size of the career and technical education program operated by the eligible recipient; or (iii) in response to a public request from an eligible recipient, if the eligible agency determines that the requirements described in clause (i) or (ii) have been met.

(5) Funds resulting from reduced allotments The eligible agency shall use funds withheld under paragraph (4) from an eligible recipient to provide (through alternative arrangements) services and activities to students within the area served by such recipient to meet the purposes of this chapter.

(6) Adjustments prohibited An eligible recipient shall not be eligible to adjust performance levels while executing an improvement plan under this section.

(Pub. L. 88–210, title I, § 123, as added Pub. L. 109–270, § 1(b), Aug. 12, 2006, 120 Stat. 721; amended Pub. L. 115–224, title I, § 123, July 31, 2018, 132 Stat. 1606.)