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Children - As enacted, allows a child care agency to lease or purchase underutilized property from local education agencies; classifies a child care family home as residential property for certain purposes, including zon, the official text

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PUBLIC CHAPTER NO. 276

SENATE BILL NO. 1379

By Watson, Stevens, Akbari, Haile, Lamar, Oliver, Taylor, Yager

Substituted for: House Bill No. 1175

By Williams, Camper, Hardaway, Davis, Hemmer, Lynn, Garringer, Parkinson, White

AN ACT to amend Tennessee Code Annotated, Title 13; Title 49; Title 68 and Title 71, relative to child
          care.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:

          SECTION 1. Tennessee Code Annotated, Section 49-13-136(c)(1), is amended by adding the
language "or child care agencies, as defined in Section 2," after the language "one (1) or more public
charter schools" and by adding the language "or child care agency" after the language "used by a
public charter school".

          SECTION 2. Tennessee Code Annotated, Title 49, Chapter 2, Part 1, is amended by adding
the following as a new section:

(a) As used in this section:

          (1) "Child care agency" means a child care agency as defined in§ 71-3-501
that is licensed to operate in this state by the department of human services;

          (2) "Underutilized property" has the same meaning as defined in § 49-13-104;
and

(3) "Vacant property" has the same meaning as defined in § 49-13-104.

          (b) An LEA in which a child care agency operates shall submit a comprehensive listing
of all underutilized property or vacant property to the department of human services and the
comptroller of the treasury. The department shall make an LEA's list available to each child
care agency operating in the LEA.

          (c) A child care agency may petition the comptroller of the treasury for an audit of the
list of all underutilized property or vacant property submitted by the LEA in which the child care
agency operates. The comptroller of the treasury is authorized to promulgate rules, in
accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, for
the administration of this subsection (c).

(d)(1) A child care agency that is operating in an LEA that does· not have one (1) or
more public charter schools operating within the geographic boundaries of the LEA has
a right of first refusal to: •

          (A) Purchase vacant property listed by the LEA under this section at or
below fair market value for child care purposes; or

(B) Lease underutilized property or vacant property listed by the LEA

under this section at or below fair market value for child care purposes. A lease

agreement executed between a child care agency and an LEA must not reflect

any outstanding bonded debt on the underutilized property or vacant property,

except as agreed upon to reflect any necessary costs associated with the

occupation or remodeling of the agency.             •
SB 1379

                             (2) If one (1) or more public charter schools operate in the LEA in which a
                   ·child care agency also operates, then a child care agency operating in the LEA has a
                   right of second refusal to purchase vacant property or lease underutilized property or
                   vacant property listed by the LEA in the same manner and to the same extent as
                   provided in subdivision (d)(1 ).

                             (3) For purposes of this subsection (d), fair market value for child care
                   purposes is determined by taking the average of two (2) separate appraisals
                   conducted by two (2) independent, qualified appraisers, one (1) selected by the LEA
                   and one (1) selected by the child care agency.

                   (e)(1) Upon the execution of a lease agreement pursuant to this section, the child
                   care agency has unrestricted use of the property; provided, that the property must be
                   used to provide child care services. The child care agency shall provide for routine
                   maintenance and repair so that the leased property is maintained in as good of order
                   as when the lease was executed. The child care agency is responsible for paying all
                   utilities used by the child care agency at the leased property. Extensive repairs to
                   buildings or facilities considered capital expenses are the responsibility of the LEA
                   funding body and not the child care agency. If the owner or operator of the child care
                   agency makes extensive repairs to buildings or facilities considered capital expenses,
                   then the capital expenses must be credited against the cost of the lease. Any fixtures,
                   improvements, or tangible assets added to leased property by the child care agency
                   pursuant to this section must remain at the leased property upon the child care
                   agency's return of the leased property to the LEA.

                             (2) If the LEA decides to sell the school building that a child care agency is
                   leasing, then the child care agency must be provided the right of first refusal to
                   purchase the school building at or below fair market value for child care purposes, as
                   described in subdivision (d)(3), less the value of all rental payments made to the LEA
                   during the term of the lease.

                             (3) If, during the term of the lease, the child care agency closes or ceases
                   using the building, then the building must be placed on the LEA's vacant or
                   underutilized property list pursuant to this section.

                   (f) If, after the purchase of vacant or underutilized property from an LEA pursuant to
          this section, the child care agency closes or ceases using the property, then the LEA has the
          right of first refusal to purchase the property from the child care agency at or below fair
          market value for child care purposes, as described in subdivision (d)(3). This subsection (f)
          does not require a child care agency to sell any property other than the property sold to the
          child care agency by the LEA pursuant to this section, if the LEA elects to exercise its right of
          first refusal.

                   (g) The comptroller of the treasury may promulgate rules, in accordance with the
          Uniform Administrative Procedures Act, compiled in title 4, chapter 5, for the administration of
          this section.

                    (h) This section is not intended to frustrate an LEA's ability to plan for the use of
          underutilized properties or vacant properties owned or operated by the LEA. In any LEA in
          which a child care agency operates, the LEA shall submit each year its plans for the use of
          underutilized or vacant properties owned or operated by the LEA in its annual report to the
          department of human services and the comptroller of the treasury.

          SECTION 3. Tennessee Code Annotated, Section 71-3-501, is amended by adding the
following as a new subdivision:

                    ( ) "Host school" means a public or private school that has a child care agency or
          early learning program operating at the schoo,I, but that is not affiliated with the school;

          SECTION 4. Tennessee Code Annotated, Section 71-3-502(d)(3), is amended by deleting
the subdivision and substituting:

                    (3) If the department determines that any of the criteria in subdivision (d)(2) has not
          been or cannot be met, then it may deny an application for a provisional license. The
          department shall not deny a provisional license under this subdivision (d)(3) if:

                              (A) A host school's fire inspection is sufficient to meet the department's
                    requirements for a provisional license as described in subdivision (d)(2) for a child
                    care agency or early learning program operating at the host school for same age
                    children as in the host school; and

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SB 1379

                              (B) The host school's facilities are sufficient to meet the department's
                    requirements as described in subdivision (d)(2) for a provisional license.
          SECTION 5. Tennessee Code Annotated, Title 71, Chapter 3, Part 5, is amended by adding
the following as a new section:
                    (a) As used in this section:

                              (1) "Child care family home" means a family child care home that is operated
                    in an occupied residential dwelling; and

                              (2) "Local governing authority" means the governing body of the municipality
                    or county where a child care family home is located.
                    (b)(1) Except as required by subdivision (b)(2), a local governing authority shall treat
                    a child care family home as residential property in the application of local regulations,
                    including:

                                        (A) Zoning;
                                        (B) Land use development; and
                                        (C) Sanitation.
                              (2) A local governing authority shall apply the standards adopted by the state
                    fire marshal pursuant to§ 68-120-101 to a child care family home for the following:
                                        (A) Fire and life safety standards; and
                                        (B) Applicable building codes.
                    (c) For zoning purposes, "residential property use" includes single-family residential
          zoning.
                    (d) For a child care family home, a local governing authority shall not impose:
                              (1) Stricter requirements than those established by the division of fire
                    prevention; or
                              (2) Any additional regulations that do not apply to other residential properties.
                    (e) This section does not restrict a local governing authority from managing the flow of
          traffic and parking adjacent to a child care family home.
          SECTION 6. This act takes effect July 1, 2025, the public welfare requiring it.

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         SENATE BILL NO. 1379

PASSED:  April 14, 2025

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                         \                RANDYlncNALLY

                                       SPEAKER OF THE SENATE

                         CAMERONSEXT"ON,SPEAKER
                         HOUSE OF REPRESENTATIVES

Apn"/ APPROVED this_:;2,4-ti.. day of     2025

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                      BILL LEE, GOVERNOR
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