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The Federal Taxpayer Relief Act of 1997 created the Qualified Zone
Academy Bond Program. Under this program, state and local governments can
issue Qualified Zone Academy Bonds at very low or even zero percent
interest rates on behalf of eligible local educational agencies (LEA's)
including eligible charter schools. Eligible charter schools may work with
a local government that has the authority to issue debt. Under this
program, a bond is defined as an obligation and is subsidized by the
Federal government in the form of tax credits to bondholders. Please note
that the QZAB is a type of bond and does not provide any additional
bonding authority beyond what is allowed under existing State and local law.
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