Archived: RILEY ISSUES PROFILE OF SCHOOLS USING QUALIFIED ZONE ACADEMY BONDS (QZABs)

A r c h i v e d I n f o r m a t i o n

FOR RELEASE
April 27, 2000

Contact:
John Emekli or Mary Stanik
(202) 401-3026

RILEY ISSUES PROFILE OF SCHOOLS USING QUALIFIED ZONE
ACADEMY BONDS (QZABs)

NEW YORK, April 27-- U.S. Secretary of Education Richard W. Riley today issued a report on an innovative form of bond that can be used to support school construction initiatives. Fixing Our Schools Now! Qualified Zone Academy Bonds: A New Approach to Financing School Renovation and Repair describes how the bonds work and provides examples of how they are being used.

"Many communities face an urgent need to rebuild and repair schools with leaky roofs, crumbling walls or portable classrooms," Riley told a summit on class-size reduction at New York University. "Millions of dollars are presently available for school repairs and renovations through Qualified Zone Academy Bonds. I urge communities and states throughout the nation to learn how QZABs can help improve their schools."

Established by Congress under the 1997 Taxpayer Relief Act, QZABs are tax-credit bonds used by local communities for renovating or repairing schools, investing in equipment and technology, developing challenging curriculum, or training quality teachers.

To qualify for a QZAB, a school must be in a high-poverty area such as an Empowerment Zone or Enterprise Community or have 35 percent of its students eligible for free and reduced price lunch. QZABs have already been used to improve schools in such diverse locations as Pomona, Calif.; Little Axe, Okla.; Houston, Tex.; and Norfolk, Va. To date, schools in at least 22 states are using QZABs and saving up to 50 percent of the cost of school improvement projects.

"The list of states and schools that use QZABs keeps growing and we are encouraged by the success of this program," Riley said. "This kind of momentum demonstrates that the tax-credit bond proposal in the President's broader school modernization package is a useful option for school officials that need assistance to build new facilities."

The QZAB program requires local educational agencies and eligible schools to establish "qualified zone academies" in partnership with local businesses. Local businesses are expected to contribute 10 percent of the total bond issue value to the school in the form of cash payments or in-kind donations. The publication issued today provides examples of partnerships that have been formed and the contributions that schools have received through this program.

"Presently, there is a bipartisan bill in Congress to expand on these resources for urgently needed school construction," Riley said. "Under this bill, states would be authorized to use nearly $25 billion in new tax credit bonds to build and modernize up to 6,000 schools. As Congress returns from recess, I urge all members to act on this important piece of legislation."

Initially, $400 million in bonding authority was provided in both FY1998 and FY1999. Last year, an additional $400 million was provided in both FY2000 and FY2001. Next year, the administration is seeking to expand the QZAB program to $2.4 billion in bond authority and $22.4 billion in tax credit bonds over two years.

The report, Fixing Our Schools Now!, is available on-line at www.ed.gov/inits/construction/qzab.html or by calling 1-877-4ED-PUBS (1-877-433-7827).

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