H.R. 7340 — Rebuild America’s Schools Act of 2026

This section states the purpose of funds under this title as supporting long-term improvements to public school facilities and reserves, for FY2027 through 2031 from amounts appropriated to carry out this title, one-half of 1 percent for allocations to outlying areas (i.e., Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and the U.S. Virgin Islands) and one-half of 1 percent for payments to the Secretary of the Interior to assist Bureau-funded schools (i.e., Bureau of Indian Affairs-operated schools, contract or grant schools, or tribally controlled schools under the Tribally Controlled Schools Act of 1988 that serve Native American students). Funds reserved under these provisions must be used in accordance with title III of this Act, with title III applied to Bureau-funded schools in the same manner as to qualified local educational agencies and their facilities treated as public school facilities; the Secretary of the Interior must provide such assistance without regard to whether a Bureau-funded school is operated by the Bureau of Indian Education or an Indian tribe and must provide it directly to the tribe for any contract or grant school (as defined in 25 U.S.C. 2021) it operates. (Thus, these reservations enable school infrastructure grants for Native American students and outlying areas under title III.) Allocations to outlying areas are proportional to their prior-year receipts under part A of title I of the Elementary and Secondary Education Act of 1965.

This section establishes a formula for allocating funds appropriated under this title (not reserved under section 101(b)) to states proportional to the prior fiscal year's Title I-A grants (20 U.S.C. 6311 et seq.) received by their local educational agencies (LEAs) relative to all eligible states. For FY2027, allocations are made within 30 days of appropriation to states providing an assurance of compliance with section 103(c); for other fiscal years, allocations are made to states with an approved state plan under subsection (b). This section authorizes states to reserve up to 5% of their allocation for state responsibilities, including (1) providing technical assistance to LEAs by coordinating relevant state agencies; (2) developing and maintaining (updating every three years) a publicly searchable online database of public school facilities infrastructure (including age of key systems such as roofs, HVAC, and plumbing; fire safety results; proximity to toxic sites or natural disaster vulnerability; presence of toxins like per- and polyfluoroalkyl substances (PFAS); needs for social distancing, hygiene, energy/water efficiency, resilience, and climate mitigation), posted on a state website and distributed to LEAs and Tribal governments; (3) issuing regulations for student/staff health and safety during construction/renovation and for safe buildings (covering indoor air quality, mold, drinking water contaminants including PFAS and lead with regular testing, energy/water efficiency, noise, maintenance levels, and building codes); (4) creating a plan to reduce exposure to toxic substances (e.g., mercury, radon, PCBs, lead, PFAS, asbestos); and (5) creating a plan to increase net zero energy schools, including professional development on energy efficiency, resilience, renewables, storage, and electrification. This section requires states (except as provided) to submit an approved plan to the Secretary to receive allocations.

This section establishes a state-administered competitive grant program to qualified local educational agencies (LEAs) from funds allocated under section 102(a) and state contributions under section 102(c)(1), for public school facility improvements and related activities under section 301(a); states may use up to 10% of such funds for grants supporting digital learning under section 301(b). Qualified LEAs must (1) rank among the state’s LEAs with the highest numbers or percentages of students counted under section 1124(c) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6333(c)) (i.e., children from families in poverty for Title I formula purposes); (2) prioritize facilities serving schools with the highest percentages of students eligible for free or reduced-price lunch under the Richard B. Russell National School Lunch Act (42 U.S.C. 1751 et seq.); and (3) demonstrate limited capacity to raise funds for school construction, based on fundraising history, bond issuance, and bond ratings. States must equitably distribute grants by numbers and percentages of such students and ensure geographic diversity, using reasonable statewide thresholds. Grant priority goes to qualified LEAs demonstrating the greatest facility needs (e.g., facility age, overcrowding, deficient building systems, roofs/windows/doors, health/safety risks including proximity to toxic sites or disaster vulnerability) that will target elementary/middle schools with at least 40% free/reduced-price lunch-eligible enrollment or high schools with at least 30% (using feeder school data if applicable); or LEAs improving high-speed broadband access for digital learning in lacking schools (including rural) that meet the above needs criteria. LEAs must apply to the state with details on projects, their benefits for health/safety, learning equity, and facility efficiency/resilience/climate mitigation, and—for charter school projects—involvement of charter operators.

This section requires the Secretary of Education to submit to the appropriate congressional committees, by September 30 of each fiscal year beginning after enactment, an annual report on projects funded under this title for the preceding fiscal year. The report must identify each grant recipient local educational agency (LEA); for each LEA, describe student demographics (disaggregated by race, counts under 20 U.S.C. 6333(c), and free or reduced-price lunch eligibility), population density, grant-funded projects (measured by school facility quality metrics from Common Education Data Standards), project benefits (e.g., health, safety, learning conditions, and energy/water efficiency), square footage improved, project costs (total and disaggregated by planning, design, construction, site purchase, and improvements), estimated jobs created, and contract awards to certified small, minority-owned, veteran-owned, and women-owned businesses (by percentage and dollar value); and provide the total dollar amount of all grants. This section further requires grant recipient LEAs to compile specified information annually, post it publicly online, and submit it to their state; and requires states to compile LEA-submitted data, report it to the Secretary, post it publicly online, and distribute it to LEAs and Tribal governments.

This section authorizes appropriations of $20 billion for each of fiscal years 2027 through 2031 to carry out this title, with such amounts remaining available through fiscal year 2036.

This section revives the qualified zone academy bond (QZAB) program—which authorizes tax credit bonds (with credits to holders under revived IRC §54A or direct refundable payments to issuers under revived IRC §6431) to finance public school facilities designated as zone academies (i.e., serving low-income or at-risk students, often in empowerment zones, for improved academic and vocational training)—but limits the program solely to QZABs, effective for bonds issued after December 31, 2026. As revived and amended, the program (1) authorizes a national volume limitation of $1,400,000,000 for 2027 and each calendar year thereafter (replacing prior annual limitations of $400,000,000); (2) eliminates the requirement for private business contributions (previously at least 10% of project costs); (3) expands eligible uses of bond proceeds to constructing, rehabilitating, retrofitting, or repairing public school facilities (from rehabilitating or repairing); and (4) applies Davis-Bacon prevailing wage requirements (40 U.S.C. §§3141 et seq.) to projects financed by QZABs issued after enactment of the American Recovery and Reinvestment Act of 2009.

This section establishes a new tax credit under new IRC §54BB for holders of designated school infrastructure bonds equal to 100% of interest payable on interest payment dates, subject to the holder's regular and alternative minimum tax liability (with unused credits carried forward indefinitely). School infrastructure bonds are otherwise tax-exempt obligations (under IRC §103) with 100% of available project proceeds used for purposes specified in §301 of the Rebuild America’s Schools Act of 2026 (i.e., school infrastructure projects); bonds must be spent within 6 years or nonqualified portions redeemed within 90 days thereafter, with special rules disregarding the credit for federal guarantee, yield, and de minimis premium determinations. The program caps aggregate designated bonds at $10 billion nationally for each of 2027, 2028, and 2029, allocated by the Treasury Secretary as follows: (1) to states proportional to local educational agencies' prior-year part A title I ESEA funding; (2) 0.5% to U.S. possessions other than Puerto Rico; and (3) 0.5% to Bureau of Indian Affairs-funded schools; states further allocate to eligible issuers per specified priorities and eligibility criteria in §§103(c)-(d) of such Act (excluding §103(b)(1)(C)).

This section directs the Secretary of the Treasury to submit to the appropriate congressional committees, not later than September 30 of each fiscal year beginning after enactment, an annual report on the amendments made by sections 201 and 202 covering the preceding fiscal year. The report must identify local educational agencies (LEAs) that received allocations under IRC §54E(b)(2) (qualified zone academy bonds) or §54BB(g) (school infrastructure bonds), and those eligible but not receiving such funds; for each, assess the LEA's capacity to raise funds for school facilities (e.g., via property taxes or bonds, including bond ratings), describe student demographics (disaggregated by race, those counted under ESEA §1124(c) [20 U.S.C. 6333(c)], and free/reduced-price lunch eligibility), population density, projects funded, benefits, and jobs created; provide the total dollar amount of school infrastructure bond funds received by LEAs; and include other relevant factors. State and local educational agencies receiving such allocations must compile and report necessary data to the Secretary of the Treasury.

This section authorizes local educational agencies receiving covered funds—except as provided in section 302—to use such funds for 22 specified public school facility purposes, including (1) developing, maintaining, and updating facilities master plans; (2) constructing, modernizing, renovating, or retrofitting facilities (including seismic retrofitting); (3) decarbonizing facilities through all-electric systems, efficiency improvements, and on-site renewables; (4) major repairs and deferred maintenance; (5) installing 10-year-life furniture or fixtures; (6) constructing new facilities or preparing sites; (7) extending life of systems and components; (8) addressing enrollment capacity; (9) ensuring secure building envelopes and interiors; (10) enhancing safety and security design; (11) improving energy and water efficiency; (12) improving indoor air quality; (13) reducing toxic substances (e.g., lead, asbestos, PFAS), mold, pests; (14) ensuring safe drinking water (including testing for lead and PFAS); (15) complying with fire, health, and safety codes; (16) achieving accessibility under the Americans with Disabilities Act and Section 504 of the Rehabilitation Act of 1973; (17) improving instructional spaces for specified programs (e.g., special education, arts); (18) supporting magnet schools to reduce isolation; (19) enabling community partnerships; (20) protecting health during construction; and (21) reducing classroom noise. Subsection (b) allows use of such funds to expand high-speed broadband for digital learning via public programs or public-private partnerships.

This section prohibits a local educational agency (LEA) receiving covered funds from using such funds for (1) routine and predictable maintenance costs and minor repairs; (2) facilities primarily used for athletic contests, exhibitions, or other events for which admission is charged to the general public; (3) vehicles; or (4) central offices, operation centers, or other facilities not primarily used to educate students. It further prohibits such funds from being used for facilities of a public charter school that is (1) operated or managed by a for-profit entity or (2) leased from an individual or for-profit entity if that individual, or an individual with a direct or indirect financial interest in the entity, has a management or governance role in the school.

This section requires a local educational agency receiving covered funds to ensure that any new construction, modernization, or renovation project funded by such agency meets or exceeds the following: (1) requirements in the most recent published edition of a nationally recognized, consensus-based model building code; (2) requirements in the most recent published edition of a nationally recognized, consensus-based model energy conservation code; (3) performance criteria under the WaterSense program—EPA's voluntary program (established under 42 U.S.C. 6294b) to promote water-efficient products, buildings, and services through labeling that reduces water use and conserves resources—as incorporated into a nationally recognized, consensus-based model code; and (4) indoor environmental air quality requirements in the most recent published edition of a nationally recognized, consensus-based code or standard.

This section requires a local educational agency using covered funds for a new construction, modernization, or renovation project to ensure the project is certified, verified, or consistent with applicable provisions of specified green building rating standards, including (1) the Leadership in Energy and Environmental Design (LEED) Green Building Rating System; (2) the Living Building Challenge; (3) a Collaborative for High-Performance Schools (CHPS)-verified program; (4) the Green Globes rating system; or (5) an equivalent or more stringent state- or jurisdiction-adopted program with a verifiable compliance method.

This section requires a local educational agency receiving covered funds to use iron, steel, and manufactured products produced in the United States in projects funded by such amounts. "Produced in the United States" means, for manufactured products, manufacturing in the United States with the cost of U.S.-sourced components exceeding 60% of total component costs, and for iron or steel products or components, all manufacturing processes from initial melting through coatings occurring in the United States (excluding certain remelted or reprocessed foreign semi-finished materials). The Secretary may waive the requirement if—(1) inconsistent with the public interest; (2) such products are not produced in sufficient and reasonably available quantities or of satisfactory quality; or (3) inclusion increases overall project costs by more than 25 percent—with any waiver preceded by a detailed Federal Register notice. The requirement applies consistent with U.S. international obligations. "Manufactured product" includes construction materials or end products (per Federal Acquisition Regulation part 25.003) other than iron or steel, such as electrical components, aluminum, PVC, glass, fiber optics, plastic, wood, masonry, rubber, manufactured stone, other nonferrous metals, and unmanufactured construction materials.

This section directs the Comptroller General of the United States to submit to the appropriate congressional committees a report—not later than two years after the majority of states receiving allocations under section 102 have made grants to local educational agencies under section 103—assessing projects carried out with covered funds. The report must assess (1) state activities, including criteria for identifying high-need students and facilities and any new regulations for student and staff health and safety during construction or renovation; (2) types of projects, including square footage improved, total costs, and costs disaggregated by planning, design, construction, site purchase, and improvements; (3) geographic distribution of projects; (4) impacts of selected projects on student and staff health and safety; and (5) ways to increase accessibility of covered funds to schools serving the highest numbers and percentages of low-income students (i.e., those counted under the Title I grant formula) and to schools facing fiscal challenges in funding infrastructure. The Comptroller General must update and resubmit the report between five and six years, and between 10 and 11 years, after the initial report.

This section directs the Secretary, acting through the Director of the Institute of Education Sciences, to conduct a comprehensive study of the physical conditions of all public schools in each state and outlying area and submit a report to the appropriate congressional committees at least once every five years beginning after enactment. The report must (1) assess the effects of school facility conditions on student and staff health, safety, and academic outcomes; facility conditions by geographic region, for economically disadvantaged students and major racial/ethnic subgroups, accessibility for those with disabilities, overcrowding and its impacts, natural disaster effects, community economic effects of funded projects, protection from natural elements and human threats, and energy/water efficiency and climate resilience; (2) explain observed differences; and (3) estimate costs to bring facilities to a state of good repair.

This section establishes within the Department of Education, not later than 90 days after enactment, the Office of School Infrastructure and Sustainability, to be headed by a Secretary designee. The Office must (1) advise the Secretary on State plans under section 102; (2) serve as a liaison with specified federal agencies (i.e., Departments of Energy, Health and Human Services, and Treasury; FEMA; and EPA) on public school facilities; (3) ensure the Department's preparedness to implement this Act; and (4) manage other school facilities programs or initiatives as directed by the Secretary.

This section directs the Secretary, not later than 120 days after enactment and in consultation with the EPA Administrator, Secretary of Energy, CDC Director, and NIOSH Director, to (1) identify data for States to collect in databases developed under section 102(a)(2)(B); (2) develop standards for measuring such data; and (3) issue guidance to States on collecting and measuring such data.

This section directs the Secretary to establish, not later than 120 days after enactment, a clearinghouse to disseminate information on federal programs and financing mechanisms available to assist schools in initiating, developing, and financing energy efficiency projects, distributed generation projects, and energy retrofitting projects. In doing so, the Secretary must (1) consult with officials described in section 404(b) to develop a list of such programs and mechanisms and (2) coordinate with those officials on a collaborative education and outreach effort—which may include a single online resource with contact information for technical assistance—to promote the programs and mechanisms to states, outlying areas, local educational agencies, and Bureau-funded schools.

This section states congressional findings that Opportunity Zones—designated in 8,763 low-income communities across all 50 states, the District of Columbia, Puerto Rico, the United States Virgin Islands, and American Samoa as of December 2018—were championed bipartisanship as an innovative approach to longstanding challenges and that modernizing school facilities supports community economic and workforce development. It expresses the sense of Congress that Opportunity Zones, combined with public infrastructure investment, can provide innovative capital financing to rebuild schools, economies, and employment in local communities.

This section revises the authorization of appropriations for Impact Aid construction grants by striking the prior levels of $17,406,000 for each of FY2017 through 2019 and $18,756,765 for FY2020 under section 7707(a)-(b) and instead authorizing $100 million for each of FY2027 through 2031 under section 7007. (As background, Impact Aid construction grants provide competitive formula and discretionary assistance to local educational agencies for emergency repairs and school facility modernization due to federal property ownership or personnel impacts, such as military bases or Indian lands.)

This section directs the Secretary of Education, beginning not later than 180 days after enactment, to carry out a program making allocations to states to cover the federal share of costs for grants to local educational agencies under section 602. The section also requires the Secretary to publish instructions on a public website of the Department of Education, not later than 180 days after enactment, describing how states may receive such allocations.

This section establishes a grant program under which states, using funds allocated under section 601(a) and non-Federal state contributions, award grants to local educational agencies (LEAs) (1) for future costs of repairing concrete school foundations damaged by pyrrhotite (i.e., a mineral causing concrete deterioration, notably affecting schools in certain states such as Connecticut) or (2) to reimburse such costs incurred in the five-year period preceding enactment. To qualify, LEAs must demonstrate that affected schools are pyrrhotite-affected based on tests, core samples, and inspections by a state-licensed professional engineer per applicable standards; provide assurances that funds will be used only for allowable purposes by qualified state-licensed contractors or architects; and, for reimbursements, show they met these criteria at the time of the original project. LEAs submit applications to states, which forward approvable ones to the Secretary of Education for approval or denial within 60 days; the Secretary disburses allocations to states within 60 days of approval, and states disburse grants to LEAs within 60 days thereafter. The federal share is up to 50% of total project costs, with states covering at least 40% from non-Federal sources (or demonstrating prior contribution of 40% for reimbursements). Grant funds may be used only for repairs or replacement to restore structural integrity and pre-damage condition per licensed engineer or architect standards, and related engineering reports, architectural design, core tests, or other directly related activities.

This section defines a pyrrhotite-affected school as an elementary or secondary school that (1) has a concrete foundation, (2) contains pyrrhotite in the foundation as shown by petrographic or other laboratory core analysis or inspection, (3) exhibits foundation deterioration at an unsafe rate per visual inspection, and (4) is determined by a qualified engineer to be structurally unsound or to become so within five years due to pyrrhotite. It defines a qualified contractor as a contractor qualified under state law, or approved by a state agency or other state-sanctioned independent or nonprofit entity, to repair or replace residential or commercial building foundations deteriorating due to pyrrhotite.