Qualified School Construction Bond (QSCB) Introduction The Qualified School Construction Bond (QSCB) program is a new program recently approved as part of the American Recovery and Reinvestment Act of 2009 (Stimulus Bill).  The QSCB program allows a school district to borrow interest free  The Stimulus Bill included a total of $22 Billion of QSCB authority (i.e. principal amount of a QSCB loan) to be allocated among the States in 2009 and 2010 to finance the construction of a public school facility. The basics of the program are as follows: QSCB authority is allocated from the Federal Government to each State The State accepts applications for the desired amount of QSCB authority from school districts The school district receives authority to issue the QSCB from the State A bank lends the funds to the school district The school district pays back only the principal The bank receives an annual Federal Tax Credit in lieu of the school district paying interest Given current parameters of similar programs, the maximum maturity of the QSCB  (which is set by the US Treasury) is expected to be 15 years.  The interest cost on a traditional municipal borrowing would be in excess of $390,000 per million dollars borrowed at 5.00% over 15 years.  By borrowing through the QSCB program, a school district can utilized this cash saving for other district purposes or to keep taxes lower. The QSCB program is new and the US Treasury is working the rules for the allocation of the QSCB authority to each state.