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TEA Correspondence

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

August 3, 2009

Subject: Qualified Zone Academy Bond (QZAB) Program Funds Are Available


The QZAB program allows school districts to obtain interest-free financing for the purpose of establishing “qualified zone academies.” The program provides an incentive in the form of federal tax credits to lenders who purchase bonds from issuing school districts. The maximum authorization that may be requested is $8,000,000 per school district or charter per year. School districts must issue bonds, lease purchases, maintenance tax notes, or time warrants. Charter schools must issue revenue bonds.

Texas Allocations

  • $  31,461,000 remaining
  • $  37,939,000
  • $132,788,000

Eligibility Requirements
The proposed “qualified zone academy” must either 1) be located in one of the following counties: Cameron County, Dimmitt County, Hidalgo County, La Salle County, Maverick County, Starr County, Uvalde County, Willacy County, or Zavala County or 2) be on a campus with at least 35 percent of its student population eligible for the federal free and reduced-price lunch program.

New Academic Program
The proposed program must be designed in cooperation with business partners (1) to enhance the academic curriculum, (2) to increase graduation and employment rates, (3) and to better prepare students for the rigors of college and the increasingly complex work world. The campus and at least one of the business partners together must create a plan for a new academic program and indicate how their combined efforts can improve student education. Postsecondary and existing programs are not eligible.

Business Partner Contribution
The district establishing the qualified zone academy must have written commitments from business partners to make qualified contributions having a present value of not less than 10 percent of the proceeds of the issue.

Qualified contributions are:

  • equipment for use in the qualified zone academy (including state-of-the-art technology and vocational equipment);
  • technical assistance in developing curriculum or in training teachers in order to promote appropriate market-driven technology in the classroom;
  • services of employees as volunteer mentors;
  • internships, field trips, or other educational opportunities outside the academy for
    students; or
  • any other property or service specified by the district.


Use of Bond Proceeds
One hundred (100) percent of the bond proceeds must be used by the close of three years after issuance of the QZABs, and at least 10 percent of the proceeds must be spent within six months of issuance for one or more of the following qualified purposes:

  • rehabilitating or repairing the public school facility in which the academy is established (but not new construction or additions);
  • providing equipment at the academy;
  • developing course materials for education to be provided at the academy; and/or
  • training teachers and other school personnel in the academy.


The district must submit a budget for the bond expenditures.

Fax or email submissions will not be accepted.Applications will be considered on a first-come, first-served basis, until the state’s allocation is fully committed. We encourage you to review this bond program, consult with legal counsel and bond counsel, and make application as appropriate. You may access the application from the QZAB website at the following address:


If you have any questions, please contact Gary Marek by telephone at (512) 463-9190 or by email at Gary.Marek@tea.state.tx.us or Sam Lester by telephone at (512) 475-2029 or by email at Sam.Lester@tea.state.tx.us in the State Funding Division.



Twanna Buford
Facilities and Transportation Manager


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