79R59 MFC-D

By:  Isett                                                        H.B. No. 483



A BILL TO BE ENTITLED

AN ACT

relating to an exemption from ad valorem taxation of property used 
as 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 11.34 to read as follows:
	Sec. 11.34.  CHILD-CARE FACILITIES.  (a)  In this section, 
"child-care facility" has the meaning assigned by Section 42.002, 
Human Resources Code.
	(b)  A person is entitled to an exemption from taxation of:             
		(1)  the real property the person owns and operates as a 
child-care facility that qualifies as provided by Subsection (d) 
and the tangible personal property the person owns and uses in 
connection with the operation of the child-care facility if:
			(A)  except as provided by Subsection (c), the 
real property and tangible personal property are used exclusively 
for providing developmental and educational services for children 
attending the facility; and
			(B)  the real property and tangible personal 
property are reasonably necessary for the operation of the 
child-care facility; and
		(2)  the real property the person owns consisting of:                  
			(A)  an incomplete improvement that is under 
active construction or other physical preparation and that is 
designed and intended to be used as a child-care facility that 
qualifies as provided by Subsection (d); and
			(B)  the land on which the incomplete improvement 
is located that will be reasonably necessary for the use of the 
improvement as a child-care facility that qualifies as provided by 
Subsection (d).
	(c)  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.                            
	(d)  To qualify as a child-care facility for the purposes of 
this section, an entity, whether operated by an individual, as a 
corporation, or as an association, must:
		(1)  meet the Texas Rising Star Provider criteria 
described by 40 T.A.C. Section 809.15(b); or
		(2)  be accredited by a nationally recognized 
accrediting organization for child-care or early childhood 
education facilities or programs approved by the Texas Workforce 
Commission and the Department of Protective and Regulatory Services 
as applying criteria for accreditation adequate to ensure the 
quality of an accredited facility or program, such as the National 
Association for the Education of Young Children or the National 
Early Childhood Program Accreditation Commission.
	(e)  Property is not disqualified from receiving an 
exemption under this section if a portion of the property is used 
for functions other than those described by Subsections (b) and 
(c).  However, the exemption does not apply to the value of the 
portion of the property that is used for those other functions.
	(f)  A property may not be exempted under Subsection (b)(2) 
for more than three years.  For purposes of Subsection (b)(2), an 
incomplete improvement is under physical preparation if the 
child-care facility has:
		(1)  engaged in architectural or engineering work, soil 
testing, land clearing activities, or site improvement work 
necessary for construction of the improvement; or
		(2)  conducted an environmental or land use study 
relating to construction of the improvement.
	SECTION 2.  Section 11.43(c), Tax Code, is amended to read as 
follows:       
	(c)  An exemption provided by Section 11.13, 11.17, 11.18, 
11.182, 11.183, 11.19, 11.20, 11.21, 11.22, 11.23(h), (j), or 
(j-1), 11.29, 11.30, [or] 11.31, or 11.34, 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, 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.
	SECTION 3.  This Act applies only to an ad valorem tax year 
that begins on or after the effective date of this Act.
	SECTION 4.  This Act takes effect January 1, 2006.