My paraphrase: Strictly the biological facts. Don't say gay. Don't say transgender.
The page for SB 49 in the Tennessee Legislature's well-organized site, here.
The American Library Association has a lot of interesting information on its web pages about "challenged" books.
The information on their site that is significant for sexual minorities:
The most "challenged" book (i.e., someone wanted it removed from the school or library) of 2010 was And Tango Makes Three, the children's book about two male penguins raising a baby chick. This book was published in 2005 and was also the most challenged book of 2006, 2007, and 2008. In 2009 it was second on the list. The book was the fourth most challenged book between 2000 and 2009.
The ALA says a challenge "is defined as a formal, written complaint, filed with a library or school requesting that materials be removed because of content or appropriateness". They also "estimate that for every reported challenge, four or five go unreported".
Books with sexual minority content made the "top ten" list of challenged books every year since 2002. A book with sexual minority content was also in the number one spot in 2005. Between 1990 and 2010, there were 892 challenges based on books with "homosexual" content. Presumably that category includes books with transgender content as well.
The number of challenges is far lower than I would have guessed (even when you account for unreported challenges), given a population of about 250 million in 1990, and 310 million in 2010.
Daddy's Roommate was the second most challenged book of the 1990s. Heather Has Two Mommies was the ninth. Both of these children's books figured prominently in a controversy in New York City in 1993. New York City, under a recently-hired school official named Joseph Fernandez, had developed a multicultural curriculum which included sexual minorities, called Children of the Rainbow. The curriculum ended up not being implemented after a conservative school district revolted, and other conservative school districts, emboldened by the first, revolted as well.