Amends TCA Title 4; Title 7, Chapter 51, Part 10; Title 9; Title 37; Title 49; Title 67 and Title 71.

MATCH FUND This bill creates a separate fund within the general fund to be known as the municipalities' access to child care fund ("MATCH fund"). The department of human services ("department") must administer the MATCH fund. Moneys in the MATCH fund must be awarded annually as grants to municipalities that provide matching funds from nonstate and nonfederal sources pursuant to this bill, and that are approved by the department, for the purpose of funding projects that expand the number of early childhood care and education quality slots for families with children who are 31 months or younger, regardless of income, and that have at least one classroom with children age 15 months or younger. This bill provides that the MATCH fund is composed of revenues derived by the tax imposed pursuant to this bill on the privilege of operating passenger transportation services, funds appropriated by the general assembly for the MATCH fund, and gifts, grants, and other donations received by the department for the MATCH fund. GRANTS AND MONEYS Subject to the availability of funds and beginning no later than January 1, 2025, and until January 1, 2028, this bill requires the department to allocate and disperse grants from the MATCH fund each fiscal year directly to municipalities. A grant awarded to a municipality under this bill must not exceed $500,000. In awarding the grants, priority must be given to municipalities located in counties identified as distressed or childcare deserts based on the department's comprehensive mapping of childcare deserts in partnership with the University of Tennessee's social work office of research and public service. This bill prohibits a grant from being awarded unless the municipality's financial commitment to the project proposed for funding provides matching funds from nonstate and nonfederal sources at a match rate of dollar-for-dollar. Each municipality must establish eligibility criteria for the early childhood care and education quality slots financed by local funds that serve as the match for the award. At a minimum, only children 31 months or younger as determined by the department are eligible for the slots, regardless of income. This bill requires moneys in the MATCH fund to be invested by the state treasurer for the benefit of the MATCH fund in accordance with existing law. Interest accruing on investments of and deposits into the MATCH fund must be returned to the MATCH fund and remain part of the MATCH fund. Any unencumbered moneys and any unexpended balance of the MATCH fund remaining at the end of a fiscal year do not revert to the general fund, but must be carried forward until expended in accordance with this bill. If there are moneys in the MATCH fund after the department has funded every qualifying project or childcare agency pursuant to this bill, then the department may award remaining unallocated monies in the fund for the exclusive use of childcare agencies that have attained an annual quality rating improvement system score of 80 or above to provide quality care for children whose parents are eligible for the childcare certificate program. The department must consider the following in selecting the recipients of such an award: the childcare certificate program waitlist, childcare agencies located in counties identified as distressed or childcare deserts, child poverty rates, childcare needs in terms of the economic development needs of the county where the center is located, and increasing the availability of high-quality early learning centers statewide. Moneys from the MATCH fund must not be used to displace, replace, or supplant the amount appropriated to the childcare certificate program. ANNUAL REPORT Present law requires each municipality receiving a grant from the MATCH fund to provide a report to the department once all of the grant funds have been expended. On or before October 1, 2025, and by October 1 of each subsequent year until October 1, 2027, the department must prepare a report to the general assembly regarding the funds received and payments made by the MATCH fund. PRIVILEGE TO OPERATE PASSENGER TRANSPORTATION SERVICES TAX This bill provides that beginning July 1, 2024, in addition to the fee charged for the issuance or renewal of a license to operate passenger transportation services in a governmental entity's jurisdiction, there is levied a tax of 10 percent of the amount of the fee, for use in accordance with this bill, on the privilege of operating in such jurisdiction. The tax is a separate charge in addition to the license fee and must be collected at the same time the license fee is being collected. The tax, including penalties and interest, levied pursuant to this bill must be collected by the governmental entity and remitted to the department of revenue. This bill requires that of the revenue received by the department of revenue under this bill 90 percent must be distributed to the MATCH fund created and 10 percent must be distributed to the department of human services to cover its expenses of administering the MATCH fund. RULE PROMULGATION This bill authorizes the commissioner to promulgate rules to effectuate this bill.