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U.S. Department of Education: Promoting Educational Excellence for all Americans
Regulations: Part 300 / B / 300.164 / a

(a) Except as provided under Sec. Sec. 300.202 through 300.205, funds paid to a State under Part B of the Act must be used to supplement and increase the level of Federal, State, and local funds (including funds that are not under the direct control of SEAs or LEAs) expended for special education and related services provided to children with disabilities under Part B of the Act and in no case to supplant those Federal, State, and local funds. A State may use funds it retains under Sec. 300.704(a) and (b) without regard to the prohibition on supplanting other funds.