Qualified School Construction Bonds (QSCBs) are one of several types of tax credit bonds authorized under IRC Section 54A, that allow a credit to investors that hold such bond on one or more of the quarterly credit allowance dates. QSCBs must comply with the requirements of IRC Section 54F.
For what purposes can QSCBs be issued?
QSCBs may be issued to construct, rehabilitate or repair a public school facility or may be used to acquire land on which such facility is to be constructed with such proceeds. Proceeds may also be used to acquire equipment or furniture provided that the equipment or furniture is to be used in the portion of the public school facility that is being constructed, rehabilitated or repaired with part of the proceeds.
Who can issue QSCBs?
QSCBs may be issued by a State or local government within the jurisdiction of which the public school facility is located. An Indian tribal government that receives an allocation from the Department of the Interior may issue QSCBs for a Bureau of Indian Affairs-funded school. Bond proceeds must be spent for a facility located within the jurisdiction of the issuer.
How is QSCB volume cap allocated?
Generally, the QSCB volume cap is allocated by the Department of the Treasury. The national volume cap allocation of $11 billion for 2009 to States and large local educational agencies is set forth in Notice 2010-17. Additionally, a volume cap allocation to construct, rehabilitate and repair schools funded by the Bureau of Indian Affairs of $200,000,000 for calendar year 2009 and $200,000,000 for calendar year 2010 is allocated by the Secretary of the Interior to Indian Tribal governments.