SENATE BILL 1014
By Oliver
HOUSE BILL 698
By Camper
HB0698
001085
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AN ACT to amend Tennessee Code Annotated, Title 49
and Title 71, relative to child care.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 49-13-136(c)(1), is amended by
deleting the language "an LEA in which one (1) or more public charter schools operate" and
substituting instead the language "each LEA".
SECTION 2. Tennessee Code Annotated, Title 49, Chapter 2, Part 1, is amended by
adding the following as a new section:
(a) As used in this section, "child care facility" means a child care agency, a child
care center, or a drop-in center, as those terms are defined in ยง 71-3-501, but only if the
center or agency is owned and operated by one (1) or more individuals who do not own
or operate the center or agency as a corporation domiciled in this or another state.
(b) An LEA in which a child care facility operates shall submit a comprehensive
listing of all underutilized property or vacant property to the department of human
services and the comptroller of the treasury. The department shall make an LEA's list
available to each child care facility operating in the LEA.
(c) The owner or operator of a child care facility may petition the comptroller of
the treasury for an audit of the list of all underutilized property or vacant property
submitted by the LEA in which a child care facility operates. The comptroller of the
treasury is authorized to promulgate rules, in accordance with the Uniform Administrative
Procedures Act, compiled in title 4, chapter 5, for the administration of this section.
(d)
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(1) The owner of a child care facility that is operating in an LEA that does
not have one (1) or more public charter schools operating within its geographic
boundaries has a right of first refusal to:
(A) Purchase vacant property listed by the LEA under this section
at or below fair market value to provide child care services; or
(B) Lease underutilized property or vacant property listed by the
LEA under this section at or below fair market value to provide child care
services. A lease agreement executed between the owner or operator of
a child care facility and an LEA must not reflect any outstanding bonded
debt on the underutilized property or vacant property, except as agreed
upon to reflect any necessary costs associated with the occupation or
remodeling of the facility.
(2) If one (1) or more public charter schools operate in the LEA in which
a child care facility also operates, then the owner or operator of a child care
facility operating in the LEA has a second right of refusal to purchase vacant
property or lease underutilized property or vacant property listed by the LEA in
the same manner and to the same extent as provided in subdivision (d)(1).
(3) For purposes of this subsection (d), fair market value for educational
purposes is determined by taking the average of two (2) separate appraisals
conducted by two (2) independent, qualified appraisers, one (1) selected by the
LEA and one (1) selected by the owner or operator of the child care facility.
(e)
(1) Upon the execution of a lease agreement pursuant to this section, the
owner or operator of the child care facility has unrestricted use of the property;
provided, that the property must be used to provide child care services. The
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owner or operator of the child care facility shall provide for routine maintenance
and repair so that the leased property is maintained in as good of order as when
the lease was executed. The owner or operator of the child care facility is
responsible for paying all utilities used by the child care facility at the leased
property. Extensive repairs to buildings or facilities considered capital expenses
are the responsibility of the LEA funding body and not the child care facility. If
the owner or operator of the child care facility makes extensive repairs to
buildings or facilities considered capital expenses, then the capital expenses
must be credited against the cost of the lease. Any fixtures, improvements, or
tangible assets added to leased property by the owner or operator of the child
care facility pursuant to this section must remain at the leased property upon the
child care facility's return of the leased property to the LEA.
(2) If the LEA decides to sell the school building that the child care facility
is leasing, then the owner or operator of the child care facility must be provided
the right of first refusal to purchase the school building at or below fair market
value to provide child care services, less the value of all rental payments made to
the LEA during the term of the lease.
(3) If, during the term of the lease, the child care facility closes or ceases
using the building, then the building must be placed on the LEA's vacant or
underutilized property list pursuant to this section.
(f) If, after the purchase of vacant or underutilized property from an LEA
pursuant to this section, the child care facility closes or ceases using the property, then
the LEA has the right of first refusal to purchase the property from the owner or operator
of the child care facility at or below fair market value for educational purposes. This
subsection (f) does not require the owner or operator of a child care facility to sell any
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property other than the property sold to the owner or operator of the child care facility by
the LEA pursuant to this section, if the LEA elects to exercise its right of first refusal.
(g) The comptroller of the treasury may promulgate rules, in accordance with the
Uniform Administrative Procedures Act, compiled in title 4, chapter 5, for the
administration of this section.
(h) This section is not intended to frustrate an LEA's ability to plan for the use of
underutilized or vacant properties owned or operated by the LEA. In any LEA in which a
child care facility operates, the LEA shall submit each year its plans for the use of
underutilized or vacant properties owned or operated by the LEA in its annual report to
the department of education and the comptroller of the treasury.
SECTION 3. This act takes effect July 1, 2025, the public welfare requiring it.