Kent Conrad: “today, I am reintroducing, with Senator Rockefeller, a bill to make some small but important changes to the Qualified…”

“today, I am reintroducing, with Senator Rockefeller, a bill to make some small but important changes to the Qualified Zone Academy Bond, QZAB, program. The QZAB program helps qualifying schools renovate and update school buildings. Schools issue special bonds to finance the cost of renovation. Purchasers of the bonds receive a Federal tax credit in lieu of interest on the bond, thus helping to reduce the cost to the school. Most States are now using this program to modernize their school facilities. The QZAB program expired in 2005, but the Tax Reconciliation bill that will soon be considered by a conference committee extends the program. We are proposing to make modest changes in the QZAB program to make it even more useful to schools across the country. Our bill would expand the pool of bond purchasers to include all taxpayers, both individuals and other entities. Currently, only financial institutions can buy QZABs, which precludes pension funds and mutual funds from purchasing QZABs. Our bill would also allow QZABs to be ``stripped'' so the purchaser could then sell separately the principal portion of the bond and the tax credit. This will encourage the development of a secondary market for the bonds and reduce the discount costs making more of the proceeds available for school-related expenses. It will also open the market to nonprofit entities such as public employee pension funds.…”