• Top 5 Things You Should Know about Qualified School Construction Bonds Now
  • April 30, 2010 | Author: Raymond "Rusty" Russell
  • Law Firm: Adams and Reese LLP - Ridgeland Office
  • The Mississippi State Board of Education has approved the application process for the Qualified School Construction Bonds (“QSCB”) authorized by the American Recovery and Reinvestment Act of 2009 (the “ARRA”). Pursuant to the new HIRE Act recently approved by Congress, a school district can issue QSCBs as either tax-credit bonds, intended to allow the district to issue the QSCBs at zero or very low interest rates, or direct payment subsidy bonds for which a district issuing QSCBs will receive payment from the federal government equal to the amount of interest it is required to pay on the QSCBs, subject to a maximum, intended to allow the district to issue QSCBs at zero or very low interest rates. Over $134 million in QSCB allocations have been allocated to Mississippi schools for the 2010 calendar year. Provided below is a “Top 5 List” of things you should know now about this unique bond program.

    1. School districts that did not apply in 2009 can start submitting applications to the Mississippi Department of Education now, and, subject to certain limitations, the allocations will be made by the State on a “first come-first served” basis.

    2. Applications must be received before the close of business on May 25, 2010.

    3. QSCBs may be used for the construction, rehabilitation, and/or repair of public school facilities, among other things.

    4. A school district must issue the QSCBs within 180 days of receiving its allocation from the Mississippi Department of Education.

    5. Mississippi was allocated approximately $134 million in QSCB allocations for calendar year 2010. Issuers must repay the principal over a maximum time period that is determined by the U.S. Department of Treasury based on the date of the sale of the bonds.