House Bill 218, known as the "Universal Pre-K Funding Act," seeks to implement a universal pre-kindergarten program across Tennessee by establishing a dedicated funding source through a new data transaction privilege tax on digital advertising. The bill amends existing laws to remove voluntary participation requirements for local education agencies (LEAs), mandating that they provide pre-kindergarten programs and implement enrollment processes via lotteries if demand exceeds available capacity. Additionally, LEAs are required to ensure adequate classrooms and staff to accommodate all eligible children, while adhering to specified quality standards regarding class size, teacher qualifications, and instructional time.

The legislation introduces a 9.5% tax on digital advertising services for companies with annual gross revenues of $50 million or more, with the generated revenue directed to a newly established universal pre-K fund managed by the Department of Education. This fund will support the creation and maintenance of pre-kindergarten programs in public and charter schools. 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