Amends TCA Title 49.

This bill requires the department of education, in collaboration with the state board, to establish by May 1, 2022, a scholarship program to assist eligible students in K-12 who are attending a school in an LEA designated by the department as a Tennessee rapid growth school district to attend a participating private school of the student's choice. "Tennessee rapid growth school district" (TRGSD) means an LEA with a minimum average growth of 2 percent in average daily membership (ADM), over the five fiscal years immediately preceding a fiscal year, and that is designated by the department as a TRGSD upon application to the department by the LEA. For purposes of this bill, "eligible student" means a student who: (A) Resides within the boundaries of an LEA that, at the time of the student's initial application for a scholarship, is designated as a TRGSD by the department; is zoned to attend or is currently enrolled in a public school within a TRGSD; meets the minimum age requirements for school attendance, with eligibility extending until the student graduates from high school; however, the student must be less than 22 years of age by August 15 of each year; and was previously enrolled in a Tennessee public school during the two semesters immediately preceding the semester in which the student receives a scholarship under this part, or is enrolling in a school within the LEA for the first time; or (B) Received a scholarship pursuant to this bill in the previous school year; resides within the boundaries of an LEA which was designated as a TRGSD during the school year in which the student began participating in the scholarship program; and meets the minimum age requirements, with eligibility extending until the student graduates from high school; however, the student must be less than 22 years of age by August 15 of each year. This bill sets out the procedures that the department must develop for administering the scholarship program. This bill also sets out requirements for schools that choose to participate in the program (participating schools), which include enrolling students eligible under this bill and annually administering to scholarship students state assessments required by present law. This bill provides that if a scholarship student would have been entitled to receive special education services in the public school the student would otherwise be attending, the parent must acknowledge in writing, as part of the enrollment process, that the parent agrees to accept only services available to the student in the private school. A participating school may partner with an LEA or other participating school to provide special education services. The department will award scholarships to no more than 1,000 students per school year. If the number of eligible students who submit applications exceeds 1,000, then the department will conduct a random selection process to award scholarships that provides each eligible student with an equal opportunity for selection. The department will give preference to students already enrolled in a participating school and to siblings of such students. An eligible student will be entitled to one scholarship per school year. If the scholarship student voluntarily leaves a participating school for reasons other than suspension or termination of the school by the department, and enrolls in another participating school, the student and the successor participating school will not receive any funds for the payment of tuition and fees for the remainder of the school year. However, if the scholarship student enrolls in a public school, then the LEA will receive the funds that otherwise would have been remitted to a participating school on behalf of the scholarship student. The annual scholarship amount to which an eligible student is entitled under this bill must be equal to the lesser of the following: (1) The cost of tuition and fees charged by the participating school; or (2) The amount representing the per pupil state and local funds generated and required through the basic education program (BEP) for the TRGSD. This bill specifies that the amount of a scholarship awarded to a student must not be treated as income or an asset for the purposes of any individual tax or qualification for any other federal or state grant or program. This bill also provides the following: (1) For the purposes of funding calculations, each scholarship recipient must be counted in the enrollment figures for the TRGSD. The scholarship funds must be subtracted from the total state funds otherwise payable to the TRGSD and must be paid directly to the participating school; (2) Subject to appropriation, the department will disburse grants to TRGSDs in an amount equal to 25 percent of the per pupil state and local funds generated and required through the basic education program (BEP) for the TRGSD for each scholarship student who: (A) Was enrolled in and attended a school in the TRGSD for the one full school year immediately preceding the school year in which the student began participating in the scholarship program; and (B) Generates BEP funds for the TRGSD in the applicable fiscal year that will be subtracted from the state BEP funds payable to the TRGSD under the above; (3) If the participating school's cost of tuition and fees is less than the amount outlined above, the remaining funds must be retained by the department and the TRGSD, with specific amounts based on the TRGSD's state and local funding share under the BEP; and (4) The department shall develop a schedule for payments of scholarship funds to participating schools. If a participating student is enrolled in a participating school for less than the entire school year, the scholarship provided under this part must be reduced on a prorated basis to reflect the shorter school term.