ON APRIL 27, 2022, THE HOUSE ADOPTED AMENDMENTS #1 AND #2 AND PASSED HOUSE BILL 2143, AS AMENDED.
AMENDMENT #1 rewrites this bill to replace the basic education program (BEP) with the Tennessee Investment in Student Achievement Act (TISA) as the system for funding education for the public schools, kindergarten through grade twelve (K-12) beginning with the 2023-2024 school year.
BEP Calculation
The BEP includes four categories of components: instructional salaries and wages; instructional benefits; classroom; and nonclassroom. Present law requires the state to provide 70 percent of the funds generated for components within the instructional salaries and wages category; 70 percent of the funds generated for components within the instructional benefits category; 75 percent of the funds generated for components within the classroom category; and 50 percent of the funds generated for components within the nonclassroom category. The BEP must provide 100 percent funding for at-risk students in K-12. The BEP provides funding for English language learner students at a ratio of 1:20 and 1:200 for teachers and translators, respectively. The BEP provides funding for special education personnel based on the level and extent of services provided and related to the student's individualized education program (IEP). The BEP must recognize the ability of local jurisdictions to raise local revenues by measuring the ability to generate local revenues from property tax and local option sales tax. The BEP must also recognize the ability of local jurisdictions to raise local revenues as determined by the multiple regression analysis model developed by TACIR. The full text of the Tennessee Education Finance Act of 1977, and other relevant provisions of present law, specify other components, factors, and measurements that apply to the BEP.
TISA Calculation
The TISA is a student-based funding formula that consists of the following student-generated funding allocations:
(1) The base funding amount;
(2) Weighted allocations for which the individual student satisfies the following criteria:
(A) Twenty-five percent for a student who is economically disadvantaged;
(B) Five percent for a student who experiences concentrated poverty;
(C) Five percent for a student who resides in a small district;
(D) Five percent for a student who resides in a sparse district; and
(E) From 15 percent to 150 percent based for students with unique learning needs, based on 10 levels to be established by rule based on the additional resources required to support each unique learning need; and
(3) Direct allocations established by rule of the department for a student who is:
(A) A rising fourth grade student who is determined to not be proficient in English language arts (ELA) based on the student achieving a performance level rating of "below" or "approaching" on the ELA portion of the student's most recent TCAP test;
(B) Assigned to a career and technical program;
(C) A junior or senior in high school who has not previously taken a postsecondary readiness assessment, or who has only taken such assessment once;
(4) A student in any of the grades K-3; and
(5) A student who attends a public charter school.
In addition to the student-generated funding allocations described in (1)-(5), and subject to available appropriations, TISA requires the department of education to allocate student-generated outcome incentive dollars to an LEA based on the achievement of member students in the LEA's public schools. This amendment requires the department to establish outcome goals by rule. The department must allocate available appropriations for student-generated outcome incentive dollars to LEAs in direct proportion to the number of outcome incentive dollars generated by students who are members in each of the LEA's public schools, relative to the total number of outcome incentive dollars generated by all Tennessee public school students.
This amendment requires the commissioner of education to convene a 12-member group to advise the commissioner regarding outcome incentive dollars and outcome goals. The full text of this amendment specifies qualifications for selection to the advisory group.
Fast Growth and Infrastructure Stipends
Funds appropriated for the purposes of stipends must first be allocated to LEAs that experience growth in the total allocation generated by students in non-virtual schools in the LEA in the current year in excess of 1.25 percent, as compared to the prior year. The amount of the fast growth stipend will be equal to the increase in allocations in excess of 1.25 percent. If the funds appropriated for fast growth stipends are insufficient to provide for an LEA's fast-growth stipend, then the commissioner must apply a pro rata reduction to the stipend amount each LEA is otherwise eligible to receive.
If there are excess funds remaining after disbursements of fast growth stipends, such funds will next be allocated to infrastructure stipends for LEAs that experience average daily membership (ADM) growth in non-virtual schools exceeding two percent for each year of a three-consecutive-year period. The infrastructure stipend is a per-student flat dollar amount based on the number of member students in non-virtual schools in the LEA for the current school year in excess of a two percent ADM growth in non-virtual schools from the prior year. An infrastructure stipend in a given year must be uniform for all eligible LEAs.
If the funds appropriated for stipends exceed the amount required to fund fast growth and infrastructure stipends, then the 1.25 percentage for fast growth stipend eligibility may be lowered to ensure that all funds appropriated are allocated and disbursed to LEAs.
Supplemental Allocations
If, during the first year of implementation of the TISA, an LEA's allocated TISA funds total less than the LEA's baseline funding amount, then the department will be required to allocate additional funds to the LEA in an amount equal to 100 percent of the difference between the LEA's baseline funding amount and the LEA's allocated TISA amount. For purposes of this amendment, the baseline funding amount is:
(1) The BEP allocations an LEA received in the 2022-2023 school year;
(2) The coordinated school health grant allocations an LEA receive in the 2022-2023 school year;
(3) The family resource center grant allocations an LEA received from the department in the 2022-2023 school year; and
(4) The school safety grant allocations an LEA received in the 2022-2023 school year.
The additional allocations for LEAs whose allocated TISA funds total less than their baseline funding amount will continue through the first four years of TISA implementation. However, the amount of the additional allocations will be reduced as follows:
(1) Seventy-five percent of the difference during the second year;
(2) Fifty percent of the difference during the third year; and
(3) Twenty-five percent of the difference during the fourth year.
An LEA's allocated education funding must not decrease more than five percent from one year to the next year. If an LEA's TISA allocation decreases by more than five percent from the LEA's TISA allocation for the prior school year, then the department must allocate additional funds to the LEA in an amount such that the decrease in the LEA's TISA allocation for the current year is only five percent except that the department must not allocate additional funds to an LEA due to being allocated TISA funds less than their baseline amount.
Grants
Subject to available appropriations, this amendment requires the department to distribute a grant to an LEA that:
(1) Is located within a county designated as distressed or at risk by the commissioner of economic and community development and for which the LEA's fiscal capacity and local contribution increase the LEA's maintenance of effort requirements; or
(2) Is located in Sevier County.
An LEA that satisfies the criteria of subdivisions (1) and (2) may receive multiple grants.
State and Local Contributions; Determination of Fiscal Capacity
The state shall provide:
(1) Seventy percent of the total funding allocation that students generate pursuant to the base and weighted allocations; and
(2) One hundred percent of the total funding allocation that students generate pursuant to direct allocations, outcome incentives, and fast growth and infrastructure stipends.
The local share, which must be paid with local government funds, is the remaining 30 percent of the total funding allocation that students funded by a local government generate pursuant to the base and weighted allocations.
A county's local contribution is calculated by multiplying the county's fiscal capacity by the local share. The fiscal capacity calculation for the TISA is the average of the fiscal capacity estimates generated by the formula established by the Boyd Center for Business and Economic Research at the University of Tennessee and the formula established by the TACIR.
Accountability Requirements
This amendment requires LEAs to produce annual accountability reports that:
(1) Establishes goals for student achievement, including the goal of 70 percent of the LEA's students in third grade taking the English language arts (ELA) portion of the TCAP tests achieving a performance level rating of "on track" or "mastered" on the ELA portion of the TCAP tests, in the current school year and explains how the goals can be met within the LEA's budget; and
(2) Describes how the LEA's budget and expenditures for prior school years enabled the LEA to make progress toward the student achievement goals established for the prior school years; provided, however, that such description will not be required in the report submitted for the 2023-2024 school year.
An LEA that operates or authorizes a public school that receives a "D" or "F" letter grade on the state report card may be required to appear for a hearing before a joint ad hoc committee of the general assembly to report on the public school's performance and how the LEA's spending decisions may have affected the ability of the LEA's public schools to achieve certain performance goals. This amendment requires the speakers of the senate and house of representatives to each appoint members to serve on the committee from the members of the general assembly serving on the education or finance committees of the senate and house of representatives. At the conclusion of such hearing, the committee may recommend that the department impose one of the following corrective actions:
(1) Require the LEA or public charter school to develop, submit to the department for approval, and implement a corrective action plan consistent with a corrective action plan template developed by the department. The department shall report on the LEA's or public charter school's implementation of the corrective action plan to the joint ad hoc committee, if the committee recommends this corrective action; or
(2) Appoint an inspector general selected by the comptroller of the treasury to audit and investigate the LEA's or public charter school's academic programming and spending. The inspector general must be selected from a list of qualified individuals developed by the state board. The department will be required to report the outcomes of the inspector general's audit and investigation to the joint ad hoc committee, if the committee recommends this corrective action.
This amendment requires the department to apportion the costs of implementing a corrective action between the department and the LEA on a case-by-case basis, subject to the approval of the joint ad hoc committee.
School Positions
This amendment encourages each LEA to fund:
(1) One full-time public school nurse position for each 750 students or one full-time position for each LEA, whichever is greater;
(2) One full-time public school counselor position for each 250 students or one full-time position for each LEA, whichever is greater; and
(3) One full-time response to instruction and intervention position for each 500 students or one full-time position for each LEA, whichever is greater.
Progress Review Board
Beginning July 1, 2023, this amendment creates a progress review board consisting of:
(1) The commissioner of education;
(2) The chair of the state board of education;
(3) Two members appointed by the speaker of the senate; and
(4) Two members appointed by the speaker of the house of representatives.
Members of the progress review board will serve two-year terms.
This amendment requires the board to:
(1) Set an LEA's minimum goal to increase the LEA's third grade student-performance level rating of "on track" or "mastered" on the ELA portion of the TCAP tests by 15 percent of the gap to 70 percent proficient in three years, beginning with the results of the 2022-2023 TCAP tests; provided, that such requirement will not apply to an LEA with 70 percent or more of the third grade students in the LEA achieving a performance level of "on track" or "mastered" on the ELA portion of the TCAP tests;
(2) Annually review each accountability report submitted pursuant to TISA to determine if an LEA is taking the proper steps to achieve the goal established pursuant to (1); and
(3) If, at the end of a three-year period as described in (1), the board verifies that an LEA does not meet a goal established pursuant to (1), then the board must determine if further action is necessary based upon whether the LEA is taking the proper steps to achieve the goal as reviewed pursuant to (2). If the board determines further action is necessary, then the board is required to recommend that the commissioner of education require the LEA to complete training in addition to this amendment's professional development requirements on how to budget to increase student achievement based upon the goal set pursuant to (1). If the board makes such a recommendation, the commissioner will be authorized to require the LEA to complete the additional training.
Other Requirements and Changes
This amendment requires the department to:
(1) By July 1, 2023, and by each July 1 thereafter, create and publish a TISA guide outlining the department's procedures for administering the TISA. The full text of this amendment specifies minimum content requirements for the guide;
(2) Prior to initiating the rulemaking process for rules required to implement the TISA, submit the department's proposed rules to the state board of education. This amendment requires the state board to issue a positive, neutral, or negative recommendation for the rules;
(3) Create or procure, and make available at no cost to participants, a professional development series on the TISA; and
(4) By January 15, 2025, and each January 15 thereafter, deliver a TISA report to the members of the general assembly.
This amendment requires the following individuals to take and pass a training assessment created or procured by the department by June 30, 2024, or within the first year of the individual's term of office or employment, whichever is later:
(1) Directors of schools;
(2) Members and the executive director of the state board;
(3) Members and the executive director of the Tennessee public charter school commission; and
(4) Employees of an LEA, a public charter school, the department, the state board, the Tennessee public charter school commission, or a local legislative body who are responsible for developing the annual education budget.
If state funds available for distribution are insufficient to meet an LEA's TISA allocation for a school year, then the commissioner must apply a pro rata reduction to the amount that each LEA is allocated.
Each LEA must have the opportunity to provide feedback and recommendations regarding the TISA to the department and the comptroller of the treasury, on a template prescribed by the department, by November 1, 2024, and each November 1 thereafter.
This amendment requires the comptroller of the treasury, through the comptroller's office of research and education accountability, to review and study the TISA to determine the effectiveness of state expenditures on K-12 education. By December 31, 2024, the comptroller must report the conclusions of the study and any legislative recommendations to the speakers of the senate and house of representatives and to the members of the education committee of the senate and the education administration committee of the house of representatives.
This amendment authorizes LEAs to use TISA funds for many of the same purposes as BEP funds and grant funds may be used under present law, including, but not limited to, coordinated school health programs, pledging security for bonds, school safety programs, and cooperative innovative high school programs.
The full text of this amendment includes various additional technical changes to present law concerning funding for K-12 public education.
Effective Date
For purposes of promulgating rules, establishing and evaluating the fiscal capacity calculation, determining fiscal capacities, determining equalization values, determining local contributions, creating and publishing the TISA guide, creating or procuring a professional development series on the TISA, and producing accountability reports for the 2023-2024 school year, the provisions of this amendment take effect upon becoming a law. For all other purposes, the provisions of this amendment take effect July 1, 2023.
AMENDMENT #2 adds a requirement that recommendations of the state board of education for proposed categorizations, proposed direct allocation amounts, proposed outcome goals, and proposed rules under this bill must be included in the filing of the rule with the office of the secretary of state.
ON APRIL 27, 2022, THE SENATE SUBSTITUTED HOUSE BILL 2143 FOR SENATE BILL 2396, ADOPTED AMENDMENTS # 1 AND 2, AND PASSED HOUSE BILL 2143, AS AMENDED.
AMENDMENT #1 removes the changes made by House Amendment #2 and makes the following substantive changes to the provisions of House Amendment #1:
(1) Removes the requirement that the three directors of schools appointed to the outcomes advisory group include representatives of urban, suburban, and rural areas;
(2) Makes participation in professional development concerning TISA permissive, removes the requirement that members of local legislative bodies participate in the training, removes the testing requirement concerning the training, and adds a requirement that the department use competitive procurement practices for goods and services to effectuate the training;
(3) Removes the requirement that the goals in each LEA's accountability report establish a goal of 70 percent of the LEA's students in third grade taking the English language arts (ELA) portion of the TCAP tests achieving a performance level rating of "on track" or "mastered" on the ELA portion of the TCAP tests;
(4) Makes author