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SB 2385

Education - As introduced, changes the definition of economically disadvantaged for purposes of the weighted allocations generated for such students in the Tennessee investment in student achievement formula; requires the department of education to allocate additional funds to an LEA that experiences a reduction in the LEA's TISA allocation in certain circumstances; requires the department to seek an amendment to this state's Every Student Succeeds Act plan to change the definition of the economically disadvantaged student subgroup. - Amends TCA Title 49, Chapter 1 and Title 49, Chapter 3.

114th Regular Session (2025-2026) Introduced by Joey Hensley

Expands econom. disadvantaged criteria for TISA, with hold-harmless funding for affected LEAs and an ESSA plan update to include more directly certified and related groups.

Placed on Senate Regular Calendar for 4/22/2026
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Bill Summary · SB 2385

Summary: SB 2385 / HB 2485 (Tennessee, 114th General Assembly)

Purpose and intent

The bill expands and modernizes how economically disadvantaged students are identified for purposes of the Tennessee Investment in Student Achievement (TISA) funding formula. It also requires the Department of Education (DOE) to seek federal ESSA plan amendments and to provide targeted funding adjustments to LEAs under certain conditions. The overall aim is to ensure more students who need resources are captured in funding weights and to align state practices with federal guidance.

Key provisions

  • Expanded definition of economically disadvantaged (ED):
    Beginning with the 2027-28 school year, ED includes students who are TennCare (Medicaid) beneficiaries or whose households receive SNAP, TANF, or FDPIR benefits and who are eligible for free meals through direct certification. This expands beyond the current ED criteria tied to free/reduced-price meals and related direct certification.

  • Funding adjustments for LEAs affected by the ED redefinition:
    If an LEA’s TISA allocation decreases solely due to a reduction in ED weights, the DOE must allocate additional funds to that LEA beginning in FY 2027-28. This “hold harmless” mechanism would apply before the funding floor and safety net provisions and would terminate on July 1, 2030.

  • ESSA plan amendment:
    The DOE must request by January 1, 2027, an amendment to Tennessee’s ESSA plan to revise the ED subgroup to include:

    • all directly certified free-lunch eligible students without household applications, and
    • homeless, runaway, and migrant children, plus children from households receiving SNAP, TANF, FDPIR, or TennCare, who are considered categorically eligible for free school meals.

  • Impact timeline and reporting:
    The provisions rely on the ESSA plan amendment taking effect; implementation is anticipated for FY 27-28.

Affected entities

  • Students: Expanded pool of students classified as economically disadvantaged, including TennCare and SNAP/TANF/FDPIR beneficiaries directly certified for free meals.
  • LEAs (Local Education Agencies): Potential increases in required local matching funds; some LEAs may receive additional state funds to offset reductions caused by ED weight changes.
  • DOE and SBE: Responsible for implementing ED definition changes, applying hold-harmless payments, and submitting ESSA plan amendments to the U.S. Department of Education.
  • Students in poverty metrics: Possible shifts in Title I/poverty-related rankings and eligibility, which could affect concentration poverty weights and related funding.

Procedural and timeline aspects

  • The TISA Review Committee must complete specified reviews and include recommendations in its annual report by November 1, 2026.
  • The ESSA amendment request to the U.S. Department of Education is due by January 1, 2027.
  • Effective date for the ED expansion funding adjustments is FY 2027-28; the ED hold-harmless provision ends July 1, 2030.
  • The act is subject to general constitutional constraints on state/local cost shifting.

Fiscal impact (summarized)

  • The corrected fiscal note estimates state expenditures and local revenue increases starting in FY 2027-28, with annual figures roughly in the mid-$80 million range for state costs and equivalent local revenue implications, escalating in subsequent years as more students qualify under the expanded ED definition.
  • A hold-harmless payment is estimated at about $1.8 million in FY 2026-27, growing thereafter.
  • The expansion will increase local obligations by tens of millions of dollars starting in FY 2027-28, subject to existing local-match flexibility.

In summary, SB/HB 2385/2485 broadens who counts as economically disadvantaged for TISA, provides targeted funding protection for affected LEAs, and seeks ESSA plan updates to reflect the broader eligibility landscape.

Compiled from official sources — confirm details with the bill’s official record.

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