WASHINGTON — A bipartisan bill offered in the House would extend the qualified zone academy bond program by providing $400 million of volume cap for the bonds in each of 2015 and 2016.
The “Investing in 21st Century Schools Act,” H.R. 3703, was introduced last week by Rep. Ron Kind, D-Wis., and is co-sponsored by Rep. Mike Kelly, R-Pa. The legislation was referred to the House Ways and Means Committee, of which Kind and Kelly are members.
“This bill would ensure Wisconsin schools continue to have access to funds to help expand education programs, purchase new technology, and upgrade facilities,” Kind said in a news release.
QZABs are tax-credit bonds whose proceeds can be used to finance renovations, equipment, course materials and teacher training at public schools or academic programs that meet certain requirements.
The bond program is one of the tax provisions that expired at the end of last year known as “extenders,” so there is currently no new national volume cap for the years after 2014. States can carry forward unused capacity under each of their annual QZAB caps for up to two years.
The $400 million volume cap provided in the bill would be the same as the caps for each year from 2011 to 2014 but less than the caps of $1.4 billion for each of 2009 and 2010 under the American Recovery and Reinvestment Act. QZABs from allocations of caps for 2011 and later can only be issued as tax-credit bonds and not as direct-pay bonds.
In addition to extending the QZAB program, the bill would ease a requirement for the bonds. Under current law, issuers have to certify that private entities will contribute property or services to the school with a value of at least 10% of the QZAB proceeds, but the bill would lower that amount to 5%.
Kind and Kelly offered a similar bill last year. Their new bill is not the first bill introduced this year that deals with QZABs.
In July, the Senate Finance Committee approved a tax extenders package that would also provide a $400 million QZAB volume cap for each of 2015 and 2016 and reduce the private business use requirement for the bonds. That bill would also extend empowerment zone tax incentives, the state and local sales tax deduction and two tax provisions relating to Puerto Rico through 2016.
Also in July, Rep. Charlie Rangel, D-N.Y., and Sen. Sherrod Brown, D-Ohio, introduced legislation that would make the QZAB program permanent, with a national volume cap of $1.4 billion a year starting with 2015. That bill would also lower the private business contribution requirement to 5%, allow QZABs to be issued as direct-pay bonds and allow QZABs to finance school construction in addition to renovations.
