IRS Issues Guidance on “Build America” and School Facility Bonds

Washington, April 3 — The Internal Revenue Service today issued guidance
on the new “Build America” and Qualified School Construction Bond programs authorized by the American Recovery and Reinvestment Act, as well as on the revised and expanded Qualified Zone Academy Bonds.

The Build America bonds provide an unusual direct subsidy for interest paid by state and local government issuers, and are expected to be particularly popular among these agencies for that reason. Usually, federal subsidies for tax-exempt bonds are provided in the form of tax credits issued to bondholders.

The new guidance also lists state allocations for the two dedicated school bond programs, as well as allocations for the 100 largest school districts under the  Qualified School Construction Bond program. 

For background on the new bonds, see SchoolGrants2009.com’s feature published yesterday, “Mind Your Qs — ARRA Bond Allocations Imminent for QSCBs, QZABs, Others.”