News items come from the U.S. Department of Educations's National Clearinghouse for Educational Facilities (NCEF).
Obama Signs BABified Jobs Bill
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Peter Schroeder , The Bond Buyer
National:
March 19, 2010
-- President Obama Thursday signed a $17.6 billion jobs bill that enables municipal issuers to receive direct, Build America Bond-style payments from four types of tax-credit bonds.
But Obama said the new law is “by no means enough” and “there’s a lot more that we’re going to need to do,” just one day after the House Ways and Means Committee cleared a second jobs bill.
That bill would extend the BAB program through April 1, 2013, at a reduced subsidy rate. It also would exempt all private-activity bonds issued through 2011 from the alternative minimum tax, exempt all PABs sold for water and sewer facilities from state volume caps, allow tribal governments to sell such PABs, and double the size of recovery zone bond programs to $50 billion.
“With this law, we’ll make it easier for [state and local governments] to raise the money they need to do what they want to do by using a model that we’ve called Build America Bonds — one of the most successful programs in the Recovery Act,” Obama said.
The Hiring Incentives to Restore Employment Act allows issuers of qualified school construction bonds, qualified zone academy bonds, new clean renewable energy bonds and qualified energy conservation bonds to opt to receive direct subsidy payments from the federal government instead of offering investors a tax credit.
The bonds, originally created as taxable tax-credit bonds, have struggled to gain a foothold in the muni market, in part because the recession lowered investor interest in tax credits.
Issuers of the school bonds that opt for the direct-pay mode will receive payments equal to the lesser of the actual interest rate of the bonds or the tax-credit rate for muni tax-credit bonds, which the Treasury sets daily. Issuers of the energy bonds will receive payments equal to 70% of that amount.
N.J. to get $216M in federal stimulus funds for school construction
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Rohan Mascarenhas, The Star-Ledger
New Jersey:
March 17, 2010
-- In a much-needed financial boost, New Jersey has been allocated $216 million in federal bonds to finance school construction, the U.S. Treasury Department said today.
The bonds, issued under the federal stimulus bill, give states a low-interest way to borrow money to pay for new schools and repair existing facilities. Investors who purchase the bonds receive a federal income tax credit rather than receive interest.
Launched last year, the program has made roughly $440 million available to New Jersey, after another allocation in 2009 topped $200 million.
But so far, none of them have been used.
"The (Corzine) administration wanted to wait until this administration took over," said Andrew Pratt, a spokesman for the state Treasury department.
It is not clear when, or if, the state will sell the bonds.
Pratt said his department would be ready to borrow money under the program this spring, but an ongoing review of the Schools Development Authority could derail that schedule.
The independent authority, which oversees school construction, has come under intense scrutiny since Gov. Chris Christie’s election. A transition panel recommended an immediate audit after finding the authority was only solvent through March 2010 and has already authorized bonds worth $12.5 billion.
Still, Pratt said, the federal bond program could be valuable for the budget-strapped state.
"If you’re going to borrow, and we have to to complete projects, then zero percent interest is pretty good," he said.
Treasury and Education Announce 2010 School Bond Allocation
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Staff Writer, US Department of Treasury
National:
March 17, 2010
-- The U.S. Department of Treasury and the Department of Education today announced $11 billion in allocation authority to issue qualified school construction bonds under the American Recovery and Reinvestment Act of 2009 (Recovery Act). Qualified school construction bonds can be used to finance the construction, rehabilitation or repair of a public school facility or for the acquisition of land where a school will be built.
"Recovery Act school construction bonds provide low-cost borrowing to build and upgrade schools, which is a win-win for communities across the country," said Deputy Treasury Secretary Neal Wolin. "The projects funded with these bonds create jobs today building modern schools to prepare our kids for the global economy of tomorrow."
"Preparing students to compete in the global economy requires improvements in all aspects of our nation's education system, including the environments in which they learn," added Education Deputy Secretary Tony Miller. "The Recovery Act is keeping teachers in the classroom and, through the construction bond program, making lasting investments in the quality of our schools. Our kids deserve no less."
Created by the Recovery Act, qualified school construction bonds help state and local governments obtain low-cost financing for much needed public school improvements and construction. Investors who buy these bonds receive Federal income tax credits at prescribed tax credit rates in lieu of interest. These tax credit bonds essentially allow state and local governments to borrow without incurring interest costs.
Treasury, Education Departments Release QSCB Allocations
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Lynn Hume , The Bond Buyer
National:
March 17, 2010
-- The Treasury and Education Departments today announced how the $11 billion of allocation authority to issue qualified school construction bonds for 2010 will be divided up among states and large local educational agencies.
Under the allocations for 2010, states will receive $6.6 billion of the authority and large local educational agencies will receive $4.4 billion. Among the states, California will receive the largest allocation of almost $720.1 million, followed by Texas at $547.7 million.
Of the local entities, New York City will receive the largest allocation, roughly $664.0 million, followed by the Puerto Rico Department of Education at almost $380.4 million, Los Angeles Unified at almost $290.2 million, and the city of Chicago School District 299 at $257.1 million.
The American Recovery and Reinvestment Act, which was enacted last year, provided $11 billion of QSCB authority for 2009 and $11 billion for 2010.
The full list of allocations can be found here.
Qualified school construction bonds can be used to finance the construction, rehabilitation or repair of a public school facility or for the acquisition of land where a school will be built.
Schools get $22M from half-cent sales tax
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Rebekah Allen, Pensacola News Journal
Florida:
March 12, 2010
-- Schools throughout Escambia County will receive $22 million worth of unexpected upgrades and renovations, thanks to the half-cent sales tax. The tax generates about $20 million a year to be used for school construction and renovation projects. But after the district finished a list of budgeted projects, there was $22 million left over from accrued interest and savings from finishing projects under budget.
"It's like getting a sixth year of revenue from a five-year referendum," said Shawn Dennis, assistant superintendent of operations.
Projects in each of the School Board's five districts received funding, as well as some districtwide programs. In all, nearly 50 schools were approved for renovations, ranging from new windows and portable construction, to parking expansions and air conditioning replacements. Projects chosen came from wish lists that principals submitted for construction and renovation projects for their schools. The projects will begin in the coming months and be complete within two years, Dennis said. "Projects that needed to be done, but weren't, are getting done a lot faster, and then there are some projects that may have never been done without this money," said Ashley Bodmer, chairwoman of the tax watch dog committee that oversees how the sales tax money is spent.
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