Tennessee Senate Bill SB2261

Tennessee 2025-2026 Regular Session

• Introduced: 2/2/26
• Failed: 3/3/26

Caption

AN ACT to amend Tennessee Code Annotated, Title 4; Title 10, Chapter 7; Title 35; Title 48 and Title 50, relative to nonprofit organizations.

Summary

SB2261 would require certain nonprofit organizations operating in Tennessee and receiving state or federal grants to compile, maintain, and publicly post the salary of each employee. If the organization has a public website, the salary information must be posted there in a publicly accessible location. The bill defines key terms such as “nonprofit organization,” “employee,” and “salary,” and it applies only to 501(c)(3) entities that receive government grant funding. The bill also requires the salary information to be updated at least every six months. In addition, it creates a private right of action allowing a person who believes a covered nonprofit has violated the disclosure requirement to sue in court. A court finding a violation may grant declaratory or injunctive relief and must award reasonable court costs and attorney fees to the prevailing party.

Impact

The bill would add a new transparency requirement to Tennessee nonprofit law by mandating public disclosure of employee salaries for grant-funded 501(c)(3) organizations. It would affect nonprofits that receive state or federal grants, their employees, and potentially any member of the public who seeks to enforce the disclosure requirement through litigation. The measure would also expose covered nonprofits to court-ordered relief and fee-shifting if they fail to comply.

Sentiment

No committee transcripts or recorded votes were provided, so there is no direct evidence of legislative debate or formal support/opposition in the available materials. Based on the text alone, the bill appears aimed at transparency and accountability for publicly funded nonprofits, which may appeal to supporters of disclosure and oversight. At the same time, the mandatory publication of individual salary information suggests the proposal could raise privacy and administrative concerns among affected organizations.

Contention

The main point of contention is likely the balance between transparency in the use of public funds and the privacy/operational burden placed on nonprofit organizations. Supporters would likely emphasize public accountability for organizations receiving taxpayer or federal dollars, while opponents may argue that disclosing every employee’s salary could deter talent, create security or privacy risks, and impose compliance costs. The private enforcement provision and mandatory attorney-fee award may also be controversial because they could encourage litigation against nonprofits.