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PUBLIC CHAPTER NO. 1057
SENATE BILL NO. 714
By Taylor, Bowling, Rose
Substituted for: House Bill No. 662
By White, Gillespie, Todd, Cepicky, Leatherwood, Moody, Maberry, Grills
AN ACT to amend Tennessee Code Annotated, Title 4; Title 5; Title 6; Title 7 and Title 49, relative to
education.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Title 49, Chapter 1, Part 6, is amended by adding
the following as a new section:
49-1-616. Educational oversight boards for underperforming school districts.
(a) An educational oversight board, hereinafter referred to as an oversight board,
must be created for an LEA that meets four (4) or more of the following six (6) criteria:
(1) The LEA's proficiency rate:
(A) In mathematics on the most recently administered Tennessee
comprehensive assessment program tests, including end-of-course
examinations, reflects that fifty percent (50%) or more of the students enrolled
in the LEA are not proficient; and
(B) In English language arts on the most recently administered
Tennessee comprehensive assessment program tests, including end-of-
course examinations, reflects that fifty percent (50%) or more of the students
enrolled in the LEA are not proficient;
(2) Twenty-five percent (25%) or more of the schools managed and controlled
by the LEA's local board of education were assigned a "D" or "F" letter grade for the
most recent school year for which letter grades were assigned by the department of
education pursuant to§ 49-1-228;
(3) Twenty-five percent (25%) or more of the students enrolled in the LEA
were chronically absent in the most recent school year. As used in this subdivision
(a)(3), "chronically absent" means that a student has been absent from school for ten
percent (10%) or more of the school year;
(4) At least one (1) school managed and controlled by the LEA's local board of
education was identified as a priority school or maintained a priority school
designation for each of the immediately preceding five (5) years;
(5) The commissioner of education determines that the findings of an audit
conducted, initiated, or directed by the comptroller of the treasury for the LEA show
deficiencies in the management, accounting, or internal controls of the LEA, or
instances of fraud, waste, abuse, or financial mismanagement, including, but not
limited to, the mismanagement of financial records; and
(6) The commissioner of education determines that the local board of
education for the LEA has employed more than two (2) directors of schools on an
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interim basis in the immediately preceding four (4) years, resulting in inconsistent
district leadership and operational instability for the LEA.
(b) If an LEA meets four (4) or more of the six (6) criteria in subsection (a), then the
commissioner of education shall notify, in writing, the LEA's local board of education, the
governor, the speaker of the senate, and the speaker of the house of representatives that an
oversight board must be appointed for the LEA. An oversight board must be established for
the LEA pursuant to this section no later than July 1 following the date of the commissioner's
written notice.
(c)(1) An oversight board consists of the following nine (9) members:
(A) Five (5) members appointed by the governor, each of whom must
reside in the county in which the LEA is located;
(B) Two (2) members appointed by the speaker of the house of
representatives, one (1) of whom must reside in the county in which the LEA
is located and one (1) of whom must be a resident of this state who may or
may not reside in the county in which the LEA is located; and
(C) Two (2) members appointed by the speaker of the senate, each of
whom must reside in the county in which the LEA is located.
(2) A vacancy created on an oversight board must be filled by the respective
appointing authority, and the member appointed to fill the vacancy serves until the
oversight board terminates.
(3) Members of an oversight board:
(A) May be removed from the oversight board by the member's
appointing authority at any time for any reason; and
(B) Must be compensated in the same manner as members of the
LEA's local board of education are compensated.
(4) The governor shall call the first meeting of the oversight board, at which
time the members of the oversight board shall elect from its membership a chair, vice
chair, and any other officers deemed necessary.
(d)(1)
(A)(i) An oversight board shall operate in the LEA for four (4) years
beginning on July 1 following tlie date of the commissioner's written
notice for the LEA pursuant to subsection (b). It is the intent of the
general assembly that an oversight board operate in the respective
LEA for four (4) consecutive years.
(ii) If, for any reason, an oversight board is enjoined, stayed, or
otherwise barred from operating in the LEA by a court of competent
jurisdiction, then, upon the expiration or lifting of any injunction or order
barring the operation of the oversight board in the LEA, the oversight
board shall operate in the LEA for the full four-year period described in
subdivision (d)(1)(A)(i).
(B) If the LEA continues to meet four (4) or more of the six (6) criteria
in subsection (a) at the end of the four-year period described in subdivision
(d)(1)(A), then the oversight board must be vacated, and the appointing
authorities shall appoint nine (9) new members to serve as the oversight
board for the LEA for the two (2) consecutive years immediately following the
four-year period described in subdivision (d)(1 )(A).
(2) An oversight board:
(A) Shall comply with the open meetings law, compiled in title 8,
chapter 44, and the public records law, compiled in title 10, chapter 7;
(B) May hold meetings in facilities owned or operated by the LEA;
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(C) May conduct meetings, including executive committee or
subcommittee meetings, electronically or allow one (1) or more members to
participate in meetings electronically.
(3) The chair of the oversight board may appoint from among the members of
the oversight board an executive committee or subcommittee that has the power to
act on behalf of the oversight board.
(4) A majority of the members of the oversight board constitutes a quorum. A
majority of the members appointed to serve on any executive committee or
subcommittee appointed by the chair of the oversight board pursuant to subdivision
(d)(3) constitutes a quorum thereof.
(5) An oversight board may hire up to three (3) staff members to assist the
oversight board or may reassign one (1) or more employees of the LEA's central
office to assist the oversight board, or both. The oversight board shall determine the
amount of the salary or compensation paid to each staff member employed or
reassigned to assist the oversight board. Staff members employed or reassigned to
assist the oversight board must be compensated in the same manner as other LEA
employees are compensated.
(6) An oversight board shall annually conduct a comprehensive needs
assessment of the LEA to determine the factors that may be contributing to the LEA
meeting four (4) or more of the six (6) criteria in subsection (a). In conducting each
comprehensive needs assessment, the oversight board shall:
(A) Identify the number of teachers employed by the LEA who:
(i) Teach a course or grade level for which the teacher holds
the required educator license or endorsement;
(ii) Hold an emergency teaching credential issued by the
department of education or state board of education; and
(iii) Have three (3) or more years of teaching experience;
(B) Calculate, from the total number of teachers and principals
employed by the LEA, the number who earned a level of overall effectiveness
score on their most recent annual evaluation conducted pursuant to § 49-1-
302 in each of the following categories:
(i) Significantly below expectations;
(ii) Below expectations;
(iii) At expectations;
(iv) Above expectations; and
(v) Significantly above expectations;
(C) Determine the teacher retention rate for the LEA;
(D) Ascertain whether the LEA is complying with the maximum class
size and average class size requirements in§ 49-1-104, including the number
of any maximum· class size or average class size waivers approved for the
LEA by the commissioner;
(E) Evaluate the quality, quantity, format, availability, and
appropriateness of the textbooks, instructional materials, supplemental
instructional materials, and curricula selected for, and used in, the public
schools managed and controlled by the LEA's local board of education;
(F) Identify the parental involvement strategies, if any, utilized by the
LEA and the effectiveness of any such strategies;
(G) Evaluate the capacity, quality, and effectiveness of the mentoring
program provided by the LEA for:
(i) Newly licensed teachers; and
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(ii) Experienced teachers who have less than two (2) years of
experience teaching the subject area or grade level for which the
teacher is assigned;
(H) Examine the professional development opportunities made
available for, and those provided to, teachers employed by the LEA;
(I) Conduct a demographic analysis of the student population served
by the LEA, including all at-risk and special education populations;
(J) Review all available information related to student and teacher
disciplinary incidents, issues, reports, and complaints, as well as all school-
safety-related issues, incidents, and threats;
(K) Review all financial statements and accounting practices;
(L) Examine the needs, costs, and usage of all buildings and facilities
owned or operated by the LEA, including all maintenance needs;
(M) Review all employment contracts to which the LEA or the local
board of education is a party;
(N) Identify any grant opportunities available to the LEA that may serve
to improve areas of insufficient performance; and
(0) Review any other information, records, statistics, policies, and
practices that the oversight board deems relevant to identifying areas of
insufficient performance or mismanagement for the LEA. The LEA's local
board of education and each school managed and controlled by the LEA's
local board of education shall provide the oversight board with any and all
information requested by the oversight board within sixty (60) days of the
request.
(7) Based on the findings of a comprehensive needs assessment, the
oversight board shall develop a transformation plan that identifies performance and
operational goals for the LEA, benchmarks for assessing the LEA's progress toward
meeting such goals, and that is designed, at a minimum, to:
(A) Optimize the education funding available to the LEA, including
TISA funding, federal and state grant funding, and local funding;
(B) Provide greater opportunities for students to complete workforce
credentials and career and technical education programs;
(C) Lower the chronic absenteeism rate for the LEA;
(D) Improve or expand early childhood literacy opportunities;
(E) Identify student supports to improve academic outcomes; and
(F) Remediate any deficiencies in the management, accounting,
information technology, or internal controls of the LEA and to remediate any
fraud, waste, abuse, or financial mismanagement in the LEA, including, but
not limited to, any mismanagement of financial records.
(8) The oversight board shall annually review and update the transformation
plan for the LEA developed pursuant to subdivision (d)(7).
(9) The oversight board may contract with a third party for the third party to
conduct a comprehensive needs assessment required in subdivision (d)(6) or to
develop or update a transformation plan for the LEA.
(10) An oversight board may perform a duty or take an action directed or
authorized in this section before the oversight board conducts or completes a
comprehensive needs assessment or. develops a transformation plan.
(11) If one (1) or more members of the oversight board suspect that a member
of the LEA's local board of education, the director of schools, or any other
administrator, employee, contractor, or agent of the LEA has committed an act or
omission in the performance of the duties of their office or position of employment
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with the LEA that, if substantiated, constitutes a state or federal offense, then the act
or omission must be reported to the appropriate federal, state, or local law
enforcement agency; the district attorney general; the United States attorney, if
applicable; and the comptroller of the treasury, if the act or omission involves the use
or misuse of public funds.
(12) An oversight board shall submit an annual progress report to the
governor; the speaker of the senate; the speaker of the house of representatives; the
commissioner of education; the local legislative body for the city or county that serves
as the local funding body for the LEA, if applicable; the senate education committee;
and the committee of the house of representatives having jurisdiction over
kindergarten through grade twelve (K-12) education regarding the progress made by
the LEA toward improving the academic performance of its student population;
implementing one (1) or more of the performance or operational goals identified in its
transformation plan; and addressing one (1) or more of the findings of the most recent
comprehensive needs assessment that the oversight board has determined to be a
contributing factor to the LEA meeting four (4) or more of the six (6) criteria in
subsection (a).
(e) Notwithstanding another law to the contrary:
(1)(A) The local board of education for an LEA for which an oversight board is
operating shall submit the proposed budget for the LEA, including any
proposed budget amendments, to the oversight board for approval before the
item may be submitted to the local legislative body for adoption or, for a
special school district, to its local board of education for adoption. The
oversight board shall establish the timeline and process by which the
proposed budget and any proposed budget amendments must be submitted
to the oversight board for approval;
(8) The oversight board shall review the proposed budget or budget
amendment and may veto the proposed budget or budget amendment as a
whole or may veto one (1) or more line items in the proposed budget or
budget amendment;
(C) If the oversight board vetoes the proposed budget or budget
amendment, then .the local board of education shall revise the proposed
budget or budget amendment as directed by the oversight board and shall
resubmit the item to the oversight board for approval;
(D) If the local board of education fails to submit the proposed budget
or budget amendment to the oversight board for approval in accordance with
the timeline and process established by the oversight board, or fails to revise
the proposed budget or budget amendment as directed by the oversight
board, then the oversight board shall submit the budget or budget amendment
to the local legislative body for adoption or, for a special school district, to the
local board of education for adoption. The local board of education for a
special school district must adopt the budget or budget amendment adopted
for the special school district by the oversight board;
(E) If the oversight board does not veto the proposed budget or budget
amendment in whole or in part or notify, in writing, the local board of education
that the proposed budget or budget amendment requires further review within
fifteen (15) business days from the date on which the proposed budget or
budget amendment is submitted to the oversight board for approval, then the
proposed budget or budget amendment is deemed to be approved by the
oversight board and may be submitted to the local legislative body for
adoption or, for a special school district, adopted by the local board of
education;
(F) A local legislative body shall not adopt a budget or budget
amendment for an LEA for which an oversight board is operating unless:
(i) The chair of the local board of education certifies, in writing,
to the local legislative body that:
(a) The budget or budget amendment was submitted to
the oversight board ·and has been approved for submission to
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the local legislative body in accordance with this subdivision
(e)(1 ); or
(b) The budget or budget amendment was submitted to
the oversight board for approval, that the budget or budget
amendment was not vetoed by the oversight board in whole or
in part within fifteen (15) business days from the date on which
it was submitted to the oversight board for approval, and that
the oversight board did not notify the local board of education
during that same fifteen-day period that the budget or budget
amendment required further review by the oversight board; or
(ii) The oversight board certifies to the local legislative body
that the local board of education failed to submit the proposed budget
or budget amendment to the oversight board for approval in
accordance with the timeline and process established by the oversight
board and that the proposed budget or budget amendment submitted
to the local legislative body was adopted by the oversight board
pursuant to subdivision (e)(1)(D); and
(G) If the local legislative body rejects the proposed budget or a
proposed budget amendment submitted for adoption by the local board of
education or the oversight board pursuant to this subdivision (e)(1 ), then the
rejected budget or budget amendment must be returned to the oversight
board, and the oversight board shall revise the budget or budget amendment
as necessary and resubmit the budget or budget amendment for the LEA to
the local legislative body for adoption;
(2)(A) The local board of education for an LEA for which an oversight board is
operating shall not:
(i) Enter into, renew, or amend any contract with a total value of
fifty thousand dollars ($50,000) or more unless the contract is
approved by the oversight board; or
(ii) Authorize any purchase or make any expenditure that is not
being made pursuant to the terms of a contract with the LEA that was
entered into, renewed, or amended prior to the effective date of this
act, or pursuant to the terms of a contract approved by the oversight
board pursuant to this subdivision (e)(2), with a value of fifty thousand
dollars ($50,000) or more unless the purchase or expenditure is
approved by the oversight board;
(B) The oversight board shall establish the timeline and process by
which a proposed contract, contract renewal, contract amendment, purchase,
or expenditure described in subdivision (e)(2)(A) must be submitted to the
oversight board for approval;
(C) If the local board of education submits a proposed contract,
contract renewal, contract amendment, purchase, or expenditure to the
oversight board for approval and the oversight board does not notify the local
board of education within fifteen (15) business days from the date on which
the item was submitted to the oversight board for approval that the contract,
contract renewal, contract amendment, purchase, or expenditure requires
further review or that its approval has been denied by the oversight board,
then the item is deemed to be approved by the oversight board;
(D)(i) The chair of the local board of education shall certify, in writing,
to any individual or entity with which the local board of education
enters into, renews, or amends a contract for which approval of the
oversight board is required pursuant to this subdivision (e)(2) that:
(a) The contract, contract renewal, or contract
amendment was submitted to the oversight board and has
been approved by the oversight board; or
.. (b) The contract, contract renewal, or contract
amendment was submitted to the oversight board for approval;
that the contract, contract renewal, or contract amendment was
not denied approval by the oversight board, in whole or in part,
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within fifteen (15) business days from the date on which it was
submitted to the oversight board for approval; and that the
oversight board did not notify the local board of education
during that same fifteen-day period that the contract, contract
renewal, or contract amendment required further review by the
oversight board;
(ii) A contract, contract renewal, or contract amendment
executed on or after the effective date of this act by and between an
individual or entity and the local board of education for an LEA for
which an oversight board is operating is not legally enforceable in this
state if the chair of the local board of education did not issue the
certification required in subdivision (e)(2)(D)(i) before the contract,
contract renewal, or contract amendment was executed, or if the chair
issued a fraudulent or misleading certification; and
(iii) If the oversight board approves, or is deemed to have
approved, a contract, contract renewal, contract amendment,
purchase, or expenditure, then the local board of education may
proceed with the contract, contract renewal, contract amendment,
purchase, or expenditure in accordance with all applicable
procurement laws, rules, and policies;
(E) The local board of education for an LEA for which an oversight
board is operating shall report to the oversight board each contract, contract
renewal, or contract amendment executed by and between any individual or
entity and the local board of education with a total value of less than fifty
thousand dollars ($50,000) that was not submitted to the oversight board for
approval pursuant to this subdivision (e)(2). The oversight board shall
establish the timeline and process by which the local board of education must
submit the report required in this subdivision (e)(2)(E); and
(F) For purposes of this subdivision (e)(2):
(i) "Contract" does not include an employment contract for a
teacher or school principal, but does include an employment contract
for a director of schools and for all other current or prospective
employees of the LEA, including, but not limited to, current or
prospective employees of the LEA's central office; and
(ii) "Expenditure" does not include the salaries or benefits paid
to a teacher or school principal, but does include the salary, benefits,
and any other contract or employment-related expenses for a director
of schools and for all other employees of the LEA, including, but not
limited to, employees of the LEA's central office;
(3)(A) The local board of education for an LEA for which an oversight board is
operating shall, if applicable, submit the comprehensive listing of all
underutilized property or vacant property required in § 49-13-136(c)(2) to the
oversight board for approval. The oversight board shall establish the timeline
and process by which the local board of education must submit its
comprehensive listing of all underutilized property or vacant property to the
oversight board for approval;
(B) The oversight board shall review the proposed list and may revise
the list as the oversight board deems necessary to accurately reflect the
underutilized prop_erty or vacant property in the LEA that is available for use by
a public charter school operating in the LEA;
(C) The local board of education shall submit to the department of
education and comptroller of the treasury the comprehensive listing of all
underutilized property or vacant property approved by the oversight board,
including any underutilized property or vacant property that may have been
added to the list by the oversight board;
(D) If the local board of education fails to submit the comprehensive
listing of all underutilized property or vacant property to the oversight board for
approval in accordance with the timeline and process established by the
oversight board, or fails to include on the list any underutilized property or
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vacant property added to the list by the oversight board, then the oversight
board shall submit the comprehensive listing of all underutilized property or
vacant property for the LEA to the department of education and the
comptroller of the treasury; and
(E) The department of education and the comptroller of the treasury
shall not accept a comprehensive listing of all underutilized property or vacant
property required pursuant to § 49-13-136(c)(2) for an LEA for which an
oversight board is operating unless:
(i) The chair of the local board of education certifies, in writing,
to the department and comptroller that the list was submitted to the
oversight board for approval, that the list includes any underutilized
property or vacant property that was added to the list by the oversight
board, and that the comprehensive listing of all underutilized property
or vacant property .submitted to the department and comptroller has
been approved by the oversight board for submission to the
department and comptroller in accordance with this subdivision (e)(3);
or
(ii) The oversight board certifies, in writing, to the department
and comptroller that the local board of education failed to submit the
list to the oversight board for approval in accordance with the timeline
and process established by the .oversight board, or failed to include in
the comprehensive listing all underutilized property or vacant property
added to the list by the oversight board, and that the comprehensive
listing of all underutilized property or vacant property was adopted by
the oversight board for the LEA pursuant to subdivision (e)(3)(D);
(4)(A) The local board of education for an LEA for which an oversight board is
operating shall not deny an amended application to open a new public charter
school, an application to convert an existing public school to a public charter
school, an application to renew the charter agreement of a public charter
school, or a petition to amend the charter agreement of a public charter school
submitted to the local board of education unless the oversight board has
approved the local board of education's decision to deny the application or
petition;
(B) The local board of education shall submit an application or petition
described in subdivision (e)(4)(A) that the local board of education seeks to
deny to the oversight board for review along with the grounds upon which the
local board of education is basing its decision to deny the application or
petition. The oversight board shall establish the timeline and process by which
an application or petition that the local board of education seeks to deny must
be submitted to the oversight board for review; provided, that the timeline and
process established by the oversight board must, at a minimum, require the
local board of education to submit such an application or petition to the
oversight board for review no later than fifteen (15) business days before the
local board of education is required to issue a final decision to deny the
application or petition pursuant to chapter 13 of this title;
(C)(i) If the oversight board approves the local board of education's
decision to deny an application or petition described in subdivision
(e)(4)(A), then the local board of education may issue a final decision,
ruling, or resolution denying the application or petition; and
(ii) This subdivision {e)(4)(C) does not prevent a sponsor or
governing body, as those terms are defined in § 49-13-104, from
appealing the denial to the Tennessee public charter school
commission in accordance with chapter 13 of this title; and
(D) If the oversight board disagrees with the local board of education's
decision to deny an application or petition described in subdivision (e)(4)(A),
then the local board of education shall issue a final decision, ruling, or
resolution approving the application or petition; and
(5)(A)
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(i) An oversight board may require the LEA's local board of
education to take a discretionary action within the local board of
education's authority, or prohibit the local board of education from
taking a discretionary action within the local board of education's
authority, if the oversight board determines that the action or inaction is
necessary to improve the LEA's performance, operation, or
management;
(ii) The local board of education shall take any discretionary
action required by the oversight board pursuant to this subdivision
(e)(S)(A). If the local board of education fails or refuses to take a
discretionary action required by the oversight board, then the oversight
board may take the action on behalf of the local board of education.
The local board of education shall not take any action prohibited by the
oversight board pursuant to this subdivision (e)(S)(A); and
(iii) For purposes of this subdivision (e)(S)(A):
(a) "Authority" includes all powers and duties of a local
board of education authorized and established in state law and
in any applicable private act or charter; and
(b) "Discretionary action" includes any formal or
informal decision or. action that may be taken by a local board
of education pursuant. to its authority for which the local board
of education may exercise its judgment, including, but not
limited to, the scope and content of policies adopted by the
local board of education, as well as any formal or informal
decision or action to open, close, or consolidate one (1) or
more schools under the jurisdiction of the local board of
education;
(B)(i) An oversight board may require the LEA's director of schools to
take a discretionary action within the director's authority, or prohibit the
director from taking a discretionary action within the director's
authority, if the oversight board determines that the action or inaction is
necessary to improve the LEA's performance, operation, or
management;
(ii) The director of schools shall take any discretionary action
required by the oversight board pursuant to this subdivision (e)(5)(8).
The director shall not take any discretionary action prohibited by the
oversight board pursuant to this subdivision (e)(S)(B). If the director
fails or refuses to take an action required by the oversight board, or
takes an action prohibited by the oversight board, then the director's
employment with the LEA may be terminated by the oversight board
and the termination is deemed to be a termination for cause; and
(iii) For purposes of this subdivision (e)(5)(8):
(a) "Authority" includes all powers and duties of a
director of schools authorized and established in state law and
in any applicable private act or charter; and
(b) "Discretionary action" includes any formal or
informal decision or action that may be taken by the director of
schools pursuant to the director's authority for which the
director may exercise the director's judgment; and
(C)(i)
(a) Subject to .subdivision (e)(S)(C)(i)(b), an oversight
board may terminate, with or without cause, the employment of
any LEA employee, including the director of schools, on behalf
of the LEA or local boar,d of education, regardless of whether
the employee is employed at will or under a contract of
employment; and
(b) An oversight board shall not:
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(1) Terminate the employment· of an LEA
employee who is employed under a contract of
employment in a manner that violates the express terms
of the contract. The oversight board may exercise, on
behalf of the LEA or local board of education, the rights
of the LEA or local board of education under the terms
of the contract to terminate the employment of the LEA
employee, with or without cause; or
(2) Terminate the employment of a tenured
teacher or tenured principal without first providing the
teacher or principal with due process in accordance with
chapter 5, part 5 of this title. The oversight board may
initiate, on behalf of the LEA or local board of education,
the process required to terminate a tenured teacher or
principal if grounds for their termination exist under §
49-5-511;
(ii) An oversight board may terminate an LEA employee,
including the director of schools, for cause, including, but not limited to,
one (1) or more of the causes for termination described in this
subdivision (e)(5)(C)(ii). A termination is deemed to be a termination
for cause if the oversight board terminates the LEA employee,
including the director of schools, for:
(a) Failing or refusing to comply with a directive of the
oversight board issued in accordance with this section,
including a directive issued by the oversight board pursuant to
subdivision (e)(5)(8), if applicable;
(b) Causing or contributing to one (1) or more
deficiencies in the management, accounting, or internal
controls of the LEA, or for causing or contributing to any fraud,
waste, abuse, or financial mismanagement, including any
mismanagement of financial records; or
(c) Having been negligent or derelict in the performance
of their duties such that the oversight board may reasonably
conclude that the negligence or dereliction of duty caused or
contributed to the LEA meeting four (4) or more of the six (6)
criteria in subsection (a);
(iii)(a) Subject to subdivision (e)(5)(C)(iii)(b), an LEA employee,
including the director of schools, who is employed by the LEA
or local board of education under a contract of employment and
whose employment is terminated by the oversight board for
cause pursuant to this subdivision (e)(5)(C), forfeits all
compensation due under the terms of the contract of
employment with the LEA or local board of education beginning
on the date of their termination, including any compensation
payable only on ,their separation from employment. The
terminated LEA employee may be compensated for any actual
services performed before the date of their termination; and
(b) An oversight board shall not deny payment of
compensation due to a terminated LEA employee, including the
director of schools, under the terms of their contract of
employment, if denying the compensation would violate the
express terms of the contract. The oversight board may
exercise, on behalf of the LEA or local board of education, the
rights of the LEA or local board of educ~tion. under the terms of
the contract to deny payment of compensation due to the
terminated LEA employee beginning on the date of their
termination, including any compensation payable only on their
separation from employment; and
(iv)(a) The oversight board shall select and employ, on behalf
of the LEA or local board of education, a qualified individual to
fill a position vacated by an LEA employee whose employment
10
SB 714
was terminated by the oversight board pursuant to this
subdivision (e)(S)(C), and may enter into a contract of
employment with the individual on behalf of the LEA or local
board of education to do so;
(b) Except as provided in subdivision (e)(S)(C)(iv)(c),
subdivision (e)(S)(C)(iv)(a) does not require an oversight board
to fill a vacated position if the oversight board determines that
the position is redundant or unnecessary for the efficient
operation of the LEA; and
(c) If the oversight board terminates the employment of
the director of schools, then the oversight board shall select
and employ a director of schools on behalf of the LEA or local
board of education under a written contract of up to four (4)
years' duration, which may be renewed in the same manner as
if the local board of education selected and employed the
director of schools. A director of schools employed by an
oversight board has the same powers and duties as a director
of schools employed by a local board pursuant to § 49-2-203.
(f)(1) There is created a special account in the state treasury to be administered by
the department of education and to be known as the educational oversight board
reserve fund, hereinafter referred to as the fund. It is the intent of the general
assembly that a nonrecurring appropriation in an amount of no less than five hundred
thousand dollars ($500,000) and no more than one million dollars ($1,000,000) be
appropriated for the fund for the 2026-2027 fiscal year.
(2) Upon application by an oversight board created pursuant to this section,
and for good cause shown, the department may disburse moneys in the fund to the
oversight board to be used for any purpose necessary or attendant to the operation of
the oversight board in furtherance of this section.
(3) Any amounts remaining in the fund at the end of a fiscal year must not
revert to the general fund, but must be carried forward into the subsequent fiscal year
and remain available for use by an oversight board.
(g) The local board of education for an LEA for which an oversight board is operating
pursuant to this section is not authorized to assert a cause of action, intervene in any cause
of action, or provide funding for any cause of action challenging any action taken by an
oversight board pursuant to, and in accordance with, this section.
SECTION 2. If any provision of this act or the application of any provision of this act to any
person or circumstance is held invalid, the invalidity does not affect other provisions or applications
of the act that can be given effect without the invalid provision or application, and to that end, the
provisions of this act are severable.
SECTION 3. The heading in this act is for reference purposes only and does not constitute a
part of the law enacted by this act. However, the Tennessee Code Commission is requested to
include the heading in any compilation or publication containing this act.
SECTION 4. This act takes effect upon becoming a law, the public welfare requiring it.
11
SENATE BILL NO. 714
PASSED: April 22, 2026
RANDY'40cNALLY
SPEAKER OF THE"sENA TE
CAMERON SEXTON, SPEAKER
HOUSE OF REPRESENTATIVES
JJ APPROVED this .,,,J. day of {VJ! 2026
&;,, ~ ~
BILL LEc,GOVERNOREvery fact on this page links to its source, starting with the official bill record.