S.B. No. 1145

AN ACT
relating to 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. Subchapter B, Chapter 11, Tax Code, is amended by
adding Section 11.36 to read as follows:
Sec. 11.36. CHILD-CARE FACILITIES. (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.
(b) Subject to Subsection (d), if the governing body of a
county or municipality in the manner required by law for official
action by the governing body adopts the exemption, a person is
entitled to an exemption from taxation by the county or
municipality of all or part of the appraised value of:
(1) the real property the person owns and operates as a
qualifying child-care facility; or
(2) the portion of the real property that the person
owns and leases to a person who uses the property to operate a
qualifying child-care facility.
(c) The governing body of a county or municipality may adopt
the exemption authorized by this section as a percentage of the
appraised value of the property. The percentage specified by the
governing body may not be less than 50 percent.
(d) To qualify for the exemption authorized by this section,
the property must be:
(1) except as provided by Subsection (e), used
exclusively to provide developmental and educational services for
children attending the child-care facility; and
(2) reasonably necessary for the operation of the
child-care facility.
(e) The use of exempt property for functions other than
providing developmental and educational services for children
attending the child-care facility located on the property does not
result in the loss of an exemption authorized by this section if
those other functions are incidental to the use of the property for
providing those services to those children and benefit:
(1) those children; or
(2) the staff and faculty of the facility.
(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;
(2) 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.
(g) Notwithstanding any other provision of this section, a
person may not claim an exemption under Subsection (b)(2) for
property:
(1) for which the person claims an exemption under
Section 11.13; or
(2) any part of which is leased by the person to
another person for use as a principal residence.
(h) Property is not ineligible for an exemption under this
section if a portion of the property is used for functions other
than those described by Subsections (d) and (e). However, the
exemption does not apply to the value of the portion of the property
that is used for those other functions.
(i) Section 25.07 does not apply to a leasehold interest in
property for which the owner receives an exemption under this
section.
(j) The comptroller may adopt rules and forms necessary for
the administration of this section.
SECTION 2. Section 11.43(c), Tax Code, is amended to read as
follows:
(c) An exemption provided by Section 11.13, 11.131, 11.132,
11.133, 11.134, 11.17, 11.18, 11.182, 11.1827, 11.183, 11.19,
11.20, 11.21, 11.22, 11.23(a), (h), (j), (j-1), or (m), 11.231,
11.254, 11.27, 11.271, 11.29, 11.30, 11.31, 11.315, [or] 11.35, or
11.36, once allowed, need not be claimed in subsequent years, and
except as otherwise provided by Subsection (e), the exemption
applies to the property until it changes ownership or the person’s
qualification for the exemption changes. However, except as
provided by Subsection (r), the chief appraiser may require a
person allowed one of the exemptions in a prior year to file a new
application to confirm the person’s current qualification for the
exemption by delivering a written notice that a new application is
required, accompanied by an appropriate application form, to the
person previously allowed the exemption. If the person previously
allowed the exemption is 65 years of age or older, the chief
appraiser may not cancel the exemption due to the person’s failure
to file the new application unless the chief appraiser complies
with the requirements of Subsection (q), if applicable.
SECTION 3. This Act applies only to ad valorem taxes imposed
for a tax year beginning on or after the effective date of this Act.
SECTION 4. This Act takes effect January 1, 2024, but only
if the constitutional amendment proposed by the 88th Legislature,
Regular Session, 2023, authorizing 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 is approved by the voters. If that amendment is not
approved by the voters, this Act has no effect.

______________________________ ______________________________
President of the Senate Speaker of the House

I hereby certify that S.B. No. 1145 passed the Senate on
May 1, 2023, by the following vote: Yeas 25, Nays 6.

______________________________
Secretary of the Senate

I hereby certify that S.B. No. 1145 passed the House on
May 16, 2023, by the following vote: Yeas 109, Nays 33,
one present not voting.

______________________________
Chief Clerk of the House

Approved:

______________________________
Date

______________________________
Governor