WASHINGTON — The Internal Revenue Service on Thursday allocated $400 million of qualified zone academy bonds to states and U.S. territories for 2011.

The QZABs can only be issued this year as taxable tax-credit bonds. While the new tax law enacted late last year authorized $400 million more of the bonds, it prohibited them from being issued with a direct-pay option, similar to Build America Bonds. With direct-pay bonds, the Treasury Department makes subsidy payments to issuers equal to a certain percentage of interest costs, in lieu of bondholders receiving tax credits.

QZABs can be used to obtain funds to repair or renovate school facilities, purchase equipment, develop course materials, or train teachers and other school personnel.

California received the largest allocation of QZABs, $45.86 million, followed by Texas with $$37.01 million, Florida with $24.24 million, and New York with $24.19 million.

The Northern Marianas Islands received the smallest allocation, $212,000, followed by the Virgin Islands with $319,000, American Samoa with $358,000, and Guam with $366,000. Wyoming had the smallest state allocation, at $482,000.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.