Current through Reg. 50, No. 187; September 24, 2024
(1)
Qualified School Construction Bonds
(QSCBs). The American Recovery and Reinvestment Act of 2009 authorized the
issuance of Qualified School Construction Bonds (QSCBs) to finance school
construction and other eligible projects for public schools. The amount of
QSCBs issued in each state is limited under federal law. This rule is created
pursuant to Sections 159.841,
159.842,
159.843,
159.844, and
159.845, F.S., which authorizes
the Department of Education (Department) to establish a program for allocating
the available allocation authority in Florida. Under this program, qualified
school districts, charter schools or state education agencies can borrow funds
with no interest cost. A Qualified School Construction Bond is an interest-free
bond issued by a state or local governmental entity, the proceeds of which are
used to construct or improve certain eligible public schools, or for certain
land or equipment purchases. Instead of receiving periodic interest payments
from the issuer, the QSCB bondholder (potential bondholders include banks,
insurance companies, and corporations actively involved in the business of
lending money) receives a federal income tax credit while the bond is
outstanding, in an amount equal to a percentage of the face amount of the bond.
The education agency's debt service obligation is only for the principal amount
of the bonds. The full faith and credit of the State of Florida is not pledged
to QSCB bonds issued by agencies other than the Florida Department of
Education.
(a) Eligibility Criteria.
1. All school districts, charter schools or
state education agencies are eligible to apply.
2. Eligible QSCB projects include all
projects permitted to be financed with QSCBs under federal law, including:
a. New construction of a public school owned
facility,
b. Rehabilitation or
repair of an existing public school owned facility,
c. Land acquisition for the facility to be
constructed with the QSCB proceeds, and
d. Equipment to be used in the facility that
is being constructed, rehabilitated, or repaired with the proceeds of QSCBs.
NOTE: Lease payments may not be made with QSCB
proceeds.
(b) Application Process.
1. Application shall be made through
submission of Form OEF 411, Qualified School Construction Bond (QSCB) Program
Notice of Intent to Issue Bonds and Request for Written Confirmation, which is
hereby incorporated by reference to become effective with the effective date of
this rule. Form OEF 411 may be obtained from the Department's website at
http://www.fldoe.org/edfacil/oef/federalbond.asp.
2. Applications must be received from the
districts or charter schools on or before October 1, or such other date as
established by the Department.
3.
Districts or charter schools should not request more bonding authority than can
be reasonably expected to be repaid, and the district or charter school must
expect that the QSCBs will be issued prior to the end of the calendar year in
which an application is made.
4.
Applications must clearly explain the pledged revenue from which the district
or charter school intends to repay the bond principal upon maturity.
5. The application must include the following
documents:
a. A copy of the resolution
referenced in the Certificate of Eligibility section of Form OEF 411.
b. A completed Qualified School Construction
Bonds Notice of Intent to Issue and Request for Written Confirmation Project
Spending Plan, Form OEF 412, which is hereby incorporated by reference to
become effective with the effective date of this rule. Form OEF 412 may be
obtained from the Department's website at
http://www.fldoe.org/edfacil/oef/federalbond.asp.
6. Charter schools must submit a copy of the
most current financial audit containing an auditor's opinion that the charter
school will remain operational until the QSCBs mature.
(c) Allocation Process.
1. After the federally imposed state bonding
authority is known for each calendar year, the school districts and charter
schools will be notified by the Department.
2. The total available state volume cap
limitation will be divided between two pools, the school district's pool and
the charter school's pool. The pools will be established based on the ratio of
the number of charter schools divided by the number of students served, as
compared to the total student population.
3. Applications are reviewed for eligibility
and completeness. Districts or charter schools may be contacted for further
information or clarification.
4.
Applications from school districts must include only survey recommended
projects.
5. District applications
will be considered and allotments awarded based on the following factors:
a. Existing classroom funding needs for
compliance with the constitutionally mandated class-size reduction
requirements;
b. Increasing
enrollment growth of greater than one (1) percent per year;
c. Need to replace aging facilities, fifty
(50) years and older, based on a Department approved analysis; or
d. Existing funding needs for survey
recommended projects included in a current Educational Plant Survey approved by
the Department.
6.
Charter school applications will be considered and allotments awarded based on
the review and evaluation of the description of the facility; including, but
not limited to, the age, condition, ownership, number of students currently
being served, projected number of students to be served, and a photograph(s) of
the existing facility demonstrating a need for the project to be financed with
QSCB proceeds.
7. Once the
Department determines the allocations to be awarded, each district or charter
school will be notified in writing. Districts or charter schools whose
applications have been denied and those with ineligible projects will also be
notified.
8. Any allotment balance
remaining after the initial allocation process will revert to a state-wide
allocation pool, to which unissued/returned allotments will be added. The
state-wide pool may be reallocated at a later date to other qualifying
districts.
9. A final confirmation
letter of the allocation will be provided upon the districts or charter schools
submission of the State of Florida, Department of Education Issuance Report
Pursuant to Part IX of Chapter 159, F.S., Form OEF 413 and a copy of the
official statement cover. Form OEF 413 is hereby incorporated by reference to
become effective with the effective date of this rule. This form may be
obtained from the Department's website at
http://www.fldoe.org/edfacil/oef/federalbond.asp.
(2) In addition to previously stated
requirements, there are a number of administrative items school districts or
charter schools must keep in mind:
(a)
Qualified School Construction Bond (QSCB) proceeds cannot be used to pay debt
service or other outstanding debt obligations incurred to finance project
costs.
(b) Qualified School
Construction Bond (QSCB) proceeds cannot be used to make lease
payments.
(c) The district or
charter school must comply with all information requests from the Department so
that federal accountability and reporting requirements can be met.
(d) Each district or charter school must
determine whether the purposes for which QSCBs are issued conform to state law
regarding indebtedness.
(e) Each
district or charter school is responsible for repayment of the principal upon
maturity.
(f) School districts
shall not use PECO or CO&DS revenues to pay QSCB debt service obligations,
but may use District School Tax revenues pursuant to Section
1011.71, F.S. (often referred to
as local discretionary capital outlay millage).
(g) If District School Tax proceeds are
proposed for repayment of QSCB debt, those proceeds shall not exceed the
Certificates of Participation (COPs) limit established for District School Tax
revenue in Section 1011.71, F.S.
(h) If a district or charter school
determines that its allotment will not be used, the district or charter school
should notify the Department as soon as possible.
(i) If the scope of one of a district's or
charter school's approved projects changes, the district or charter school must
receive the approval of the Department before reallocating the funds to other
projects. Requests will be reviewed on a case-by-case basis.
1. The Department may allow reallocations
among approved projects, as identified on the current QSCB award letter, to
another current approved project.
2. The Department will disallow the
reallocation of funds to new or unapproved projects.
(j) Districts or charter schools must have
all bonds issued by December 31 of its funding year.
(k) As districts or charter schools issue
QSCB bonds, Form OEF 413 and a copy of the cover of the official statement must
be forwarded to the Department upon issuance of the bonds in order to receive a
final confirmation of the volume cap allocation.
(l) On December 31 of the district's or
charter schools' funding year, unused allotments will revert back to the
Department for reallocation.
(m)
Allocations of the volume limitation are granted first from carried-forward
balances from previous years and then from the current year
balance.
Rulemaking Authority
159.845 FS. Law Implemented
159.841, 159.842, 159.843, 159.844
159.845
FS.
New 12-15-09.
