The U.S. Treasury/Internal Revenue Service published the state-by-state allocations for the Qualified Zone Academy Bond Program following the approval of $400 million in bonds for each of the two years of 2006 and 2007. The 109th Congress approved the QZAB funds before it adjourned in December. States have two years from the beginning of the calendar year to use the funds.

QZABs provide federal tax credits to underwrite interest on school bonds which can be used to renovate and repair schools. Organizations Concerned about Rural Education supported the extension of the QZAB program and advocates that the 110th Congress expand the program and increase federal support for the school facility program. The U.S. Treasury allocates the bonding authority to the states based on their school population and state education agencies assign the bonding authority to the school districts in their states. To be eligible, 35 percent of the students to be served must receive free or reduced-cost lunches under the federal school lunch program.

Dale Lestina, president of Organizations Concerned about Rural Education, applauded the actions of Congress and the Treasury. “This legislation is important to students in rural schools,” he said, pointing out that about half of the nation’s schools are in rural areas or small towns and 40 percent of the 53 million public school students live in rural areas.

“The average public school building is well past 40 years of age and cannot meet the demands of modern technology,” Lestina said. “Of the nation’s 80,000 public school buildings, at least one-third need extensive repair or replacement and two-thirds have troublesome environmental conditions such as the presence of asbestos or lead in water and paint. Roofs leak. Ventilation is poor; heating and air conditioning systems don’t work. Lighting is inadequate; plumbing is a problem. In short, the condition of these schools make it extremely difficult for teachers to teach and students to learn."

“State education administrators estimate that the cost of bringing public schools up to modern standards range as high as $322 billion beyond what local districts and states can afford. It is critical that they get federal financial assistance for their school building infrastructure needs,” Lestina continued.

More than 100 national and regional organizations back the tax credit plan, including education and parent groups, rural and farm groups, education advocacy groups, religious and labor organizations, and business and professional groups.

The national limitation for Bonds for each of the calendar years 2006 and 2007 is $400 million. This amount is allocated among the states (in thousands of dollars) as follows:

Alabama, $7,698; Alaska, 677; Arizona, 9,412; Arkansas, 3,921; California, 48,404; Colorado, 5,440; Connecticut, 3,346; Delaware, 801; District of Columbia, 1,180; Florida, 20,271; Georgia, 13,322; Hawaii, 1,129; Idaho, 1,468; Illinois, 14,790; Indiana, 7,944; Iowa, 3,356; Kansas, 3,459; Kentucky, 6,148; Louisiana, 7,677; Maine, 1,704; Maryland, 5,563; Massachusetts, 6,579; Michigan, 12,275; Minnesota, 4,229; Mississippi, 5,861; Missouri, 6,764; Montana, 1,314; Nebraska, 1,714; Nevada, 2,669; New Hampshire, 749; New Jersey, 6,076; New Mexico, 3,562; New York, 28,328; North Carolina, 11,444; North Dakota, 718; Ohio, 14,287; Oklahoma, 5,573; Oregon, 4,475; Pennsylvania, 14,082; Rhode Island, 1,304; South Carolina, 6,425; South Dakota, 924; Tennessee, 8,950; Texas, 37,781; Utah, 2,381; Vermont, 482; Virginia, 7,020; Washington, 6,528; West Virginia, 2,833; Wisconsin, 5,676; Wyoming, 554; American Samoa, 363; Guam, 397; Northern Marianas, 380; Puerto Rico, 19,230, and Virgin Islands, 363.

Total $400,000

This revenue procedure is effective for Bonds issued pursuant to the national limitation for calendar year 2006 on or after January 1, 2006, and Bonds issued pursuant to the national limitation for calendar year 2007 on or after January 1, 2007.