Senate Bill 1978, also known as House Bill 1889, amends various sections of the Tennessee Code Annotated to establish and regulate education freedom scholarships. The bill introduces new sections that require audits of the scholarship program by the comptroller of the treasury, ensuring compliance with state and federal student privacy laws. Private schools enrolling scholarship recipients must also undergo audits, with costs borne by the schools, and are required to provide transparency regarding tuition, admissions criteria, and educational outcomes. Additionally, the bill mandates that eligible students disclose their previous school on scholarship applications and outlines the department's responsibilities for reporting on the program's effectiveness and compliance.

The bill also modifies existing provisions related to scholarship eligibility and testing requirements. It raises the income threshold for household eligibility to 300% of the amount required for free or reduced-price lunch and stipulates that scholarship recipients must take the same standardized tests as public school students. Furthermore, it repeals certain sections and adds new requirements for private schools, including annual audits and reporting on financial expenditures and employee salaries. The act is set to take effect on July 1, 2026.

Statutes affected:
Introduced: 49-6-3504, 49-6-3507(a)(1), 49-6-3507, 49-6-3507(a)(2), 49-6-3508, 49-6-5101(a), 49-6-5101, 49-6-5101(c)