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Tennessee General Assembly· SB 2062Sponsor(s) Added.

Human Services, Dept. of - As enacted, enacts the "Promising Futures Act." - Amends TCA Title 4; Title 43; Title 49; Title 57; Title 67 and Title 71. Companion bill has been assigned Public Chapter Number 997 by the Secr, the official text

Shown verbatim: the complete text as captured from the official PDF posted by the Tennessee General Assembly, fetched 2026-09-25. Page and line markers are part of the official record; nothing is edited or removed. This is the chaptered version. The official bill page.
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                        ~tate of ~ennessee

                          PUBLIC CHAPTER NO. 997

                                                  HOUSE BILL NO. 1979

                                  By Representatives White, Cepicky, Wright

                                       Substituted for: Senate Bill No. 2062

By Senators Watson, Massey, Lamar, Haile, Yarbro, Akbari, Bailey, Crowe, Hensley, Kyle,
                                 Oliver, Reeves, Rose, Stevens, Walley, White

          AN ACT to amend Tennessee Code Annotated, Title 4; Title 43; Title 49; Title 57; Title
67 and Title 71, relative to child care.

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

          SECTION 1. Tennessee Code Annotated, Title 71, Chapter 1, is amended by adding the
following as a new part:

          71-1-301. Short title.

                    This part is known and may be cited as the "Promising Futures Act."

          71-1-302. Findings and purpose.

                    (a) The general assembly finds that:

                              (1) Access to affordable, reliable child care is essential to workforce
                    participation, economic stability for working families, and the long-term well-being
                    of children;

                              (2) Employers across multiple sectors in this state report that the lack of
                    available and affordable child care is a significant barrier to employee recruitment
                    and retention;

                              (3) The child care workforce experiences persistent shortages and high
                    turnover, in part due to the cost of child care for workers with young children; and

                              (4) Strategic, targeted investments in child care assistance can
                    strengthen the workforce, support employers, and promote economic growth.

                    (b) The purpose of this part is to establish the promising futures fund to support
          pilot programs and targeted child care assistance initiatives that:

                              (1) Strengthen and stabilize this state's child care workforce;

                              (2) Support employer participation in shared child care cost models;

                              (3) Expand access to child care for working families who are ineligible for
                    existing subsidy programs; and

                              (4) Provide accountability, transparency, and data-driven evaluation to
                    inform future programming and policy decisions.

          71-1-303. Part definitions.

                    As used in this part, unless the context otherwise requires:

                              (1) "Department" means the department of human services;
HB1979

                             (2) "Eligible child care provider" means a child care provider licensed by
                   the department of human services or certified by the department of education to
                    provide child care services in this state;

                              (3) "Fund" means the promising futures fund created in this part and
                    described in § 67-6-205(d)(4)(C);

                              (4) "State median income" means the most recent estimate of the median
                    household income for residents of this state, as determined by the United States
                    census bureau, adjusted for family size; and

                              (5) "Third-party administrator" means a private entity under contract with
                   the department to administer a program authorized in this part.

         71-1-304. Promising futures fund - Revenue dedication.

                    (a) There is created in the state treasury a special fund to be known as the
          promising futures fund, hereinafter referred to as the fund. The fund created by this
         subsection (a) is the same fund described in§ 67-6-205(d)(4)(C).

                    (b) The fund consists of:

                              (1) Any amounts credited to the fund pursuant to§ 67-6-205(d)(4)(C);

                              (2) Moneys specifically appropriated to the fund by the general assembly;

                              (3) Any federal funds, grants, gifts, or donations received by the
                    department for purposes consistent with this part; and

                              (4) Any other moneys authorized by law to be deposited into the fund.

                    (c) Moneys in the fund must be used solely for the purposes authorized in this
         part and used as funds are available, subject to appropriation by the general assembly.

                    (d) Notwithstanding § 9-4-205 or another law to the contrary, interest earned on
         moneys in the fund must be credited to and remain in the fund. Any moneys in the fund
          remaining unexpended at the end of any fiscal year do not revert to the general fund.

                   (e) From any amounts credited to the fund, the department may retain and use
          up to ten percent (10%) of the fund balance for administrative purposes and to
         implement, operate, oversee, evaluate, and report on the programs created in this part,
         including payments to third-party administrators or vendors. Any amounts used by the
         department pursuant to this subsection (e) are separate from, and may not be used for,
         the regulation, enforcement, or collection of any taxes, fees, or assessments.

                   (f) This section must not be construed to limit the authority of any state agency to
         expend moneys, pursuant to appropriation, for the administration, enforcement, or
         collection of any taxes, fees, or assessments authorized under title 67.

         71-1-305. Programs supported by the fund.

                    (a) Moneys in the fund must be used to establish and operate the following
         programs, in the following order:

                             (1) The child care workforce scholarship pilot program created in§ 71-1-
                   306 to provide categorical eligibility for free child care for children of eligible child
                   care workers. It is the general assembly's intent that the child care workforce pilot
                   program receives allocations from the fund over each three-year period of the
                   pilot program's operation totaling five million dollars ($5,000,000);

                             (2) The CareShare Tennessee pilot program created in§ 71-1-307, which
                   is an employer-supported child care assistance program. It is the general
                   assembly's intent that the CareShare Tennessee pilot program receive
                   allocations from the fund over each three-year period of the pilot program's
                   operation totaling five million dollars ($5,000,000); and

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                              (3) The smart steps plus program created in § 71-1-308, if any funds
                    remain available in the promising futures fund after the funding goals expressed
                    in subdivisions (a)(1) and (2) are met for the respective programs.

                    (b) Subject to available funding, the department may continue or expand the child
          care workforce scholarship pilot program created in § 71-1-306, and the CareShare
          Tennessee pilot program created in § 71-1-307, if the department's continuation or
         expansion of one (1) or more of the programs are approved by the governor.

          71-1-306. Child care workforce scholarship pilot program.

                    (a) As used in this section:

                              (1) "Categorical eligibility" means eligibility for child care assistance based
                    solely on an individual's employment in the child care workforce, without regard
                    to the individual's household income;

                              (2) "Child care workforce" means individuals employed in this state by an
                    eligible child care provider in a position involving the direct care, supervision, or
                   education of children, including, but not limited to, teachers, assistant teachers,
                    aides, and other instructional or caregiving staff, as determined by the
                    department;

                              (3) "Eligible child care worker" means a member of the child care
                   workforce who works at least thirty (30) hours per week on average and who
                    meets any additional employment, residency, and participation requirements
                    established by the department;

                              (4) "Free child care" means child care services provided to an eligible
                    child care worker at no cost to the worker, after application of any federal or state
                    child care assistance for which the worker or child is otherwise eligible;

                              (5) "Marketing and outreach vendor" means a private entity under
                    contract with the department to conduct recruitment, outreach, and related
                    activities for the pilot program;

                              (6) "Pilot program" means the child care workforce scholarship pilot
                    program created in this section; and

                              (7) "Scholarship" means financial assistance paid on behalf of an eligible
                   child to an eligible child care provider to cover the costs of child care services
                   through the pilot program.

                    (b) The department shall administer a child care workforce scholarship pilot
          program to provide categorical eligibility for free child care for children of eligible child
         care workers employed in this state after application of any federal or state child care
         assistance for which the child or family is otherwise eligible to receive.

                    (c) The department shall enter into a contract with one (1) or more marketing and
         outreach vendors to conduct recruitment and outreach activities for the pilot program.
         Any contract entered into pursuant to this subsection- (c) must be performance-based
         and include measurable targets and key performance indicators tied to the recruitment of
          new child care workers into the workforce.

                    (d) A marketing and outreach vendor under contract with the department
          pursuant to subsection (c) is responsible for collecting, maintaining, and reporting data
          necessary to measure performance against the key performance indicators established
         in the contract and documenting all outreach and recruitment activity.

                    (e) The department shall submit the report required in§ 71-1-309 for purposes of
         evaluating the pilot program. The following are the minimum key performance indicators
         that must be used to evaluate the pilot program:

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                              (1) The number of individuals entering the child care workforce for the first
                   time that is attributable to outreach and recruitment activities;

                              (2) The number of eligible child care workers with categorical eligibility;

                              (3) Child care workforce retention rates for each three-year period for
                   which the pilot program is in operation;

                              (4) Geographic distribution of eligible child care workers and eligible child
                    care providers participating in the pilot program; and

                              (5) Outreach efficiency measures, including costs per recruited worker.

                    (f) All reports submitted for purposes of the pilot program must be independently
          verified by the office of research and education accountability in the office of the
          comptroller of the treasury or by an independent entity selected by the comptroller.

                    (g) The department shall coordinate eligibility criteria and benefit administration
          for the pilot program with existing child care subsidy programs.

                    (h) At the end of each three-year period for which the pilot program operates, the
          department may, subject to available funding, continue or expand the pilot program if the
          pilot program's continuation or expansion is approved by the governor.

                    (i) The department shall complete procurement and selection of any marketing
          and outreach vendors required for the pilot program by November 1, 2026, and, subject
          to available funding, begin operating the pilot program by January 1, 2027.

          71-1-307. CareShare Tennessee pilot program.

                    (a) The department shall establish a CareShare Tennessee pilot program within
          the department to provide employer-supported child care assistance through shared
          contributions by participating employers, participating employees, and the state.

                    (b) As used in this section:

                              (1) "Contribution" means a payment made by an employer or employee,
                    whether directly or through a third-party administrator, to subsidize eligible child
                    care costs;

                              (2) "Eligible child care costs" means the costs incurred for child care
                    services provided by an eligible child care provider;

                              (3) "Employee" means an individual employed in this state by a
                    participating employer;

                              (4) "Employer" means a for-profit or nonprofit entity, including, but not
                    limited to, a local government or local education agency, that employs one (1) or
                    more employees in this state;

                              (5) "Participating employer" means an employer approved by the
                    department or a third-party administrator to participate in the program;

                              (6) "Pilot program" means the CareShare Tennessee pilot program
                    created in this section; and

                              (7) "State match" means the funds paid from the promising futures fund
                    created in § 71-1-304 to an eligible child care provider to match employer and
                    employee contributions received through the pilot program.

                    (c)

                              (1) The state match for the pilot program must be used to supplement
                    employer and employee contributions toward eligible child care costs.

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                              (2) Subject to available funds, the state match must be determined using
                   a declining match formula based on household income as follows:

                                       (A) The state match may equal up to one hundred percent (100%)
                              of the employer contribution for participating employees with household
                              incomes -at or below one hundred percent (100%) of the state median
                              income;

                                       (8) The state match must decrease by ten percent (10%) for each
                             twenty percent (20%) increase in household income over one hundred
                              percent (100%) of the state median household income up to one hundred
                             fifty percent (150%) of the state median household income; and

                                       (C) The state match is fifty percent (50%) if the employee's
                             household income exceeds one hundred fifty percent (150%) of the state
                              median household income.

                    (d)

                              (1) The department shall contract with one (1) third-party administrator to
                   administer the pilot program. The contract must be performance-based and
                    include measurable targets and key performance indicators.

                              (2) The third-party administrator is responsible for:

                                       (A) Developing and managing standardized participation
                              agreements among employers, employees, and child care providers;

                                        (8) Verifying eligibility of employers, employees, and child care
                              providers for purposes of the pilot program;

                                        (C) Collecting and disbursing employer and employee
                              contributions and issuing state match payments to child care providers;

                                       (D) Collecting, maintaining, and reporting data necessary to
                             measure performance against the key performance indicators established
                             in the contract and documenting all pilot program activity;

                                       (E) Ensuring that state match payments are made only when
                             sufficient funds are available and that program obligations do not exceed
                             the balance of the promising futures fund created in§ 71-1-304; and

                                       (F) Maintaining waitlists when sufficient funding is unavailable.

                             (3) The department shall submit the report required in § 71-1-309 for
                   purposes of evaluating the pilot program. The following are the minimum key
                   performance indicators that must be used to evaluate the pilot program:

                                       (A) The number of participating employers, disaggregated by size,
                             sector, and geographic region;

                                       (8) The number of participating employees receiving child care
                             assistance;

                                       (C) The total amount of employer, employee, and state
                             contributions made through the pilot program;

                                       (D) The number and characteristics of participating child care
                             providers;

                                       (E) Utilization rates of approved child care assistance by
                             participating employees; and

                                       (F) Administrative timeliness and accuracy, including contract
                             processing times and payment disbursement timelines.

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HB1979

                    (e) All reports submitted for purposes of the pilot program must be independently
         verified by the office of research and education accountability in the office of the
         comptroller of the treasury or by an independent entity selected by the comptroller.

                    (f) Participation in the pilot program is voluntary for employers, employees, and
          child care providers.

                    (g) At the end of each three-year period for which the pilot program operates, the
         department may, subject to available funding, continue or expand the pilot program if the
          pilot program's continuation or expansion is approved by the governor.

                    (h) The department shall complete procurement and selection of the third-party
          administrator for the pilot program by November 1, 2026, and, subject to available
         funding, begin operating the pilot program by January 1, 2027.

          71-1-308. Smart Steps Plus program.

                    (a) There is established the Smart Steps Plus program to provide child care
          scholarships to eligible working families whose household income exceeds eligibility
         thresholds for existing child care assistance programs.

                    (b) As used in this section:

                              (1) "Eligible working family" means a household with one (1) or more
                    children requiring child care in which the household income does not exceed one
                    hundred fifty percent (150%) of the state median income; and

                              (2) "Program" means the Smart Steps Plus program created in this
                    section.

                    (c) Subject to available funding, the department shall administer a Smart Steps
          Plus program to provide child care scholarships on a sliding scale basis, after application
          of any federal or state child care assistance, including any federal temporary assistance
         for needy families (TANF) funds set aside to be transferred to the child care and
          development fund (CCDF), for which the child or family is otherwise eligible to receive.

                    (d) The department may establish eligibility criteria, benefit levels, copayment
          requirements, and prioritization schedules for the program by rule; provided, that the
          assistance must be targeted to support workforce participation and employment stability.
         Any rules promulgated by the department must be promulgated in accordance with the
          Uniform Administrative Procedures Act, compiled in title 4, chapter 5.

                    (e) The department may administer and begin operating the program on or after
         January 1, 2027, subject to available funding.

          71-1-309. Reporting and evaluation.

                    (a) The department shall submit an annual report for evaluating each of the
          programs created in this part. Each report must be submitted to the governor, the
          speaker of the senate, the speaker of the house of representatives, the chair of the
         finance, ways and means committee of the senate, and the chair of the committee of the
          house of representatives having jurisdiction over finance by March 31 immediately
         following a year for which one (1) or more of the programs operated in this state.

                    (b) Each report must include, at a minimum:

                              (1) A summary of fund revenues, expenditures, and balances, including
                    amounts expended for administrative, regulatory, and evaluation purposes;

                              (2) Verified performance data for the child care workforce scholarship
                    pilot program, including the key performance indicators specified in§ 71-1-306;

                              (3) Verified performance data for the CareShare Tennessee pilot
                    program, including the key performance indicators specified in § 71-1-307;

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HB1979
                              (4) Participation and utilization data for the Smart Steps Plus program,

                    including the number of families served, income distribution of participating
                   families, and average benefit levels;

                              (5) An assessment of the effectiveness of each program in meeting its
                    stated goals, based on independently verified data;

                              (6) Identification of any barriers to implementation or participation; and
                              (7) Any recommendations for continuation, modification, expansion, or
                    termination of one (1) or more of the programs.
                    (c) Performance data used in the report must be based on reports submitted by
         third-party administrators or vendors and independently verified by the office of research
          and education accountability in the office of the comptroller of the treasury or by an
          independent entity selected by the comptroller.
                    (d) The department shall make the report publicly available on its website.
          SECTION 2. The headings in this act are for reference purposes only and do not
constitute a part of the law enacted by this act. However, the Tennessee Code Commission is
requested to include the headings in any compilation or publication containing this act.
          SECTION 3. For purposes of promulgating rules and the procurement and selection of a
third-party administrator and marketing and outreach vendors, this act takes effect upon
becoming a law. For all other purposes1 this act takes effect January 1, 2027, the public welfare
requiring it.

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         HOUSE BILL NO. 1979

PASSED:  April 22, 2026

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                         CAMERON SEXTON, SPEAKER
                         HOUSE OF REPRESENTATIVES

                         :0.- ~- i',\," >t \\...
                                 \  RANDY MCNA:lY

                                    SPEAKER OF THE S:A E

APPROVED this \°\-t!I- day of ~     2026

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BILL LEE, GOVERNOR
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