Iowa Department of Education Qualified School Construction Bonds (QSCBs)

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1 Iowa Department of Education Qualified School Construction Bonds (QSCBs) REQUEST FOR AUTHORIZATION TO ISSUE QUALIFIED SCHOOL CONSTRUCTION BONDS Two copies of the request with original signatures must be submitted to the Iowa Department of Education. Electronically submitted or faxed applications will not be accepted. Iowa Department of Education Grimes State Office Building 400 East 14 th Street Des Moines, IA Contact Person: Gary Schwartz (515)

2 Qualified School Construction Bonds Request for Authorization Information and Instructions The American Recovery and Reinvestment Act of 2009 created the Qualified School Construction Bond Program (QSCBs) to provide no interest financing for the renovation, repair and construction of school buildings, the purchase of land on which school buildings will be built and the purchase of equipment to be used in the portion or portions of the public school facility that is being constructed, rehabilitated, or repaired. New construction does qualify under this program. The U.S. Treasury Department establishes State bonding allocation limits and sets a tax-credit rate for the QSCB program that, on average, equals the amount of interest schools would ordinarily pay on debt. Since the Federal Government covers most or all of the interest on these bonds, school districts receive a substantial benefit, as interest payments may typically equal up to 50 percent of the economic cost of a bond. Iowa s level of bonding allocation is $64,422,000 in 2010 QSCB authority, and the Iowa Department of Education (Department) will determine which districts will be authorized to issue QSCB bonds. QSCBs are financial instruments that provide no interest loans that are subsidized by the Federal government in the form of tax credits to the lender. For more information about QSCBs, see QSCB requirements: percent of the available proceeds, including investment earnings on such proceeds minus cost of issuance, which may not exceed 2 percent of the sale proceeds, are to be used for the construction, rehabilitation, or repair of a public school facility, for the acquisition of land or the purchase of equipment to be used in the portion or portions of the public school facility that is being constructed, rehabilitated, or repaired. 2. The Issuer designates such bonds as Qualified School Construction Bonds. 3. The school district issuing the QSCBs (the Issuer ) reasonably expects at the time of issuance of the QSCBs that 100 percent of the available QSCB proceeds will be spent for qualified purposes within three years of issuance. 4. Within six months of issuance, the school district will have entered into contracts for use of the QSCB funds equal to 10 percent of the issue. School districts may use the Voter Approved School Physical Plant and Equipment Levy (VPPEL) and/or the Local Option/Statewide Sales and Services Tax for School Infrastructure to repay the principal. If using infrastructure sales and services tax to repay the principal, an approved certificate of need from the Iowa Department of Education is required for new construction for school districts with a certified enrollment of fewer than 250 students in the entire district or certified enrollment of fewer than 100 students in high school. A certificate of need is not required for repairing schoolhouses or buildings, or for construction necessary for compliance with the Federal Americans with Disabilities Act. 2

3 Davis-Bacon Act Section 1601 of The American Recovery and Reinvestment Act of 2009 requires that projects that are funded with the proceeds of QSCB must comply with the Davis-Bacon Act (Subchapter IV of Chapter 31 of the Title 40 of the United States Code) Davis- Bacon Act. For further information on Davis-Bacon Act and compliance with this requirement please see: U.S. Department of Labor Wage Determinations Online.gov Districts must complete the request for authorization application, including appropriate assurances page, and submit to the Department. Allocations for QSCB bonding authority will be made upon receipt of an application on a first come-first served basis. Incomplete applications will be disqualified and the next application will be considered. The date of receipt shall be determined by postmark or, if hand-delivered, by stamped date of delivery. Authorizations will be made at the discretion of the Department and shall fit within the statewide allocation for QSCBs. The Department reserves the right to limit the amount of any authorization based upon the number of applications for QSCBs and to fit within the statewide allocation for QSCBs. The districts must notify the Department upon issuance of the QSCB debt. If debt has not been issued within one year after the authorization is received, a status report is required. If a district accepted authorization to issue bonds, and later determines the full amount of bonds will not be issued, the Department must be notified immediately so the authorization can be reallocated to another district before the allocation expires. 3

4 Qualified School Construction Bonds (QSCB) Application for Authorization District Name District Number Building Name Building Number Contact Person This is the official QSCB contact person and will receive all QSCB information. Address Street Address IA AEA _ County City State Zip Contact Phone Number ( ) Fax Number ( ) Address Project Description: Source of Repayment: Attach a description of the project. Attach a description of the funds that will be utilized to repay this issue, including referendum results, revenue purpose statements, and whether a Certificate of Need is required. In accordance with the provisions of federal laws and regulations governing Qualified School Construction Bonds, request is hereby made for an authorization of such QSCB in the amount of dollars ($ ) Anticipated date for debt issuance: We certify under penalty of perjury that to the best of our knowledge, the information in this application is true and correct and is in compliance with statutes and administrative rules of the Iowa Department of Education. The Governing Board of the above named school district has authorized us to sign this request for authorization on its behalf. Signature of Superintendent: Typed Name of Superintendent: Date: Signature of Board President: Typed Name of Board President: Date: 4

5 QUALIFIED SCHOOL CONSTRUCTION BONDS Assurances and Required Attachments A district that requests Qualified School Construction Bond authority certifies that the proposed project qualifies under the QSCB program and assures the following: percent of the QSCB proceeds, including investment earnings (except for cost of issuance not exceeding 2 percent of the sale proceeds) of such issue will be spent for qualified purposes within three years. Please attach a spending plan and cash flow projections for the project. 2. The bonds issued will be designated for the purpose of issuance as a Qualified School Construction Bond. 3. The bond issuer has written approval of the eligible school district for such bond issuance. 4. The school district understands that it is completely responsible for compliance with all applicable laws and regulations governing the terms and conditions of such bond issuance and school construction projects upon being allocated authorization to issue bonds by the Department of Education. These laws and regulations include, but are not limited to the Davis-Bacon Act payment of prevailing wage rates requirement, Americans with Disabilities Act, and the Iowa Administrative Code. Signature of Superintendent Date Signature of Board President Date Note: Applications MUST include: a) Application page; b) Assurances; c) Description of the project; d) Description of the source of repayment; and e) Spending plan and cash flow projections. 5