Tennessee Senate Bill SB0840

Tennessee 2025-2026 Regular Session

• Introduced: 2/4/25

Caption

AN ACT to amend Tennessee Code Annotated, Title 4, Chapter 51; Title 8, Chapter 4; Title 9 and Title 49, relative to the use of excess lottery funds pursuant to Article XI, Section 5 of the Constitution of Tennessee.

Summary

SB0840 restructures the use of excess Tennessee lottery revenues by creating two new special accounts in the state treasury: a K-12 lottery capital outlay special account and an early learning program account. Under the bill, any year-end balance in the lottery for education account above $250 million would be treated as excess lottery funds and split equally between the two new accounts. Money in the K-12 account must be used only for capital outlay projects for K-12 educational facilities, while money in the early learning account must be used only for expenses to operate new or existing pre-kindergarten programs. The bill also directs the Comptroller to create and administer grant programs for both purposes, including a uniform application process, need-based matching requirements, annual awards to local education agencies (LEAs), and audit authority to ensure compliance. Unspent balances and interest in the special accounts would carry forward from year to year rather than revert to the lottery for education account or the general fund. The bill further amends existing law governing lottery fund allocation to reflect that excess funds may be used for both early learning and K-12 capital projects.

Impact

SB0840 would amend Tennessee law governing the disposition of excess lottery proceeds, especially Tennessee Code Annotated §§ 4-51-111, 8-4-120, and 49-4-901. It would create dedicated funding streams for school facility capital projects and pre-K operations, changing the current allocation structure by splitting excess funds between those two purposes and authorizing the Comptroller to administer grants, set application procedures, establish matching requirements, and audit recipients. The bill would affect the state treasury, the Comptroller’s office, and local education agencies that could receive annual grant allocations based on average daily membership.

Sentiment

The available record shows no committee transcript or vote history, so there is no documented debate or recorded opposition in the materials provided. Based on the bill text alone, the measure appears policy-driven and education-focused, with an emphasis on directing surplus lottery revenue to visible public education uses. The structure suggests an intent to provide stable, recurring support for both early learning and school infrastructure.

Contention

The main potential points of contention are the diversion of excess lottery funds away from the existing lottery for education account and the decision to split those funds equally between pre-K operations and K-12 capital outlay. Stakeholders concerned about preserving reserves, maintaining flexibility in the lottery for education account, or prioritizing one education need over another could object to the formula. Local education agencies may also scrutinize the grant and matching requirements, while the Comptroller’s expanded administrative and audit role could raise implementation concerns.