10/12/04 -- Congress has passed legislation to extend qualified zone academy bonds (QZABs) for two years and authorized $400 million each year for 2004 and 2005.
QZABs allows eligible school districts -- with low-income populations -- to save money on school renovation and other costs.
The federal government generally covers all of the interest on these bonds, allowing districts to save up to 50 percent of the costs of school projects. The interest payment is actually a tax credit, in lieu of cash, provided to financial institutions that hold the bonds.
In addition to renovating and repairing buildings, QZABs can be used for investing in equipment and new technology, developing curricula, and training teachers.
The bill, as approved by a House-Senate conference committee, does not include provisions in the Senate bill that would have allowed school districts to use QZABs for school construction and land acquisition.
NSBA had urged the conferees to approve the Senate provisions on QZABs.
The QZAB measure was included in a section of the tax relief bill with many more controversial tax law changes. The conferees agreed to extend all of the expiring tax provisions in that section without making changes.
Any effort to start revising any of those provisions would likely have led to lengthy delays, says Robert Canavan, chair of Rebuild America's Schools, a coalition of organizations, including NSBA, and individual school districts that support federal policies to help local communities build and modernize public schools.
While it's disappointing that Congress didn't extend QZABs to allow school construction, Canavan says, "it's important that the program will continue and will provide financial relief for school districts." QZABs are the only federal program that supports school renovation.
"Since the program was created in 1997, $2.8 billion in school bonds have been underwritten by QZABs," he says.
The tax relief act also extends the $250 tax deduction for out-of-pocket expenses for instructional materials and classroom supplies incurred by teachers and paraprofessionals for the 2004 and 2005 tax years.