Federal Facility Program

The Federal Facility Program allows school districts to take advantage of federal school facility funding that becomes available in Maine, including grants and low-interest loans, in order to improve the quality and condition of learning environments for students.

Qualified Zone Academy Bonds (QZABs)

QZABs are bonds issued by state or local governments to renovate and improve eligible public schools. The federal government subsidizes the bonds by providing tax credits to the holder of the QZABs. The credits are approximately equal to the interest that states and communities would pay the holders of taxable bonds. Therefore, issuers are generally responsible for repayment of just the principal. This is a tax credit program, not a grant program.

Each state is allotted an amount of money based on state percentages of the national population of individuals with incomes below the poverty line.

QZABs may be used for rehabilitation or repair of school buildings, purchasing equipment, developing course materials and/or training teachers and other school personnel, but not for new construction.

The following eligibility criteria must be met:

  • There must be a reasonable expectation that at least 35 percent of students at the school will be eligible for free or reduced-cost lunches under the National School Lunch Act (PDF).
  • Eligible schools must have an educational program developed in cooperation with business and receive a private business contribution worth at least 10 percent of the money borrowed using the QZAB.
  • Eligible schools must have an education plan that is approved by their school district and in which students are subject to the same standards and assessments as other students in the district.

One-hundred percent of available proceeds must be spent within three years from the date of issuance, and issuers must certify applicable State, local and federal conflict of interest requirements are met. These bonds are subject to the prevailing wage standards under the Davis Bacon Act of 1931.

School administrative units (SAUs) are advised to consult with bond counsel prior to applying for QZAB approval. For more information about the federal QZAB program, visit the U.S. Department of Education website.

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