By: Brittany Flaherty Theis
In August 1997, the United States Congress enacted the Taxpayer Relief Act of 1997 (House Resolution 2014). Section 226 granted authority to issue QZABs, which are subsidized by the federal government. The federal government allocates the authority to issue these bonds to the states, and the states may either directly issue the bonds on behalf of eligible schools or they may delegate that authority within the state. If the authority to issue QZABs is delegated within the state, the issuer must have authority under state and local law to incur the additional debt.
Schools that are eligible to be “Zone Academies” must have an education plan approved by its school district, and its students must be subject to the same standards and assessments as other students in the district. Schools eligible for QZABs include: 1) schools located in an empowerment zone or an enterprise community, and 2) schools with at least 35 percent of their students eligible for free or reduced-cost lunches under the National School Lunch Act. The school must have an education program designed in cooperation with business (referred to as a product of “public private partnership”) and receive “substantial business support” (a contribution from private business that equals at least 10 percent of the bond proceeds). Proceeds from QZABs may be used for renovating school buildings, purchasing equipment, developing curricula, and training school personnel, but may not be used for new construction.
The Qualified Zone Academy Bonds program has been extended and its implementing regulations allocated $28.744 million to Illinois for calendar years 2015 and 2016 ($14.372 million each). The School Business Services Department of the Illinois State Board of Education (“ISBE”) is currently accepting applications for Qualified Zone Academy Bonds (“QZABs”). All applications, with all supplemental materials and final signatures included, must be received by 4:00p.m. February 28, 2017.
Please contact Whitt Law Attorney Brittany Flaherty Theis with questions regarding this update from the Illinois State Board of Education.
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