Amends TCA Section 49-1-228 and Title 49, Chapter 1, Part 6.

Present law requires the department of education to develop a school grading system that annually assigns A, B, C, D, and F letter grades to schools based on: (1) Student performance on the Tennessee comprehensive assessment program (TCAP) tests or end-of-course exams; (2) Student growth as indicated by Tennessee Value-Added Assessment System (TVAAS) data or data from other measures of student growth; and (3) Other outcome indicators of student achievement that the department finds to be reliable measures of school performance. This bill prohibits the use of high school graduation rates for the 2021-2022, 2022-2023, 2023-2024, and 2024-2025 school years in assigning a letter grade to a school, unless the use results in a higher letter grade for the school. Similarly, this bill prohibits the use of high school graduation rates in the above-referenced school years for purposes of identifying a school as a priority school or assigning a school to the achievement school district, or as a metric included in school or LEA accountability. This bill authorizes the department to report graduation rates for the referenced school years as required by federal law and as required as a part of Tennessee's Every Student Succeeds Act (ESSA) plan. This bill requires the department of education to promptly seek a waiver from the United States department of education, or seek to amend Tennessee's Every Student Succeeds Act (ESSA) plan, as necessary and appropriate to implement this bill. ON APRIL 12, 2021, THE HOUSE ADOPTED AMENDMENT #1 AND PASSED HOUSE BILL 462, AS AMENDED. AMENDMENT #1 rewrites this bill and requires the department of education to: (1) Submit a report to the education committee of the senate and the education administration committee and education instruction committee of the house on the high school graduation rate no later than January 1, 2022. The report must include: (A) An analysis of the adjusted cohort graduation rate and the ready graduate indicator, as defined by Tennessee's Every Student Succeeds Act (ESSA) plan on school and LEA accountability, including whether the use of the metrics appropriately encourages LEAs and schools to graduate students who are prepared for postsecondary coursework and the workforce; (B) The number and percentage of students, disaggregated by each student group, as defined within Tennessee's ESSA plan, that graduate from high school in less than four years, in four years, in four years and one summer, in five years, and in six years with a regular high school diploma and ready graduate indicator status; and (C) An analysis of available information, to the extent practicable, related to metrics or practices pertaining to student graduation and postsecondary readiness in schools and LEAs, including student course access; graduation requirements; grades and credit recovery; and college, career, and technical education opportunities; (2) Post the report described in above in (1) the department's website; and (3) Annually report on the state report card information related to state, LEA, and school level indicators of postsecondary readiness by graduating class, including the percentage of students achieving postsecondary readiness pursuant to the department's defined eligibility criteria. The department must begin reporting with the graduating class of 2021 in the 2022 state report card. ON APRIL 15, 2021, THE SENATE SUBSTITUTED HOUSE BILL 462 FOR SENATE BILL 1340, ADOPTED AMENDMENT #2, AND PASSED HOUSE BILL 462, AS AMENDED. AMENDMENT #2 removes the education committee of the senate as one of the committees to which the department of education will be required to submit the report on student graduation.