The Reinvest in Public Schools Act of 2026 allows public school districts to issue tax-exempt advance refunding bonds, a financing tool that helps schools borrow money at lower interest rates to fund construction, repair, and renovation projects. The bill specifically permits state and local governments to refinance existing school bonds using this tax-exempt status, which was previously restricted under 2017 tax law changes. This change primarily affects public school districts that want to save money on borrowing costs for facility improvements and new construction. The legislation includes safeguards to prevent misuse by prohibiting the use of arbitrage schemes designed purely for financial gain rather than genuine interest rate savings. The bill takes effect once enacted and applies to all advance refunding bonds issued after that date.
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