Education, Dept. of

Plain English Breakdown

The effectiveness of the five-year ban on providers operating new virtual schools after a closure is uncertain.

Virtual School Closures and Provider Restrictions

This bill requires local education agencies to close virtual schools that do not meet certain performance criteria and restricts providers from operating new virtual schools if their previous school was closed due to poor performance.

What This Bill Does

• Requires the commissioner of education to direct a local education agency (LEA) to close a virtual school if it is identified as a priority school or shows low student achievement growth for three consecutive years, as measured by TVAAS.
• Prohibits providers who operated a virtual school that was closed due to poor performance from starting new virtual schools in Tennessee for five years after the closure.
• Requires LEAs to notify parents of students enrolled in a closing virtual school and provide them with other educational options within 30 days of the closure decision.

Who It Names or Affects

• Local education agencies (LEAs) that operate virtual schools
• Providers who manage or operate virtual schools
• Students enrolled in virtual schools and their parents

Terms To Know

Priority school

A designation for a school that is performing poorly according to state standards.

Tennessee Value-Added Assessment System (TVAAS)

A system used by Tennessee to measure student achievement growth over time.

Limits and Unknowns

• The bill does not specify what happens if a virtual school meets the criteria for closure but is not closed.
• It remains unclear how LEAs will be supported in providing alternative educational options for students from closing schools.

Official Summary Text

Present law authorizes the commissioner of education to reinstitute an enrollment cap or order the closure of a public virtual school that is identified as a priority school or demonstrates student achievement growth at a level of "significantly below exp
ectations" for any three consecutive years of the school's operation, as represented by the TVAAS. This bill makes the closure of a public virtual school mandatory under such circumstances and implements a process for such school's closure, which would t
a
ke effect at the end of the school year in which the commissioner directs the LEA to close the virtual school and includes parental notification, a moratorium on new student enrollment, and a prohibition against withholding student records.

If a virtual school is closed upon direction of the commissioner, or if the LEA elects to close the virtual school, then this bill requires that the TISA payments for the LEA that established the school exclude a student who was a member in the virtual s
chool the prior year who did not remain a member in the LEA following the closure of the virtual school.

Present law authorizes an LEA to contract for services with nonprofit and for-profit providers for the operation and management of a virtual school. This bill adds the following with regard to such contracts:

(1) A provider that has contracted with an LEA to operate or manage a virtual school that is closed pursuant to this bill is prohibited from operating a new virtual school in this state for a period of five consecutive years immediately following the ye
ar of the school's closure;

(2) The department shall maintain and publish on the department's website a list of providers that are currently ineligible to contract for the operation and management of a new virtual school and a list of providers that were formerly ineligible to so
contract but are now eligible.

This bill also adds that, if a nonprofit or for-profit entity provides services to more than one virtual school that is operating in this state at the time that one or more of the virtual schools closes, then the nonprofit or for-profit entity may contin
ue to provide services to the virtual school or virtual schools that do not meet the criteria for closure and that are in operation at the time of the other virtual school's closure.

ON MARCH 19, 2026, THE SENATE ADOPTED AMENDMENT #1 AND PASSED SENATE BILL 2441, AS AMENDED.

AMENDMENT #1 removes the requirement that the commissioner must direct the closure of a virtual school that is not meeting the requirements for continued operation. Under this amendment, an LEA will be required to close a virtual school not meeting the r
equirements for continued operation.

This amendment removes authorization for an LEA that closes a virtual school to establish a new virtual school.

This amendment removes the provision of this bill that prohibits a provider who operated a virtual school that was closed from operating a new virtual school for five years.

This amendment requires the

department of education to maintain and publish on the department's website a list of providers that operated or managed a virtual school that was closed for
not meeting the requirements for continued operation.

ON APRIL 13, 2026, THE HOUSE SUBSTITUTED SENATE BILL 2441 FOR HOUSE BILL 2420, ADOPTED AMENDMENT #1, AND PASSED SENATE BILL 2441, AS AMENDED.

AMENDMENT #1 incorporates the provisions of Senate Amendment #1 and adds the following:

(1) Specifies that the intervention options for virtual schools required by this bill will apply to a virtual school that is identified as a priority school beginning with the first priority school list released after the 2025 priority school list, or t
hat has demonstrated school composite level student achievement growth at a level of "significantly below expectations" for any three-consecutive-year period beginning with the 2025-2026 school year; and

(2) Specifies that the requirements for parental notification of a low-performing virtual school will apply to a virtual school that attains a school composite level student achievement growth score of "significantly below expectations" for any two-cons
ecutive-year period beginning with the 2025-2026 school year, or that is identified as being among the bottom 10% of schools in overall achievement; and

(3) Prohibits a virtual school for which parental notification is required under (2) from enrolling new students in the current or upcoming school year.

Current Bill Text

SENATE BILL 2441
By Powers

HOUSE BILL 2420
By White
HB2420
012558
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AN ACT to amend Tennessee Code Annotated, Title 49,
relative to virtual schools.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 49-16-213, is amended by deleting
subsection (b) and substituting:
(b)
(1) In addition to the intervention options available under § 49-1-602, if a
virtual school was identified as a priority school pursuant to § 49-1-602 beginning
with the priority school list released in 2025 or has demonstrated school
composite level student achievement growth at a level of "significantly below
expectations" for any three (3) consecutive years of the school's operation, as
represented by the Tennessee Value-Added Assessment System (TVAAS)
developed pursuant to chapter 1, part 6 of this title and guidelines adopted by the
state board of education pursuant to chapter 1, part 3 of this title, then the
commissioner shall direct the LEA to close the virtual school. The closure of a
virtual school pursuant to this subdivision (b)(1) takes effect at the end of the
school year in which the commissioner directs the LEA to close the virtual school.
Notwithstanding chapter 3, part 1 of this title, if a virtual school is closed upon
direction of the commissioner, or if the LEA elects to close the virtual school, then
the Tennessee investment in student achievement formula (TISA) payments for
the LEA that established the school must exclude a student who was a member
in the virtual school the prior year who did not remain a member in the LEA
following the closure of the virtual school.

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(2) If an LEA closes a virtual school pursuant to subdivision (b)(1), then
the LEA may establish a new virtual school in accordance with this part.
(3) If a virtual school is closed upon direction of the commissioner, or if
the LEA elects to close the virtual school, then:
(A) Within one (1) calendar week of the closure decision, the
virtual school must notify in writing the parents or legal guardians of all
students enrolled in the virtual school of the closure decision;
(B) Within thirty (30) days of the closure decision, the department
shall communicate to the parents or legal guardians of all students
enrolled in the virtual school other options for which the student is eligible
to enroll;
(C) The virtual school shall not enroll any new students; and
(D) A contracted nonprofit or for-profit provider of the virtual
school shall not withhold student records from the establisher or from a
school in which a virtual school student transfers.
(4) If a virtual school demonstrates school composite level student
achievement growth at a level of "significantly below expectations" for two (2)
consecutive years, as represented by the TVAAS developed pursuant to chapter
1, part 6 of this title and guidelines adopted by the state board of education
pursuant to chapter 1, part 3 of this title, or if a virtual school is identified as being
among the bottom ten percent (10%) of schools in overall achievement as
determined by the performance standards and other criteria set by the state
board pursuant to § 49-1-602(b)(2)(B), then the department shall notify, in
writing, the establisher, the provider, and the parents or legal guardians of all
students enrolled in the school of the virtual school's performance status and that

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if the virtual school's performance meets the criteria in subdivision (b)(1), then the
commissioner is required to direct the LEA to close the virtual school.
SECTION 2. Tennessee Code Annotated, Section 49-16-214, is amended by deleting
the section and substituting:
(a) An establisher may contract for services with nonprofit and for-profit
providers for the operation and management of a virtual school in accordance with this
section.
(b) A provider that has contracted with an establisher to operate or manage a
virtual school pursuant to subsection (a) that is closed pursuant to § 49-16-213(b)(1)
shall not operate a new virtual school in this state for a period of five (5) consecutive
years immediately following the year of the school's closure.
(c) The department shall maintain and publish on the department's website a list
of providers that:
(1) Are currently ineligible to contract for the operation and management
of a new virtual school pursuant to subsection (b); and
(2) Were formerly ineligible to contract for the operation and
management of a new virtual school pursuant to subsection (b), but that are now
eligible to contract with an establisher due to the expiration of the five-year period
described in subsection (b).
(d) If a nonprofit or for-profit entity provides services to more than one (1) virtual
school that is operating in this state at the time that one (1) or more of the virtual schools
closes pursuant to § 49-16-213(b)(1), then the nonprofit or for-profit entity may continue
to provide services to the virtual school or virtual schools that do not meet the criteria for
closure pursuant to § 49-16-213(b)(1) and that are in operation at the time of the other
virtual school's closure.

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SECTION 3. This act takes effect July 1, 2026, the public welfare requiring it.