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HB0691 • 2026

Taxes, Exemption and Credits

AN ACT to amend Tennessee Code Annotated, Section 67-4-2109, relative to tax credits for financial institutions.

Housing Taxes
Active

The official status still shows this bill as active or still awaiting another formal step.

Sponsor
Baum, Walley
Last action
2025-05-27
Official status
Effective date(s) 01/01/2026
Effective date
Not listed

Plain English Breakdown

The official bill text does not provide details on extending the effective date beyond July 1, 2025. The extension to January 1, 2026, is mentioned in an amendment but not in the provided official summary or bill text.

Tax Credits for Financial Institutions

This bill changes how tax credits are calculated for financial institutions that make loans to eligible housing entities by increasing the percentage from 3% annually to 5% annually and adjusting the calculation method.

What This Bill Does

  • Changes the percentage of unpaid principal balance used in calculating tax credits from 3% annually to 5% annually for certain qualified low-rate loans made to eligible housing entities.
  • Modifies the calculation method for tax credits, changing it from an annual average to a monthly average of the unpaid principal balance.

Who It Names or Affects

  • Financial institutions that make loans or grants to eligible housing entities.
  • Eligible housing entities receiving qualified low-rate loans or contributions from financial institutions.

Terms To Know

Tax Credit
A reduction in the amount of tax owed, which can be used to lower a taxpayer's liability for franchise and excise taxes.
Eligible Housing Entity
An organization that qualifies under state law to receive loans or grants from financial institutions for housing-related activities.

Limits and Unknowns

  • The exact impact on state revenue cannot be determined due to multiple unknown variables.
  • This bill only affects tax years beginning on or after January 1, 2026.

Amendments

These notes stay tied to the official amendment files and metadata from the legislature.

Amendment 1-0 to HB0691

Plain English: The amendment changes when a new law about tax credits for financial institutions will start.

  • Changes the effective date of the bill from an unspecified date to January 1, 2026.
  • The original text does not specify the initial effective date, so it's unclear what date was intended before this amendment.
Amendment 1-0 to SB0784

Plain English: The amendment changes when a new law about tax credits for financial institutions will start.

  • Changes the effective date of the bill from an unspecified date to January 1, 2026.
  • The original section being replaced is not provided in the amendment text, so details about what was originally there are unknown.

Bill History

  1. 2025-05-27 Tennessee General Assembly

    Effective date(s) 01/01/2026

  2. 2025-05-27 Tennessee General Assembly

    Pub. Ch. 496

  3. 2025-05-27 Tennessee General Assembly

    Comp. became Pub. Ch. 496

  4. 2025-05-21 Tennessee General Assembly

    Signed by Governor.

  5. 2025-05-09 Tennessee General Assembly

    Transmitted to Governor for his action.

  6. 2025-05-08 Tennessee General Assembly

    Signed by Senate Speaker

  7. 2025-04-30 Tennessee General Assembly

    Signed by H. Speaker

  8. 2025-04-28 Tennessee General Assembly

    Enrolled; ready for sig. of H. Speaker.

  9. 2025-04-22 Tennessee General Assembly

    Passed Senate, Ayes 33, Nays 0

  10. 2025-04-22 Tennessee General Assembly

    Amendment withdrawn. (Amendment 1 - SA0448)

  11. 2025-04-22 Tennessee General Assembly

    Senate substituted House Bill for companion Senate Bill.

  12. 2025-04-22 Tennessee General Assembly

    Received from House, Passed on First Consideration

  13. 2025-04-22 Tennessee General Assembly

    Companion House Bill substituted

  14. 2025-04-21 Tennessee General Assembly

    Engrossed; ready for transmission to Sen.

  15. 2025-04-21 Tennessee General Assembly

    Passed H., as am., Ayes 92, Nays 0, PNV 0

  16. 2025-04-21 Tennessee General Assembly

    H. adopted am. (Amendment 1 - HA0502)

  17. 2025-04-21 Tennessee General Assembly

    Placed on Senate Regular Calendar for 4/22/2025

  18. 2025-04-21 Tennessee General Assembly

    Recommended for passage with amendment/s, refer to Senate Calendar Committee Ayes 11, Nays 0 PNV 0

  19. 2025-04-17 Tennessee General Assembly

    H. Placed on Regular Calendar for 4/21/2025

  20. 2025-04-17 Tennessee General Assembly

    Placed on cal. Calendar & Rules Committee for 4/17/2025

  21. 2025-04-17 Tennessee General Assembly

    Rec. for pass. if am., ref. to Calendar & Rules Committee

  22. 2025-04-17 Tennessee General Assembly

    Rec. for pass by s/c ref. to Finance, Ways, and Means Committee

  23. 2025-04-17 Tennessee General Assembly

    Placed on Senate Finance, Ways, and Means Committee calendar for 4/21/2025

  24. 2025-04-16 Tennessee General Assembly

    Placed on s/c cal Finance, Ways, and Means Subcommittee for 4/17/2025

  25. 2025-04-16 Tennessee General Assembly

    Sponsor(s) Added.

  26. 2025-04-14 Tennessee General Assembly

    Placed on Senate Finance, Ways, and Means Committee calendar for 4/15/2025

  27. 2025-04-14 Tennessee General Assembly

    Rule #83(8) Suspended, to be heard in Senate Finance, Ways & Means Committee on 4/15/2025

  28. 2025-04-09 Tennessee General Assembly

    Placed on s/c cal Finance, Ways, and Means Subcommittee for 4/14/2025

  29. 2025-03-11 Tennessee General Assembly

    Refer to Senate Finance, Ways & Means Committee w/ negative recommendation, as amended

  30. 2025-03-04 Tennessee General Assembly

    Placed on Senate FW&M Revenue Subcommittee calendar for 3/11/2025

  31. 2025-02-26 Tennessee General Assembly

    Placed behind the budget

  32. 2025-02-19 Tennessee General Assembly

    Placed on s/c cal Finance, Ways, and Means Subcommittee for 2/26/2025

  33. 2025-02-18 Tennessee General Assembly

    Refer to Senate F,W&M Revenue Subcommittee

  34. 2025-02-12 Tennessee General Assembly

    Passed on Second Consideration, refer to Senate Finance, Ways, and Means Committee

  35. 2025-02-10 Tennessee General Assembly

    Assigned to s/c Finance, Ways, and Means Subcommittee

  36. 2025-02-10 Tennessee General Assembly

    Introduced, Passed on First Consideration

  37. 2025-02-06 Tennessee General Assembly

    P2C, ref. to Finance, Ways, and Means Committee

  38. 2025-02-05 Tennessee General Assembly

    Intro., P1C.

  39. 2025-02-04 Tennessee General Assembly

    Filed for introduction

  40. 2025-02-03 Tennessee General Assembly

    Filed for introduction

Official Summary Text

Present law provides that, for any financial institution, a credit against the sum total of the taxes impose
d by the Franchise Tax Law and by the Excise Tax Law is allowed in an amount equal to either (i) 5% of a qualified loan or qualified long-term investment made to an eligible housing entity for any eligible activity or (ii) 3% annually of the unpaid princi
p
al balance of a qualified loan made to an eligible housing entity for any eligible activity as of December 31 of each year for the life of the loan or 15 years, whichever is earlier. This bill revises (ii) by increasing the percentage from 3% to 5% annua
l
ly of the unpaid principal balance of a qualified low-rate loan made to an eligible housing entity for any eligible activity as of December 31 of each year for the life of the loan or 15 years, whichever is earlier.

Present law provides that, for any fin
ancial institution, a credit against the sum total of the taxes imposed by the Franchise Tax Law and by the Excise Tax Law is allowed in an amount equal to either (i) 10% of a grant, contribution, or qualified low-rate loan made to an eligible housing ent
i
ty for any eligible activity or (ii) 5% annually of the unpaid principal balance of a qualified low-rate loan made to an eligible housing entity for any eligible activity as of December 31 of each year for the life of the loan or 15 years, whichever is ea
r
lier. This bill revises (ii) to, instead, be 5% annually of the month-end average unpaid principal balance of a qualified low-rate loan made to an eligible housing entity for any eligible activity for the financial institution's fiscal year life of the l
o
an or 15 years, whichever is earlier.

ON APRIL 21, 2025, THE HOUSE ADOPTED AMENDMENT #1 AND PASSED HOUSE BILL 691, AS AMENDED.

AMENDMENT #1 extends the effective date of the bill from July 1, 2025, to January 1, 2026, and clarifies that the bill applie
s
to tax years beginning on or after
January 1, 2026.

Current Bill Text

Read the full stored bill text 
SENATE BILL 784
By Walley

HOUSE BILL 691
By Baum

HB0691
002403
- 1 -

AN ACT to amend Tennessee Code Annotated, Section
67-4-2109, relative to tax credits for financial
institutions.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 67-4-2109(h)(1)(B), is amended by
deleting the subdivision and substituting instead:
(B) Three percent (3%) annually of the month-end average unpaid principal
balance of a qualified loan made to an eligible housing entity for any eligible activity for
the financial institution's fiscal year life of the loan or fifteen (15) years, whichever is
earlier.
SECTION 2. Tennessee Code Annotated, Section 67-4-2109(h)(2)(B), is amended by
deleting the subdivision and substituting instead:
(B) Five percent (5%) annually of the month-end average unpaid principal
balance of a qualified low-rate loan made to an eligible housing entity for any eligible
activity for the financial institution's fiscal year life of the loan or fifteen (15) years,
whichever is earlier.
SECTION 3. This act takes effect July 1, 2025, the public welfare requiring it.