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J enne&see Senate
PUBLIC CHAPTER NO. 256
SENATE BILL NO. 729
By Lowe, Hatcher, Taylor
Substituted for: House Bill No. 759
By Marsh
AN ACT to amend Tennessee Code Annotated, Title 49, relative to compensation for licensed
personnel.
BE IT ENACTED BY THE GENERAL ASS EMBLY OF THE ST ATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 49-3-306, is amended by adding the
following as a new subsection:
(i) An LEA may adopt and implement a merit-based pay structure for educators to
award additional compensation to high-performing educators and to incentivize educators to
meet and exceed expectations. A merit-based pay structure adopted pursuant to this
subsection (i) may only result in an increase to the compensation of an educator, whether in
the form of a one-time bonus or an increase to the salary payable to the educator in
accordance with the salary schedule approved by the commissioner for the LEA for the
respective school year. An LEA may decline to award merit pay in any school year for which
the LEA does not receive increased or additional state funds, as compared to a prior year, in
an amount sufficient to award merit pay. An LEA is not required to supplement its local
expenditures for salaries and wages in any school year in order to continue any merit pay an
educator received in a prior school year.
SECTION 2. This act takes effect upon becoming a law, the public welfare requiring it, and
applies to the 2025-2026 school year and each school year thereafter. PASSED:
SENATE BILL NO. 729
April 14, 2025
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' RANDY}fcNALLY
SPEAKER OF THE SENATE
CAMERON'91!XTON,SPEAKER
HOUSE OF REPRESENTATIVES
APPROVED this aY(t,. day of Arpr, 2025
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BILL LEE, GOVERNOR