SUBJECT
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An Ordinance of the City of Laredo, Texas, adopting a Child-Care Facilities tax exemption equal to 100 percent of the appraised value of all or a portion of real property operating as a qualifying Child-Care Facility. This exemption was passed during the 88th Texas Legislature regular session under Senate Bill 1145 and approved by the voters in November 2023, Proposition 2. The owner or operator of the Child-Care Facility must be licensed with the Health and Human Services Commission; participate in the Texas Workforce Commission’s Rising Star Program; and have at least 20 percent child enrollment as recipients of subsidized childcare services; qualifying Child-Care Facilities will be exempt from City ad valorem taxes in accordance with Chapter 11, Section 11.36 of the Texas Property Tax Code, starting with tax year 2024 and each year thereafter unless amended; and declaring an effective date.
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PREVIOUS COUNCIL ACTION
On May 20, 2024, City Council approved the Introductory Ordinance for a Child-Care Facilities exemption equal to 100 percent of the appraised value of all or a portion of real property operating as a qualifying Child-Care Facility and shall be exempt from all taxation for all City purposes beginning in Tax Year 2024 and future years, unless amended.
BACKGROUND
The Child-Care Facilities exemption was passed during the 88th Texas Legislature’s regular session under Senate Bill 1145 and approved by the voters in November 2023, Proposition 2. Pursuant to the provisions of the Texas Property Tax Code, Chapter 11, Section 11.36, a county or a municipality to adopt a Child-Care Facilities exemption as a percentage of the appraised value of all or a portion of real property operating as a qualifying Child-Care Facility, and the percentage cannot be less than 50 percent; each person desiring such exemption shall file an application and an affidavit form with the Webb County Appraisal District.
The owner or operator of the Child-Care Facility must be licensed with the Health and Human Services Commission; participate in the Texas Workforce Commission’s Rising Star Program; and have at least 20 percent child enrollment as recipients of subsidized childcare services. If the owner of the property receives the exemption and leases to a person who is a qualifying Child-Care Facility, the owner must pass on the savings to the tenant and should reflect as a reduction in the monthly or annual rent of the tenant.
A person cannot claim the Child-Care Facility exemption if the person also claims a residence homestead exemption under Section 11.13 of the Texas Property Tax Code or leases any part of the property to another for use as a principal residence.
COMMITTEE RECOMMENDATION
Not Applicable.
STAFF RECOMMENDATION
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That City Council approves the Ordinance.
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Fiscal Impact
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FINANCIAL IMPACT:
If the City adopts the Child-Care Facilities exemption, the revenue loss is estimated to be $318,764.