House Bill 1238 establishes a new division within the Tennessee Department of Education, known as the Division of Early Child Care and Education, which must be created by December 31, 2026. The bill outlines the division's administrative responsibilities, which include overseeing various child care and early educational services funded by state or federal money, such as the Child Care and Development Block Grant and the Individuals with Disabilities Education Act. Additionally, the division is tasked with creating a unified early child care and education system that encompasses a uniform licensing and regulatory framework, accountability measures, community engagement mechanisms, and an advisory council to streamline processes and enhance child health and safety.

The bill also mandates the establishment of a two-part transition plan to facilitate the creation of the new division and the unified system. A transition advisory council will be formed to guide this process, with specific timelines for submitting the transition plan to the governor. The first phase of the plan is due by January 1, 2026, and the second phase by October 1, 2026. Furthermore, starting January 1, 2027, the division is required to publish a strategic plan for the unified system and provide annual progress reports to the General Assembly. The act takes effect upon becoming law.