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The Law, Qualified School Construction Bond


Part II - Tax Credit Bonds for Schools
Sec. 1521. Qualified School Construction Bonds.
  1. In General - Subpart I of part IV of subchapter A of Chapter 1 is amended by adding at the end the following new section:
Sec. 54F. Qualified School Construction Bonds.
  1. Qualified School Construction Bond. For purposes of this subchapter, the term 'qualified school construction bond' means any bond issued as part of an issue if:
    1. 100 percent of the available project proceeds of such issue are to be used for the construction, rehabilitation, or repair of a public school facility or for the acquisition of land on which such a facility is to be constructed with part of the proceeds of such issue,
    2. the bond is issued by a State or local government within the jurisdiction of which such school is located, and
    3. the issuer designates such bond for purposes of this section.
  2. Limitation on amount of bonds designated. The maximum aggregate face amount of bonds issued during any calendar year which may be designated under subsection (a) by any issuer shall not exceed the limitation amount allocated under subsection (d) for such calendar year to such issuer.
  3. National Limitation on Amount of Bonds Designated. There is a national qualified school construction bond limitation for each calendar year. Such limitation is:
    1. $11,000,000,000 for 2009,
    2. $11,000,000,000 for 2010, and
    3. except as provided in subsection (e), zero after 2010.
  4. Allocation of Limitation.
    1. Allocation among States. Except as provided in paragraph (2)(C), the limitation applicable under subsection (c) for any calendar year shall be allocated by the Secretary among the States in proportion to the respective amounts each such State is eligible to receive under section 1124 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6333) for the most recent fiscal year ending before such calendar year. The limitation amount allocated to a State under the preceding sentence shall be allocated by the State to issuers within such State.
    2. 40 percent of Limitation Allocated Among Largest School Districts.
      1. In General. 40 percent of the limitation applicable under subsection (c) for any calendar year shall be allocated under subparagraph (B) by the Secretary among local educational agencies which are large local educational agencies for such year.
      2. Allocation Formula. The amount to be allocated under subparagraph (A) for any calendar year shall be allocated among large local educational agencies in proportion to the respective amounts each such agency received under section 1124 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6333) for the most recent fiscal year ending before such calendar year.
      3. Reduction in State Allocation. The allocation to any State under paragraph (1) shall be reduced by the aggregate amount of the allocations under this paragraph to large local educational agencies within such State.
      4. Allocation of Unused Limitation to State. The amount allocated under this paragraph to a large local educational agency for any calendar year may be reallocated by such agency to the State in which such agency is located for such calendar year. Any amount reallocated to a State under the preceding sentence be allocated as provided in paragraph (1).
      5. Large Local Educational Agency. For purposes of this paragraph, the term 'large educational agency' means, with respect to a calendar year, any local educational agency if such agency is:
        1. among the 100 local educational agencies with the largest numbers of children aged 5 through 17 from families living below the poverty level, as determined by the Secretary using the most recent data available from the Department of Commerce that are satisfactory to the Secretary, or
        2. 1 of not more than 25 local educational agencies (other than those described in clause (i)) that the Secretary of Education determines (based on the most recent data available satisfactory to the Secretary) are in particular need of assistance, based on a low level of resources for school construction, a high level of enrollment growth, or such other factors as the Secretary deems appropriate.
    3. Allocations to Certain Possessions. The amount to be allocated under paragraph (1) to any possession of the United States other than Puerto Rico shall be the amount which would have been allocated if all allocations under paragraph (1) were made on the basis of respective populations of individuals below the poverty line (as defined by the Office of Management and Budget). In making other allocations, the amount to be allocated under paragraph (1) shall be reduced by the aggregate amount allocated under this paragraph to possessions of the United States.
    4. Allocations for Indian Schools. In addition to the amounts otherwise allocated under this subsection, $200,000,000 for calendar year 2009, and $200,000,000 for calendar year 2010, shall be allocated by the Secretary of the Interior for purposes of the construction, rehabilitation, and repair of schools funded by the Bureau of Indian Affairs. In the case of amounts allocated under the preceding sentence, Indian tribal governments (as defined in section 77701(a)(40)) shall be treated as qualified issuers for purposes of this subchapter.
  5. Carryover of Unused Limitation. If for any calendar year
    1. the amount allocated under subsection (d) to any State, exceeds
    2. the amount of bonds issued during such year which are designated under subsection (a) pursuant to such allocation, the following calendar year shall be increased by the amount of such excess. A similar rule shall apply to the amounts allocated under subsection (d)(4).
  6. Conforming Amendments.
    1. paragraph (1) of section 54A(d) is amended by striking "or" at the end of subparagraph (C), by inserting "or" at the end of subparagraph (D), and by inserting after subparagraph (D) the following new subparagraph:
      1. a qualified school construction bond,
    2. Subparagraph (C) of section 54A(d)(2) is amended by striking "and" at the end of clause (iii), by striking the period at the end of clause (iv) and inserting ", and", and by adding at the end the following new clause:
      1. in the case of a qualified school construction bond, a purpose specified in section 54F(a)(1).
    3. The table of sections for subpart I of part IV of subchapter A of chapter 1 is amended by adding at the end the following new item:
      Sec. 54F. Qualified School Construction Bonds.
      c. Effective Date. The amendments made by this section shall apply to obligations issued after the date of the enactment of this Act.
Questions:   Shannon Farrell-Hart | sfarrell@cde.ca.gov | 916-323-3923
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