Senate General Assembly File No. 162, Substitute Senate Bill No. 284, proposes the creation of a Security Deposit Loan Assistance Program to help certain individuals, such as low-income households, veterans, victims of domestic violence, and recent college graduates, obtain loans for rental security deposits. The program, administered by the Commissioner of Housing and effective July 1, 2024, allows eligible financial institutions to provide loans with a capped interest rate of 4% per annum, to be repaid within 24 months. The loans are to be used for security deposits, with the amount not exceeding one month's rent and the rent not exceeding 35% of the household income. The bill prohibits financial institutions from considering the renter's creditworthiness or debt-to-income ratio and requires the loan funds to be paid directly to the landlord. It also mandates financial literacy classes for loan recipients and the reporting of on-time rental payments to credit bureaus.

The bill also amends the state tax code, effective January 1, 2025, with insertions and deletions affecting the calculation of state gross income and the treatment of Social Security benefits. It specifies deductions based on federal adjusted gross income levels, with a sliding scale for deductions related to pension or annuity income, and introduces deductions for various other incomes and expenses, including a new insertion for interest deferred or not charged on security deposit loans. The bill outlines the process for financial institutions to claim payment from the state for uncollected loans and includes provisions for the Department of Banking and the Department of Housing to incur costs related to the administration of the program. The bill also establishes a state income tax exemption for interest on security deposit loans, potentially resulting in a minor revenue loss for the General Fund. The effective date for the program is July 1, 2024, while the tax exemption takes effect on January 1, 2025.