Qualified school construction bond program 2010

Other Eligibility Considerations If the program is oversubscribed the order of allocation shall be established using the following criteria: 1 earliest date of postmark; 2 the project for which the authorization will be applied has received prior approval from the Division of the State Architect before the application was submitted; and 3 the greater percentage of pupils who qualify for the federal free and reduced priced meals program and are enrolled in the applying school district or county office of education in the school year.

Contacts Program Shannon Farrell-Hart, , sfarrell cde. Share this Page. QSCBs are generally structured as bullet term bonds, with a single principal payment at maturity; however, borrowers may create voluntary sinking funds subject to certain requirements.

The second method, more heavily utilized by investors, is to structure QSCBs as direct payment bonds. In March the Hiring Incentives to Restore Employment HIRE Act was signed into law, authorizing QSCBs to be issued as direct payment bonds for which an issuer irrevocably elects to receive cash subsidy payments from the Treasury Department in lieu of tax credits that could otherwise be claimed.

The amount of the cash subsidy paid directly to issuers on each interest payment date is equal to the amount of tax credit that would have been available on each quarterly date based on the tax credit rate set by the Treasury Department.

While it was anticipated that QSCBs would be zero-cost to borrowers, investors have typically required a supplemental coupon payment that, together with the tax credit, meets their required return. In a few cases, bond issuers and investors have structured the bonds to have the ability to strip the tax credits and sell them separately. In addition to complying with IRC section 54A, issuers of tax credit bonds must also comply with the IRC section that relates to each bond :.

The credit rate under section 54A 3 b that applies to all four types of tax credit bonds issued under IRC section 54A is set at a rate the Secretary of the Treasury estimates will allow the issuer to sell the tax credit bonds at par, without interest. The issuer applies the credit rate in effect on the first day there is a binding, written contract to sell the bonds, generally the date the bond purchase agreement is signed.

This Federal subsidy reduces borrowing costs to the issuer. The tax credit is generally allowed against both regular and alternative minimum tax. There are no restrictions on the type of investor who can purchase tax credit bonds. The issuer applies the 1 maximum maturity, 2 applicable credit rate, and 3 permitted sinking fund yield in effect on the first day there is a binding written contract, generally when the bond purchase agreement is signed. No, the rules under IRC section 54A are very strict.

Thus, investment earnings on tax credit bonds must also be spent for the qualified purpose. Funding a reserve is not a qualified purpose. However, the issuer may fund a reserve from other sources. See the following question. District Initiatives. School Boards. Curriculum Standards. Early Childhood Education. Graduation Information. Instructional Materials. Learning Support and Programs. Special Student Populations. Subject Areas. Financial Compliance.

State Funding.