((a)) ** Supplement not supplant** Funds made available under this chapter for career and technical education activities shall supplement, and shall not supplant, non-Federal funds expended to carry out career and technical education activities.

((b)) ** Maintenance of effort**

((1)) ** Determination**

((A)) ** In general** Except as provided in subparagraph (B), (C), or (D), in order for a State to receive its full allotment of funds under this chapter for any fiscal year, the Secretary must find that the State’s fiscal effort per student, or the aggregate expenditures of such State, with respect to career and technical education for the preceding fiscal year was not less than the fiscal effort per student, or the aggregate expenditures of such State, for the second preceding fiscal year.

((B)) ** Computation** In computing the fiscal effort or aggregate expenditures pursuant to subparagraph (A), the Secretary shall, at the request of the State, exclude competitive or incentive-based programs established by the State, capital expenditures, special one-time project costs, and the cost of pilot programs.

((C)) ** Decrease in Federal support** If the amount made available for career and technical education programs under this chapter for a fiscal year is less than the amount made available for career and technical education programs under this chapter for the preceding fiscal year, then the fiscal effort per student or the aggregate expenditures of a State required by subparagraph (A) for the preceding fiscal year shall be decreased by the same percentage as the percentage decrease in the amount so made available.

((D)) ** Establishing the state baseline** For purposes of applying subparagraph (A) for years which require the calculation of the State’s fiscal effort per student, or aggregate expenditures of such State, with respect to career and technical education for the first full fiscal year following , the State may determine the State’s fiscal effort per student, or aggregate expenditures of such State, with respect to career and technical education for such first full fiscal year by—

((i)) continuing to use the State’s fiscal effort per student, or aggregate expenditures of such State, with respect to career and technical education, as was in effect on the day before ; or

((ii)) establishing a new level of fiscal effort per student, or aggregate expenditures of such State, with respect to career and technical education, which is not less than 95 percent of the State’s fiscal effort per student, or the aggregate expenditures of such State, with respect to career and technical education for the preceding fiscal year.

((2)) ** Failure to meet**

((A)) ** In general** The Secretary shall reduce the amount of a State’s allotment of funds under this chapter for any fiscal year in the exact proportion by which the State fails to meet the requirement of paragraph (1) by falling below the State’s fiscal effort per student or the State’s aggregate expenditures (using the measure most favorable to the State), if the State failed to meet such requirement (as determined using the measure most favorable to the State) for 1 or more of the 5 immediately preceding fiscal years.

((B)) ** Special rule** No such lesser amount shall be used for computing the effort required under paragraph (1) for subsequent years.

((3)) ** Waiver** The Secretary may waive paragraph (2) due to exceptional or uncontrollable circumstances affecting the ability of the State to meet the requirement of paragraph (1) such as a natural disaster or an unforeseen and precipitous decline in financial resources. No level of funding permitted under such a waiver may be used as the basis for computing the fiscal effort or aggregate expenditures required under this section for years subsequent to the year covered by such waiver. The fiscal effort or aggregate expenditures for the subsequent years shall be computed on the basis of the level of funding that would, but for such waiver, have been required.