School Facilities Services/Transportation Team

	*Driving directions and map to the Department of Education*

	High Performance School Construction and Operations Resource Guide

FEDERAL FACILITY GRANTS

Qualified Zone Academy Bonds ( QZABs )

Congress first provided authority to issue Qualified Zone Academy Bonds under Section 226 of the Taxpayer Relief Act of 1997. 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 a bank or other financial institution that holds 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. Maine’s current allocation for calendar years 2006 and 2007 totals $3,408,000.

QZABs may be used for renovation and repair of school buildings, purchasing equipment, developing curricula, and/or training school personnel, but not for new construction.

The following eligibility criteria must be met:

Schools must either be located in an empowerment zone or an enterprise community or there must be a reasonable expectation that at least 35 percent of students will be eligible for free or reduced-cost lunches under the National School Lunch Act.

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.

The recent extension of the QZAB program for calendar years 2006 and 2007 included changes to federal requirements governing arbitrage, reporting and timing of expenditures of bond proceeds. School Administrative Units 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.

Rev. 2-26-2007

Documents below are provided in PDF or Microsoft Word formats. To view PDF documents, you will need the free Adobe Reader. To view MS Word documents, you will need Microsoft Word or the free Word Viewer. If you need assistance, view our PDF Help page or contact me at Karen.L.Bossie@Maine.Gov or (207) 624-6848.

Qualified Zone Academy Bond(QZAB) Program Application - FY 2008

Commissioner's Informational Letter #51 - November 14, 2007

State of Maine Free and Reduced Lunch Percentages

QZAB Approvals for 2006 and 2007 Allocations

Informational Letter #82 dated March 5, 2007 - Qualified Zone Academy Bond Program

Informational Letter #140 dated May 12, 2006 - Qualified Zone Academy Bonds

IRS Revenue Procedure 2007-18 (state bond limits) [PDF format]

HR 6111, Tax Relief and Health Care Act of 2006 (see section 107 for recently passed amendments to the QZAB law) [PDF format]

Section 1397E of the Internal Revenue Code (not updated - see HR 6111 above for amendments)