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After Receiving Applications Amounting to $3.7 Billion for $700 Million in Funds Actually Available, QSCB Goes to Lottery Over $3.7 billion in applications were submitted to California Department of Education (CDE) on Tuesday for the $700 Million available in the Qualified School Construction Bond program. A provision of the federal stimulus package (the American Recovery and Reinvestment Act, or ARRA) provides for the sale of interest free bonds for school construction, modernization or repair projects that are construction ready. This program is called the Qualified School Construction Bond (QSCB) program. The program allows a school district to sell bonds to entities seeking federal tax exemptions in lieu of interest. The feds have authorized $700 million in tax exempt bonds for California public school districts and an additional $73.525 million for California charter schools. It is anticipated that similar amounts will be available in 2010. The QSCB program is administered by the California Department of Education. A school district could apply for up to $25 million in bonding authorization. Applications were due on August 25. When the deadline passed, there were 230 applications totaling $3.7 billion. (That’s “billion” with a “b”.) CDE had made provisions for such an occurrence: There will be a lottery on Friday, August 28, to determine which applications will be authorized. As of Wednesday (August 26), the final procedures for the lottery were still being developed. However, we have been assured that the drawing will be conducted by an impartial member of the Department in a public venue. It is likely that a list of applications beyond the $700 million limit will be developed to account for projects that are selected but may be unable to meet the requirements for the program. The program requires that a district has the capacity and local authorization to sell bonds. The district may choose to sell any type of bond for which the district is eligible; Proposition 39, General Obligation (GO), etc. The district is responsible for selling the bonds to an entity seeking tax credits in lieu of interest. For more information on the QSCB program and Friday’s lottery, visit the CDE web site at www.cde.ca.gov/ls/fa/qs/. Editor's Note: Dennis L. Dunston, AIA, REFP, LEED AP is the Director of Facilities Planning and Program Management at the educational consulting firm Total School Solutions (TSS). |
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