We have a school in our AA that burned down. The school is located in a non Metro distressed tract that is middle income. The school has been rebuilt, but doesn't have library books. If we make a donation to the school, would this qualify as a CD Investment?

Think about the 4 different definitions of community development under CRA and determine which you think applies. In this case you seem to think it has the potential to qualify under "activities that revitalize or stabilize . . . distressed non-metropolitan middle-income geographies."

§ __.12(g)(4)(iii) – 3: What activities are considered to “revitalize or stabilize” a distressed nonmetropolitan middle-income geography, and how are those activities evaluated?

A3. An activity revitalizes or stabilizes a distressed nonmetropolitan middle-income geography if it helps to attract
new, or retain existing, businesses or residents. An activity will be presumed to revitalize or stabilize the area if the
activity is consistent with a bona fide government revitalization or stabilization plan. The Agencies generally
will consider all activities that revitalize or stabilize a distressed nonmetropolitan middle-income geography, but will
give greater weight to those activities that are most responsive to community needs, including needs of low- or moderate-income
individuals or neighborhoods. Qualifying activities may include, for example, providing financing to attract a major new employer that will create long-term job opportunities, including for low- and moderate-income individuals, and activities that provide financing or other assistance for essential infrastructure or facilities necessary to attract or retain businesses or residents. See Q&As
§ __.12(g)(4)(i) – 1 and § __.12(h) – 5.

So it doesn't appear to meet that definition. What is the population of the school like? Is it primarily students from low- or moderate-income families, receiving free or reduced price lunch?

No. Unfortunately the majority of students do not qualify for free or reduced lunches. The tract is distressed based on 24.91% of population is below poverty level.

Isn't providing books to a school an activity that provides " essential infrastructure or facilities necessary to attract or retain businesses or residents."
I'm thinking people would not want to live in the area if the school doesn't have books.

It's a stretch, but you can try. I wouldn't count on it surviving examiner scrutiny.