S. 5480: School Infrastructure Modernization Act of 2026

This bill would change federal tax law so that rehabilitation work on public school buildings can qualify for the existing federal rehabilitation tax credit under certain conditions.

What changes

Under current law, the rehabilitation credit generally does not apply to some buildings that were used as qualified public educational facilities. This bill would create an exception so that this restriction would not apply when:

• the building was used as a qualified public educational facility at some point during the 5 years before the rehabilitation begins, and
• the building is used again as a qualified public educational facility immediately after the rehabilitation is finished.

Practical effect

In plain terms, this means that if a public school building is renovated and continues to serve as a public school afterward, the renovation may become eligible for a federal tax credit. The bill is aimed at making it easier for school districts and other eligible parties to finance repairs, upgrades, and modernization of school facilities.

Reporting requirement

The bill would also require the Treasury Department to report to Congress within 5 years of enactment on how the change is working. That report would include:

• how many public school facilities were rehabilitated, broken down by state,
• how many students use those facilities, also broken down by state,
• how much qualifying rehabilitation spending was used for each project, and
• any other information Treasury thinks would help evaluate the effect of the law.

When it would take effect

The change would apply to property placed in service after December 31, 2026. In practice, that means projects completed and ready for use after that date could potentially qualify, if they meet the other requirements.

Relevant Companies

None found