(4) Review and Approval Process.
(a) Prior to the implementation of TISA in
the 2023-24 school year, the State Board shall review the evaluation report of
the fiscal capacity formula from the Comptroller of the Treasury, along with
any recommendations or considerations from the Comptroller of the Treasury and
approve the formula.
(b) The
Comptroller of the Treasury shall conduct a new evaluation of the fiscal
capacity formula and provide the evaluation report and any recommendations or
considerations to the State Board no more than five (5) years from the date the
formula was last approved by the State Board. The evaluation report shall be
submitted to the State Board on or before January 1 of the fifth (5th) year.
1. If the Comptroller of the Treasury
undertakes an off-cycle review and the State Board approves changes to the
fiscal capacity formula as a result of the off-cycle review as set forth in
paragraph (4)(e) of this Rule, the regular five (5) year review cycle does not
reset. The regular five (5) year review cycle will always be determined based
on the date the formula was last approved by the State Board as part of a
regular review.
(c) If
the Comptroller of the Treasury's evaluation report includes recommendations or
considerations regarding changes to the fiscal capacity formula, the evaluation
report shall include:
1. A detailed
description of the proposed change and the rationale for the proposed
change;
2. The expected fiscal or
other impact of the proposed change on school districts and/or local
governments;
3. A detailed
description of options to mitigate any negative fiscal impact to school
districts and/or local governments, including, but not limited to the
appropriation of additional state funding external to the TISA formula by the
Tennessee General Assembly or the passage of legislation;
4. Any methods for implementing the proposed
change; and
5. Any additional
information the Comptroller of the Treasury determines will aid the State Board
in evaluating the proposed change.
(d) If the Comptroller of the Treasury's
evaluation report includes recommendations or considerations regarding changes
to the fiscal capacity formula, the State Board may approve the formula, with
or without the change(s). The approval of any changes to the fiscal capacity
formula that includes a request for an adjustment in state appropriations shall
be done in consultation with the Department of Finance and Administration.
1. If changes to the formula are approved by
the State Board, the Department shall incorporate the revised fiscal capacity
estimates received from the Tennessee Advisory Commission on Intergovernmental
Relations ("TACIR") and the Boyd Center for Business and Economic Research at
the University of Tennessee ("CBER") into preliminary TISA allocations provided
to districts in the first fiscal year following adoption of the changes. For
the second fiscal year following adoption of the changes, the Department shall
incorporate revised fiscal capacity estimates into final TISA allocations
provided to districts.
2. The State
Board may also place additional requirements on the implementation of any
approved changes to the formula, including, but not limited to, the occurrence
of certain conditions specified by the State Board or delayed implementation of
changes beyond the timelines set forth in paragraph (4)(d)1. of this Rule,
according to a schedule specified by the State Board. If the State Board
approves changes to the fiscal capacity formula contingent on additional state
appropriations from the General Assembly external to the TISA formula, the
approved changes shall not take effect pursuant to the schedule set forth in
paragraph (4)(d)1. of this Rule until such funds are appropriated by the
General Assembly.
(e)
The State Board may request that the Comptroller of the Treasury evaluate
proposed changes to the fiscal capacity formula outside of the regular five (5)
year cycle established above if the State Board receives a request from TACIR,
CBER, the TISA Review Committee, the Commissioner of Finance and
Administration, both chairs of the Finance Ways and Means Committees of the
Tennessee House and Senate, or the Commissioner of Education to undertake an
off-cycle evaluation of proposed changes to the fiscal capacity formula.
Requests shall be submitted to the Executive Director of the State Board
("Executive Director").
1. A request to
undertake an off-cycle evaluation of proposed changes to the fiscal capacity
formula submitted by TACIR or CBER shall include all information set forth in
paragraphs (4)(c)1. through 4. of this Rule and any additional information that
would aid the State Board and the Comptroller of the Treasury in evaluating the
proposed change. Requests that do not contain all of the required information
will not be considered.
2. A
request to undertake an off-cycle evaluation of proposed changes to the fiscal
capacity formula submitted by the TISA Review Committee, the Commissioner of
Finance and Administration, both chairs of the Finance Ways and Means
Committees of the Tennessee House and Senate, or the Commissioner of Education
shall include a justification for the off-cycle review request and any
information that would aid the State Board and the Comptroller of the Treasury
in evaluating the request for the off-cycle evaluation and proposed change.
Requests that do not contain all of the required information will not be
considered.
3. After receipt of a
complete request, the Executive Director shall conduct a review of the request
and make a recommendation to the State Board. The Executive Director may
recommend that the request for an off-cycle review be approved, denied, or that
the request be considered by the Comptroller of the Treasury during the next
scheduled regular five (5) year review.
4. If the State Board votes to request the
Comptroller of the Treasury to conduct an off-cycle evaluation of proposed
changes to the fiscal capacity formula, the Executive Director shall work with
the Comptroller of the Treasury to determine an appropriate timeframe within
which the evaluation of proposed changes to the formula shall be submitted by
the Comptroller of the Treasury to the State Board for review.
5. The Comptroller of the Treasury shall
submit its evaluation of the proposed changes to the fiscal capacity formula to
the State Board by the deadline agreed upon by the Executive Director and the
Comptroller of the Treasury. The evaluation report shall include:
(i) A detailed description of the proposed
change and the rationale for the proposed change;
(ii) The expected fiscal or other impact of
the proposed change on school districts and/or local governments;
(iii) A detailed description of options to
mitigate any negative fiscal impact to school districts and/or local
governments, including, but not limited to, the appropriation of additional
state funding external to the TISA formula by the Tennessee General Assembly or
the passage of legislation;
(iv)
Any methods for implementing the proposed change; and
(v) Any additional information the
Comptroller of the Treasury determines will aid the State Board in evaluating
the proposed change.
6.
Upon receipt of the Comptroller's report evaluating the proposed change, the
State Board may take no action on the report or vote to approve the changes to
the fiscal capacity formula. The approval of any changes to the fiscal capacity
formula that includes a request for an adjustment in state appropriations shall
be done in consultation with the Department of Finance and Administration.
(i) If changes to the formula are approved by
the State Board, the Department shall incorporate the revised fiscal capacity
estimates received from TACIR and CBER into preliminary TISA allocations
provided to districts in the first fiscal year following adoption of the
changes. For the second fiscal year following adoption of the changes, the
Department shall incorporate revised fiscal capacity estimates into final TISA
allocations provided to districts.
(ii) The State Board may also place
additional requirements on the implementation of any approved changes to the
formula, including, but not limited to, the occurrence of certain conditions
specified by the State Board or delayed implementation of changes beyond the
timelines set forth in paragraph (4)(e)6.(i) of this Rule, according to a
schedule specified by the State Board. If the State Board approves changes to
the fiscal capacity formula contingent on additional state appropriations from
the General Assembly external to the TISA formula, the approved changes shall
not take effect pursuant to the schedule set forth in paragraph (4)(e)6.(i) of
this Rule until such funds are appropriated by the General Assembly.