From Holland & Knight: Legislative Update

Update from Holland & Knight:

Legislative Update 

General Assembly Adjourns Special Session with Passage of School Choice, Immigration Enforcement & Disaster Relief

The 114^th General Assembly convened Monday pursuant to the call of Governor Lee to address school choice legislation, disaster relief for Hurricane Helene, and a framework for immigration enforcement in anticipation of federal policy changes enacted by the Trump Administration.

Education Freedom Act

The cornerstone of Governor Lee’s agenda centered on the Education Freedom Act, legislation which establishes a statewide school voucher program and provides additional funding for teacher bonuses and K-12 facilities. Legislators fielded intense opposition to the $447M package from public school advocates and passed the measure in the House on a narrow margin of 54 to 44, with one member not voting, after more than four hours of debate on Thursday afternoon. While Senate members faced similar pressure, the margin of victory widened by several votes after the bill’s successful passage in the House with a final count of 20 to 13.

The Act implements the following measures:

• Offers 20,000 Education Freedom Scholarships worth approximately $7,296 each in taxpayer funds to students statewide to attend Category I-III state-accredited private schools. Students attending independent home schools and umbrella church-related home schools are not eligible to participate.
• Half of the scholarships are reserved for families with incomes below 300% of the income limit to quality for free or reduced price lunch, children with disabilities or students who are eligible for the existing ESA program.
• The remaining 10,000 scholarships do not have an income limit and are available to a universal pool of students entitled to attend a public school.
• In the 2026-27 school year, the program will open universal eligibility for all Tennessee students entitled to attend a public school, prioritizing currently enrolled students, low-income and public school students if demand exceeds available funding.

• 5,000 additional scholarships will be added to the program for each year after applications for 75% of total scholarships are submitted in the prior year.

• Participating students will be required to take a standardized achievement test each year from third through 11th grade.

• Students are not required to take the Tennessee Comprehensive Assessment Program test.
• For the number of private schools that already administer the TCAP each year, the bill requires the state to collect a sampling of voucher-recipient’s TCAP test results to compare with statewide TCAP achievement.

• Allocates funding for school construction and maintenance, which will prioritize at-risk counties, high-performing districts, and fast-growing counties, then counties with damage from natural disasters.
• Provides funding for a $2,000 bonus for every teacher in the state, if local school boards adopt a resolution affirming they want to participate in the Education Freedom Act.
• The bill’s hold harmless provision purports that school districts will never receive less state TISA funding than they currently receive, to bridge any gaps they may endure from enrollment drops.

Immigration Enforcement

Lawmakers also passed immigration enforcement legislation on party lines which establishes criminal penalties for local and state officials who adopt sanctuary policies that limit cooperation with federal immigration enforcement officials and could result in the removal of local or state officials who disobey. The bill creates an Immigration Enforcement Division within the Tennessee Department of Safety and authorizes the governor to appoint a Chief Immigration Enforcement Officer to coordinate directly with the Trump Administration on federal immigration policies and implementation.

The legislation also requires that a lawful permanent resident who renews or reinstates a driver license, permit, or photo identification license on or after January 1, 2026, to provide proof of United States citizenship to maintain the identification.  If such proof of citizenship is not provided, then the person must be issued a temporary driver license, temporary permit, or temporary photo identification license. A temporary license, permit, or photo identification is prohibited from being used as evidence of identification to verify a person's identity on an application for a voting ballot. A temporary driver license, photo identification, or permit must include a visually distinctive marker for the class designation on the face of the license to distinguish the temporary license from a license issued to a United States citizen used as photo identification for voting purposes.

The Senate passed the measure on Wednesday with a 26-7 vote and the House followed suit with a 72-22 vote on Thursday.

Disaster Relief for Hurricane Helene

In response to the devastation inflicted by Hurricane Helene in Northeast Tennessee, the legislature unanimously passed a comprehensive disaster relief package worth $450 million which implements the following:

• Funds a Hurricane Helene Interest Payment Fund to pay local governments’ interest costs of up to 5% or the primary interest for up to three years on money borrowed to pay eligible recovery costs.
• Creates the Governor’s Response and Recovery Fund for the purpose of responding to or recovering from an emergency, including agricultural recovery efforts, unemployment assistance and business recovery assistance.

With special session concluded, the General Assembly will now resume their customary business. The House will convene for regular session on Monday, while the Senate has elected to take a one week recess and reconvene on February 10.