S. 3777 — Rebuild America’s Schools Act of 2026

This section establishes the purpose of funds made available under this title as supporting long-term improvements to public school facilities and reserves, for each of FY2027 through 2031 from the amount appropriated to carry out this title, (1) 0.5% for allocations to outlying areas proportional to their prior-year funding under part A of title I of the Elementary and Secondary Education Act of 1965, and (2) 0.5% for payments to the Secretary of the Interior to assist Bureau-funded schools (i.e., Bureau-operated schools, contract or grant schools, or those receiving assistance under the Tribally Controlled Schools Act of 1988). Funds reserved under these provisions are to be used in accordance with title III of this Act. For Bureau-funded schools, title III applies in the same manner as for a qualified local educational agency receiving such funds, with those schools' facilities treated as public school facilities; the Secretary of the Interior must provide assistance without regard to whether a school is operated by the Bureau of Indian Education or an Indian tribe and must provide it directly to the tribe operating a contract or grant school (as defined in 25 U.S.C. 2021).

This section establishes a formula for allocating funds appropriated under this title (except amounts reserved under section 101(b)) to states proportional to the prior fiscal year's funding received by their local educational agencies (LEAs) under part A of title I of the Elementary and Secondary Education Act of 1965 (i.e., formula grants to LEAs serving low-income and disadvantaged students), with allocations for FY2027 (not later than 30 days after appropriation) requiring only a state assurance of compliance with section 103(c) and allocations for other fiscal years requiring an approved state plan under subsection (b). A state may reserve up to 5% of its allocation to carry out statewide responsibilities, including (1) providing technical assistance to LEAs by coordinating relevant state agencies; (2) developing, maintaining every three years, and publicly posting an online database inventorying all public school facilities' infrastructure (including age of key systems such as roofs, HVAC, plumbing, and appliances; fire safety; proximity to toxics or disaster vulnerability; prior toxic inspections; COVID-19-related needs; and energy/water efficiency improvements); (3) issuing regulations ensuring health, safety, and high performance in school buildings (e.g., indoor air quality, mold control, drinking water testing for lead and PFAS, energy efficiency, and construction standards); and (4) creating plans to reduce exposure to toxic substances (e.g., mercury, radon, PCBs, lead, PFAS, asbestos) and to increase net-zero energy schools (including staff professional development on efficiency, resilience, renewables, and electrification).

This section requires states to award competitive grants to qualified local educational agencies (LEAs) from amounts allocated under section 102(a) and state contributions under section 102(c)(1), primarily for activities described in section 301(a) (i.e., improving public school facilities) and up to 10% for digital learning activities under section 301(b). (As background, students counted under section 1124(c) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6333(c)) include children from families below the poverty line, foster children, and children in institutions for neglected or delinquent children, who drive Title I formula grant allocations to LEAs.) To qualify, an LEA must (1) rank among the state’s LEAs with the highest numbers or percentages of such students, (2) commit to prioritizing facilities serving schools with the highest free or reduced-price lunch eligibility under the Richard B. Russell National School Lunch Act (42 U.S.C. 1751 et seq.) (e.g., using feeder school data for high schools), and (3) demonstrate limited capacity to raise funds for school construction based on fundraising history, bond issuance, and bond rating. States must equitably distribute grants by numbers and percentages of such students, ensure geographic diversity, and set reasonable statewide thresholds for eligibility. In awarding grants, states must prioritize LEAs that (1) show the greatest facility needs (e.g., median facility age, overcrowding, deficient building systems, roofs, or health/safety threats including proximity to toxic sites), plan to serve elementary/middle schools with at least 40% free or reduced-price lunch eligibility or high schools with at least 30%, or face severe health/safety risks; or (2) will expand high-speed broadband for digital learning in lacking schools (including rural) while meeting other need criteria. LEAs must apply to the state with details on eligibility/priority factors, planned projects, and expected benefits for health/safety, learning equity, and facility efficiency/resilience/climate mitigation.

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 carried out by local educational agencies (LEAs) with grants under this title for the preceding fiscal year. The report must identify each grant recipient LEA; for each, describe student demographics (disaggregated by race, number and percentage counted under ESEA §1124(c) [20 U.S.C. 6333(c)], and free or reduced-price lunch eligibility), population density, projects (using Common Education Data Standards facility quality measures), benefits (to health, safety, learning, energy/water efficiency, resilience, emissions, and climate mitigation), square footage improved, project costs (total and by planning, design, construction, site purchase, improvements), jobs created, and contract awards to certified small, minority-owned, veteran-owned, and women-owned businesses (by percentage and dollar value); and state the total grants awarded under this title. LEAs receiving grants must annually compile, publicly post, and submit this information to their state; states must compile it, report to the Secretary, publicly post it, 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 amounts so appropriated remaining available through fiscal year 2036.

This section revives the Qualified Zone Academy Bonds (QZAB) program under the Internal Revenue Code for bonds issued after December 31, 2026. (As background, QZABs allow state and local governments to issue tax credit bonds—credits to holders or elective refundable credits to issuers—to finance public school facilities and programs at designated zone academies, i.e., schools in low-income areas partnering with local businesses to offer vocational or technical education.) The section makes the following changes to the revived provisions: (1) limits qualified tax credit bonds eligible for credits to QZABs only (previously included others such as qualified energy conservation bonds); (2) removes the requirement that at least 10% of project costs be funded by private business contributions (thus allowing fully public funding); (3) expands eligible public school facility expenditures to include construction and retrofitting (from rehabilitating or repairing); and (4) increases the annual national volume cap to $1.4 billion for calendar years 2027 and thereafter (from $400 million). The section also applies Davis-Bacon prevailing wage requirements (40 U.S.C. ch. 31 subch. IV) to projects financed with proceeds of such bonds.

This section establishes a new tax credit under new IRC §54BB(a)–(b) for holders of qualified school infrastructure bonds equal to 100% of interest payable on specified dates (with carryover of unused credits). A school infrastructure bond is any otherwise tax-exempt bond (under IRC §103) if (1) 100% of available project proceeds finance eligible capital projects under §301 of the Rebuild America’s Schools Act of 2026 (i.e., repairs, renovations, and construction at public schools); (2) proceeds are expected to be spent within 6 years of issuance, with mandatory redemption of unspent amounts; and (3) the bond is designated by the issuer (subject to applicable rules treating the credit as non-federal guarantee and ignoring it for yield calculations). The program has a national bond volume cap of $10 billion for each of calendar years 2027 through 2029, allocated by the Treasury Secretary as follows: (1) to states proportional to local educational agencies’ prior-year receipts under ESEA Title I-A (i.e., grants for low-income and disadvantaged students); (2) 0.5% to U.S. possessions other than Puerto Rico; and (3) 0.5% to the Secretary of the Interior for Bureau of Indian Affairs-funded schools. States further allocate their share to eligible issuers based on the Rebuild America’s Schools Act’s §103 priorities and eligibility (excluding income caps). (Thus, the full interest credit effectively subsidizes issuer borrowing costs for school infrastructure.)

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 with respect to the preceding fiscal year. The report must (1) identify each local educational agency (LEA) that received an allocation under IRC §54E(b)(2) (qualified zone academy bonds) or §54BB(g) (school infrastructure bonds), and each eligible LEA that did not receive such funds; (2) for each such LEA, assess capacity to raise funds for school facilities (including historic property tax levies, bond issuance for construction/renovation including under §§54E and 54BB, and bond ratings), describe student demographics disaggregated by race, students counted under ESEA §1124(c) (20 U.S.C. 6333(c)) (i.e., children from families at or below poverty), free or reduced-price lunch eligibility, and population density of the served area, and detail projects funded by school infrastructure bonds, their benefits, and estimated jobs created; (3) state the total dollar amount of school infrastructure bond funds received by LEAs; and (4) include other factors as determined appropriate by the Secretary. State and local educational agencies receiving such allocations must annually compile and report required data to the Secretary of the Treasury.

This section authorizes a local educational agency receiving covered funds to use such funds for 22 specified purposes related to public school facilities (except as provided in section 302), including (1) developing, maintaining, and updating facilities master plans; (2) construction, modernization, renovation, or retrofitting, which may include seismic retrofitting; (3) decarbonization through all-electric systems, efficiency improvements, and on-site renewable energy; (4) major repairs and deferred maintenance; (5) installing furniture or fixtures with at least a 10-year life; (6) new construction and site acquisition; (7) safety and security enhancements, including building design plans with layered security; (8) accessibility compliance with the Americans with Disabilities Act of 1990 and Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794); (9) energy and water efficiency, indoor air quality, and drinking water safety improvements; (10) removal of toxic substances (e.g., lead, asbestos, PFAS), mold, pests; and (11) instructional space for early learning, special education, arts, and magnet schools to reduce isolation. The section further allows use of such funds to expand high-speed broadband access for digital learning through existing public programs or public-private partnerships.

This section prohibits a local educational agency receiving covered funds from using such funds for (1) routine and predictable maintenance costs and minor repairs; (2) any facility primarily used for athletic contests or 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 covered funds from being used for (1) facilities of a public charter school operated or managed by a for-profit entity; or (2) facilities of a public charter school that leases such facilities 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 carried out with such funds meets or exceeds the following requirements: (1) those in the most recent published edition of a nationally recognized, consensus-based model building code; (2) those 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 to promote water-efficient products, buildings, landscapes, facilities, processes, and services (42 U.S.C. 6294b)—applicable to such projects within 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 (1) the United States Green Building Council Leadership in Energy and Environmental Design green building rating standard (LEED Green Building Rating System); (2) the Living Building Challenge developed by the International Living Future Institute; (3) a green building rating program developed by the Collaborative for High-Performance Schools (CHPS) that is CHPS-verified; (4) the Green Building Initiative Green Globes rating system; or (5) a program with equivalent or more stringent standards that is adopted by the state or another relevant jurisdiction and includes a verifiable compliance method.

This section requires a local educational agency receiving covered funds to ensure that iron, steel, and manufactured products used in projects funded by such funds are produced in the United States, subject to a waiver by the Secretary if (1) it is inconsistent with the public interest, (2) such products are not produced in sufficient quantity, reasonably available, or of satisfactory quality, or (3) their use increases overall project costs by more than 25 percent (with the waiver determination published in the Federal Register). The section requires application consistent with U.S. international obligations and defines "produced in the United States" to mean, for manufactured products, domestic manufacturing with U.S. component costs exceeding 60 percent of total component costs, and for iron or steel products or components, all manufacturing processes from initial melting through coatings occurring domestically (with specified exceptions); "manufactured product" includes construction materials and end products under the Federal Acquisition Regulation (excluding iron or steel), such as electrical components and nonferrous building materials (e.g., aluminum, PVC, glass).

This section directs the Comptroller General to submit to the appropriate congressional committees a report assessing projects carried out with covered funds (i.e., funds allocated to states under section 102 and granted to local educational agencies under section 103, generally for high-need students and school facilities), not later than two years after the majority of recipient states have made such grants. The report must evaluate (1) state criteria for identifying high-need students and facilities and any new state regulations on health, safety, and high-performing buildings; (2) project types, including square footage improved, total costs, and cost breakdowns by planning, design, construction, site purchase, and improvements; (3) geographic distribution of projects; (4) health and safety impacts of selected projects; and (5) ways to increase covered funds' accessibility to schools with the highest numbers and percentages of students counted under ESEA section 1124(c) (i.e., children from families below the poverty line) and to fiscally challenged schools. 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 of Education, 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 not less frequently than once every five years beginning after enactment. The study and report must assess (1) the effects of facility conditions on student and staff health, safety, and academic outcomes; (2) facility conditions by geographic region, for economically disadvantaged students and major racial/ethnic subgroups, post-natural disasters, and for accessibility, overcrowding, community impacts from funded projects, protection from elements/threats, and energy/water efficiency and climate resilience; (3) explanations for observed differences; and (4) a cost estimate for bringing facilities to a state of good repair.

This section establishes within the Department of Education the Office of School Infrastructure and Sustainability, to be headed by a Secretary designee and operational not later than 90 days after enactment. 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 timely implementation of the Act by the Department; and (4) manage other school facilities programs or initiatives as directed by the Secretary.

This section directs the Secretary, in consultation with the EPA Administrator, Secretary of Energy, CDC Director, and NIOSH Director, not later than 120 days after enactment, to (1) identify data that states must collect for inclusion 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 for inclusion in the clearinghouse and (2) coordinate with those officials on a collaborative education and outreach effort to streamline communications and promote the programs, which may include a single online resource with contact information for technical assistance available to states, outlying areas, local educational agencies, and Bureau-funded schools.

This section states the sense of Congress that opportunity zones, when combined with public infrastructure investment, can provide an innovative approach to capital financing to help local communities rebuild schools, economies, and employment. It includes congressional findings that opportunity zones were championed by bipartisan leaders; that 8,763 low-income communities across all 50 states, the District of Columbia, Puerto Rico, the United States Virgin Islands, and American Samoa were designated as opportunity zones as of December 2018; and that modernizing school facilities supports community economic and workforce development.

This section revises the authorization of appropriations for Impact Aid construction by replacing the prior amounts—$17,406,000 for each of FY2017 through 2019 and $18,756,765 for FY2020—for section 7707 with $100,000,000 for each of FY2027 through 2031 for section 7007. (Impact Aid construction grants assist local educational agencies with high concentrations of federally connected children (e.g., those on military bases or Indian lands) in repairing and modernizing school facilities.)

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 Department of Education website, within 180 days after enactment, describing how states may receive such allocations.

This section directs states to award grants to local educational agencies (LEAs) from amounts allocated under section 601(a) and state contributions—(1) to cover future costs of repairing concrete school foundations damaged by pyrrhotite (i.e., a sulfide mineral that causes premature concrete deterioration); or (2) to reimburse such costs incurred in the five-year period preceding enactment. To qualify, LEAs must demonstrate that affected schools were tested by a state-licensed professional engineer per applicable standards; provide assurances that funds will be used only for allowable purposes by qualified contractors; and, for reimbursements, show they met these criteria at the time of repair. LEAs apply to the state, which approves eligible applications and submits them to the Secretary of Education for final approval within 60 days; the Secretary disburses funds to states within 60 days of approval, and states disburse 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, plus related engineering, design, core tests, and inspections; other uses are prohibited.

This section defines two terms for purposes of this title: (1) “pyrrhotite-affected school” as an elementary or secondary school with a concrete foundation that contains pyrrhotite (as demonstrated by petrographic or other laboratory core analysis or core inspection), shows visual deterioration at an unsafe rate due to pyrrhotite, and has been determined by a qualified engineer to be structurally unsound or to become so within five years; and (2) “qualified contractor” as a contractor qualified under state law or approved by a state agency or state-sanctioned independent or nonprofit entity to repair or replace residential or commercial building foundations deteriorating due to pyrrhotite.