Present law provides that implementation of Tennessee's existing pilot pre-k programs by LEAs are voluntary. This bill revises this provision to, instead, require each LEA to provide a pre-k program that provides the number of classrooms necessary to serve all eligible children under the voluntary pre-k program that serves at-risk children.
As used in present law, "at-risk children" means the following children:
(1) Children who are (i) four years on or before August 15 and (ii) members of families with incomes that meet the eligibility requirements for free or reduced-price lunch as determined by federal law; or
(2) Dependent children who are four on or before August 15, whose parent was killed; died as a direct result of injuries received or has been officially reported as being either a prisoner of war or missing in action while serving honorably as a member of the U.S. armed forces during a qualifying period of armed conflict; or was formerly a prisoner of war or missing in action under such circumstances, who can present (i) official certification from the U.S. government that the parent veteran was killed or died as a direct result of injuries received while serving honorably as a member of the U.S. armed forces during a qualifying period of armed conflict or (ii) official certification from the United States government that the parent veteran has been officially reported as being a prisoner of war or missing in action while serving honorably as a member of the U.S. armed forces during a qualifying period of armed conflict or was formerly a prisoner of war or missing in action under such circumstances as appropriate within 180 days prior to applying for services under this present law.
ENROLLMENT IN PRE-K PROGRAM
Present law authorizes an LEA to establish a voluntary pre-k program that serves at-risk children residing in the geographic area served by the LEA. A voluntary pre-k program must be designed to comprehensively address the educational needs of children who are not otherwise eligible for similar programs or who do not have access to a pre-k program that includes, but is not limited to, the cognitive, physical, social, and emotional needs of children participating in the program.
This bill removes the above provisions to, instead, require each LEA to establish a pre-k program that enrolls eligible children. Each pre-k program must be designed to comprehensively address the educational needs of the children enrolled in the program.
Present law requires the department of education to establish an initial enrollment deadline that an LEA must use to determine if a voluntary pre-k classroom provided by the LEA has space available to enroll students in addition to at-risk children residing in the geographic area served by the LEA. If the number of at-risk children seeking to enroll in an LEA's voluntary pre-k program on the date of the initial enrollment deadline does not meet the maximum class size of the pre-k classroom provided by the LEA as part of the LEA's voluntary pre-k program, then the LEA may enroll children who are not at-risk children, but who reside within the geographic area served by the LEA and who are (A) four, with or without a disability, on or before August 15; (B) three on or before August 15 and (i) who have been in the Tennessee Early Intervention System (TEIS); or (ii) who are screened and identified as educationally at-risk, as determined pursuant to the Individuals with Disabilities Education Act; or (C) three on or before August 15, who are members of families with incomes that meet the eligibility requirements for free or reduced-price lunch, as determined pursuant to present law.
This bill removes the above provision to, instead, require each LEA to establish an initial enrollment deadline for eligible children to enroll in the pre-k program. If, in the application period for a school year, the number of program applications received by the LEA exceeds the number of students the LEA is able to serve, then the LEA must select students for participation in the pre-k program through an enrollment lottery process.
CRITERIA FOR A PRE-K PROGRAM
Present law requires a voluntary pre-k program to satisfy the following criteria:
(1) Consist of a maximum class size of 20;
(2) Have at least one licensed teacher per classroom who is certified in early childhood education;
(3) Have at least one educational assistant per classroom who holds a child development associate credential or associate degree in early childhood education, or who is actively working toward acquiring such credentials. However, if a person with such credentials is unavailable, then educational assistants who hold a high school diploma and who have relevant experience working with children in pre-k or other early childhood programs may be employed to satisfy this requirement;
(4) Provide a minimum of five and one-half hours of quality instructional time per day;
(5) Use an educational, age-appropriate curriculum that is aligned with the early learning standards approved by the department of education and that includes, at a minimum, literacy, writing, math, and science skills;
(6) Have a developmental learning program that addresses the cognitive, physical, emotional, social, and communication areas of child development;
(7) Meet the criteria for a "high quality pre-k program," as identified by the department of education;
(8) Comply with the state board of education's rules and policies related to early childhood education and pre-k programs; and
(9) Have voluntary enrollment.
This bill retains the same criteria set forth in (1)-(9) above.
APPLICATION FOR FUNDING AND COLLABORATIVE AGREEMENTS
Present law authorizes LEAs to apply to the department of education for funding and approval of one or more pre-k programs. This bill revises this provision by no longer authorizing LEAs to apply to the department of education for funding and approval of one of or more pre-k programs.
As part of the application process, present law requires the LEA to include a statement that it has given consideration to how to serve all children four years old within their geographical area. Applications that target establishing programs for at-risk children not served by an existing program must be given preference in the application process. Documentation of local financial support must also be considered as a factor in the application process. Present law requires the commissioner of education to establish the system for submitting applications and programs must be approved on a competitive basis. This bill deletes these provisions.
Present law requires LEAs that receive pre-k program approval under present law to utilize the pre-k/k growth portfolio model approved by the state board of education, or a comparable alternative measure of student growth approved by the state board of education and adopted by the LEA, in the evaluation of pre-k and k teachers pursuant to existing law. Each LEA must notify all teachers evaluated using a growth portfolio model of training and professional development opportunities available on growth portfolio models. This bill revises the present law by removing any mention of LEAs that receive pre-k program approval, and, instead, requires all LEAs to use the pre-k/kindergarten growth portfolio model approved by the state board of education, or a comparable alternative measure of student growth approved by the state board of education and adopted by the LEA, in the evaluation of pre-kindergarten and kindergarten teachers
Prior to the 2018-2019 school year, present law requires the department of education to study the pre-k/k growth portfolio model. The study must include feedback from pre-k and k teachers, as well as other teachers using other growth portfolio models. This bill deletes these provisions.
Present law does not prohibit an LEA or public charter school from evaluating pre-k and k teachers using the pre-k/k growth portfolio model approved by the state board of education, or a comparable alternative measure of student growth approved by the state board of education and adopted by the LEA or public charter school, for the 2019-2020 or 2020-2021 school year. If an LEA or public charter school chooses to evaluate its pre-k and k teachers, for the 2020-2021 school year, using the pre-k/k growth portfolio model, or a comparable alternative measure of student growth, then the LEA or public charter school must notify the department. If an LEA or public charter school chooses to evaluate its pre-k and k teachers, for the 2019-2020 or 2020-2021 school year, using the pre-k/k growth portfolio model, or a comparable alternative measure of student growth, then the data generated must not comprise the student growth portion of a teacher's evaluation, unless such use results in a higher final evaluation score. This bill deletes these provisions.
Finally, present law requires selection of voluntary pre-k program sites to take into consideration the areas of greatest need. This bill deletes this provision.
ADVISORY COUNCIL
Present law requires each LEA applying to the voluntary pre-k program to create and appoint a community pre-K advisory council. The director of schools, or the director's designee, must serve as chair and coordinate the activities of the council. The council must include members representing the local school board, parents, teachers, nonprofit providers, for-profit providers, Head Start, the business community and local government funding bodies, where applicable. The council must provide input to the local board of education in creating the board's application for programs, taking into consideration the number and type of existing programs currently serving children four years of age within the geographical area served by the LEA. While the content of the final application for programs must be within the sole authority of the local school board, present law prohibits a board from submitting an application without first allowing the council to provide input, either in writing or otherwise, and without first giving due consideration to the council's input and recommendations. This bill deletes these provisions.
ANNUAL APPROPRIATIONS
Present law requires voluntary pre-k programs that serves at risk children to be subject to annual appropriations. The commissioner of education must annually recommend a funding amount per classroom for those classrooms established under the program.
To receive state funds for classrooms, present law requires the LEA to provide a matching amount of funds based on the Tennessee investment in student achievement formula (TISA). Grants, federal funds and private funds may be used by the LEA to meet the matching funds requirement. The LEA may also meet the matching funds requirement through in-kind matches. Any local funding must be subject to annual appropriations by the local governing body.
Present law prohibits a child from being required to pay tuition or fees solely for the purpose of enrolling in or attending a pre-k program. Present law also prohibits state funds received for pre-k programs from being used to supplant any other state or local funds for pre-k programs.
This bill deletes the above provisions, and, instead, provides the following:
(1) The state must fund 100 percent of the costs required for an LEA to provide the number of classrooms, and to employ the number of licensed teachers and educational assistants, required for the LEA to comply with the requirements of this bill. Subject to appropriations, the commissioner of education must allocate to each LEA an amount sufficient for the LEA to serve all eligible children in the LEA's pre-k program;
(2) It is the legislative intent that funds in the universal pre-K fund, established in this bill, must be made available for appropriation and expenditure in accordance with this bill; and
(3) An eligible child must not be required to pay tuition or fees to enroll in, or attend, a pre-k program established by an LEA. However, these provisions do not prohibit an LEA from charging fees for child care provided outside the instructional day of the LEA's pre-k program.
OFFICE OF EARLY LEARNING
Present law provides that there is established within the department of education an office of early learning that administers the pre-k classroom application process, reviews existing regulations and standards, and recommends needed changes, to promote a consistent approval, assessment and monitoring process for providers of pre-k programs. This bill deletes this present law.
TAX IMPOSED
This bill requires that a data transaction privilege tax is imposed on a person's annual gross revenues that are derived from data transactions from digital advertising services in this state. As used in this bill, "digital advertising services" means data transactions from advertising services on a digital interface and includes advertisements in the form of banner advertising, search engine advertising, interstitial advertising, and other comparable advertising services that use personal information about the people to whom the ads are being served.
This bill requires the portion of a person's annual gross revenues derived from data transactions from digital advertising services in this state to be determined using an apportionment factor. The apportionment factor is a fraction, the numerator of which is the person's annual gross revenues derived from data transactions from digital advertising services in this state and the denominator of which is the person's annual gross revenues derived from data transactions from digital advertising services in the U.S.
TAX RATE
The bill provides that the data transaction privilege tax imposed is levied at the rate of 9.5 percent of the assessable base and applies only to persons with an assessable base of $50,000,000 or more.
RETURNS
This bill requires each person that, in a calendar year, has an assessable base of at least $50,000,000 to complete and file with the department a return on or before April 15 of the following year.
This bill also requires a person that reasonably expects that the person's assessable base will be $50,000,000 or more to complete and file with the department a declaration of estimated tax, on or before April 15 of that year. A person required under this provision to file a declaration of estimated tax for a taxable year must complete and file with the department a quarterly estimated tax return on or before June 15, September 15, and December 15 of that year.
This bill requires a person required to file a return under this bill to file with the return an attachment that provides any information that the department requires to determine annual gross revenues derived from data transactions from digital advertising services in this state. A person required to file a return under this bill must maintain records of data transactions from digital advertising services provided in this state and the basis for the calculation of the data transaction privilege tax owed for a minimum of five years.
This bill requires the chief executive officer, proprietor, owner, or highest-ranking manager to sign annual and quarterly returns to certify the accuracy of the information contained therein under penalty of perjury.
TAX PAYMENT
This bill requires a person who is required to file a return under this bill to pay the data transaction privilege tax with the return that covers the period for which the tax is due. A person required to file such a return must pay the following:
(1) At least 25 percent of the estimated data transaction privilege tax shown on the declaration or amended declaration for the taxable year with (i) the declaration or amended declaration that covers the year and (ii) each quarterly return for that year; and
(2) Any unpaid digital transaction privilege tax for the year shown on the person's return that covers that year with the return.
ALLOCATION OF TAX REVENUE
This bill requires all revenue from the data transaction privilege tax collected under this bill, including penalties and interest, to be deposited in a special account in the state treasury to be known as the universal pre-K fund. The fund must be administered by the department of education and used exclusively to fund, establish, and maintain a universal pre-k program in each public and public charter elementary school in this state in accordance with this bill. Any balance remaining unexpended at the end of a fiscal year in the fund must not revert to the general fund but must be carried forward into the subsequent fiscal year.
However, this bill requires 2 percent of the revenue from the data transaction privilege tax collected under this bill, including penalties and interest, to be paid into the state treasury and earmarked and allocated to the department of revenue for the administration and enforcement of this bill.
VIOLATIONS AND PENALTIES
If the total amount of the digital transaction privilege tax due for the year is less than $300, then this bill provides that it is a Class E felony for the following:
(1) A person subject to this bill to knowingly (i) fail to file a return; (ii) violate this bill's requirements for filing a return and for making a tax payment; (iii) fail to keep books and records as required by this bill; (iv) file a fraudulent return; or (E) violate a rule promulgated by the department for the administration and enforcement of this bill;
(2) An officer or agent of a corporation or manager, member, or agent of a limited liability company subject to this bill to knowingly sign a fraudulent return filed on behalf of such corporation or limited liability company; or
(3) An accountant or other agent to knowingly enter false information on the return of any taxpayer.
However, this bill provides that an act described in (1)-(3) above is a Class D felony if the total amount of the digital transaction privilege tax due for the year is $300 or more.
This bill requires a prosecution for an act in violation of this bill to commence within three years of the commission of the act.
RULEMAKING
This bill requires the commissioner of revenue to promulgate rules and forms necessary to implement this bill.
APPLICABILITY
This bill applies to the 2025-2026 school year and each school year thereafter. Additionally, the data transaction privilege tax imposed on a person's annual gross revenues that are derived from data transactions from digital advertising services takes effect January 1, 2025.

Statutes affected:
Introduced: 49-6-103, 49-6-104, 49-6-105, 49-6-106, 49-6-107, 49-6-108