Tennessee Senate Bill SB0115

Tennessee 2025-2026 Regular Session

• Introduced: 1/13/25
• Engrossed: 2/24/25
• Enrolled: 2/27/25
• Passed: 3/12/25
• Chaptered: 3/21/25

Caption

AN ACT to amend Tennessee Code Annotated, Title 6, Chapter 56, Part 1, relative to audits of municipalities.

Summary

SB0115 amends Tennessee law governing municipal audits by requiring all municipal audits to be completed and submitted to the Comptroller of the Treasury within six months after the end of the municipality’s fiscal year. The bill also requires the audit preparer to provide copies to the mayor, chief executive officer, each member of the governing body, and the comptroller, and it makes copies available to the press. The bill adds a penalty for municipalities with two or more outstanding late annual audits. In those cases, state-distributed sales tax revenue owed to the municipality may be reduced by an amount agreed to by the comptroller and the commissioner of revenue, up to 15% of the municipality’s annual sales tax distribution. Those withheld funds are held in reserve and later returned once the municipality comes back into compliance, and the comptroller is authorized to waive a penalty under established policies and procedures. The act takes effect July 1, 2025.

Impact

The bill strengthens enforcement of existing municipal audit deadlines in Tennessee Code Annotated, Title 6, Chapter 56, Part 1, by adding a specific submission deadline and a financial penalty mechanism tied to state sales tax distributions. It affects municipalities, local governing bodies, audit preparers, the Comptroller of the Treasury, and the Department of Revenue, and it increases public access to audit reports by requiring copies to be made available to the press.

Sentiment

The bill appears to have broad support and little visible opposition. It passed the Senate State & Local Government Committee unanimously and then cleared both floor stages with overwhelming support, including a 33-0 motion to adopt and a 92-0 final passage vote. The voting history suggests the measure was viewed as a routine accountability and compliance bill rather than a controversial policy change.

Contention

No major points of contention are reflected in the available record. The only potentially sensitive feature is the new penalty that can reduce a municipality’s sales tax revenue, which may concern local governments that struggle to complete audits on time. However, the bill also includes a reserve-and-release mechanism and allows the comptroller to waive penalties, which may have reduced opposition by making the enforcement tool more flexible.