Relating to the contents of an affidavit required to be included with an application for an exemption from ad valorem taxation of all or part of the appraised value of real property used to operate a child-care facility.

89(R) HB 1035 - Engrossed version - Bill Text

89R20799 CJC-F

By: Talarico, Button

H.B. No. 1035

A BILL TO BE ENTITLED

AN ACT

relating to the contents of an affidavit required to be included

with an application for an exemption from ad valorem taxation 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(a), Tax Code, as added by Chapter

281 (S.B. 1145), Acts of the 88th Legislature, Regular Session,

2023, is amended by amending Subdivision (2) and adding Subdivision

(3) to read as follows:

(2)
"Net lease" means a lease under which the lessee

pays, in addition to a base rental amount, the taxes imposed on the

property that is the subject of the lease. The term includes a

double net lease and a triple net lease.

(3)
"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.

SECTION 2. Section 11.36(f), Tax Code, as added by Chapter

281 (S.B. 1145), Acts of the 88th Legislature, Regular Session,

2023, is amended to read as follows:

(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)
either:

(A)
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;
or

(B)

the property is subject to a net lease and the

child-care facility to which the property is leased is responsible

for paying the taxes imposed on the property;

(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
, either
through a monthly or annual

credit against the rent
or, if applicable, by operation of the net

lease to which the property is subject
; 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 3. The change in law made by this Act applies only

to an application for an exemption from ad valorem taxation under

Section 11.36, Tax Code, as added by Chapter 281 (S.B. 1145), Acts

of the 88th Legislature, Regular Session, 2023, that is filed on or

after the effective date of this Act. An application for an

exemption from ad valorem taxation under that section that was

filed before the effective date of this Act is covered by the law in

effect on the date the application was filed, and the former law is

continued in effect for that purpose.

SECTION 4. To the extent of any conflict, this Act prevails

over another Act of the 89th Legislature, Regular Session, 2025,

relating to nonsubstantive additions to and corrections in enacted

codes.

SECTION 5. 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.