Section 29.60.540 - Limitations on uses of grants by municipalities and villages(a) A municipality may not use a grant made under AS 29.60.510 to reduce current municipal tax rates or to retire its existing bonded indebtedness.(b) Money received by a municipality, village, or school district under AS 29.60.500 - 29.60.599 may not be used for a capital improvement, as that term is defined in AS 46.08.900.