Qualified Zone Academy Bond (QZAB)QUALIFIED ZONE ACADEMY BOND (QZAB)
Qualified Zone Academy Bond (QZAB)
The Qualified Zone Academy Bond (QZAB) Program is a federal program to help strengthen schools serving large concentrations of low-income families. Eligible public schools in the State of Michigan can take advantage of this program to finance the equipping and/or renovating of school facilities on an interest-free basis through the allocation of tax credits.
Created by the Taxpayer Relief Act of 1997, QZABs are obligations issued by state or local governments to renovate and improve certain eligible public schools. These obligations may be used on behalf of schools or programs that meet a few eligibility criteria:
- (1) The school is located in an empowerment zone or an enterprise community or (2) has at least 35 percent of its students eligible for free or reduced-cost lunches under the National School Lunch Act.
- An eligible school must have an education program designed in cooperation with business and receive a private business contribution that is not less than 10 percent of the proceeds of the bond.
- An eligible school must have an education plan that is approved by its school district and its students must be subject to the same standards and assessments as other students in the district.
The QZAB is a loan that must be repaid within a specified time. The rate of the tax credit and the maximum term of the bond are determined by the United States Treasury Department. The tax credit mechanism eliminates the cost of interest only, not the bond principal.
Direct questions about this program to Joshua Long, Grants Coordination and School Support, Michigan Department of Education at email@example.com or 517-335-9618.