Tennessee § 49-3-314 - Distribution of state funds.

§ 49-3-314. Distribution of state funds.

State education finance funds shall be distributed annually to the LEAs by the commissioner according to the plan set out in subsection (b) and subject to all restrictions provided by law. In making distribution of state funds to the LEAs, no allowance shall be made by the state for any school in which the right to exercise authority of the respective local director of schools and the board is not as full and ample in all phases of the school program as in any other school of the LEA. Approximately one-tenth ( ) of the estimated total of the state funds annually appropriated for the BEP shall be distributed on or about August 15, and on or about the fifteenth day of each succeeding month through April 15, and the amount of the remainder due each LEA for the school year shall be determined during June of such school year. The amount of the remainder due shall be determined on the basis of the records that each LEA has furnished the commissioner. The actual delivery of the warrant covering the final distribution to an LEA shall not be made until after all records required by the commissioner have been furnished. Before a full and complete settlement is made with any LEA for any year, all records and reports required by the commissioner shall be filed with the commissioner by the LEA. The disbursement of state funds annually appropriated for the school lunch program, as defined in § 49-3-313, shall be under rules and regulations prescribed by the commissioner, as approved by the state board. In order for any LEA to receive state education finance funds as set forth in this part, the system shall meet the conditions and requirements set out in subdivisions (c)(2) and (3). In order to enforce those conditions and requirements, the commissioner may, in the commissioner's discretion, withhold a portion or all of the state education finance funds that the LEA is otherwise eligible to receive. No LEA shall use state funds to supplant total local current operating funds, excluding capital outlay and debt service. This subdivision (c)(2) shall not apply to a newly created LEA in any county where the county and city schools are being combined for a period of three (3) years after the creation of the LEA. Notwithstanding any other law to the contrary, for fiscal year 1992-1993 and any subsequent fiscal year, if state funding to the county for education is less than state funding to the county for education during the previous fiscal year, except that a reduction in funding based on fewer students in the county rather than actual funding cuts shall not be considered a reduction in funding for purposes of this subdivision (c)(3)(A), local funds that were appropriated and allocated to offset state funding reductions during any previous fiscal year are excluded from this maintenance of local funding effort requirement. It is the intent of subdivision (c)(3)(A) to allow local governments the option to appropriate and allocate funds to make up for state cuts without being subject to a continuation of funding effort requirement as to those funds for any year during which the state reinstates the funding, or restores the previous cuts, and during any subsequent year should the state fail to restore the funding cuts. Notwithstanding any other law to the contrary, if, in any fiscal year, a local government appropriates funds for education for nonrecurring expenditures, including nonrecurring funds for priority schools, evidenced by a written agreement with the LEA establishing the nonrecurring use of the funds, then such funds must be excluded from the maintenance of local funding requirement and from any apportionment requirement under § 49-3-315(a). Before any such agreement takes effect, it must be reviewed by the department of education to ensure the nonrecurring nature of the expenditures. If, pursuant to subdivision (c)(4)(A), a local government appropriates nonrecurring funds for priority schools, evidenced by a written agreement with the LEA establishing the nonrecurring use of the funds, then such funds must be excluded from the maintenance of local funding requirement and from any apportionment requirement under § 49-3-315(a) for each year that the school is identified as a priority school plus one (1) additional year. Before any such agreement takes effect, it must be reviewed by the department of education to ensure the nonrecurring nature of the expenditures. Acts 1977, ch. 289, § 11; T.C.A., § 49-613; Acts 1984 (1st E.S.), ch. 6, § 14; 1987, ch. 280, §§ 2, 3; 1992, ch. 603, § 2; 2001, ch. 284, § 9; 2013, ch. 305, § 1; 2016, ch. 622, § 1; 2019, ch. 439, § 1. Cross-References. Restrictions on replacing local funds with state funds, § 49-2-203 . Attorney General Opinions. Unless it has fewer students than the previous year, county school system must maintain its level of K-12 education funding in an amount sufficient to make up for the amount of city funding, if the city stops paying, OAG 02-068, 2002 Tenn. AG LEXIS 144 (5/22/02). Because the City of Memphis is legally obliged to provide funding for K-12 education, it cannot reduce or eliminate its current level of school funding, OAG 05-021, 2005 Tenn. AG LEXIS 21 (3/10/05). Reduction of local school funding by a county commission, OAG 07-095 (6/25/07). Constitutionality of amendments to BEP's “maintenance of effort” provisions, OAG 08-194, 2008 Tenn. AG LEXIS 239 (12/29/08). The dedicated education fund balance in excess of 3% of the annual LEA budget can be used for any educational purpose with the consent of the LEA, including recurring or nonrecurring education expenses. T.C.A. § 49-3-314(c)(3) does not affect the ability of an LEA to use the fund balance for recurring expenses. OAG 13-69, 2013 Tenn. AG LEXIS 66 (8/23/13).