MAJOR SCHOOL CONSTRUCTION & JOBS BILL PASSES ASSEMBLY COMMITTEE
California Political Desk
January 23, 2010
Sacramento -- A bill by Senator Loni Hancock (D-Oakland) that opens the door to immediate new school construction jobs passed the Assembly Appropriations Committee yesterday on a unanimous vote.
"This bill will provide innovative financing to create jobs on "shovel-ready" school construction projects throughout the state," Senator Hancock said.
Senate Bill 205 authorizes school districts and charter schools to use $773 million of federal stimulus funds to sell local school bonds without offering interest payments to investors. Instead, investors will be able to claim a valuable federal tax credit when they purchase the bonds. This has never been offered before.
"This bill gets the money out on the street so that people can be put to work," Senator Hancock added. "Itīs a win-win situation; we create new jobs by building better schools."
The money can be used for construction, repair and rehabilitation of school facilities or for the purchase of land and equipment.
"School districts and charter schools will benefit enormously from these bonds because they wonīt need to take on additional debt, "Senator Hancock stated. "Itīs important to emphasize that these are federal tax credits that are being offered to investors. There will be no impact whatsoever on the stateīs general fund."
The funds are formally called Qualified School Construction Bonds and were authorized by the American Recovery and Reinvestment Act. More than $1.3 billion of the bonds were allocated to California, with $582 million of that amount distributed directly to 11 large school districts by the federal government.
The demand for the rest of the funds has been so large that the California Department of Education established a lottery to allocate the money. The Department received more than $3.6 billion in requests for the remaining $773 million of federal funds.
"This bill will provide innovative financing to create jobs on "shovel-ready" school construction projects throughout the state," Senator Hancock said.
Senate Bill 205 authorizes school districts and charter schools to use $773 million of federal stimulus funds to sell local school bonds without offering interest payments to investors. Instead, investors will be able to claim a valuable federal tax credit when they purchase the bonds. This has never been offered before.
"This bill gets the money out on the street so that people can be put to work," Senator Hancock added. "Itīs a win-win situation; we create new jobs by building better schools."
The money can be used for construction, repair and rehabilitation of school facilities or for the purchase of land and equipment.
"School districts and charter schools will benefit enormously from these bonds because they wonīt need to take on additional debt, "Senator Hancock stated. "Itīs important to emphasize that these are federal tax credits that are being offered to investors. There will be no impact whatsoever on the stateīs general fund."
The funds are formally called Qualified School Construction Bonds and were authorized by the American Recovery and Reinvestment Act. More than $1.3 billion of the bonds were allocated to California, with $582 million of that amount distributed directly to 11 large school districts by the federal government.
The demand for the rest of the funds has been so large that the California Department of Education established a lottery to allocate the money. The Department received more than $3.6 billion in requests for the remaining $773 million of federal funds.
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