School Construction and Renovation: A Review of Federal Programs and Legislation
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School Construction and Renovation:
A Review of Federal Programs and Legislation
Updated August 31, 2020
Congressional Research Service
https://crsreports.congress.gov
R41142
SUMMARY
School Construction and Renovation: A Review
of Federal Programs and Legislation
R41142
August 31, 2020
Kyle D. Shohfi
By some measures, spending on new construction and renovation in public elementary and
Analyst in Education Policy
secondary schools in the United States in FY2018 was over $50 billion. Although there is
currently no ongoing federal collection of data on the conditions of schools, a one-time report by
the Department of Education in 2014 estimated that the cost of repairs, renovations, and
modernization required to bring 2012-2013 public school facilities into good condition was
approximately $197 billion, or $4.5 million per school. Additionally, in 2020 the Government Accountability Office
estimated that 54% of public school districts need to update or replace multiple building systems or features (e.g., HVAC,
structural integrity, roofing) in their schools.
School construction and renovation have traditionally been considered to be primarily state and local responsibilities.
Nonetheless, the federal government has established a role in financing school construction and renovation. The federal
government provides both indirect support for school construction (mainly by exempting from federal income taxation the
interest on state and local governmental bonds used to finance school construction and renovation) and direct support via
grants and loans. Few federal programs focus specifically on supporting school infrastructure. However, numerous federal
programs provide financial support that may be used, at least to some extent, for school construction, renovation, or repair.
Federal programs that provide support for school construction and renovation may be categorized according to their
availability. For instance, some sources of federal support are broadly and consistently available; others are available only
episodically, such as in the aftermath of a disaster. Additional programs are targeted toward specific geographic areas or
populations, while still others are available for specific institutions or types of institutions.
In the 116th Congress, five bills related to school construction and renovation have been acted upon as of the cover date of
this report. H.R. 865, the Rebuild America’s Schools Act of 2019, would authorize $70 billion in grants and facilitate $30
billion in school infrastructure tax credit bonds to be used toward the construction and repair of public elementary and
secondary school facilities. H.R. 762 and S. 253, both entitled the Streamlining Energy Efficiency for Schools Act, would
require the Secretary of Energy to establish a clearinghouse to disseminate information regarding available federal programs
and financing mechanisms that may be used to help initiate, develop, and finance energy efficiency, distributed generation,
and energy retrofitting projects for schools. P.L. 116-136, the Coronavirus Aid, Relief, and Economic Security Act (CARES
Act), authorizes the Secretary of Education to grant a deferment during a qualifying emergency to an institution that has a
loan under the Historically Black College and University Capital Financing Program. Finally, H.R. 2, the Moving Forward
Act, would authorize $100 billion in grants and facilitate $30 billion in school infrastructure tax credit bonds to be used
toward the construction and repair of public elementary and secondary school facilities .
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School Construction and Renovation: A Review of Federal Programs and Legislation
Contents
Introduction ................................................................................................................... 1
School Infrastructure: Current Conditions and Needs............................................................ 1
Studies of K-12 School Facilities ................................................................................. 1
Postsecondary Facilities.............................................................................................. 3
History of Federal Assistance for Educational Facilities ........................................................ 3
Federal Tax Treatment of State and Local Bonds ............................................................ 3
Elementary and Secondary Schools .............................................................................. 4
Postsecondary Facilities.............................................................................................. 5
Broadly Available Sources of Federal Support ..................................................................... 8
Public Purpose Tax Exempt Bonds .......................................................................... 8
New Markets Tax Credit........................................................................................ 8
Qualified Public Educational Facilities (Private Activity Bonds) .................................. 8
Individuals with Disabilities Education Act .............................................................. 9
Head Start ........................................................................................................... 9
Child Care Access Means Parents in School Program............................................... 10
State Energy Program ......................................................................................... 10
National Endowment for the Humanities (NEH) ..................................................... 10
School-Based Health Center Capital Program ......................................................... 11
Episodically Available Sources of Federal Support ............................................................. 11
Department of Education Disaster Relief ............................................................... 11
Public Assistance Grant Program .......................................................................... 11
Hazard Mitigation .............................................................................................. 12
Federal Support for Targeted Geographic Areas or Populations ............................................ 12
Compensation for Loss of Local Tax Base ................................................................... 12
Department of Education Impact Aid Programs....................................................... 12
Payments in Lieu of Taxes ................................................................................... 13
Secure Rural Schools Payments ............................................................................ 13
Economically Distressed Areas .................................................................................. 14
Public Works and Economic Development ............................................................. 14
Support for Schools Serving Certain Populations .......................................................... 14
Community Facilities Loans and Grants Program .................................................... 14
Public School Facilities on Military Installations ..................................................... 14
Department of Defense Impact Aid Program........................................................... 15
Elementary and Secondary Schools for Native Americans ........................................ 15
Postsecondary Schools for Native Americans.......................................................... 15
Native Hawaiian Education.................................................................................. 16
Alaska Native Education ..................................................................................... 16
Federal Support for Specific Institutions or Types of Institutions .......................................... 16
Historically Black College and University Capital Financing Program........................ 16
Low-Income and Minority-Serving Institutions of Higher Education .......................... 17
Land-Grant Colleges........................................................................................... 17
Howard University ............................................................................................. 18
Schools for the Deaf ........................................................................................... 19
Charter School Facilities ..................................................................................... 19
Institute of American Indian and Alaska Native Culture and Arts Development............ 20
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Hispanic-Serving Institutions Education Grants Program.......................................... 20
Department of Defense Education Activity (DODEA).............................................. 20
Defense-Operated Institutions of Higher Education ................................................. 20
Legislation in the 116th Congress ..................................................................................... 21
The Rebuild America’s Schools Act of 2019................................................................ 21
Streamlining Energy Efficiency for Schools Act of 2019................................................ 21
The Coronavirus Aid, Relief, and Economic Security (CARES) Act ................................ 22
Moving Forward Act................................................................................................ 22
Appendixes
Appendix. Selected Acronyms Used in This Report............................................................ 23
Contacts
Author Information ....................................................................................................... 23
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School Construction and Renovation: A Review of Federal Programs and Legislation
Introduction
According to U.S. Department of Education (ED) data for FY2018, the most recent data
available, $51.3 billion was expended on construction and $4.3 billion was expended on land and
existing structures for public elementary and secondary education and other related programs.1
According to College Planning & Management, U.S. colleges and universities completed $12.0
billion worth of new construction, additions, and retrofits in 2014, the most recent year for which
data are available. 2
School construction and renovation have traditionally been considered to be primarily state and
local responsibilities. Nonetheless, the federal government has established a role in financing
school construction and renovation. The federal government provides both indirect support for
school construction (mainly by exempting from federal income taxation the interest on state and
local governmental bonds used to finance school construction and renovation) and direct support
via grants and loans for unique schools and populations. Few federal programs focus specifically
on supporting school infrastructure. However, numerous federal programs provide financial
support that may be used, at least to some extent, for school construction, renovation, or repair. 3
This report examines estimates of school infrastructure needs and discusses the federal role in
financing early childhood facilities, elementary and secondary (K-12) public school
infrastructure, and postsecondary educational facilities. Federal programs that provide support for
school construction and renovation are organized in this report according to characteristics
associated with their availability. For instance, some sources of federal support are broadly and
consistently available; others are available only episodically, such as in the aftermath of a disaster.
Additional programs are targeted toward specific geographic areas or populations, while still
others are available for specific institutions or types of institutions. The report concludes with a
description of legislation acted upon in the 116 th Congress as of the date of publication.
School Infrastructure: Current Conditions
and Needs
National data on the condition of school infrastructure and the need for infrastructure investment
are limited and difficult to assess in part because of the wide variation of potential assumptions
and definitions regarding both conditions and needs. In addition, there is substantial complexity
associated with gathering and compiling data for which there is currently no central repository.
Studies of K-12 School Facilities
At present, there is no ongoing federal collection of data on the conditions of schools. However,
in response to concerns about the physical condition of schools and a congressional mandate, ED
issued a one-time study in 2000 that contained estimates of the costs of needed modernizations,
1 Stephen Q. Cornman, et al. Revenues and Expenditures for Public Elementary and Secondary Education: FY 18
(NCES 2020-306), U.S. Department of Education, Washington, DC: National Center for Educat ion Statistics.
Retrieved August 26, 2020, from http://nces.ed.gov/pubsearch.
2
T he comparable figure for 2012 was $9.7 billion. Paul Abramson, 2015 College Construction Report, College
Planning & Management, February 2015.
3 Department of Education regulations prohibit grantees from using funds for construction unless specifically permitted
by the authorizing statute or implementing regulations for the program (34 C.F.R. §75.533).
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renovations, and repairs to K-12 public school buildings and/or building features. 4 In 2000, ED
estimated the cost of bringing K-12 school facilities into good condition 5 in 1999 at $127 billion. 6
ED more recently followed the 2000 report with a 2014 report. 7 The estimated cost of repairs,
renovations, and modernization required to bring 2012-2013 public school facilities into good
condition was approximately $197 billion or $4.5 million per school. 8
In June 2020, the Government Accountability Office (GAO) published a report in which it
estimated that 54% of public school districts need to update or replace multiple building systems
or features (e.g., HVAC, structural integrity, roofing) in their schools. 9 The most common
building systems or features in need of updating or replacement were heating, ventilation, and air
conditioning (HVAC) systems, with an estimated 41% of school districts needing to update or
replace HVAC systems in at least half of their schools. 10 Additionally, GAO estimated that over
25% of school districts need to update or replace interior light fixtures, roofing, or safety and
security building features in at least half of their schools. 11
The GAO report also addressed the frequency of data collection concerning the condition of
public schools. An estimated 65% of school districts conducted a facilities condition assessment
at their public schools in the last 10 years, 12 while 11 states reported having conducted a statewide
facilities condition assessment at public schools in the last 10 years. 13
School infrastructure needs are affected not only by the age and physical condition of a school,
but also by shifts in the student population or changes in school policies and by changes in
expectations, technology, and school instructional practices. For example, implementing smaller
class sizes may require additional floor space and walls. Preferences or requirements for energy
4 L. Lewis, K. Snow, E. Farris, B. Smerdon, S. Cronen, and J. Kaplan, Project Officer: B. Greene, Condition of
America’s Public School Facilities: 1999, (NCES 2000-32), U.S. Department Of Education, Washington, D.C.
(Hereinafter referred to as ED, Condition of America’s Public School Facilities.)
5
ED defined good condition to mean that only routine maintenance or minor repair was require d.
6
T hese data are based on surveys of school officials rather than on direct, independent assessment of needs and costs.
GAO estimated the unmet need for school construction and renovation in 1994 at $112 billion. U.S. Governme nt
Accountability Office, School Facilities: Condition of America’s Schools, GAO/HEHS 95-61, Washington, DC, 1995.
7 D. Alexander and L. Lewis, Condition of America’s Public School Facilities: 2012 –13 (NCES 2014-022), U.S.
Department of Education, Washington, DC: National Center for Education Statistics, 2014. Retrieved November 5,
2015, from http://nces.ed.gov/pubsearch.
8 T he estimates were based on a mix of professional judgment of surveyed school personnel, recent facilities
inspection(s)/assessment(s), and capital improvement/facilities plans.
9 GAO conducted a survey of a nationally representative sample of K-12 public school districts from August to October
2019. U.S. Government Accountability Office, K-12 Education: School Districts Frequently Identified Multiple
Building Systems Needing Updates or Replacement, GAO-20-494, June 2020. (Hereinafter referred to as GAO, K-12
Education: School Districts Frequently Identified Multiple Building Systems Needing Updates or Replacemen t.)
10
GAO, K-12 Education: School Districts Frequently Identified Multiple Building Systems Needing Updates or
Replacement, p. 9.
11
GAO, K-12 Education: School Districts Frequently Identified Multiple Building Systems Needing Updates or
Replacement, p. 9.
12 16% of surveyed school districts reported that they had not conducted such an assessment, while 19% reported that
they did not know if such an assessment had been conducted in the last 10 years. GAO, K-12 Education: School
Districts Frequently Identified Multiple Building Systems Needing Updates or Replacement, p. 18.
13 T he 50 states plus the District of Columbia were included in GAO’s survey of states. Illinois and Mississippi did not
respond. GAO, K-12 Education: School Districts Frequently Identified Multiple Building Systems Needing Updates or
Replacement, p.19.
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efficiency may require retrofitting or renovations. Increased focus on STEM education may
require new or additional laboratory and workshop facilities.
Postsecondary Facilities
Land and facilities are major tangible assets of postsecondary education institutions. Appropriate
facilities are required to support increases in enrollment and changes in technological
expectations. 14 Aside from the need for new facilities, regular maintenance and renovation of the
facilities are required for institutions to fulfill their research, educational, and other missions. One
estimate suggests that facilities at research universities require an endowment equal to the cost of
construction to maintain the facilities over their lifetime. 15 According to the National Science
Foundation’s (NSF’s) biennial study of science and engineering research facilities at colleges and
universities, 21% of research space required renovation or replacement in FY2017. 16 The costs
for new construction, repair, and renovation of science and engineering research space in
academic institutions started in FY2016 or FY2017 were $11.3 billion, and the cost of deferred
projects was estimated to be $20.7 billion in FY2017. 17
History of Federal Assistance for
Educational Facilities
This section describes the historical role of the federal government in the construction and
renovation of school facilities.
Federal Tax Treatment of State and Local Bonds
The Revenue Act of 1913 (38 Stat. 114) excluded from federal income tax the interest income
earned by holders of state and local government debt obligations. This exclusion has been
retained through subsequent revisions of the Internal Revenue Code (IRC). Almost all state and
local governments sell bonds to finance public projects and certain qualified private activities.
Bonds issued for certain purposes are tax-exempt because the interest payments are not included
in the bondholder’s (purchaser’s) federal taxable income. This exemption allows these bonds to
be issued at lower interest rates but still provide competitive returns. 18 In the past, the Internal
Revenue Code had also authorized state and local governments to issue tax credit bonds, which
allow the holder to claim a federal tax credit equal to a percentage of the bond’s par value (face
value) for a limited number of years. Meanwhile, issuers of tax credit bonds would typically pay
no interest to bondholders. Thus, tax credit bonds could deliver a larger federal subsidy to the
issuing state or local government than tax-exempt bonds.
14 APPA, Thought Leaders Series 2019: Innovation in an Age of Disruption , Alexandria, VA 2019.
Scott Carlson, “As Campuses Crumble, Budgets Are Crunched,” The Chronicle of Higher Education, vol. 54, no. 37
(May 23, 2008), p. A1.
16 National Science Foundation, National Center for Science and Engineering Statistics, Science and Engineering
Research Facilities: Fiscal Year 2017. Data T ables, available at https://ncsesdata.nsf.gov/datatables/facilities/2017/.
(Hereinafter referred to as NSF, National Center for Science and Engineering Statistics, Science and Engineering
Facilities: FY2017.)
15
17
NSF, National Center for Science and Engineering Statistics, Science and Engineering Facilities: FY2017.
18 For an in-depth discussion of tax-exempt bonds, including issues regarding costs (revenue loss), see CRS Report
RL30638, Tax-Exempt Bonds: A Description of State and Local Government Debt.
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Elementary and Secondary Schools
As far back as the Great Depression, the federal government provided funding to support K-12
school infrastructure. The Works Progress Administration (WPA) financed 4,383 new schools and
renovated thousands of additional schools between 1935 and 1940. WPA was intended to support
economic recovery following the Great Depression. In 1950, Title I of P.L. 81-815 authorized
funds to assist states in surveying school construction needs. Also in 1950, Impact Aid programs
were enacted under P.L. 81-815, P.L. 81-874, and P.L. 81-875 to fund school construction in areas
affected by federal activities and facilities damaged by major disasters. From FY1989 through
FY2001, in response to Supreme Court rulings regarding the provision of equitable services to
private school students, local educational agencies (LEAs) received federal assistance for capital
expenses, including mobile educational units (20 U.S.C. §7279 et seq.). 19
Attempts to increase federal assistance for needed improvements to school infrastructure
continued in the 1990s. The Education Infrastructure Act of 1994 was enacted as Title XII of the
Elementary and Secondary Education Act (ESEA) by the Improving America’s Schools Act of
1994 (P.L. 103-382) to provide direct federal assistance for the renovation and construction of
public elementary and secondary schools, among other things. The program was never funded.
The Federal Emergency Management Agency (FEMA) has administered the primary disaster
assistance program since 1992, through which the federal government supports reconstruction
following disasters. In response to specific natural disasters, Congress has enacted additional
legislation to create temporary programs to meet the needs of students, schools, LEAs, and states,
including modernizing, renovating, or repairing school buildings.
The Consolidated Appropriations Act for FY2001 (P.L. 106-554) appropriated $1.2 billion in
FY2001 to be used for emergency school renovation and repair activities, as well as activities
under part B of the Individuals with Disabilities Education Act (20 U.S.C. §1411 et seq.) and
technology activities. Over 75% of the $1.2 billion was designated for school facilities, and the
appropriations act ensured distribution to LEAs in the outlying areas, LEAs enrolling significant
numbers of children connected to federal lands or low-rent public housing, high poverty LEAs,
and rural LEAs. The program was not permanently authorized and did not receive funding in
subsequent years.
The Consolidated Appropriations Act for FY2001 (P.L. 106-554) also authorized and
appropriated the first federal funds for charter school facilities. The act created the Charter School
Facilities Financing Demonstration Program, which authorized ED to award competitive grants to
various entities (e.g., a public entity, a private nonprofit entity, or a consortium of each) to assist
public charter schools in the acquisition, construction, or renovation of facilities by enhancing the
availability of loans or bond financing. The No Child Left Behind Act of 2001 (P.L. 107-110)
amended the ESEA to authorize two programs specifically aimed at providing financial assistance
for public charter school activities. These programs, the State Charter School Facilities Incentive
Grants Program and the Credit Enhancement for Charter School Facilities Program, are further
discussed in the “Charter School Facilities” subsection of this report.
Most recently, in 2009, Congress provided a one-time appropriation that could be used for
renovation and construction, among other purposes. The American Recovery and Reinvestment
19 T he 1985 Supreme Court decision in Aguilar v. Felton (473 U.S. 402 (1985)) held that the provision of ESEA T itle I
services by public school teachers to children attending parochial schools on the premises of such schools was
unconstitutional. T he 1988 T itle I amendments (P.L. 100-297) authorized a grant program providing additional “capital
expenses” to help public schools serve nonpublic school pupils. T he 1997 Supreme Court decision in Agostini v. Felton
(521 U.S. 203 (1997)) overturned its 1985 decision.
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Act of 2009 (ARRA; P.L. 111-5) authorized a $54 billion State Fiscal Stabilization Fund (SFSF).
ARRA was intended to support economic recovery following a recession which began in
December 2007. States were required to use at least 81.8% of their share of the SFSF to restore
support of public elementary, secondary, and postsecondary schools, and, as applicable, early
childhood education programs and services. Among the allowable uses of restoration funds were
modernization, renovation, or repair of public school facilities. States were required to use the
remaining 18.2% of their share of the SFSF for education, public safety, and other government
services, which included modernization, renovation, or repair of public school and public or
private college facilities, depending on the criteria that the governor used to allocate the funds.
ED issued guidance specifically allowing the SFSF to be used for the construction of K-12
schools but not institutions of higher education. 20
Postsecondary Facilities
Federal support for higher education facilities also has a long history. Since the 1857 Act21 to
incorporate the Columbian Institution for the Instruction of the Deaf and Dumb and the Blind
(later renamed Gallaudet University), Congress has appropriated funds for construction and
operation of the university. In 1928, Congress authorized the appropriation of funds for Howard
University to aid in its construction, development, improvement, and maintenance. 22 In 1965, the
National Technical Institute for the Deaf Act (P.L. 89-36) established the National Technical
Institute for the Deaf and authorized the appropriation of funds for its operation and construction.
Congress authorized several loan or interest subsidy grant programs to help finance the
construction, reconstruction, and renovation of housing, academic, and other educational
facilities. The College Housing Loan program (Title IV of the Housing Act of 1950; 64 Stat. 77)
was intended to alleviate housing shortages on college campuses that resulted from increased
enrollments. 23 Following World War II, enrollment at postsecondary educational institutions
swelled, driven in large part by veterans utilizing their GI Bill benefits. 24 The Higher Education
Facilities Act of 1963 (P.L. 88-204) authorized Loans for Construction of Academic Facilities. A
revolving loan fund was established to make higher education academic facilities loans by P.L.
89-429. The Education Amendments of 1972 (P.L. 92-318) established annual interest grants to
reduce borrowing costs and academic facilities loan insurance to assist private nonprofit entities
in procuring loans for the construction, reconstruction, and renovation of academic facilities.
The Public Health Service Act, as amended by the Health Professions Educational Assistance Act
of 1963 (P.L. 88-129), authorized grants for the construction, rehabilitation, and replacement of
teaching facilities for health personnel and schools of nursing. Authorization for the construction,
rehabilitation, and replacement of teaching facilities for allied health professionals was added by
the Allied Health Professions Personnel Training Act of 1966 (P.L. 89-751) and repealed by the
Health Professions Educational Assistance Act of 1976 (P.L. 94-484). Loan guaranties and
20 T he Education Stabilization Fund, which comprised 81.8% of each state’s SFSF
allocation, could not be used for the
construction of institutions of higher education. T he Government Services Fund, which comprised 18.2% of each
state’s SFSF allocation, could be used for such a purpose. U.S. Department of Education, Guidance on the State Fiscal
Stabilization Fund Program , Washington, DC, April 2009, pp. 18, 27.
21 11 Stat. 161.
22 45 Stat. 1021.
U.S. Congress, House Committee on Government Operations, Department of Education’s College Construction
Loan Programs, 98 th Cong., 2 nd sess., May 15, 1984 (Washington: GPO, 1984), p. 1.
23
24 Roger L. Geiger, American Higher Education Since World War II: A History (Princeton, NJ: Princeton University
Press, 2019).
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interest subsidies were authorized in 1971 for the construction, rehabilitation, and replacement of
teaching facilities for health personnel and schools of nursing. 25 The Nurse Education
Amendments of 1985 (P.L. 99-92) repealed the program of support for nursing school facilities,
and the Health Professions Education Extension Amendments of 1992 (P.L. 102-408) repealed
federal support of teaching facilities for health personnel.
General U.S. Department of Education-administered facilities grant programs were authorized
beginning in 1963. The Higher Education Facilities Act of 1963 (P.L. 88-204) authorized Grants
for the Construction of Undergraduate Academic Facilities (Title VII-A of the HEA), Grants for
the Construction of Graduate Academic Facilities (Title VII-B of the HEA), and Construction
Assistance for Public Higher Education Facilities in Major Disaster Areas (Title VII-D of the
HEA). The programs were intended to increase the enrollment capacity of institutions of higher
education (IHEs).
The Education Amendments of 1972 (P.L. 92-318) authorized the Establishment and Expansion
of Community Colleges program. Funds from the community college program encouraged states
to prepare a statewide plan for the expansion and improvement of postsecondary education
programs in community colleges. Funds could be used to remodel or renovate existing facilities,
to equip new and existing facilities, or to lease facilities.
The Education Amendments of 1976 (P.L. 94-482) amended the programs to provide for
reconstruction, renovation, and modernization of existing facilities and authorized a new
Reconstruction and Renovation grant program to reduce energy consumption and to make
facilities accessible to the physically disabled.
The Education Amendments of 1980 (P.L. 96-374) repealed three of the then-existing facilities
programs: the Reconstruction and Renovation grant program, Construction Assistance for Public
Higher Education Facilities in Major Disaster Areas, and the Establishment and Expansion of
Community Colleges program. However, the 1980 Amendments allowed funds from the
remaining facilities programs to be used by undergraduate and graduate postsecondary
institutions to economize on the use of energy resources, to make facilities accessible to the
physically disabled, to improve research facilities, and to eliminate asbestos hazards.
The Higher Education Amendments of 1986 (P.L. 99-498) expanded the HEA Title VII programs
to include, as authorized uses of funds, the acquisition and maintenance of special research and
instructional instrumentation and equipment, compliance with federal hazardous waste disposal
requirements, more efficient use of energy sources, advanced skill training programs, and
preservation of significant architecture. The Higher Education Amendments of 1986 also
authorized the establishment of the College Construction Loan Insurance Association (also
known as Connie Lee) as a private, for-profit corporation. Connie Lee succeeded the Academic
Facilities Loan Insurance program. The function of Connie Lee was to
guarantee, insure, and reinsure bonds, debentures, notes, evidences of debt, loans,
and interests therein, the proceeds of which were to be used for an education
facilities purpose;
guarantee and insure leases of personal, real, or mixed property to be used for an
education facilities purpose; and
25 T he Comprehensive Health Manpower T raining Act of 1971 (P.L. 92-157) and the Nurse T raining Act of 1971 (P.L.
92-158).
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issue letters of credit and undertake obligations and commitments as Connie Lee
deemed necessary.
Congress was concerned that deteriorating facilities would affect the quality of higher education
and that financially sound postsecondary institutions whose debt was not investment grade did
not have the necessary access to long-term capital. 26 Both the U.S. Department of Education and
the Student Loan Marketing Association27 (also known as Sallie Mae) became significant
shareholders of Connie Lee. The 1986 Amendments also authorized Sallie Mae (20 U.S.C.
§1087-2) to directly or indirectly finance higher education academic facilities. 28 Connie Lee and
Sallie Mae were eventually privatized under the Omnibus Consolidated Appropriations Act, 1997
(P.L. 104-208). There were several explanations for privatizing Connie Lee:
The federal government’s share in Connie Lee was declining.
Other investors and insurers were providing loans for higher education facilities
as a result of the federal government’s success.
The statutory language authorizing Connie Lee prevented it from expanding its
market.
General federal policy encouraged the downsizing and privatizing of previous
government operations, as appropriate.
Partial federal ownership of Connie Lee provided the impression that the federal
government would be liable in case of Connie Lee’s financial difficulties. 29
In the late 1980s, the Administration also requested no new monies for the higher education
facilities programs except what would be necessary to service previous obligations. The reasons
given were that federal support of higher education facilities was inappropriate; the programs
displaced the traditional role of state and local governments and private enterprise; the programs
were duplicative and complicated; and the programs were too costly. 30 Academic Facilities
Construction Grants were last funded in FY1991.
The Higher Education Amendments of 1992 (P.L. 102-325) replaced then-existing grant and loan
programs with new programs, which were never funded. The repealed loan programs have not
made any new loans since FY1993, but loan collections, property dispositions, and the resolution
of defaulted loans may continue through FY2030. 31 The 1992 Amendments also authorized the
Historically Black College and University Capital Financing program to provide Historically
Black Colleges and Universities (HBCUs) with access to low -cost capital.
As with elementary and secondary schools, institutions of higher education have received disaster
assistance through the Federal Emergency Management Agency (FEMA) since 1992.
26 U.S. Congress, House Committee on Economic and Educational Opportunities, Privatization Act of 1995, Report
T ogether with Minority and Additional Views to Accompany H.R. 1720, 104 th Cong., 1 st sess., June 22, 1995, H.Rept.
104-153 (Washington: GPO, 1995).
27 T he Education Amendments of 1972 (P.L. 92-318) established the Student Loan Marketing Association as a
government sponsored private corporation, financed by private capital, to serve as a secondary market and warehousing
facility for insured student loans.
28 For a description of projects financed by Sallie Mae through 1991, see U.S. General Accounting Office, School
Construction, Sallie Mae Financing, HRD-93-61, April 13, 1993, http://archive.gao.gov/d44t15/148896.pdf.
29
U.S. Congress, House Committee on Economic and Educational Opportunities, Privatization Act of 1995, Report
T ogether with Minority and Additional Views to Accompany H.R. 1720, 104 th Cong., 1 st sess., June 22, 1995, H.Rept.
104-153 (Washington: GPO, 1995), pp. 15-16.
30 FY1987-FY1990 President’s Budget.
31 FY2021 President’s Budget.
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Postsecondary educational facilities have also been eligible for various programs and funds
enacted in response to specific disasters as well.
Broadly Available Sources of Federal Support
This section of the report addresses sources of federal support for school construction, renovation,
and repair that are not limited to specific geographic areas, populations, or institutions.
Furthermore, the programs included in this section are generally consistently available. While
each of the programs may be used to support school infrastructure, it is not the primary focus of
most programs. The appropriations amount listed in this section reflect total program
appropriations, and therefore, may not reflect expenditures for school facilities depending on the
other uses of program funds.
Public Purpose Tax Exempt Bonds
The federal government exempts interest income earned on bonds issued by state, local, and tribal
governments for a “public” purpose from federal income tax. 32 Bonds are considered to be for a
public purpose if they satisfy either of two criteria: less than 10% of the proceeds are used
directly or indirectly by a non-governmental entity, or less than 10% of the bond proceeds are
secured directly or indirectly by property used in a trade or business. Examples of public projects
include elementary, secondary, and postsecondary schools; public buildings; and roads. The tax
exemption lowers the cost of capital for state and local governments. There is no bond volume
cap on state and local government bonds.
New Markets Tax Credit
The New Markets Tax Credit (NMTC) is a nonrefundable tax credit intended to support qualified
low-income community investments, including charter schools.33 The NMTC encourages
qualified investment groups to support certified Community Development Entities (CDEs) that
operate in eligible low-income communities. While the NMTC is credited through the federal tax
code, the Community Development Financial Institutions Fund is responsible for awarding the
tax credit allocations to eligible CDEs through a competitive award process. After the CDE is
awarded a tax credit allocation, the CDE is authorized to offer the tax credits to private equity
investors in the CDE. The tax credit value is 39% of the cost of the qualified equity investment
and is claimed over a seven-year credit allowance period. With the funds raised from investors,
CDEs then make equity investments in low-income communities and low-income community
businesses, all of which must be qualified. The NMTC allocation is currently authorized at $5.0
billion for calendar year 2020. 34
Qualified Public Educational Facilities (Private Activity Bonds)
State and local governments may issue bonds that are exempt from federal taxation to finance
certain qualified private activities, including qualified public educational facilities. 35 Indian tribal
32 26 U.S.C. §103. For additional information, see CRS Report RL30638, Tax-Exempt Bonds: A Description of State
and Local Government Debt.
33 26 U.S.C. §45D. For more information about, see CRS Report RL34402, New Markets Tax Credit: An Introduction.
34
26 U.S.C. §45D(f)(1)(G).
35 26 U.S.C. §142. For additional information about private activity bonds, see CRS Report RL30638, Tax-Exempt
Bonds: A Description of State and Local Government Debt.
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governments generally cannot issue tax-exempt private activity bonds. 36 Private activity bonds
benefit state and local governments because the bond buyer is willing to accept a lower interest
rate because the interest income is not subject to federal income taxes. 37 A qualified public
educational facility is a public elementary or secondary school facility (including a stadium)
constructed, rehabilitated, refurbished, or equipped through a public -private partnership
agreement. Bonds issued for qualified educational facilities are not counted against a state’s
private-activity volume cap. However, the qualified public educational facility bonds have their
own volume capacity limit equal to the greater of $10 multiplied by the state population or $5
million. 38
Individuals with Disabilities Education Act
The Individuals with Disabilities Education Act (IDEA)39 provides funds to states for the
education of children with disabilities. IDEA contains four parts:
Part A contains General Provisions, including Congressional findings, the
purposes of the act, and definitions;
Part B authorizes the grants-to-states program (Section 611) and the state grants
program for preschool children with disabilities (Section 619);
Part C authorizes the state grants program for infants and toddlers with
disabilities; and
Part D authorizes various national programs and grants.
Although Part B funds are primarily used to support educational services for students with
disabilities, with the permission of the Secretary of Education, Part B funds may be used for the
acquisition of appropriate equipment, the construction of new K-12 facilities, and the alteration of
existing facilities. 40 The appropriations for Part B in FY2020 were $13.2 billion. 41
Head Start
Head Start is a federal program that has provided comprehensive early childhood development
services to low-income children since 1965. 42 Head Start is administered by the Administration
for Children and Families (ACF) within the Department of Health and Human Services. Federal
Head Start funds are provided directly to local grantees. Programs are locally des igned and are
administered by a network of roughly 1,600 public and private nonprofit and for-profit agencies.
Although grant funds primarily support other services and activities, in certain circumstances,
36 26 U.S.C. §7871(c)(2).
37
Interest income from tax-exempt private activity bonds is included in the calculation of the federal alternative
minimum tax (AMT ). ARRA temporarily suspended the AMT taxability for the 2009 and 2010 tax years.
38 26 U.S.C. §142(k)(5)(A).
39 20 U.S.C. §1400 et seq.
40 For additional information, see CRS Report R41833, The Individuals with Disabilities Education Act (IDEA), Part
B: Key Statutory and Regulatory Provisions.
41 Rep. Nita Lowey, “Explanatory Statement Submitted by Mrs. Lowey, Chairwoman of the House Committee on
Appropriations, Regarding H.R. 1865, Further Consolidated Appropriations Act, 2020,” Congressional Record, daily
edition, vol. 165 (December 17, 2019), p. H11142. (Hereinafter referred to as Rep. Nita Lowey, “Explanatory
Statement Regarding H.R. 1865, Further Consolidated Appropriations Act, 2020.”)
42 42 U.S.C §9801 et seq. For more information, see CRS In Focus IF11008, Head Start: Overview and Current Issues.
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grantees may apply to use funds to purchase, construct, or make major renovations to a Head
Start facility. 43 The FY2020 appropriations were approximately $10.6 billion. 44
Child Care Access Means Parents in School Program
The Child Care Access Means Parents in School Program,45 administered by ED, supports the
participation of low-income parents in postsecondary education through the provision of child
care services. Funds may be used to provide child care and early childhood development services
to enable low-income students to pursue postsecondary education. Funds may also be used for
minor renovation or repair of facilities to meet applicable state or local health or safety
requirements; funds may not be used for new construction. 46 The appropriations were $53.0
million in FY2020. 47
State Energy Program
The State Energy Program (SEP), 48 established in 1996 and administered by the Department of
Energy, provides grants to states and territories to address their energy priorities and to adopt
emerging renewable energy and energy efficiency technologies. 49 Each state is required to
develop a state energy conservation plan. Funding may be used for a wide variety of energy
efficiency and renewable energy initiatives, including projects in schools. The appropriations for
FY2020 were $62.5 million. 50
National Endow ment for the Humanities (NEH)
The National Endowment for the Humanities’ Office of Challenge Grants 51 strengthens
humanities education by supporting long-term institutional development. Funds may be used to
purchase equipment, upgrade technology, renovate or construct facilities, add library or museum
collections, provide staffing, provide educational programming, and increase or establish
endowments. Nonprofit organizations such as museums, tribal centers, libraries, colleges and
universities, scholarly research organizations, state humanities councils, public radio and
43
T he rules regarding the use of Head Start funds for this purpose are codified at 45 C.F.R. §1303, Subpart E. For more
information, see CRS Report RL30952, Head Start: Background and Funding.
44
P.L. 116-94.
45 20 U.S.C. §1070e.
46
T he program website is available at http://www.ed.gov/programs/campisp/index.html.
Rep. Nita Lowey, “Explanatory Statement Regarding H.R. 1865, Further Consolidated Appropriations Act, 2020, p.
H11147.
47
48 https://www.energy.gov/eere/wipo/state-energy-program.
49
T he program is authorized by the Energy Policy and Conservation Act of 1975 (EPCA; P.L. 94-163); the Energy
Supply and Production Act of 1976 (ECPA; P.L. 94-385); the National Energy Conservation Policy Act of 1978
(NECPA; P.L. 95-619); the State Energy Efficiency Programs Improvement Act of 1990 ( P.L. 101-440); the Energy
Policy Act of 1992 (EPACT ; P.L. 102-486); the Energy Conservation Reauthorization Act of 1998 (P.L. 105-388); the
Energy Policy Act of 2005 (EPACT 2005; P.L. 109-58); the Energy Independence and Security Act of 2007 (EISA;
P.L. 110-140); and the American Recovery and Reinvestment Act of 2009 (ARRA; P.L. 111-5).
Rep. Nita Lowey, “Explanatory Statement Regarding H.R. 1865, Further Consolidated Appropriations Act, 2020,”
p. H11251.
50
51 National Foundation on the Arts and the Humanities Act of 1965, as amended; 20 U.S.C §951.
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television stations, and historical societies and historic sites are eligible to receive grants. The
Challenge Grants program received $12.5 million in FY2020. 52
School-Based Health Center Capital Program
The School-Based Health Center Capital (SBHCC) Program, 53 administered by the Department
of Health and Human Services (HHS), Health Resources and Services Administration (HRSA),
awards grant funds for the physical improvement of school-based health centers, as defined by
Section 2110(c)(9)(A) of the Social Security Act, as amended. Program funds may be used for
minor alteration or renovation projects as well as the purchase of moveable equipment, trailers,
and manufactured buildings. While funds may not be expended for new construction, grant funds
may be used to pay the costs associated with expanding and modernizing existing buildings for
use as a school-based health center. HRSA awarded $11.2 million in funding in FY2019. 54
Episodically Available Sources of Federal Support
This section of the report covers sources of federal support for school infrastructure that are
generally made available in response to a particular event, such as a major disaster.
Department of Education Disaster Relief
In response to various natural disasters, Congress has enacted legislation to create temporary
programs and give the Secretary of Education temporary authority to issue various waivers and
flexibilities at the K-12 and higher education levels. Congress has also enacted supplemental
appropriations for facilities following certain natural disasters. 55
Public Assistance Grant Program
The Public Assistance Grant Program (PA Program) is administered by FEMA and combines the
authorities of multiple sections of the Robert T. Stafford Disaster Relief and Emergency
Assistance Act (P.L. 93-288, as amended, the Stafford Act). 56 Grants from the PA Program are
only available in states and communities that have received a major or emergency disaster
declaration through the Stafford Act. Grants may be awarded for a variety of eligible types of
assistance, including debris removal, emergency protective measures, or the repair and
replacement of damaged buildings and facilities. The primary grantee for all PA grants is the state
or tribal government designated by a disaster declaration, but applicants (or subgrantees) can be
many types of local governmental entities and private nonprofits, ranging from police
departments to homeless shelters, public utilities, civic buildings, etc. Eligible applicants under
the PA Program include public and private nonprofit schools and IHEs. School facilities of a
church or other religious institution are also generally eligible for grant assistance, so long as the
52 P.L. 116-94.
53
42 U.S.C. §280h-5.
54 Health Resources & Services Administration, “ FY 2019 School-Based Health Center Capital (SBHCC) Program
(HRSA-19-073) Grant Awards.”
55
For additional information, see CRS Report R42881, Education-Related Regulatory Flexibilities, Waivers, and
Federal Assistance in Response to Disasters and National Emergencies.
56 For more information, see CRS Report R43990, FEMA’s Public Assistance Grant Program: Background and
Considerations for Congress.
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primary purpose of the damaged facilities is for secular education. 57 Eligible applicants can also
apply for grants to replace certain damaged school supplies and equipment, including the possible
repair and replacement of advanced laboratory and research equipment for IHEs. Federal
obligations under the PA program totaled approximately $7.1 billion in FY2019, of which $505.1
million were obligated for public buildings projects. 58
Hazard Mitigation
FEMA’s Hazard Mitigation Grant Program (HMGP) 59 provides grants to states and local
governments, including school districts; tribal governments; and certain private nonprofit
organizations, including IHEs, to implement long-term hazard mitigation measures after a major
disaster declaration. While presidential declarations for major disasters specify the designated
counties for certain forms of assistance, almost all declarations permit hazard mitigation funds to
be used statewide. Allowable activities include acquisition of real property and retrofitting
structures and facilities to minimize damages from high winds, earthquakes, floods, wildfires, or
other natural hazards. Examples of allowable projects are community safe rooms in schools, dry
floodproofing schools, and wildfire mitigation in schools. Funding amounts for HMGP are
derived from a percentage of total disaster spending, not to exceed 15%. Eligible projects are
cost-shared between FEMA (75%) and non-federal sources (25%). 60
Federal Support for Targeted Geographic Areas or
Populations
This section of the report addresses sources of federal support for school infrastructure that are
targeted toward specific geographic areas or populations. These include localities whose tax base
is reduced due to federal activity, areas that are economically distressed, and several specified
populations.
Compensation for Loss of Local Tax Base
The following programs provide federal funds to local governments and LEAs as compensation
for federal activities that reduce local tax revenue.
Department of Education Impact Aid Programs
The Department of Education’s Impact Aid program61 provides funding to certain LEAs to
compensate them for lost revenue as a result of federal activities. 62 There are several types of
See the example provided by FEMA of a fictional “Community Church” school at FEMA, Public Assistance
Program and policy Guide, FP 1004-009-2, April 2018, p. 172, at https://www.fema.gov/media-library-data/
1525468328389-4a038bbef9081cd7dfe7538e7751aa9c/PAPPG_3.1_508_FINAL_5-4-2018.pdf.
57
58 Federal Emergency Management Agency (FEMA), “ OpenFEMA Dataset: Public Assistance Funded Projects Details
-V1,” accessed May 11, 2020, https://www.fema.gov/openfema-dataset-public-assistance-funded-projects-details-v1.
Individual data from the spreadsheet indicate the data has been updated as recently as May 10, 2020 .
59 42 U.S.C. §5170c.
60
T here is one source of federal funds that may be used for the 25% share of project costs: Community Development
Block Grants awarded to states, tribes, or territories by the Department of Housing and Urban Development.
61 20 U.S.C. §7001 et seq.; T itle VII of the ESEA, as amended.
62 For additional information, see CRS Report R45400, Impact Aid, Title VII of the Elementary and Secondary
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Impact Aid payments: payments relating to federal acquisition of real property (section 7002),
payments for federally connected children (section 7003), and payments for construction and
maintenance of school facilities (section 7007). While the non-construction-related funds are
usually used by LEAs for general operating expenses, the payments may also be used for capital
expenditures. Impact Aid received an appropriation of $1.5 billion in FY2020. 63
Payments in Lieu of Taxes
Although federal law authorizes various programs to compensate local governments for
reductions to their property tax bases due to the presence of most federally owned land, the most
widely applicable program is the “Payments in Lieu of Taxes” program, or PILT, administered by
the Department of the Interior. 64 The payments are authorized by the Payment for Entitlement
Land chapter of the U.S. Code. 65 The authorized level of PILT payments is calculated under a
complex formula. PILT payments are offset by the prior year’s payments under several laws,
including the Secure Rural Schools (SRS) program for certain lands under the jurisdiction of the
Forest Service. Payments made under the law may be used for any governmental purpose,
including school facilities. In FY2020, PILT payments totaled $514.7 million. 66
Secure Rural Schools Payments
The SRS Payments compensate counties for the tax-exempt status of federal lands under the
jurisdiction of the Forest Service nationwide as well as certain Bureau of Land Management
(BLM) lands in Oregon. 67 Funds are allocated to states by formula and passed through to local
governmental entities for use at the county level (but not necessarily to county governments).
SRS payments are made by both the Forest Service and the BLM. The Forest Service payments
can be spent only on roads and schools in the counties in which the national forests are located.
State law dictates which road and school programs are financed with the payments, and the state
laws differ widely. In general, 30% to 100% of funds are allocated for school programs, with a
few states providing substantial local discretion on how funds are divided between schools and
roads. 68 The BLM payments are available for any local governmental purpose. For FY2019, the
Forest Service made $225.8 million in total SRS payments, 69 and the BLM made $28.4 million in
total SRS payments. 70
Education Act: A Primer.
63
P.L. 116-94.
64 For more information, see CRS Report RL31392, PILT (Payments in Lieu of Taxes): Somewhat Simplified .
65 31 U.S.C. §§6901-6907; codified by P.L. 97-258.
66 U.S. Department of the Interior, “ Interior Distributes More T han $514 Million to Communities, Supports Critical
Local Services,” press release, June 29, 2020, https://www.doi.gov/pressreleases/interior-distributes-more-514-millioncommunities-supports-critical-local-services.
67 T itle I of the Secure Rural Schools and Community Self-Determination Act of 2000 (SRS; P.L. 106-393), as
amended (16. U.S.C. §§7101-7153; 16 U.S.C. §500). For more information , see CRS Report R41303, The Secure Rural
Schools and Community Self-Determination Act: Background and Issues.
68 See CRS Report R41303, The Secure Rural Schools and Community Self-Determination Act: Background and
Issues.
69 U.S. Forest Service, ASR 18-3, “ Secure Rural Schools Act T itles I, II and III Report ,” February 27, 2020,
https://www.fs.usda.gov/Internet/FSE_DOCUMENT S/fseprd718565.pdf
70 U.S. Department of the Interior, “ Interior Announces $28.4 Million in Payments t o Western Oregon Counties,” press
release, April 17, 2020, https://www.blm.gov/press-release/interior-announces-284-million-payments-western-oregoncounties.
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Economically Distressed Areas
The following program is targeted to provide federal support for public works projects in
economically distressed areas.
Public Works and Economic Development
The Economic Development Administration within the Department of Commerce administers the
Public Works and Economic Development Facilities Program 71 as one of its Economic
Development Assistance Programs. The competitive grant program awards grants to fund public
works investments to support the construction or rehabilitation of essential public infrastructure
and facilities (e.g., schools) necessary to generate or retain private sector jobs and investments,
attract private sector capital, and promote regional competitiveness. Indian tribes , political
subdivisions of a state, and nonprofit IHEs are eligible to apply for grants. The area to be
impacted by the project must meet certain criteria of economic distress. The program was
appropriated $118.5 million in FY2020. 72
Support for Schools Serving Certain Populations
The following programs provide federal support for schools serving certain populations,
including rural communities, military-connected children, Native Americans, Native Hawaiians,
and Alaska Natives.
Community Facilities Loans and Grants Program
The U.S. Department of Agriculture (USDA) administers the Community Facilities Loans and
Grants program, which provides project grants, direct loans, and guaranteed/insured loans for the
construction, enlargement, extension, or other improvement of community facilities providing
essential services to rural residents. 73 Community facilities include child care facilities and K-12
and postsecondary education facilities. State and local governments, political and quasi-political
subdivisions of states and associations, federally recognized Indian tribes, and nonprofit
organizations may apply. The program was appropriated $32.0 million for Community Facilities
grants in FY2020. 74 Loan authorization levels for FY2020 are $2.8 billion for direct loans and
$500.0 million for guaranteed loans in FY2020. 75
Public School Facilities on Military Installations
In recent years, Congress has provided funds in Department of Defense (DOD) appropriations
acts to construct, renovate, repair, or expand elementary and secondary public schools located on
military installations in order to address capacity or facility condition deficiencies at such schools.
71 42 U.S.C. §3141.
Rep. Nita Lowey, “Explanatory Statement Regarding H.R. 1865, Further Consolidated Appropriations Act, 2020,”
p. H10961.
73 7 U.S.C. §1926; Section 306(a)(1) of the Consolidated Farm and Rural Development Act of 1972 . For more
information, see CRS Report RL31837, An Overview of USDA Rural Development Programs.
72
Rep. Nita Lowey, “Explanatory Statement Regarding H.R. 1865, Further Consolidated Appropriations Act, 2020,”
p. H11167.
74
Rep. Nita Lowey, “Explanatory Statement Regarding H.R. 1865, Further Consolidat ed Appropriations Act, 2020,”
p. H11167.
75
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FY2020 funds required a state or local match equal to not less than 20% of the total project cost. 76
The FY2020 appropriation was $315.0 million. 77
Department of Defense Impact Aid Program
The DOD Impact Aid program—distinct from the ED Impact Aid program—provides funds to
LEAs that enroll military-connected children. In recent years, Congress has provided funds
through the DOD authorization and appropriation acts to LEAs serving military children. DOD
awards funding under three subprograms. The Impact Aid Supplemental program supports LEAs
serving significant numbers of military dependent students and allows payments to be used
without restriction. 78 The Impact Aid for Large Scale Rebasing (BRAC) program supports LEAs
with enrollment changes due to base closures. The Impact Aid for Children with Severe
Disabilities program79 supports LEAs serving children with severe disabilities as reimbursement
for eligible costs incurred in providing such children a free and appropriate education (FAPE).
For FY2020, $40.0 million was appropriated to the Supplemental program, and $10.0 million was
appropriated for children with severe disabilities. 80 No appropriations have been made as a result
of base closures in recent years.
Elementary and Secondary Schools for Native Americans
There are 183 BIE-funded elementary and secondary schools and dormitories funded by the
Bureau of Indian Education (BIE) in 23 states. 81 Construction activities supported by the BIE
include new school facilities, employee and student housing, and facilities improvement and
repair. The FY2020 appropriations for education construction were $248.3 million. 82
Postsecondary Schools for Native Americans
The Tribally Controlled Colleges or Universities Assistance Act (P.L. 95-471, as amended), the
Navajo Community College Act (P.L. 92-189, as amended), and the Snyder Act (25 U.S.C. §13),
as amended, provide grants for the operation and improvement of tribally controlled colleges and
universities and two BIE institutions of higher education to ensure continued and expanded
educational opportunities for Indian students and to allow for the improvement and expansion of
the physical resources of such institutions. The institutional programs received $107.2 million in
FY2020 appropriations. 83
76 P.L. 116-93 and 76 Federal Register 55883 et seq.
77 P.L. 116-93.
78 Section 306 of the National Defense Aut horization Act for FY1990 and FY1991 (P.L. 101-189) authorized
supplementary funds from DOD for LEAs serving military dependent students. Subsequently, the Department of
Defense Appropriations Act, 1991 (P.L. 101-511) set the eligibility criteria for this program and appropriated $10
million.
79 20 U.S.C. §7703a.
80
P.L. 116-92.
81 25 U.S.C. §13, §2005, §2503(b), and §5301 et seq. For more information, see CRS Report RL34205, Indian
Elementary-Secondary Education: Programs, Background, and Issues.
Rep. Nita Lowey, “Explanatory Statement Regarding H.R. 1865, Further Consolidated Appropriations Act, 2020,”
p. H11290.
82
Rep. Nita Lowey, “Explanatory Statement Regarding H.R. 1865, Further Consolidated Appropriations Act, 2020,”
p. H11325.
83
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Native Hawaiian Education
The Native Hawaiian Education Act84 provides competitive grants to Native Hawaiian and other
organizations to develop, supplement, and expand innovative education programs to assist Native
Hawaiians. The act also authorizes the Native Hawaiian Education Council. The appropriations
acts of FY2012-FY2020 contained provisions allowing a portion of the appropriation to be used
for elementary and secondary school construction, renovation, and modernization of a facility run
by the Department of Education of the State of Hawaii that served a predominantly Native
Hawaiian student body. The FY2020 appropriation level was $36.9 million. 85
Alaska Native Education
The Alaska Native Educational Equity, Support, and Assistance Act86 provides competitive grants
to Alaska Native and other organizations to meet the unique educational needs of Alaska Natives
and to support supplemental education programs to benefit Alaska Natives. The appropriations
acts of FY2010-FY2020 authorized construction as an allowable use of funds. The FY2020
appropriations were approximately $36.0 million. 87
Federal Support for Specific Institutions or Types of
Institutions
This section of the report addresses sources of federal support for specific institutions or types of
institutions, such as historically Black colleges and universities, minority-serving institutions,
charter schools, and others.
Historically Black College and University Capital Financing Program
The Historically Black College and University Capital Financing Program88 provides low-cost
capital (loans) to finance improvements to the infrastructure of the nation’s historically Black
colleges and universities (HBCUs). The Secretary of Education provides financial insurance to
guarantee the full payment of principal and interest on qualified bonds issued by a designated
bonding authority (DBA). The DBA uses the majority of the bond proceeds to issue loans to
HBCUs. HBCUs may use the loans to finance or refinance the repair, renovation, and
construction of classrooms, libraries, laboratories, dormitories, instructional equipment, and
research instrumentation. The loan and interest volume cap is $1.1 billion according to statutory
provisions; however, the appropriations acts of FY2012-FY2020 allow the Secretary to disregard
the limitation. The appropriations acts permit the Secretary to guarantee loans of up to $212.1
million in FY2020. 89 The new loan subsidy costs appropriations for FY2020 was $20.2 million. 90
84 20 U.S.C. §7511 et seq.; T itle VI-B of the ESEA, as amended.
Rep. Nita Lowey, “Explanatory Statement Regarding H.R. 1865, Further Consolidated Appropriations Act, 2020, p.
H11139.
85
86
20 U.S.C §7541 et seq.; T itle VI-C of the Elementary and Secondary Education Act of 1965 (ESEA), as amended.
Rep. Nita Lowey, “Explanatory Statement Regarding H.R. 1865, Further Consolidated Appropriat ions Act, 2020,”
p. H11139.
88 T itle III, Part D of the HEA; 20 U.S.C. §1066 et seq.
87
89 P.L. 116-94.
90 P.L. 116-94.
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Low -Income and Minority-Serving Institutions of Higher Education
ED’s Aid for Institutional Development programs, authorized under Title III-A, Title III-B, Title
III-F, Title V, Title VII-A-4, and Title VIII-AA of the HEA, 91 provide grants to certain eligible
public and private nonprofit institutions of higher education (IHEs) for activities such as the
purchase of equipment, faculty development, curriculum development, tutoring, endowment
development, and administrative improvements. 92 Although institutional eligibility criteria differ
for each of the programs, eligible IHEs must generally enroll a high proportion of needy students
and have lower than average educational and general expenditures. Many of the programs also
require eligible IHEs to enroll a higher than average proportion of minority students.
To varying extents, the programs allow construction, maintenance, renovation, improvement of
instructional facilities, or the acquisition of land on which to construct instructional or campus
facilities. The discretionary appropriations for all of the programs were $772.2 million for
FY2020. 93 Additional mandatory appropriations of $240.0 million in FY2020 were provided by
the SAFRA Act (P.L. 111-152). 94
Land-Grant Colleges
Land-grant colleges were created in 1862 by the Morrill Act in each state as public IHEs to teach
the “agricultural and mechanical arts.”95 In 1890, Congress extended the designation to certain
HBCUs, known as the 1890 institutions, and again in 1994 to certain tribal colleges, known as the
1994 institutions. Federal funds provide a major source of funding for public research and
extension activities at land-grant institutions, including the 1862, 1890, and 1994 land-grant
institutions. Six of the programs for land-grant colleges allow construction or renovation of
facilities at the institutions.
The Hatch Act of 1887 (7 U.S.C. §301 et seq.), as amended, supports
agricultural research and educational activities at the 1862 land-grant colleges. 96
Funds may be used for the purchase and rental of land and the construction,
acquisition, alteration, or repair of buildings necessary for conducting research.
Appropriations for the Hatch Act were $259.0 million in FY2020. 97
The Payments to 1890 Land-Grant Colleges and Tuskegee University
program (Section 1445 of the National Agricultural Research, Extension, and
Teaching Policy Act of 1977, as amended), also known as the Evans-Allen
Research program, allows the purchase and rental of land and the construction,
acquisition, alteration, or repair of buildings necessary for conducting
91 20 U.S.C. §1057 et seq.; 20 U.S.C. §1060 et seq.; 20 U.S.C. §1067q; 20 U.S.C. §1101 et seq.; 20 U.S.C. §1136a et
seq.; and 20 U.S.C. §1161aa, respectively.
92 For additional information, see CRS Report R43237, Programs for Minority-Serving Institutions Under the Higher
Education Act.
93 Department of Education Budget T ables, “FY2020 Congressional Action,” https://www2.ed.gov/about/overview/
budget/budget20/20action.pdf.
94 T his figure reflects the 6.2% sequester of non-exempt mandatory non-defense programs.
95 For more information, see CRS Report R45897, The U.S. Land-Grant University System: An Overview.
U.S. Department of Agriculture, National Inst itute of Food and Agriculture, “T he Hatch Act of 1887,”
https://nifa.usda.gov/program/hatch-act-1887.
96
Rep. Nita Lowey, “Explanatory Statement Regarding H.R. 1865, Further Consolidated Appropriations Act, 2020,”
p. H11163.
97
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agricultural research, among other activities. 98 Funds are allocated by formula.
The appropriations were $67.0 million in FY2020. 99
The 1890 Facilities Grants program (7 U.S.C. §3222b) provides funds to 1890
land-grant institutions, including Tuskegee University and West Virginia State
University, for the acquisition and improvement of agricultural and food sciences
facilities and equipment, including libraries. The appropriations were $20.5
million in FY2020. 100
The Tribal Colleges Endowment Fund (7 U.S.C. §301 note.) enhances
education in agricultural sciences and related disciplines for Native Americans
by building educational capacity at tribal colleges in the areas of curricula design
and materials development, faculty development and preparation for teaching,
instruction delivery systems, experiential learning, equipment and
instrumentation for teaching, and student recruitment and retention. It also funds
facility renovation, repair, construction, and maintenance in support of these
efforts. At the end of each fiscal year, the earned interest income from the
endowment fund is distributed to tribal colleges according to a statutory formula.
The appropriations were $11.9 million in FY2020. 101
The Tribal Colleges Education Equity Program (7 U.S.C. §301 note and 7
U.S.C. §7601 note) supports the institutional capacity of the 1994 institutions to
enhance educational opportunities for Native Americans in the food and
agricultural sciences. Although funds may not be used to acquire or construct
facilities, minor alterations, renovations, or repairs necessary and incidental to
the major purpose for which a grant is issued may be allowed with prior
approval. The appropriations were $4.0 million in FY2020. 102
The Tribal Colleges Extension Program, also known as Extension Services at
1994 Institutions (7 U.S.C. §343), supports the capacity of the 1994 institutions
to provide culturally relevant extension education programs to the public.
Although funds may not be used to acquire or construct facilities, minor
improvements, alterations, renovations, or repairs to land, buildings, or
equipment necessary and incidental to the major purpose for which a grant is
issued may be allowed with prior approval. The appropriations were $8.0 million
in FY2020. 103
How ard University
Howard University is a private doctorate-granting, research university. It was chartered by
Congress in 1867 to educate African Americans. The Federal Support for Howard University
U.S. Department of Agriculture, National Institute of Food and Agriculture, “Agricultural Research at 1890 LandGrant Institutions,” https://nifa.usda.gov/program/agricultural-research-1890-land-grant-institutions.
98
Rep. Nita Lowey, “Explanatory Statement Regarding H.R. 1865, Further Consolidated Appropriations Act, 2020,”
p. H11163.
99
Rep. Nita Lowey, “Explanatory Statement Regarding H.R. 1865, Further Consolidated Appropriations Act, 2020,”
p. H11164.
101 P.L. 116-94.
100
Rep. Nita Lowey, “Explanatory Statement Regarding H.R. 1865, Further Consolidated Appropriations Act, 2020,”
p. H11163.
102
Rep. Nita Lowey, “Explanatory Statement Regarding H.R. 1865, Further Consolidated Appropriations Act, 2020,”
p. H11164.
103
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program provides partial support for construction, development, improvement, endowment, and
maintenance of the university and the Howard University Hospital. Howard University has
discretion in allocating funds for its academic, research, and endowment programs, and for its
construction activities. 104 The appropriations for Howard University and the Howard University
Hospital were $240.0 million in FY2020. 105
Schools for the Deaf
Gallaudet University offers traditional undergraduate and graduate programs, continuing
education, and programs in fields related to deafness for students who are deaf and those who are
not. Gallaudet University operates the Laurent Clerc National Deaf Education Center, which
includes the Kendall Demonstration Elementary School and the Model Secondary School for the
Deaf. The Kendall Demonstration Elementary School provides an elementary school for children
who are deaf, and the Model Secondary School for the Deaf provides secondary education
programs for students who are deaf. The Gallaudet University program 106 provides general
support for the institutions. Funds may also be used for the construction and maintenance of
facilities at those institutions. The appropriations for Gallaudet University were $137.4 million in
FY2020. 107
The National Technical Institute for the Deaf (NTID) is a technical college for students who are
deaf or hard of hearing. NTID was established by Congress in 1965 and became a college within
the Rochester Institute of Technology, a private university, in 1968. Statutory authorization (20
U.S.C. §4331 et seq.) is provided to support the operation, including construction and equipping,
of NTID. The appropriations were $79.5 million for FY2020. 108
Charter School Facilities
ED administers two programs that provide facilities support to elementary and secondary charter
schools. The State Charter Schools Facilities Incentive Grants, 109 also known as the Per-Pupil
Facilities Aid Programs, are competitive grants awarded to states that have per-pupil charter
school facilities aid programs specified in state law and that annually provide financing on a perpupil basis for charter school facilities. The program assists charter schools in meeting school
facility costs.
The second program, Credit Enhancement Grants for Charter School Facilities, 110 is intended to
improve access to capital markets for the financing of charter school facilities. Funds are awarded
on a competitive basis to public and nonprofit entities to leverage nonfederal funds that help
charter schools obtain school facilities through purchase, lease, renovation, or construction.
These two programs are collectively allocated 12.5 percent of the amount annually appropriated
for the Charter Schools program,111 and at least 50 percent of the allocation must be used for the
104 Howard University Incorporation Act of 1867, as amended, codified in T itle 20, Chapt er 8 of the United States Code
(20 U.S.C. §121 et seq.). T he program website is available at http://www.ed.gov/programs/howard/index.html.
105 P.L. 116-94.
106
20 U.S.C. §4301 et seq.
107 P.L. 116-94.
108
P.L. 116-94.
109 20 U.S.C. §7221c(k); ESEA §4304(k).
110 20 U.S.C. §7221c(a); ESEA §4304(a).
111 20 U.S.C. §7221a(b)(1); ESEA §4302(b)(1).
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Credit Enhancement Grants program.112 The Charter Schools program supports planning, design,
and initial implementation of charter schools. The Charter Schools program’s appropriation for
FY2020 was $440.0 million, of which $60.0 million was designated for facilities financing
assistance. Of the $60.0 million, not less than $50.0 million was reserved for the Credit
Enhancement program, and the remainder was allocated to the Incentive Grants program.113
Institute of American Indian and Alaska Native Culture and
Arts Development
The Institute of American Indian and Alaska Native Culture and Arts Development 114 is a
federally chartered independent nonprofit educational institution that serves as a multi-tribal
center of higher education for Native Americans and is dedicated to the study, creative
application, preservation, and care of Indian arts and culture. Appropriations may be used for the
institution’s operation. In addition, a portion of funds may be deposited in a trust account for
capital improvements, including the expenses associated with site selection and preparation, site
planning and architectural design and planning, new construction, materials and equipment
procurement, renovation, alteration, repair, and other building and expansion costs of the institute.
The institute was appropriated $10.5 million in FY2020. 115
Hispanic-Serving Institutions Education Grants Program
The Hispanic-Serving Institutions Education Grants Program, 116 administered by the USDA,
supports the ability of Hispanic-serving IHEs to attract, retain, and graduate students pursuing
careers in the food and agricultural sciences and natural resources. Although funds may not be
used to acquire or construct facilities, minor alterations, renovations, or repairs necessary and
incidental to the major purpose for which a grant is issued may be allowed with prior approval.
The appropriations were $11.2 million in FY2020. 117
Department of Defense Education Activity (DODEA)
The Department of Defense operates schools for the children of military members stationed in the
United States and abroad. Major construction and replacement projects are funded through the
Defense-wide military construction appropriations.
Defense-Operated Institutions of Higher Education
The Department of Defense and service branches operate several institutions of higher education,
including the service academies and the Uniformed Services University of the Health Sciences.
Defense appropriations support operations, maintenance, and facilities.
112 20 U.S.C. §7221c(a)(1); ESEA §4304(a)(1).
Rep. Nita Lowey, “Explanatory Statement Regarding H.R. 1865, Further Consolidated Appropriations Act, 2020,”
p. H11081.
113
114 20 U.S.C., Chapter 56.
115 T hese funds are forward funded, becoming available on July 1, 2020, and remaining available through September
30, 2021. P.L. 116-94.
116
7 U.S.C. §3241.
Rep. Nita Lowey, “Explanatory Statement Regarding H.R. 1865, Further Consolidated Appropriations Act, 2020,”
p. H11163.
117
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Legislation in the 116 th Congress
This section of the report addresses legislation related to school facilities that has, at a minimum,
been ordered to be reported out of committee or passed by one chamber during the 116 th
Congress.
The Rebuild America’s Schools Act of 2019
On February 26, 2019, the House Committee on Education and Labor ordered to be reported H.R.
865, the Rebuild America’s Schools Act of 2019. 118 The bill would authorize $70 billion in grants
and facilitate $30 billion in school infrastructure tax credit bonds to be used toward the
construction and repair of public elementary and secondary school facilities. Funds would be
allocated to states proportionally based on their prior-year share of grant allocations under Title IA of the Elementary and Secondary Education Act (ESEA), a grant program designed to provide
educational and related services to low-achieving and other students attending schools with
relatively high concentrations of students from low-income families.
States would be directed to award grant funds provided through the bill to local educational
agencies (LEAs) with the highest numbers or percentages of students who are counted in the
formulas used to allocate ESEA Title I-A grants—and among LEAs meeting this criterion, to
those prioritizing improvement of facilities of public schools that serve the highest percentages of
students who qualify for free or reduced price lunches. Additional consideration in the awarding
of grants to LEAs could be given to those with school facilities that pose a severe health or safety
threat.
The bill would also require the Institute of Education Sciences to conduct a comprehensive study
of the physical conditions of all public schools in the United States at least every five years.
Funds would also be authorized under H.R. 865 for Impact Aid construction for FY2020 through
FY2023 at levels substantially higher than current authorization of appropriations levels.
Streamlining Energy Efficiency for Schools Act of 2019
On March 5, 2019, the House passed H.R. 762, the Streamlining Energy Efficiency for Schools
Act. The bill would amend the Energy Policy and Conservation Act (42 U.S.C §6371a) to require
the Secretary of Energy to establish a clearinghouse to disseminate information regarding
available federal programs and financing mechanisms that may be used to help initiate, develop,
and finance energy efficiency, distributed generation, and energy retrofitting projects for schools.
In the Senate, Senator Murkowski of the Committee for Energy and Natural Resources reported
H.R. 762 with an amendment in the nature of a substitute. The amendment strikes the text of H.R.
762 and inserts the text of a related Senate bill, S. 253, as ordered reported by the Committee. 119
S. 253, also called the Streamlining Energy Efficiency for Schools Act, was reported out of
committee on September 19, 2019. The bill would authorize the clearinghouse as in H.R. 762. It
would also require the Office of Energy Efficiency and Renewable Energy within the Department
of Energy to act as the lead federal agency for coordinating and disseminating information on
118 An identical companion bill, S. 266, was introduced in the Senate on January 29, 2019, though no action on the bill
has been taken as of the date of publication of this report. For more information, see CRS Report R45767, The Rebuild
America’s Schools Act of 2019 (H.R. 865/S. 266): In Brief.
119 S.Rept. 116-108.
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existing federal programs that support energy efficiency, renewable energy, and energy
retrofitting projects for schools.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act
On March 27, 2020, Congress and the President enacted P.L. 116-136, the Coronavirus Aid,
Relief, and Economic Security Act (CARES Act), in response to the national emergency declared
by the President on March 13, 2020, concerning the COVID-19 pandemic. The CARES Act
authorizes the Secretary of Education to grant a deferment during a qualifying emergency to an
institution that has a loan under the HBCU Capital Financing Program. During the period of the
deferment, the Secretary is required to pay the required principal and interest due. At the end of
the deferment, the IHE is required to repay the Secretary for payments made on its behalf.
Moving Forward Act
On July 1, 2020, the House passed H.R. 2, the Moving Forward Act, which contains a Division K
entitled the Reopen and Rebuild America’s Schools Act of 2020. Like H.R. 865, H.R. 2 would
authorize grants and school infrastructure tax credit bonds to be used toward the construction and
repair of public elementary and secondary school facilities. Funds would be allocated to states
proportionally based on their prior-year share of grant allocations under Title I-A of the ESEA.
States would be directed to award grant funds provided through the bill to local educational
agencies (LEAs) with the highest numbers or percentages of students who are counted in the
formulas used to allocate ESEA Title I-A grants—and among LEAs meeting this criterion, to
those prioritizing improvement of facilities of public schools that serve the highest percentages of
students who qualify for free or reduced price lunches. Additional consideration in the awarding
of grants to LEAs could be given to those with school facilities that pose a severe health or safety
threat. For grants awarded in FY2020, specifically, additional priority would be given to LEAs
that would use the grants to improve facilities to support social distancing, personal hygiene, and
building hygiene (e.g., HVAC), consistent with guidance issued by the Centers for Disease
Control and Prevention.
H.R. 2 would authorize $20 billion in grants for each of fiscal years 2020 through 2024 and
facilitate $10 billion in school infrastructure tax credit bonds for each of calendar years 2021
through 2023.
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Appendix. Selected Acronyms Used in This Report
ARRA: The American Recovery and Reinvestment Act of 2009 (P.L. 111-5)
BIE: Bureau of Indian Education
DOD: Department of Defense
ED: U.S. Department of Education
ESEA: Elementary and Secondary Education Act
FEMA: Federal Emergency Management Agency
HBCU: Historically Black Colleges and Universities
HEA: Higher Education Act
IHE: Institution of Higher Education
K-12: Kindergarten through grade 12
LEA: Local Educational Agency
P.L.: Public Law
U.S.C.: United States Code
Author Information
Kyle D. Shohfi
Analyst in Education Policy
Acknowledgments
This is a substantially revised version of a report originally written by Cassandria Dortch, Specialist in
Education Policy.
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in
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