The bill, H.B. No. 1035, amends Section 11.36 of the Texas Tax Code to establish criteria for local option exemptions from ad valorem taxation for real property used to operate child-care facilities. It defines a "child-care facility" and introduces the term "qualifying child-care facility," which must participate in the Texas Rising Star Program and have at least 20% of enrolled children receiving subsidized services. Additionally, the bill introduces the definition of "net lease," which refers to a lease where the lessee pays rent plus property taxes, including triple net leases.

Furthermore, the bill outlines requirements for individuals claiming the exemption, including the necessity of providing an affidavit to the chief appraiser. This affidavit must certify that the property is subject to a net lease or that the rent charged reflects the tax reduction from the exemption. It also stipulates that the rent cannot exceed the amounts charged for similar spaces in commercial properties or the average rent for comparable properties. The bill will take effect immediately upon receiving a two-thirds vote from both houses or on September 1, 2025, if that vote is not achieved.

Statutes affected:
Introduced: Tax Code 11.36 (Tax Code 11)