AN ACT to amend Tennessee Code Annotated, Section 67-4-2109, relative to tax credits for financial institutions.
Summary
SB0784 amends Tennessee’s tax credit provisions for financial institutions by changing the credit calculation for certain loans made to eligible housing entities. Specifically, it sets the credit at 3% annually of the month-end average unpaid principal balance for a qualified loan and 5% annually for a qualified low-rate loan, with the credit available for the financial institution’s fiscal year life of the loan or 15 years, whichever comes first.
The bill is focused on housing-related lending incentives and is intended to support financing for eligible housing activities through the state tax code. It applies to tax years beginning on or after January 1, 2026, and updates Tennessee Code Annotated Section 67-4-2109 to reflect the new credit percentages and duration limits.
Impact
The bill narrows and clarifies Tennessee’s financial institution tax credit rules for housing-related loans by replacing the existing credit language in Section 67-4-2109(h)(1)(B) and (h)(2)(B). It affects banks and other financial institutions that make qualified loans or qualified low-rate loans to eligible housing entities, as well as the housing entities receiving financing. The changes take effect January 1, 2026, and apply prospectively to tax years beginning on or after that date.
Sentiment
The available legislative history suggests broad support for the measure. The Senate Finance, Ways and Means Committee recommended passage with amendment(s) by an 11-0 vote, indicating unanimous committee approval. No committee transcript was provided, but the vote history reflects a generally favorable view of the bill’s housing-finance incentives.
Contention
No major points of contention are evident in the provided materials. The bill passed committee unanimously, and there is no transcript showing objections or debate. Any potential policy concern would likely center on the cost of the tax credit to state revenues versus the benefit of encouraging housing finance, but no specific opposition is documented in the record provided.