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~tate of ~ennessee
PUBLIC CHAPTER NO. 1007
HOUSE BILL NO. 2121
By Representatives Williams, Reneau
Substituted for: Senate Bill No. 2072
By Senators Watson, Stevens, Gardenhire, Haile, Lowe
AN ACT to amend Tennessee Code Annotated, Title 4; Title 8; Title 49 and Title 67,
relative to education.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. This act is known and may be cited as the "Better Spending, Better Schools
Act of 2026."
SECTION 2. Tennessee Code Annotated, Title 49, Chapter 3, Part 1, is amended by
adding the following as a new section:
(a) Each LEA and public charter school shall submit to the office of research and
education accountability (OREA) in the office of the comptroller of the treasury and to the
department of education by August 1 each year:
(1) A planning and budgetary report for the upcoming school year; and
(2) An expenditure report for the immediately preceding school year.
(b) The department shall develop the standardized forms that must be used by
each LEA and public charter school to comply with the requirements of subsection (a).
(c) The standardized form developed by the department for purposes of
subdivision (a)(1) must require each LEA and public charter school to provide the
following information on its planning and budgetary report:
(1) The budget adopted by local legislative body for the LEA or by the
governing body of the public charter school for the upcoming school year;
(2) Revenue estimates for the LEA or public charter school for the
upcoming school year, disaggregated by the type and source of all estimated
revenue, design·ating whether the estimated revenue source is local, state, or
federal and whether the estimated revenue is recurring or nonrecurring; and
(3) Projected expenditures by the LEA or public charter school for the
upcoming school year in each of the categories identified in subdivision (d)(1),
disaggregated by the type and source of the estimated revenue projected by the
LEA or public charter school to be used for such purposes, designating whether
the estimated revenue source is local, state, or federal and whether the
estimated revenue is recurring or nonrecurring..
(d)
(1) The standardized form developed by the department for purposes of
subdivision (a)(2) must require each LEA and public charter school report
expenditures made by the LEA or public charter school in the immediately
preceding school year in each of the following categories:
(A) Instructional costs, including, but not limited to, the cost of any
instructional materials, equipment, technology, or software purchased by
the LEA or public charter school that directly supports instruction;
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(8) Personnel costs, including, but not limited to, the salaries,
benefits, and other compensation paid and provided to classroom
teachers, instructional aides, principals, assistant principals, instructional
leaders, other school administrators, administrative office staff, the
director of schools, and central office staff, as applicable;
(C) Student support service costs, including, but not limited to,
counseling services, mental health services, services provided by social
workers, and all other costs associated with providing student well-being
supports, services, programs, or resources;
(D) School administrative costs, including, but not limited to, the
costs associated with the administrative office operations at each school
in the LEA or at the public charter school, as applicable;
(E) District administrative costs, if applicable, including, but not
limited to, any costs or expenses of the local board of education, and the
costs associated with all other administrative office operations;
(F) Operation and maintenance costs, including, but not limited to,
the costs of operating, maintaining, and updating facilities and utilities,
and the costs of providing school security, custodial services, and any
costs associated with providing student transportation;
(G) Professional development costs, including, but not limited to,
trainings, workshops, and certification programs for educators and staff;
and
(H) Expenditures made using direct allocations to the LEA or
public charter school, including, but not limited to, the costs of providing
literacy services and programs for students in any of the grades
kindergarten through three (K-3), tutoring services for fourth-grade
students, career and technical education, postsecondary readiness
assessments, and public charter school facilities.
(2) The information reported by an LEA or public charter school in each of
the categories listed in subdivision (d)(1) must be disaggregated by the type and
source of the revenue used for each reported expenditure, designating for each
expenditure whether the revenue source is local, state, or federal and whether
the revenue is recurring or nonrecurring.
(3) The standardized form developed by the department for purposes of
subdivision (a)(2) must also require each LEA and public charter school to report:
(A) The total amount of all grants received by the LEA or public
charter school in the immediately preceding school year, disaggregated
by the type and source of each grant received, designating for each grant
whether it was provided by the federal, state, or a local government, or by
a private third party or other charitable organization or association, and
whether the grant is available to, and will be applied for or pursued by, the
LEA or public charter school in the upcoming school year; and
(8) The total amount of all reimbursements received by the LEA or
public charter school in the immediately preceding school year, including,
but not limited to, reimbursements received through the state medicaid
program, disaggregated by the type and source of each reimbursement
received, designating for each reimbursement whether it was provided by
the federal, state, or a local government, or by a private third party or
other charitable organization or association, and whether the
reimbursement is available to, and will be applied for or pursued by, the
LEA or public charter school in the upcoming school year.
(e) The department shall make the reports submitted by each LEA and public
charter school pursuant to this section publicly available by posting the reports on the
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state report card. The reports submitted pursuant to this section must be included on the
state report card for each LEA and public charter school for no less than two (2)
consecutive school years. The department shall also include on the state report card:
(1) The total amount of state funds appropriated to each LEA and public
charter school through the TISA, as well as the required local contribution for the
respective school year; and
(2) The total indebtedness of the LEA or public charter school as of the
last school day of the respective school year, disaggregated by the type, term,
and purpose of each debt obligation. For purposes of this subdivision (e)(2), the
total indebtedness of an LEA or public charter school includes, but is not limited
to, any outstanding bonds issued the local governing body that serves as the
local funding body for the LEA or public charter school, as well as all loans,
lease-purchase agreements, and any other debt instruments executed by, or on
behalf of, the LEA or public charter school.
(f) The department shall, by policy, establish reporting standards, define data
categories for reporting purposes, provide technical assistance to LEAs and public
charter schools, and establish submission procedures and timelines for consistent,
efficient, and accurate reporting for purposes of this section. Notwithstanding title 4,
chapter 5 to the contrary, neither the department nor the state board of education is
required to promulgate rules to comply with the requirements of this subsection (f).
SECTION 3. For purposes of developing and adopting policies, this act takes effect upon
becoming a law, the public welfare requiring it. For all other purposes, this act takes effect
October 1, 2026, the public welfare requiring it.
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HOUSE BILL NO. 2121
PASSED: April 22, 2026
CAMERO~XTON,SPEAKER
HOUSE OF REPRESENTATIVES
RANDY MCNALL
AKER OF THE SENAT
APPROVED this \Ci\d. day of Mc, v~ 2026
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