Tennessee Senate Bill SB2194

Tennessee 2025-2026 Regular Session

• Introduced: 2/2/26
• Engrossed: 3/23/26
• Enrolled: 4/2/26
• Passed: 4/16/26
• Chaptered: 5/5/26

Caption

AN ACT to amend Tennessee Code Annotated, Title 48, Chapter 68 and Title 68, Chapter 11, relative to hospitals.

Summary

SB2194 amends Tennessee’s nonprofit hospital acquisition law to carve out a specific category of hospital from an existing statutory rule. Under the bill, a hospital is excluded from the definition of a “public benefit hospital entity” for purposes of Tennessee Code Annotated § 48-68-206(a)(5) if it was established solely for the benefit of a county government and has an estimated sales value of more than $500 million. The new exception applies only in a county government that contains such a hospital, and only after approval by a two-thirds vote of that county’s legislative body. The bill also revises the general rule governing how acquisition proceeds are handled in hospital transactions. Except for the new carve-out, the law continues to require that the question of whether proceeds are controlled independently of the acquiring or related entities be considered, but it now expressly states that proceeds may not be returned to any county or municipal government except to the extent needed to satisfy lawful obligations owed to that government. The act takes effect immediately upon becoming law.

Impact

SB2194 narrows the application of Tennessee’s public benefit hospital entity provisions by creating a targeted exemption for a large county-affiliated hospital meeting specified ownership and valuation criteria. It changes Tennessee Code Annotated Title 48, Chapter 68, which governs nonprofit corporations and hospital transactions, and affects how proceeds from hospital acquisitions may be distributed or retained. The bill is likely to affect county governments, hospital systems, nonprofit healthcare entities, and potential acquirers involved in transactions involving large public-benefit hospitals.

Sentiment

The bill appears to have been generally supported throughout the legislative process. It received a unanimous recommendation in the Senate Health and Welfare Committee, passed the Senate floor with only one dissenting vote, and then passed the House on third consideration with no opposition. The voting history suggests broad bipartisan acceptance and little visible controversy at the final stages.

Contention

The main point of contention is the bill’s narrow, transaction-specific exemption for a hospital established solely for a county government and valued above $500 million. Supporters likely viewed the measure as a tailored fix for a particular hospital acquisition or governance issue, while any opposition appears to have centered on whether the carve-out creates special treatment for one institution and limits the return of proceeds to county or municipal governments. The requirement of a two-thirds vote by the affected county’s legislative body indicates an effort to ensure local approval before the exemption applies.