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SB 2261

Corporations, Not for Profit - As introduced, requires a nonprofit organization that receives state or federal grants to compile, maintain, and publish in a publicly available location the salaries of the nonprofit organization's employees. - Amends TCA Title 4; Title 10, Chapter 7; Title 35; Title 48 and Title 50.

114th Regular Session (2025-2026) Introduced by Adam Lowe

TN nonprofits receiving grants would publicly disclose employee salaries and update semiannually, with private civil action for noncompliance, effective July 1, 2026.

Failed in Senate Commerce and Labor Committee (no second)
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WeVote Research Nonpartisan
Bill Summary · SB 2261

Summary: SB 2261 / HB 2181 (Tennessee 114th General Assembly)

Bill at a Glance

  • Subject: Corporations, Not for Profit – Public disclosure of nonprofit employee salaries
  • Jurisdiction: Tennessee
  • Introduced as: SB 2261 (Senate) / HB 2181 (House)
  • Introduced by: Senate sponsor Adam Lowe (and House sponsor)
  • Current status: As of the latest action, failed in Senate Commerce and Labor Committee (no second). Subsequent actions pending or not enacted.

Purpose and Intent

The bill requires certain nonprofit organizations to publicly publish the salaries of their employees if they receive state or federal grants. The intent appears to promote transparency in how grant funds are used by recipient nonprofits.

Key Provisions

New Part and Definitions (Title 48, Chapter 101)

  • Establishes a new part with defined terms:
    • Employee: A person who performs services for wages subject to withholding under 26 U.S.C. § 3402.
    • Nonprofit organization: A nonprofit entity tax-exempt under IRC 501(c)(3).
    • Person: An individual or entity.
    • Salary: Fixed, regular payments (often monthly/biweekly), typically expressed as an annual sum.

Public Disclosure Requirement (48-101-402)

  • Scope: A nonprofit organization operating in Tennessee that receives state or federal grants must:
    • Compile, maintain, and publish the salary of every employee.
    • Publish this information in a publicly available location.
    • If the nonprofit has a public website, publish the salary information on that site in a publicly accessible location.

Update Frequency (48-101-402)

  • The salary information must be updated at least every six months.

Private Right of Action (48-101-403)

  • A person who believes a nonprofit has violated the disclosure requirement may bring a civil action.
  • A court finding of violation may grant declaratory or injunctive relief.
  • Prevailing parties may be awarded court costs and attorney fees.

Who Is Affected

  • Directly Affected: Nonprofit organizations operating in Tennessee that receive state or federal grants.
  • Indirectly Affected: Employees of those nonprofit organizations (salary data becomes public); donors, researchers, journalists, and members of the public who access the salary information.
  • Other Stakeholders: The general public gains access to salary information; potential legal exposure for nonprofits failing to comply.

Procedural and Timeline Aspects

  • Effective Date: July 1, 2026.
  • Strategic Timeline: If enacted, nonprofits would need to begin publishing and updating salary data after this date, with updates required every six months.
  • Enforcement Mechanism: Private civil action; courts can award relief and legal costs to prevailing parties.
  • Current Legislative Status: As of the latest recorded action (March 3, 2026), the bill failed in the Senate Commerce and Labor Committee (no second vote). It advanced through initial readings and committee referrals earlier in 2026.

Fiscal and Economic Impact (per fiscal note)

  • Fiscal Impact: Not significant.
  • Assumptions: Compliance costs borne by grant-receiving nonprofits; minimal expected burden on court systems or state/local government; no significant impact on commerce or jobs.
  • The fiscal note suggests the main costs fall on nonprofits to collect and publish data, with modest or negligible macroeconomic effects.

Practical Considerations

  • Public access to salary data can raise privacy and security considerations for individuals.
  • Compliance requires robust record-keeping and a publicly accessible publishing mechanism (website or other public location).
  • Public and media scrutiny could influence nonprofit governance and compensation practices.

Summary

SB 2261 / HB 2181 would mandate that Tennessee-based nonprofit organizations receiving state or federal grant funds publicly disclose employee salary information, maintain updates at least semiannually, and provide a private right of action for noncompliance. The act would take effect July 1, 2026, but as of the latest action, the bill did not pass out of the Senate Commerce and Labor Committee.

Compiled from official sources — confirm details with the bill’s official record.

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