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HB0759 • 2026

Local Education Agencies

AN ACT to amend Tennessee Code Annotated, Title 49, relative to compensation for licensed personnel.

Education Labor
Enacted

This bill passed the Legislature and reached final enactment based on the latest official action.

Sponsor
Marsh, Lowe
Last action
2025-04-29
Official status
Comp. became Pub. Ch. 256
Effective date
Not listed

Plain English Breakdown

The official source does not specify the exact impact on local spending or whether LEAs are required to continue merit pay if they do not receive additional state funding.

Act for Merit-Based Pay in Education

This act allows local education agencies (LEAs) in Tennessee to create merit-based pay systems that reward high-performing educators with additional compensation, but only if they receive more state funding than the previous year.

What This Bill Does

  • Allows LEAs to make a plan for giving extra money to teachers who do really well at their jobs.
  • Requires any extra money given through merit-based pay to be in addition to what is already set by the state salary schedule.
  • Permits an LEA not to give out merit pay if it does not get more funding from the state compared to the previous year.

Who It Names or Affects

  • Local education agencies (LEAs) in Tennessee
  • Educators and teachers working for these LEAs

Terms To Know

Local Education Agency (LEA)
An organization that is responsible for providing public education to students within a specific area.
Merit-based pay
Extra money given to employees based on their performance and achievements at work.

Limits and Unknowns

  • The exact impact on local spending cannot be predicted with certainty.
  • LEAs are not required to continue merit pay if they do not receive additional state funding.

Bill History

  1. 2025-04-29 Tennessee General Assembly

    Comp. became Pub. Ch. 256

  2. 2025-04-29 Tennessee General Assembly

    Effective date(s) 04/24/2025

  3. 2025-04-29 Tennessee General Assembly

    Pub. Ch. 256

  4. 2025-04-24 Tennessee General Assembly

    Signed by Governor.

  5. 2025-04-21 Tennessee General Assembly

    Transmitted to Governor for action.

  6. 2025-04-21 Tennessee General Assembly

    Signed by H. Speaker

  7. 2025-04-17 Tennessee General Assembly

    Signed by Senate Speaker

  8. 2025-04-16 Tennessee General Assembly

    Enrolled and ready for signatures

  9. 2025-04-14 Tennessee General Assembly

    Comp. SB subst.

  10. 2025-04-14 Tennessee General Assembly

    Passed H., Ayes 94, Nays 0, PNV 1

  11. 2025-04-14 Tennessee General Assembly

    Subst. for comp. HB.

  12. 2025-04-10 Tennessee General Assembly

    H. Placed on Consent Calendar for 4/14/2025

  13. 2025-04-09 Tennessee General Assembly

    Placed on cal. Calendar & Rules Committee for 4/10/2025

  14. 2025-04-08 Tennessee General Assembly

    Rec. for pass; ref to Calendar & Rules Committee

  15. 2025-04-02 Tennessee General Assembly

    Placed on cal. Finance, Ways, and Means Committee for 4/8/2025

  16. 2025-04-02 Tennessee General Assembly

    Rec. for pass by s/c ref. to Finance, Ways, and Means Committee

  17. 2025-03-27 Tennessee General Assembly

    Rcvd. from S., held on H. desk.

  18. 2025-03-26 Tennessee General Assembly

    Placed on s/c cal Finance, Ways, and Means Subcommittee for 4/2/2025

  19. 2025-03-26 Tennessee General Assembly

    Assigned to s/c Finance, Ways, and Means Subcommittee

  20. 2025-03-25 Tennessee General Assembly

    Rec. for pass; ref to Finance, Ways, and Means Committee

  21. 2025-03-24 Tennessee General Assembly

    Sponsor(s) Added.

  22. 2025-03-24 Tennessee General Assembly

    Engrossed; ready for transmission to House

  23. 2025-03-24 Tennessee General Assembly

    Passed Senate, Ayes 32, Nays 0

  24. 2025-03-21 Tennessee General Assembly

    Placed on Senate Consent Calendar 2 for 3/24/2025

  25. 2025-03-19 Tennessee General Assembly

    Placed on cal. Education Committee for 3/25/2025

  26. 2025-03-19 Tennessee General Assembly

    Recommended for passage, refer to Senate Calendar Committee

  27. 2025-03-18 Tennessee General Assembly

    Rec. for pass by s/c ref. to Education Committee

  28. 2025-03-12 Tennessee General Assembly

    Placed on s/c cal K-12 Subcommittee for 3/18/2025

  29. 2025-03-12 Tennessee General Assembly

    Placed on Senate Education Committee calendar for 3/19/2025

  30. 2025-02-12 Tennessee General Assembly

    Passed on Second Consideration, refer to Senate Education Committee

  31. 2025-02-10 Tennessee General Assembly

    Assigned to s/c K-12 Subcommittee

  32. 2025-02-10 Tennessee General Assembly

    Introduced, Passed on First Consideration

  33. 2025-02-06 Tennessee General Assembly

    P2C, ref. to Education Committee

  34. 2025-02-05 Tennessee General Assembly

    Intro., P1C.

  35. 2025-02-04 Tennessee General Assembly

    Filed for introduction

  36. 2025-02-04 Tennessee General Assembly

    Filed for introduction

Official Summary Text

Present law requires the
commissioner
of education to
annually formulate a table of training and experience factors and a state salary schedule to be effective for each school year
. Present law further requires e
ach LEA
to
establish a lo
cal salary schedule for all licensed personnel in the LEA, and the schedule shall include, as a minimum, the same salary level or levels based upon college preparation as established by the state board in the state salary schedule.

This bill adds autho
rization for LEAs to
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
bill
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 th
e 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.

Current Bill Text

Read the full stored bill text 
SENATE BILL 729
By Lowe

HOUSE BILL 759
By Marsh

HB0759
002545
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 49,
relative to compensation for licensed personnel.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE 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.