Amends TCA Title 49, Chapter 3, Part 4.

Under present law, the Volunteer Public Education Trust Fund Act provides for a special trust fund within the state treasury for education. The commissioner of education and the state treasurer establish operational guidelines for the expenditure of the income from the special trust fund for education, which include special projects or programs that would not otherwise be funded that are deemed by the commissioner and treasurer to improve the overall quality of the total educational program and provisions for participation in the programs funded by the trust fund by all LEAs participating in the basic education program.<br /> <br /> This bill revises various provisions of the Act, as follows:<br /> <br /> (1) This bill specifies that the special fund will be known as the volunteer public education trust fund;<br /> (2) This bill clarifies that the commissioner and treasurer administer the fund, and refers to the commissioner and treasurer as "trustees";<br /> (3) Present law authorizes the treasurer to accept funds from any person, association or corporation wishing to contribute voluntarily to the trust fund. This bill revises this provision to instead provide that the treasurer may accept money contributed to the fund from any individual, association, trust, corporation, partnership, firm, venture, agency, organization, governmental entity, or political subdivision, including, but not limited to, state-appropriated funds or monetary gifts, grants, or any other monetary aids received by the program from public or private sources;<br /> (4) This bill adds the following:<br /> (A) The state treasurer may accept funds from a private or public entity that may be earmarked for a specific purpose and for a specific local education agency (LEA) and the income from these funds must be disbursed to the LEA in the name of the private or public entity as long as the funds are used for public education;<br /> (B) For all funds deposited into the trust fund, the income from the funds may be expended by the trustees in accordance with the trustees' operational guidelines for the expenditure of income in an amount certain to one or more LEAs, subject to the earmarked purpose of the money contributed to the fund;<br /> (C) The trust fund must be divided into the following two general accounts: one for public funds and one for private funds;<br /> (D) Each general account must be divided into subaccounts for each LEA to the extent that the trust fund money is allocated for a specific LEA;<br /> (E) Corpus from the fund must be allocated to each subaccount in an amount sufficient to fund a public education purpose or project in accordance with the expenditure authorization from the trustees. All income on the corpus allocated must be paid to the subaccount;<br /> (F) Income on the remaining corpus in each general account that has not been allocated must be maintained in a special reserve at the general account level;<br /> (G) Income in excess of the funding for a subaccount must be maintained in a special reserve at the subaccount level; AND<br /> (H) Regardless of the allocation of funds, all moneys in the trust fund may be commingled for investment purposes with other trust funds and other funds subject to investment by the state treasurer in accordance with the trustees' investment policy and applicable law;<br /> (5) Present law requires that funds in the trust fund be invested by the state treasurer pursuant to policy guidelines established by resolution of the funding board within the laws, guidelines and policies that govern investments of the Tennessee consolidated retirement system. This bill revises this provision to instead require that funds be invested and reinvested by the state treasurer and to authorize the trust to invest in any security or investment in which TCRS is permitted to invest. This bill specifies that investments by the trust must be governed by the investment policies and guidelines adopted by the trustees;<br /> (6) Present law provides that the principal of the trust fund may not be expended for any purpose. This bill specifies that the "corpus" instead of "principal" of the trust may not be expended for any purpose, and that under no circumstances may any of the money in the fund be used for any purpose other than public education;<br /> (7) This bill revises and clarifies the duties of the trustees under the Act;<br /> (8) Present law requires the state treasurer to add all voluntary contributions, constituting principal, to the trust fund. This bill revises this provision to instead provide that the corpus of the trust fund consists of funds appropriated by the state as well as any other contributions from public or private sources and that income from the fund includes the income from the fund's investment portfolio from whatever source derived, including, but not limited to, interest, dividends, and realized capital gains and losses. Present law provides that income accruing on voluntary contributions must be deposited in the special trust fund by the state treasurer until the minimum trust fund amount is met. This bill adds that the trustees will establish the minimum trust fund amount; and<br /> (9) Present law authorizes the commissioner and treasurer to create a nonprofit corporation in accordance with the laws of this state and applicable federal law. This bill revises this provision to instead authorize the trustees to create a nonprofit corporation in accordance with the Tennessee Nonprofit Corporation Act, and, after such incorporation, to apply for tax exempt status under federal law.<br /> <br />