Issuers of QZABs
receive 100 percent of the interest paid to the borrower if the interest were determined at the tax credit bond rate determined under section 54A(b) (3) for qualified tax credit bonds.
Qualified Zone Academy Bonds (QZABs
) can also be used for renovating school buildings.
1397E, to provide a credit to QZAB
holders, so that such bonds generally can be issued without discount or interest.
program, recently extended by Congress through 2001, is based on a time-honored concept: investment through tax breaks.
Created by Congress in 1997, the QZAB
program is a federal tax credit program for education construction administered by the U.S.
Qualified zone academy bond ("QZAB
")--A type of tax credit bond issued by a State or local government to finance certain eligible public school purposes authorized under IRC section 54E.
The plan also would extend the only existing tax credit bond initiative--the Qualified Zone Academy Bond (QZAB
) program--by authorizing an additional $1 billion in 2001 and $1.4 billion in 2002, and allow the proceeds of QZABs
to be used for construction.
Qualified zone academy bond--Section 54E(a) of the Internal Revenue Code provides that a qualified zone academy bond (QZAB
) means any bond issued as part of an issue if: (1) 100 percent of the available project proceeds of such issue are to be used for a qualified purpose with respect to a qualified zone academy established by an eligible local education agency; (2) the bond is issued by a State or local government within whose jurisdiction the academy is located, and (3) the issuer: (a) designates such bond for purposes of this section; (b) certifies that it has written assurances that the private business contribution requirement of subsection 54E(b) will be met; and, (c) certifies that it has written approval of the eligible local education agency for such bond issuance.
However, the primary accomplishment for the year was a two-year extension of the Qualified Zone Academy Bond (QZAB
) program, which finances $400 million per year in tax-credit bonds for school improvements in targeted areas.
The Qualified Zone Academy Bond (QZAB
) program was established in 1998 in order to promote public school rehabilitation and public-private partnership in education in areas with constrained public resources.