HB 691

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.