45 CFR § 261.53 - May a State correct the problem before incurring a penalty?

---
identifier: "/us/cfr/t45/s261.53"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "45 CFR § 261.53 - May a State correct the problem before incurring a penalty?"
title_number: 45
title_name: "Public Welfare"
section_number: "261.53"
section_name: "May a State correct the problem before incurring a penalty?"
chapter_name: "OFFICE OF FAMILY ASSISTANCE (ASSISTANCE PROGRAMS), ADMINISTRATION FOR CHILDREN AND FAMILIES, DEPARTMENT OF HEALTH AND HUMAN SERVICES"
part_number: "261"
part_name: "ENSURING THAT RECIPIENTS WORK"
positive_law: false
currency: "2026-03-24"
last_updated: "2026-03-24"
format_version: "1.1.0"
generator: "[email protected]"
authority: "42 U.S.C. 601, 602, 607, and 609; Pub. L. 109-171."
regulatory_source: "64 FR 17884, Apr. 12, 1999, unless otherwise noted."
cfr_part: "261"
---


# 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 of this chapter.

(b) To qualify for a penalty reduction under § 262.6(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 of this part) by at least 50 percent.