Tennessee Code Title 49. Education § 49-3-108

(b)(1) If, during the first year of implementation of the TISA, an LEA's allocated TISA funds total less than the LEA's baseline funding amount, then the department shall allocate additional funds to the LEA in an amount equal to one hundred percent (100%) of the difference between the LEA's baseline funding amount and the LEA's allocated TISA amount.

(2) If an LEA was eligible for additional funds under subdivision (b)(1), and if, during the second year of implementation of the TISA, the LEA's allocated TISA funds total less than the LEA's baseline funding amount, then the department shall allocate additional funds to the LEA in an amount equal to seventy-five percent (75%) of the difference between the LEA's baseline funding amount and the LEA's allocated TISA amount.

(3) If an LEA was eligible for additional funds under subdivisions (b)(1) and (b)(2), and if, during the third year of implementation of the TISA, the LEA's allocated TISA funds total less than the LEA's baseline funding amount, then the department shall allocate additional funds to the LEA in an amount equal to fifty percent (50%) of the difference between the LEA's baseline funding amount and the LEA's allocated TISA amount.

(4) If an LEA was eligible for additional funds under subdivisions (b)(1)-(3), and if, during the fourth year of implementation of the TISA, the LEA's allocated TISA funds total less than the LEA's baseline funding amount, then the department shall allocate additional funds to the LEA in an amount equal to twenty-five percent (25%) of the difference between the LEA's baseline funding amount and the LEA's allocated TISA amount.

(c)(1) An LEA's allocated education funding must not decrease more than five percent (5%) from one (1) year to the next year.  If an LEA's TISA allocation decreases by more than five percent (5%) from the LEA's TISA allocation for the prior school year, then the department shall allocate additional funds to the LEA in an amount such that the decrease in the LEA's TISA allocation for the current year is only five percent (5%), except that the department shall not allocate additional funds to an LEA pursuant to this subsection (c) if the department is required to allocate additional funds to the LEA pursuant to subsection (b).

(2) Beginning with allocations for the 2025-2026 school year, for purposes of implementing subdivision (c)(1), the department shall determine whether an LEA is eligible for additional funds pursuant to subdivision (c)(1) based on funds generated by students in non-virtual schools only.

(2) Subject to available appropriations, the department shall distribute a cost differential factor (CDF) grant to an LEA located in a county in which the cost of living is greater than the statewide average.  An LEA is eligible for a CDF grant if the LEA is located in a county for which the ratio between the county's non-governmental wages and the statewide non-governmental wages is greater than one (1), as calculated by the Boyd Center for Business and Economic Research at the University of Tennessee.  The department shall determine the amount of a grant awarded to an eligible LEA pursuant to this subdivision (d)(2).

(i)(1) For the 2026-2027 school year, if an LEAs TISA allocation for the current school year is less than the LEAs TISA allocation for the 2025-2026 school year and the LEA experienced disenrollment, then the department shall allocate additional funds to the LEA in the amount of the difference between the LEA's TISA allocation for the current school year and the LEA's TISA allocation for the 2025-2026 school year.

(5) As used in this subsection (i), “disenrollment” means that the LEA's non-virtual average daily membership for the current school year is lower than the LEA's non-virtual average daily membership for the immediately preceding school year.