Economic Recovery and Reinvestment

QUALIFIED ZONE ACADEMY BOND (QZAB)

August 5, 2009

Doyle, Evers Allocate 125.5 Million in Bond Authority for Wisconsin Schools

Program Description: Through the federal Qualified Zone Academy Bond (QZAB) program, school districts with low-income populations can save on interest costs associated with financing school renovations. The federal government covers all of the interest in the form of tax credits on these bonds, resulting in savings up to 50 percent of the cost of these renovation and improvement projects.

QZAB proceeds may be used to rehabilitate or repair school facilities, obtain equipment, develop curricula, and/or train teachers and other school personnel. QZAB proceeds may not be used on new construction.

To qualify, there must be a reasonable expectation that at least 35 percent of the school’s students or program participants will be eligible for free or reduced-cost lunches under the National School Lunch Act when the bonds are issued. The school district also must obtain commitments from private entities for "qualified contributions," such as equipment, technical assistance, or volunteer services, with a present value of not less than 10 percent of the proceeds of the bond issue.

Funding: The U.S. Treasury has released the state allocations for the Qualified Zone Academy Bonds. The American Recovery and Reinvestment Act ARRA extends and expands the QZAB program authorizing $400,000,000 in 2008 and $1,400,000,000 in 2009 and 2010 nationwide. Wisconsin will receive $5,885,000 of 2008 authorization and $20,596,000 in 2009. The 2010 allocation is pending.

Districts are encouraged to work with their bond councel to develop a bonding plan which best benefits the school district needs.

Application process: Similar to previous years, districts will be requested to send letters of proposal to DPI. If your district has an interest in the QZAB program, please provide the department with a letter of interest by June 15, 2009. Your letter should identify the projects by building, acknowledge that the 35 percent free and reduced-cost lunch requirement for such buildings will be met, identify QZAB funding expectations by project, explain how the private participation requirement will be achieved, and confirm the districts commitment to comply with the Davis Bacon prevailing wage requirements. We encourage you to work with local businesses and community organizations to create proposals that will qualify. Again, new construction is not an eligible QZAB use. The department will give priority consideration to eligible school districts that have passed a referendum or have a board approved resolution to issue non referendum debt, and have not previously participated in the QZAB program.

2008-2009 Letter to School District Administrators

Timeline

May 8, 2009 - Application Process Opens
May 8, 2009 - Letter to school district administrators
June 15, 2009 - Application due at department
August 1, 2009 - Department announces allocation of QZAB authorization

Guidance

QZAB Allocation
Qualified Zone Academy Bond Program General Information
The U.S. Department of Education, National Clearinghouse for Educational Facilities (NCEF) provides information on planning, designing, funding, building, improving, and maintaining safe, healthy, high performance schools.

Davis Bacon Act

Please refer to the U.S. Department of Education’s website at

http://www.ed.gov/programs/qualifiedzone/index.html for detailed information concerning the program

Contact: Natalie Rew, School Finance Auditor, (608) 267-9212

Links

Last updated on 8/5/2009 7:39:33 AM