Washington, D.C. — U.S. Rep. Bob Etheridge (D-Lillington), the only North Carolina member of the House Ways and Means Committee, announced last week that he voted in favor of H.R. 2847, “The Jobs for Main Street Act of 2010,” which included an important provision he requested that will promote job growth in North Carolina and nationwide.
Congressman Etheridge wrote to Speaker Pelosi earlier this month asking that this fix be included in the jobs legislation. The technical change to Qualified School Construction Bonds will spur immediate investments of billions of dollars in school construction, rehabilitation and repair.
“This change is a win-win for North Carolina, enabling job creation and local school construction,” said Etheridge. “This is a simple fix that adds nothing to the cost of the bonds but achieves the goals of Congress by expanding access to credit for state and local governments, and creating jobs by building the new schools we need.”
Qualified School Construction bonds were created in the American Recovery and Reinvestment Act, and built on a proposal by Congressman Etheridge and Ways and Means Chairman Rangel, the America’s Better Classrooms Act. The Act authorized zero-interest school construction and modernization bonds for states and local communities. The federal government provides tax credits to the bond holder for the interest normally paid on a bond. State and local governments would only have to pay back the principal, meaning funds used to pay bond interest would be freed for other education needs.
The provision in the Jobs for Main Street Act would allow the state or local government to choose to receive a direct payment from the Federal government equal to the value of that credit. This is similar to the Build America Bond direct payment option that has been very successful in helping state and local governments find a market for those bonds. The change would also apply to Qualified Zone Academy Bonds.
Currently only 15% or $1.7 billion, of QSCBs have been used to date. That figure contrasts with the tens of billions of dollars of Build America Bonds which have been issued. Local municipalities and bond traders have informed the Congressman Etheridge that a major reason for this disparity is the complexity of QSCBs.
“By investing in school construction, we can provide 21st century learning facilities for our students, and put people to work,” said Etheridge.