December 2000

TO: Superintendent of Schools

FROM: Carl T. Thurnau, P.E. Coordinator

SUBJECT: Qualified Zone Academy Bonds

As you may be aware, the federal government enacted legislation and regulations in 1996 providing Qualified Zone Academy Bond (QZAB) tax credits in lieu of interest payments for eligible districts (26 USC Section 1397E). This legislation allows school districts to forego interest payments on capital construction debt that would otherwise be paid by the district and its taxpayers. In order to be eligible for the program at least 35 percent of a district’s student enrollment must be eligible to receive free or reduced price lunches under the National School Lunch Program, or the district must be located in a federally designated empowerment or enterprise community.

QZAB tax credits for New York State totaled approximately $96 million for the first three years. Another allocation of approximately $30 million this year will bring New York State’s allocation to approximately $126 million. The tax credits can be used for rehabilitation or repair, purchase of equipment, developing course material or training of teachers or other staff for these academies. State Building Aid will be available for qualifying capital projects.

At the federal level the Federal Department of the Treasury and the Internal Revenue Service will jointly administer the QZAB allocation. The NYS Education Department’s Office of Facilities Planning will coordinate New York State’s allocation.

Your district is eligible to apply for the QZAB program. Enclosed is a copy of Section 155.22 of the Regulations of the Commissioner of Education that were approved by the Regents on October 5, 2000 and became effective November 20, 2000. In addition, we have enclosed an application for your district to apply for a QZAB allocation. The first application period will begin December 14, 2000. Applications for the

1998-99 allocation applications must be received in this office by March 31, 2001.

Please send applications to:

Mr. Robert Rogers

NYS Education Department

Office of Facilities Planning – Room 1060 EBA

Albany, NY 12234

If you have any questions or concerns, please contact Mr. Rogers at (518) 474-3906.

Sincerely,

Carl T. Thurnau, P.E.   Coordinator

Commissioners Regulation 155.22
List of Elegible Districts
Application Form   pdf format
Link to U.S. Education Department QZAB Site