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S 39

An act relating to the State Aid for School Construction Program

2025-2026 Regular Session Introduced by Martine Gulick and 2 co-sponsors

Vermont establishes a state-funded, incentive-based program to subsidize K–12 school construction debt, prioritizing planning, regional collaboration, and modernization.

Committee on Education relieved; bill committed to Committee on Finance on motion of Senator Bongartz
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Bill Summary · S 39

Summary of S.39 (2025-2026) – State Aid for School Construction Program (Vermont)

Purpose and intent

  • Establish a new State Aid for School Construction Program within the Agency of Education.
  • Provide state debt service subsidies to school districts for eligible capital construction projects.
  • Use a bonus incentive structure to increase state aid eligibility, with bonus criteria set by Agency rules.
  • Encourage efficient use of public funds to modernize school infrastructure, align with 21st-century education standards, prioritize regional needs, and promote use of existing facilities. Also encourages joint construction and consolidation where feasible and educationally appropriate.

Key provisions and changes

  • Section 3440 (Statement of Policy)

    • Sets goals to modernize school infrastructure while considering quality standards, statewide enrollment trends, and capacity.
    • Promotes utilization of existing infrastructure and regional/shared solutions.

  • Section 3442 (State Aid for School Construction Program – Administration)

    • Agency of Education leads the program, including:
    • Reviewing preliminary aid applications and issuing approvals/denials (per 3445).
    • Adopting rules, including a point-based priority system and bonus incentives.
    • Including annual funding requests in the Agency’s budget.
    • Developing a prequalification/review process for design/engineering firms.
    • Providing technical assistance, training, and guidance to districts and vendors.
    • Maintaining lists of approved projects and quarterly progress reports (costs and timelines).
    • Recommending cost-reduction policies, conducting needs surveys at least every five years, and developing enrollment projections.
    • Encouraging space optimization and maintaining a prototypical school plans clearinghouse.
    • Retaining consultants as needed.
    • Submitting an annual written report to the General Assembly by December 15.

  • Section 3443 (State Aid for School Construction Advisory Board)

    • Establishes an eight-member Advisory Board (4 ex officio and 4 from the legislature, with terms and appointment processes described).
    • Duties include advising on rules, priorities, project approvals, enrollment modeling, data collection, and space utilization.
    • Meetings: first meeting by Aug 15, 2025; up to six meetings per year; chair chosen by Board; administrative support from the Agency.

  • Section 3444 (School Construction Aid Special Fund)

    • Creates a dedicated fund to:
    • Award construction aid (section 3445),
    • Fund the Facilities Master Plan Grant Program (section 3441),
    • Cover administrative costs,
    • Provide emergency aid.
    • Funded by General Assembly appropriations and earned interest.

  • Section 3445 (Approval and Funding of School Construction Projects)

    • Eligibility and process:
    • Preliminary application required; must show need and purpose.
    • Secretary evaluates needs, regional opportunities, cost-efficiency, and alignment with standards.
    • Criteria for approval include health/safety needs, inadequacy of facilities, energy concerns, consolidation benefits, and a demonstrated facilities master planning process with community involvement.
    • After preliminary approval, projects are prioritized using a point system, contingent on local funding votes/bonds.
    • Annual funding request to the Governor, with legislative recommendation thereafter.
    • Final approval required before construction begins (with exceptions for good cause); final applications may be submitted after preliminary approval.
    • Final approval prerequisites include: bond funds voted, competent construction supervision, financing arrangements, compliance with requirements, playground safety standards, and small-cost exemptions.
    • High school projects may have a condition for ensuring high school instruction for students living in prescribed areas.
    • Construction can begin after final approval; however, reimbursements for debt incurred before aid are not permitted.
    • Award of construction aid:
    • Base aid equals 20% of the eligible debt service cost.
    • Additional bonus incentives may provide up to an extra 20% of eligible debt service cost, as determined by rule.
    • Eligible debt service cost is calculated as the product of the bond’s lifetime cost and the ratio of approved project cost to total project cost.
    • Emergency aid provision allows up to $100,000 total project cost for certain emergency projects, outside the usual formula.

  • Section 3446 (Appeal)

    • Municipal corporations may appeal an Agency decision regarding orders, allocations, or awards to Superior Court within 30 days.

  • Section 3448 Transfer of Rulemaking Authority (administrative)

    • Transfers rulemaking authority for school construction and capital outlay from the State Board of Education to the Agency of Education.
    • Pre-July 1, 2026 rules remain in effect until amended or repealed by the Agency.
    • Notice requirements to Secretary of State and Legislative Committee on Administrative Rules.

  • Section 3441 (Facilities Master Plan Grant Program) and other related provisions referenced in sections above

    • Not fully reproduced in the excerpt, but referenced as existing or to be integrated with the new fund and processes.

  • Effective date

    • The act takes effect July 1, 2026.

Who would be affected

  • Public school districts and supervisory unions seeking state aid for capital construction projects.
  • The Agency of Education, which would administer the program, rulemaking, reporting, and technical assistance.
  • The State Aid for School Construction Advisory Board, which would guide priorities, rules, and project selection.
  • The Vermont Bond Bank, and other state financial entities involved in debt issuance and financing arrangements.
  • The general public through the Facilities Master Plan Grant Program and the public reporting of project status and costs.

Procedural and timeline aspects

  • Administrative timeline:
    • First Advisory Board meeting by August 15, 2025.
    • Ongoing quarterly project reports and annual legislative reporting by December 15 each year.
    • Transfer of rulemaking authority completed by July 1, 2026.
  • Project lifecycle:
    • Preliminary application → potential preliminary approval based on criteria → priority scoring after local funding commitments → final approval prior to construction → construction with potential state debt service subsidies → ongoing reporting and potential adjustments based on rules.
  • Repeal/transition:
    • The State Aid for School Construction Advisory Board is prospectively repealed on July 1, 2035, unless extended or amended.
    • Rules currently held by the State Board of Education would transfer to the Agency of Education, with transitional provisions.

Key takeaways

  • Vermont would create a centralized, state-financed subsidy for school construction debt, with a structured, rule-based prioritization and incentives system.
  • The program emphasizes regional collaboration, space optimization, lifecycle planning, and alignment with educational needs and facility standards.
  • Access to funding depends on a multi-stage process, including preliminary and final approvals, local funding commitments, and compliance with planning and safety requirements.
  • A dedicated fund and advisory board aim to provide governance, transparency, and ongoing evaluation of capital needs for K–12 facilities.

Compiled from official sources — confirm details with the bill’s official record.

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