Section 300.700 - Grants to States(a)Purpose of grants. The Secretary makes grants to States, outlying areas, and freely associated States (as defined in § 300.717 ), and provides funds to the Secretary of the Interior, to assist them to provide special education and related services to children with disabilities in accordance with Part B of the Act.(b)Maximum amount. The maximum amount of the grant a State may receive under section 611 of the Act is-(1) For fiscal years 2005 and 2006- (i) The number of children with disabilities in the State who are receiving special education and related services- (A) Aged three through five, if the State is eligible for a grant under section 619 of the Act; and(B) Aged 6 through 21; multiplied by-(ii) Forty (40) percent of the average per-pupil expenditure in public elementary schools and secondary schools in the United States (as defined in § 300.717 ); and(2) For fiscal year 2007 and subsequent fiscal years-(i) The number of children with disabilities in the 2004-2005 school year in the State who received special education and related services- (A) Aged three through five if the State is eligible for a grant under section 619 of the Act; and(B) Aged 6 through 21; multiplied by(ii) Forty (40) percent of the average per-pupil expenditure in public elementary schools and secondary schools in the United States (as defined in § 300.717 );(iii) Adjusted by the rate of annual change in the sum of-(A) Eighty-five (85) percent of the State's population of children aged 3 through 21 who are of the same age as children with disabilities for whom the State ensures the availability of FAPE under Part B of the Act; and(B) Fifteen (15) percent of the State's population of children described in paragraph (b)(2)(iii)(A) of this section who are living in poverty. Authority: 20 U.S.C. 1411(a) and (d)