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AWL <br /> FAR AL& <br /> U.5. DEPARTMENT Op THE TREASURY <br /> �~=~ <br /> Restrictions on Use <br /> While recipients have considerable flexibility to use Coronavirus State and Local Fiscal Recovery Funds to <br /> address the diverse needs of their communities, some restrictions on use of funds apply. <br /> OFFSET AREDUCTION IN NET TAX REVENUE <br /> m States and territories may not use this funding to directly or indirect,ly offset a reduction in net <br /> tax revenue resulting from a change in !am/ regulation) or administrative interpretation <br /> beginning on March 3, 2021,,through the last day of the fiscal year in which the funds <br /> provided have been spent. /fa state or territory cuts taxes during this period, it must <br /> demonstrate how it paid for the tax cuts from sources other than SLFRF, such as by enacting <br /> policies to raise other sources of revenue) by cutting spending, or through higher revenue due to <br /> economic growth. |f the funds provided have been used to offset tax cuts, the amount used for <br /> this purpose must be repaid to the Treasury. <br /> DEPOSITS INTO PENSION FUNDS <br /> � No recipients except Tribal governments may use this funding to make a deposit to a pension <br /> fund. Treasury defines a ""deposit" as an extraordinary contribution to a pension fund for the <br /> purpose of reducing an accrued, unfunded liability. While pension deposits are prohibited, <br /> recipients may use funds for routine payroll contributions connected to an eligible use of funds <br /> (e.g.,for public health and safety staff). Examples of extraordinary payments include ones that: <br /> � Reduce a liability incurred prior tothe Occur at the regular time for pension <br /> start of the COV|O'19 public health contributions but is larger than aregular <br /> emergency and occur outside the payment would have been <br /> recipient's regular timing for making the <br /> payment <br /> ADDITIONAL RESTRICTIONS AND REQUIREMENTS | <br /> Additional restrictions and requirements that apply across all eligible use categories include: <br /> ° No debt service or replenishing financial reserves.Since SLFRF funds are intended to be used <br /> prospectively, recipients may not use SLFRF funds for debt service or replenishing financial <br /> reserves(e.Q, rainy day funds). <br /> w No satisfaction of settlements and judgments. Satisfaction of any obligation arising under or <br /> pursuant to a settlement agreement,judgment, consent decree, or judicially confirmed debt <br /> restructuring in ajudicia|, administrative, or regulatory proceeding is itself not an eligible use. <br /> However, if a settlement requires the recipient to provide services or incur other costs that are <br /> an eligible use ofSLFRF funds, 5LFRF may be used for those costs. <br /> w Additional general restrictions.SLFRF funds may not be used for a project that conflicts with or <br /> contravenes the purpose of the American Rescue Plan Act statute (e.g., uses of funds that <br /> Cononowirusstote&Loco/Fiscal Recovery Funds/Overview qƒthe Final Rule <br />