House Bill 218, titled the "Universal Pre-K Funding Act," seeks to implement a universal pre-kindergarten program throughout Tennessee by establishing a dedicated funding source through a tax on digital advertising. The bill modifies existing laws to require local education agencies (LEAs) to provide pre-kindergarten programs, removing the previous voluntary nature of these offerings. It mandates that LEAs ensure sufficient classroom availability for all eligible children and sets forth specific quality criteria, including class size, teacher qualifications, and instructional time. Additionally, a lottery system will be introduced for enrollment if demand surpasses available capacity.

To fund this initiative, the bill introduces a 9.5% data transaction privilege tax on digital advertising services for companies with annual gross revenues exceeding $50 million. The revenue generated will be directed to a newly established universal pre-K fund, which will exclusively support the pre-kindergarten programs. The Department of Education will administer this fund, ensuring that any interest earned is reinvested into the fund. The bill also outlines penalties for violations of the tax, categorizing offenses based on the amount due, and mandates that prosecutions for these violations must begin within three years. The act will take effect upon becoming law, with certain provisions applicable to the 2026-2027 school year and beyond.

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