MACo Testifies in Support of “QZAB” School Construction Program

The Budget and Taxation Committee heard testimony today, February 18, on SB 79, Creating of a State Debt – Qualified Zone Academy Bonds. As described in the Department of Legislative Services fiscal and policy note,

The federal Tax Reform Act of 1997 created Qualified Zone Academy Bonds as a new type of debt instrument to finance education projects. Financial institutions, insurance companies, and investment houses are the only entities allowed to purchase the bonds, which provide for a federal tax credit instead of interest earnings.

MACo’s Policy Analyst Robin Clark testified in support of the bill which would authorize the Board of Public Works to issue interest-free Qualified Zone Academy Bonds (QZABs) this year, thereby increasing local school board revenues for school renovation by $4.6 million. These bonds would be used for development or improvement purposes of qualified schools in accordance with criteria established under the Aging Schools Program.

MACo’s written testimony states:

 These programs fill an important niche by covering projects that would not normally qualify as true capital projects eligible for general obligation bond (GO) funding. The counties, who share responsibility with the State for Maryland’s schools, appreciate financial support for their infrastructure goals.

For more information on MACo’s 2015 legislation, visit the Legislative Database.