Important notice on QZAB
The final Federal Tax Reform Bill eliminated all Tax Credit Bonds, including Qualified Zone Academy Bonds (QZAB) as of December 31, 2017. Bonds previously awarded are not impacted.
As you will note below, there is $405,276 remaining of the 2016 QZAB allocation to Kansas. Bonds would need to be issued by December 31, 2018, for this allocation.
Guidance on QZAB
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 for 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 tat 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: $405,276 (2016 funds) remaining
Open this document for instructions to apply for QZAB funds: (PDF) (waiting list for the 2017 allocation)
Timeline: 2016 allocation expires December 31, 2018.
Applications received for 2016 funds will be processed. Applications are being accepted for the 2017 allocation and will be placed on a "waiting list."
To apply for the QZAB program, please download the application below:
Application for Allocation of QZAB (Word) or (PDF)
To submit your application to the School Finance team, you can either email the completed application to email@example.com or complete the form and fax it to: 785-296-6659.
Kansas Guidance on QZAB
The State of Kansas is authorized to issue QZAB authority to school district's that meet federal requirements. One requirement is that the school district has at least 35% of its students eligible for free or reduced-price meals under the national school lunch program. Also, districts must comply with state law restrictions.
Federal Law (26 USCS §1397E) covers purposes for which QZAB's may be used. The bonds are paid back over a period of several years. Thus, state law imposes restrictions. Specifically, the projects and payments must conform with the Kansas lease purchase law, K.S.A. 72-8225 and K.S.A. 10-1116(c) (attached).
In order to qualify for the bonds, the project the school wants to undertake must meet both state and federal laws. The most typical type of expenditure that would meet both the state and federal law would be the acquisition of educational equipment. If your district chooses other types of expenditures, we would advise you to have your attorney review both laws before proceeding. It appears to us that, at a minimum, a school district could not complete items (5)(c) and (d) under the federal law because they are not authorized under the Kansas lease purchase law [72-8225 and 10-1116(c)].
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.
Please refer to the U.S. Department of Education's website at:
http://www2.ed.gov/programs/qualifiedzone/index.html for detailed information concerning the program.
Craig Neuenswander, Director
School Finance Team
Kansas State Department of Education
785-296-3872 -- firstname.lastname@example.org
Dale Dennis, Deputy Commissioner
Fiscal and Administrative Services Team
Kansas State Department of Education
785-296-3871 -- email@example.com
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