bill rewrites the child-care property tax break

The text as introduced · 559 words

By: Talarico
H.B. No. 1035

A BILL TO BE ENTITLED

AN ACT

relating to the criteria for a local option exemption from ad

valorem taxation by a county or municipality of all or part of the

appraised value of real property used to operate a child-care

facility.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 11.36, Tax Code, is amended by amending

subsections (a) and (f) to read as follows:

(a) In this section:

(1) "Child-care facility" means a facility licensed by

the Health and Human Services Commission to provide assessment,

care, training, education, custody, treatment, or supervision for a

child who is not related by blood, marriage, or adoption to the

owner or operator of the facility, for all or part of the 24-hour

day, whether or not the facility is operated for profit or charges

for the services it offers.

(2) "Qualifying child-care facility" means a

child-care facility:

(A) the owner or operator of which participates

in the Texas Workforce Commission's Texas Rising Star Program as

described by Section 2308.3155, Government Code, for that facility;

and

(B) at which at least 20 percent of the total

number of children enrolled at the facility receive subsidized

child-care services provided through the child-care services

program administered by the Texas Workforce Commission.

(3) "Net lease" means a lease in which the lessee pays

rent plus the ad valorem taxes for the property. The term "net

lease" includes a triple net or net-net-net lease.

(f) A person who claims an exemption under Subsection (b)(2)

must include with the application for the exemption an affidavit

certifying to the chief appraiser for the appraisal district that

appraises the property that is the subject of the application that:

(1) the person has provided to the child-care facility

to which the property is leased a disclosure document stating the

amount by which the taxes on the property are reduced as a result of

the exemption and the method the person will implement to ensure

that the rent charged for the lease of the property fully reflects

that reduction , including by certifying that the property is

subject to a net lease under which the lessee is directly

responsible for the payment of ad valorem taxes imposed on the

property ;

(2) either:

(A) the property is subject to a net lease under

which the lessee is directly responsible for the payment of ad

valorem taxes imposed on the property; or

(B) the rent charged for the lease of the

property reflects the reduction in the amount of taxes on the

property resulting from the exemption through a monthly or annual

credit against the rent; and

(3) the person does not charge rent for the lease of

the property in an amount that exceeds:

(A) for property that consists of space in a

commercial property, the rent charged by the person to other

tenants of the commercial property for similar space; or

(B) for property other than property described by

Paragraph (A), the average rent charged for comparable rental

property.

SECTION 2. This Act takes effect immediately if it receives

a vote of two-thirds of all the members elected to each house, as

provided by Section 39, Article III, Texas Constitution. If this

Act does not receive the vote necessary for immediate effect, this

Act takes effect September 1, 2025.