42 U.S.C. § 280c–1 — Limitation on duration of grant and requirement of matching funds

(a) A State can receive payments from a grant under section 280c(a) for no more than 3 years. The Secretary must evaluate these payments every year. (b) The State must also match part of the federal money. (1) The federal share of the cost of the services drops each year: (A) In the first year, the Secretary cannot pay more than 75 percent of the cost of the State's services. (B) In the second year, the Secretary cannot pay more than 65 percent. (C) In the third year, the Secretary cannot pay more than 55 percent. (2) The Secretary cannot give a State a grant under section 280c(a) unless the State agrees to contribute non-federal money toward the cost, directly or through donations. The required match also changes each year: (A) In the first year, the State must contribute at least $25 (in cash or in kind, as described in subsection (c)) for every $75 of federal money. (B) In the second year, the State must contribute at least $35 for every $65 of federal money. (C) In the third year, the State must contribute at least $45 for every $55 of federal money. (c) The State's non-federal contribution can be cash or in-kind goods and services — like equipment or plant — as long as they are fairly valued. But the State cannot count money that came from the federal government, or services that the federal government paid for or subsidized to a significant extent, toward this required contribution.