§ 303.3 - Scope.

(a) Section 401(h) of the Act authorizes the Director to withhold payment of any financial contribution under section 201 or section 205 of the Act to a State or a person, or to limit payments to specified programs or projects upon (1) a finding by the Director of failure by a State or person to expend funds in accordance with the regulations, terms, and conditions established under the Act for approved civil defense plans, programs or projects; and (2) notification to the State or person that certain payments for approved financial contributions will not be made until the Director is satisfied that there will no longer be failure by a State or person to expend funds in accordance with such regulations, terms, and conditions. Prior to the making of such finding and issuance of the notification, the State or person must have been given reasonable notice and opportunity for hearing.

(b) The regulations in this part specify (1) the notice which must be given to a State or person, (2) the procedures for obtaining a hearing, and (3) the terms of the notification to the State or person that further payments will not be made if the Director determines, after notice and hearing that there has been a failure to expend funds in accordance with regulations, terms, and conditions established pursuant to the Act.