Dear Mr. Resch

As you are likely aware, due to the failure of Congress to reach a deal on balanced deficit reduction to avoid sequestration, the President on Firday March 1, 2013 was required by law to issue a sequestration order canceling approximately $85 billion in budgetary resources across the federal government ofr the remainder of the Federal fiscal year. As partners with the U.S. Department of the Treasury (Treasury) we wanted to provide you with timely and clear information about how these ungortunate budget cuts impact us, and in turn what it means for your members that have applied for funding under the Section 1603 program. Please share this information with your membershipas you deep appropriate.

At this time, Treasury is implementing a reduction to all Section 1603 awards for the remainder of the fiscal year (through September 30, 2013) in the amount of 8.7 percent. These reductions will continue for the duration of sequestration. The sequestration reduction rate will be applied until the end of the fiscal year, at which time the sequestration rate is subject to change.

Treasury will continue to review applications and make determinations in accordance with current practice. Applicatns are eminded that the amount of their Section 1603 claim must be calculated in accordance with the Section 1603 Program Guidance and the laws applicable to calculating basis for federal tax purposes. Applicatns may not adjust claims to account for the impact of sequestration.

Thank you for your continueud partnership with the Treasury and for your cooperation as we work together to manage these unfortunate circumstances

Sincerely,

Richard L. Gregg

Fiscal Assistant Secretary