Tennessee's Senate Bill 114, recently passed by the state legislature, aims to enhance transparency in public finance by tightening debt reporting requirements for public entities. Introduced on March 21, 2025, the bill amends existing laws to ensure timely disclosure of financial obligations and significant events, such as covenant violations and credit rating downgrades.

Key provisions of the bill mandate that public entities report any finance transactions to their governing bodies within 45 days. If no meeting is scheduled within that timeframe, they must distribute the information to all members and present it at the next meeting. Additionally, the bill requires public entities to disclose any defaults or financial issues on the Electronic Municipal Market Access (EMMA) website, ensuring that stakeholders have access to critical financial data.

The legislation has sparked discussions among lawmakers, with proponents arguing that it will foster greater accountability and protect taxpayers from potential financial mismanagement. Critics, however, express concerns about the administrative burden it may place on smaller public entities, potentially diverting resources from essential services.

Experts suggest that the bill's implications could be significant, as improved transparency may lead to better credit ratings for compliant entities, ultimately lowering borrowing costs. As the bill takes effect immediately, public entities will need to adapt quickly to the new requirements, setting the stage for a more transparent financial landscape in Tennessee.