Mountain View Elementary school to receive $7 million

State Superintendent of Public Instruction Jack O'Connell today announced 43 school districts have been selected via lottery as recipients of $700 million in Qualified School Construction Bond (QSCB) tax credits. A lottery selection process was necessary because the number of applications exceeded the allocation available. The list of recipients is attached.

One of the districts to benefit from the bond is Mountain View Elementary School. The Ontario-based district is expected to receive $7 million.

"This tax credit program will jump start new school construction and modernization projects throughout the state that, in turn, will stimulate the economy and create jobs," said O'Connell. "The Qualified School Construction Bond program will not infuse communities with new money but will help school districts use their local bond dollars more efficiently. Finding new ways to save money is especially welcome by school districts in these tight budgetary times. I deeply appreciate President Barack Obama and U.S. Education Secretary Arne Duncan for providing California this economic stimulus program to help us rebuild our state's school buildings."

The new QSCB tax credit program is part of the American Recovery and Reinvestment Act (ARRA) that was signed into law by the President in February 2009. ARRA allows tax credits on $22 billion nationwide to QSCB for this year and next. California's share is an estimated $2.7 billion over the same two-year period. Of this sum, $582 million already has been directly allocated to the state's 11 largest school districts; $700 million was available through today's lottery to qualifying school districts; and $73 million is available to allocate this year to qualifying charter schools. The remaining estimated $1.3 billion will be allocated in 2010.

The California Department of Education awarded the $700 million in tax credit bond authorizations to 43 qualifying school districts and county offices of education during a drawing that was held this morning at department headquarters in Sacramento. More than 230 applications were received totaling more than $3.7 billion in requests. The lottery was held to determine the recipients of the tax credit authorization. School districts will then take this authorization and issue locally authorized bonds.

QSCB provides federal income tax credits in lieu of interest to lenders who purchase bonds from eligible school districts. The United States Treasury Department established state allocation limits and set a tax credit rate for QSCB that, on average, equals the amount of interest schools would ordinarily pay on debt. With the federal government covering most or all of the interest on the bonds, school districts will receive a substantial benefit because interest payments typically equal about 50 percent of the economic cost of a bond. 

The bond proceeds may be used for new construction and/or renovation and repair of school facilities, the purchase of land on which the public school facility will be built, and the purchase of equipment related to the project constructed or rehabilitated with proceeds of the issuance. For more information on QSCB, please visithttp://www.cde.ca.gov/ls/fa/qs/.