AN ACT to amend Tennessee Code Annotated, Section 67-4-2109, relative to tax credits for financial institutions.
Summary
HB0691 amends Tennessee’s tax credit provisions for financial institutions that make certain loans to eligible housing entities. The bill revises two existing credit calculations under Tennessee Code Annotated section 67-4-2109: one for qualified loans and one for qualified low-rate loans. For qualified loans, the credit is set at 3% annually of the month-end average unpaid principal balance; for qualified low-rate loans, the credit is set at 5% annually of that balance.
The credits apply for the financial institution’s fiscal year life of the loan or for 15 years, whichever comes first. The bill is aimed at encouraging lending tied to eligible housing activities by preserving or enhancing the tax incentive available to banks and other financial institutions that finance housing entities. It takes effect January 1, 2026, and applies to tax years beginning on or after that date.
Impact
The bill updates Tennessee’s financial institution tax credit statute by changing the percentage rates used to calculate credits for certain housing-related loans. It affects the tax liability of participating financial institutions and indirectly supports eligible housing entities by making these loans more attractive to lenders. The amendment applies prospectively to tax years beginning January 1, 2026, and does not appear to alter the underlying eligibility framework beyond the revised credit amounts and duration cap.
Sentiment
The bill appears to have received strongly favorable treatment throughout the legislative process. It advanced unanimously in subcommittee and full committee, then passed the House on third consideration with no recorded opposition. The final enactment indicates broad bipartisan or at least noncontroversial support for the measure, likely reflecting its targeted tax-credit nature and housing-finance purpose.
Contention
No notable substantive contention is reflected in the available votes or bill history, as every recorded vote was unanimous. If there were policy concerns, they are not captured in the provided materials. The only likely areas for debate would have been the fiscal cost of the credits to the state and whether the revised percentages appropriately balance housing incentives with tax revenue, but no member opposition is shown in the record provided.