Texas Education Agency Skip to Main Content
   Home | District Locator | Index A-Z | Divisions | School Directory
  SEARCH   Administrators   Teachers   Funding   Testing/Account   Curriculum   Reports   News   ARRA

TEA Correspondence

A Microsoft Word version of this letter is available for download and PRINTING.



July 28, 2009

Subject:  Qualified School Construction Bond Program Allocation Availability


With the passage of the American Recovery and Reinvestment Act of 2009, Congress authorized the creation of the Qualified School Construction Bond (QSCB) program. The program allows school districts and charter schools to obtain interest-free or very-low interest financing for qualified construction projects. The program provides an incentive in the form of federal tax credits to lenders who purchase bonds from issuing school districts and charter schools. For the purpose of the QSCB Program, for school districts a “bond” may be in the form of a bond, lease purchase, time warrant, or maintenance tax note, and for charter schools a “bond” may be in the form of a revenue bond.

The Texas allocation for the QSCB program consists of a $538.585 million general allocation to the state and a direct allocation of approximately $466 million to 18 school districts selected by the U.S. Department of Education. Of the state’s general allocation, $100 million is reserved exclusively for charter schools, and an additional $100 million is reserved exclusively for school districts located in Hurricane Ike affected counties. If the allocations reserved for charter schools and the allocations reserved for school districts located in Hurricane Ike affected counties are not fully committed by February 1, 2010, the reservations will lapse and the uncommitted allocations will return to the state’s overall allocation balance.

QSCB proceeds are to be used as a funding source for:

  • construction of a public school facility;
  • the acquisition of land on which such a facility is to be constructed with part of the proceeds of such issue;
  • rehabilitation of a public school facility; or
  • repair of a public school facility.

The maximum bond authorization that may be requested per school district or charter school per allocation year is based on the greater of:

  • $5,000,000; or
  • {$5,000,000 + [$500 x (2008-09 PEIMS student enrollment - 400)]}.  

For the eighteen districts that received a direct QSCB allocation, if the above formula produces a higher allocation than their direct QSCB allocation, the district may submit an application for debt authorization for the difference between the formula allocation and their direct QSCB allocation. The maximum bond authorization that may be requested per school district or charter school per allocation year will be increased by an additional 5 percent if the school district or charter school commits to designing and constructing their projects so that they receive certification under a high-performance building standard such as:

  • the Leadership in Energy and Environmental Design (LEED) Green Building Rating System;
  • the Texas Collaborative for High Performance Schools (TX-CHPS) Criteria;
  • the Green Building Initiative's Green Globes Criteria; or
  • an equivalent standard adopted by the municipality or county in which the projects are located.

There are restrictions applicable to QSCB and other tax credit programs under the Food, Conservation, and Energy Act of 2008 (P.L. 110-246). Issuers must spend 100 percent of the QSCB proceeds within three years of the sale of the bonds and must expect to enter into a binding commitment with a third party to spend at least 10 percent of the proceeds within six months. Issuers must also comply with arbitrage rebate and information reporting requirements and with the requirements of the Davis-Bacon Act.

We encourage you to review the information on this bond program that is available on our website and to consult with appropriate legal and financial professionals to determine whether your district would be interested in participating in this program. You may access the application and other program information from the QSCB website at the following address:


If you have any questions, please contact either Gary B. Marek at (512) 463-9190 or Sam Lester at (512) 475-2029 in the State Funding Division.



Twanna Buford
Facilities and Transportation Manager

TEA Homepage

Back to TEA Correspondence Homepage

Texas Education Agency
1701 N. Congress Avenue
Austin, Texas, 78701
(512) 463-9734
Map | Site Policies | TEA Jobs
Fraud Hotline
Compact with Texans
Open Records Requests
Frequently Asked Questions
State of Texas
Texas Legislature
Homeland Security
Military Families
Where Our Money Goes
Equal Educational Opportunity
Governor's Committee on People with Disabilities
Copyright Texas Education Agency (TEA) 2007-2012