Tennessee House Bill HB1863

Tennessee 2025-2026 Regular Session

• Introduced: 1/21/26
• Refer: 2/2/26

Caption

AN ACT to amend Tennessee Code Annotated, Title 4, Chapter 49; Title 4, Chapter 51 and Title 49, Chapter 4, relative to safeguarding financial aid programs funded using net lottery proceeds.

Summary

HB1863 requires the Tennessee Higher Education Commission (THEC) to prepare a one-time report identifying any fiscal year from 2004 through 2026 in which net lottery proceeds were not sufficient to fully fund Tennessee’s scholarship and grant programs. The report must identify years when awards were reduced on a pro rata basis under the state’s lottery scholarship statute or when the state had to use the general shortfall reserve subaccount to cover a deficiency in the lottery for education account. The report must be submitted by October 1, 2027, to the relevant education and finance committees in both chambers of the General Assembly. The bill does not directly change scholarship eligibility, award formulas, or funding levels; instead, it creates a retrospective review of whether the lottery-funded financial aid system has experienced shortfalls and how those shortfalls were handled over time.

Impact

HB1863 amends Tennessee law in Titles 4 and 49 by adding a reporting obligation for THEC related to lottery-funded financial aid programs. Its practical effect is to require a historical accounting of funding gaps affecting scholarships and grants under Title 49, Chapter 4, Part 9, and any use of the general shortfall reserve subaccount under Title 4, Chapter 51. The bill affects THEC and legislative oversight committees, but it does not itself appropriate funds, alter the lottery funding structure, or change student aid benefits.

Sentiment

Based on the bill text and the absence of recorded committee discussion or votes, the overall sentiment appears neutral and oversight-oriented. The measure is framed as a safeguard for financial aid programs funded by net lottery proceeds, suggesting a policy interest in transparency and accountability rather than controversy over substantive program changes. No opposition or support is documented in the provided materials.

Contention

The main point of potential contention is whether the state has experienced repeated or significant lottery revenue shortfalls and whether those shortfalls have undermined scholarship funding. Any concern would likely center on the implications of documenting pro rata reductions or reserve fund draws, which could raise questions about the stability of Tennessee’s lottery-funded aid system and the adequacy of existing safeguards. However, no specific disagreements, amendments, or opposing viewpoints are included in the provided record.