(a) In general
The Commission shall make a requirements payment each year in an amount determined under section 21002 of this title to each State which meets the conditions described in section 21003 of this title for the year.

(b) Use of funds

(1) In general
Except as provided in paragraphs (2) and (3), a State receiving a requirements payment shall use the payment only to meet the requirements of subchapter III.

(2) Other activities
A State may use a requirements payment to carry out other activities to improve the administration of elections for Federal office if the State certifies to the Commission that—

(A) the State has implemented the requirements of subchapter III; or

(B) the amount expended with respect to such other activities does not exceed an amount equal to the minimum payment amount applicable to the State under section 21002(c) of this title.

(3) Activities under Uniformed and Overseas Citizens Absentee Voting Act
A State shall use a requirements payment made using funds appropriated pursuant to the authorization under section 21007(a)(4) of this title only to meet the requirements under the Uniformed and Overseas Citizens Absentee Voting Act [52 U.S.C. 20301 et seq.] imposed as a result of the provisions of and amendments made by the Military and Overseas Voter Empowerment Act.

(c) Retroactive payments

(1) In general
Notwithstanding any other provision of this part, including the maintenance of effort requirements of section 21004(a)(7) of this title, a State may use a requirements payment as a reimbursement for costs incurred in obtaining voting equipment which meets the requirements of section 21081 of this title if the State obtains the equipment after the regularly scheduled general election for Federal office held in November 2000.

(2) Special rule regarding multiyear contracts
A State may use a requirements payment for any costs for voting equipment which meets the requirements of section 21081 of this title that, pursuant to a multiyear contract, were incurred on or after January 1, 2001, except that the amount that the State is otherwise required to contribute under the maintenance of effort requirements of section 21004(a)(7) of this title shall be increased by the amount of the payment made with respect to such multiyear contract.

(d) Adoption of Commission guidelines and guidance not required to receive payment
Nothing in this subpart may be construed to require a State to implement any of the voluntary voting system guidelines or any of the voluntary guidance adopted by the Commission with respect to any matter as a condition for receiving a requirements payment.

(e) Schedule of payments
As soon as practicable after the initial appointment of all members of the Commission (but in no event later than 6 months thereafter), and not less frequently than once each calendar year thereafter, the Commission shall make requirements payments to States under this subpart.

(f) Limitation
A State may not use any portion of a requirements payment—

(1) to pay costs associated with any litigation, except to the extent that such costs otherwise constitute permitted uses of a requirements payment under this subpart; or

(2) for the payment of any judgment.