1. (1) Direct Allocations. The amount set for Direct Allocations generated for each Student listed in T.C.A. § 49-3-105(c), for the LEA in which the Student is a member, are subject to an annual appropriation by the Tennessee General Assembly and shall be based on Students meeting one (1) or more of the following criteria:

   1. (a) Rising Fourth Grade Students. A Direct Allocation amount is generated for a rising fourth grade Student who is determined not to be proficient in English language arts (ELA) based on the Student achieving a performance level rating of “below” or “approaching” on the ELA portion of the Student’s most recent TCAP test.

   2. (b) Students Enrolled in Career and Technical Programs.

      1. 1. Pursuant to T.C.A. § 49-3-105(c)(2), a Direct Allocation amount is generated for each Student Membership in a Career and Technical Program based on:
   3. (i) The level of the program; and

   4. (ii) The Student progression in coursework through the program.

      1. 2. Career and Technical Programs shall be designated into one (1) of three (3) levels. Programs will be classified into the three (3) levels based on alignment to Wage- Earning Potential indicators and additional resources required to support the program if aligned to high Wage-Earning Potential occupational pathways.

   5. (i) The level of each program will be determined by the following methodology:

      1. (I) SOC Codes will be reviewed for alignment to each program.

         1. I. For each program, the Department will develop a list of aligned careers in conjunction with stakeholder groups. The list of each program will be based on the SOC codes. II. For each program’s list of aligned SOC codes, the SOC codes with the top ten (10) highest employments in Tennessee will be used in the scoring process outlined below in this Rule. If a program’s list of aligned SOC codes is fewer than ten (10) SOC codes, then the available SOC codes will be used for the analysis outlined below in this Rule.

            1. (II) Programs will be scored using information on aligned SOC codes to establish the Wage-Earning Potential for each program by analyzing high-wage, high-demand, and high-skill data points. Each of the analyses detailed below will begin with the list of up to ten (10) SOC codes identified within each program as detailed above.

               1. I. High-wage score determination:

                  1. A. Using occupational wage data provided by the Tennessee Department of Labor and Workforce Development (TDLWD), the Department will identify the top five (5) median wage SOC codes within a program. If a program has fewer than five (5) aligned SOC codes, then the available SOC codes will be used for the purposes of this determination.

                     1. B. The median wages of the top (5) SOC codes will then be averaged together to produce the average median-wage of the program.

                        1. C. The resulting average median wage for each program will then be compared to the statewide median-wage. The comparison will result in a score ranging from one (1) to five (5) for the high-wage score based on the following:

                           1. (A) Average median wages at or below the statewide median will earn a score of one (1).
                           2. (B) Average median wages above 100% to 120% of the statewide median will earn a score of two (2).
                           3. (C) Average median wages above 120% to 130% of the statewide median will earn a score of three (3).
                           4. (D) Average median wages above 130% to 140% of the statewide median will earn a score of four (4).

                           5. (E) Average median wages above 140% of the statewide median will earn a score of five (5). II. High-demand score determination:

                              1. A. Using employment projection data provided by the TDLWD, the Department will identify the top five (5) in- demand SOC codes within each program based on regional prevalence of demand and volume of demand. If a program has fewer than five (5) aligned SOC codes, then the available SOC codes will be used for the purposes of this determination.

                                 1. B. For each aligned SOC code, the in-demand indicator will be based on the number of regions in which the SOC code is identified as in-demand using the following scores:

                                    1. (A) For a SOC code identified as in-demand in eight (8) or nine (9) workforce development regions, the SOC code will earn a score of four (4).
                                    2. (B) For a SOC code identified as in-demand in five (5) to seven (7) workforce development regions, the SOC code will earn a score of three (3).
                                    3. (C) For a SOC code identified as in-demand in three (3) to four (4) workforce development regions, the SOC code will earn a score of two (2).
                                    4. (D) For a SOC code identified as in-demand in two (2) or fewer workforce development regions, the SOC code will earn a score of one (1).

                                    5. (E) If a SOC code is projected to have annual openings in the most recent employment projections of equal to or more than one thousand (1,000), the SOC code will earn a score of four (4) regardless of the regional prevalence score determined in the above paragraphs.

                                       1. C. The scores for the top five (5) in-demand SOC codes will be averaged to generate the overall high-demand score for the program, ranging from one (1) to four (4).

                                          1. D. If the sum total of annual openings projected by the most recent employment projections for the five (5) top SOC codes is equal to or more than three thousand (3,000), then the program will score a four (4) for the high-demand score. III. High-skill score determination:

                                             1. A. Using the same set of top five (5) SOC codes identified in the high-wage score process and data provided by the TDLWD, the Department will total the number of SOC codes with a typical entry education level above a high school diploma. If a program has fewer than five (5) aligned SOC codes, then the available SOC codes will be used for the purpose of this determination.

                                                1. (A) SOC codes with typical entry education levels above a high school diploma (postsecondary non- degree award, some college, no degree, associate’s degree, bachelor’s degree, master’s degree, doctoral or professional degree) will generate a score of one (1).

                                                2. (B) SOC codes with typical entry education levels at or below a high school diploma (high school diploma or equivalent or no formal educational credential) will generate a score of zero (0).

                                                   1. B. The program will generate an overall high-skill score based on the sum of the identified SOC codes using the following:

                                                      1. (A) If the sum is five (5), the program generates a score of two (2).
                                                      2. (B) If the sum is three (3) to four (4), the program generates a score of one (1).
                                                      3. (C) If the sum is less than three (3), the program generates a score of zero (0).

                                                      4. (III) Weights and final program scores:

                                                         1. I. To determine a final program score, the high-wage, high- demand, and high-skill scores calculated above will be weighted in the following methodology:

                                                            1. A. High-wage will be weighted at 70%.

                                                               1. B. High-demand will be weighted at 20%.

                                                                  1. C. High-skill will be weighted at 10%. II. The formula for final program score is (High-Wage Score x 0.7) + (High-Demand Score x 0.2) + (High-Skill Score x 0.1) = final program score.

                                                                     1. (IV) Tiers and additional resources:

                                                                        1. I. The final program scores will be divided into three (3) levels based on the following methodology:

                                                                           1. A. Programs at or above the eightieth (80th) percentile of all scores will be identified as Level 3.

                                                                              1. B. Program scores between the fortieth (40th) and eightieth (80th) percentile of scores will be identified as Level 2.

                                                                                 1. C. Program scores below the fortieth (40th) percentile of scores will be identified as Level 1. II. Additional resources: The Department shall evaluate and establish a list of high-cost programs to reflect the additional resources needed to support the program. For programs identified in the top ten percent (10%) of additional resources needed, if the program falls into either Level 2 or Level 3, then the Department will apply an additional level of funding for student membership in these programs as identified in the appropriations process.

                                                                                    1. 3. Student progression in coursework through a program shall be determined by each course’s alignment as a first, second, third, or fourth year course of the career and technical education program.
                                                                                    2. 4. Special Considerations - Career and Technical Program Levels.
                                                                                    3. (i) If a course appears in multiple programs and the aligned programs represent two (2) or more different levels as identified in Paragraph (b)(2) of this Rule, then the course will be funded at the highest level of the aligned program.

                                                                                    4. (ii) Career and Technical Program courses for elective credit and middle school Career and Technical Program courses will be valued the same as a Student assigned to the first year of a level one (1) Career and Technical Program. Funding for general education courses that are part of a Career and Technical Program will not be funded as part of the Career and Technical Program.

                                                                                       1. 5. By July 1 of each year, the Department shall:
                                                                                    5. (i) Create and publish a listing of all approved Career and Technical Program courses and determine for each course whether it aligns with first, second, third, or fourth year of the Career and Technical Program;
                                                                                    6. (ii) Create and publish a listing of all approved Career and Technical Programs by level;
                                                                                    7. (iii) Conduct an annual review of Wage-Earning Potential indicators through data from the Tennessee Department of Labor and Workforce Development and other sources, for all occupations and ensure alignment to approved Career and Technical Programs; and

                                                                                    8. (iv) Conduct an annual review of additional resources required to support Career and Technical Programs.

                                                                                       1. 6. With the exception of the first year of implementation, program levels and course assignment to progression years, while evaluated annually, will be updated for TISA funding purposes every three (3) years to allow LEAs appropriate time to align programs. This re-evaluation, including additional resources analysis, will be released by July 1 on the three (3) year cycle and become effective for the subsequent fiscal year, providing a full year between the release date and the year in which data will drive updated funding implications.

                                                                                    9. (c) Students Taking a Postsecondary Readiness Assessment. A Direct Allocation amount is generated, which shall be maintained by the Department and used to fund the cost of Postsecondary Readiness Assessments, for each Student meeting one (1) or more of the following criteria:

                                                                                       1. 1. A junior or senior in high school, as determined from data from Education Information System and the LEA, who has not previously taken a Postsecondary Readiness Assessment; or
                                                                                       2. 2. A junior or senior in high school, as determined from data from Education Information System and the LEA, who has previously taken a Postsecondary Readiness Assessment, but only once.
                                                                                    10. (d) Kindergarten-Grade 3 Students. A Direct Allocation amount is generated for each member Student enrolled in any of the grades kindergarten through three (K-3) as determined from data from Education Information System intended to support literacy instruction; and

                                                                                    11. (e) Public Charter School Students. A Direct Allocation amount is generated for each member Student of a public charter school as reported by LEAs in the Student information system. The Department shall calculate and disburse public charter school Direct Allocations by:

                                                                                        1. 1. Dividing the total recurring funding appropriated by the Tennessee General Assembly annually for this purpose by the prior year ADM in charter schools to generate a per Student amount. The per Student amount is then multiplied by prior year ADM at each public charter school to generate the total Direct Allocation generated by individual public charter schools; and
                                                                                        2. 2. Allocating and distributing to the public charter school’s Authorizing Entity, the per Student amount multiplied by prior year ADM generated by each of the authorizer’s public charter schools. The authorizing LEA shall distribute these funds and other state, local, and federal funds to public charter schools pursuant to State Board of Education Rules, Division 0520-14 on Charter Schools.
                                                                                    12. (2) The amount set for Direct Allocations generated for each Student listed in T.C.A. § 49-3-105(c) shall be administered and allocated by the Department to the LEA in which the Student is a member, or maintained by the Department as specified in subdivision (1)(c), based on data collected for an LEA during the immediately preceding school year, in accordance with T.C.A. § 49-3-105(d).
                                                                                    13. (3) The amount for each Direct Allocation shall be determined through the state budget and appropriations process.

Authority: T.C.A. §§ 49-3-103(c), 49-3-104(4)(G), 49-3-105(c), and 49-3-115. Administrative History: New rules filed November 17, 2022; effective February 15, 2023. Amendments filed March 25, 2024; effective June 23, 2024.