In today’s article on the 14 proposed amendments to the Texas Constitution, we’ll look at Proposition 2 also known as the “Property Tax Exemption for Childcare Facilities Amendment”. (read related article)
Proposition 2 – SJR 64 “The constitutional amendment 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.”
Breaking Down Proposition 2
Proposition 2 would authorize the state legislature to pass a law to exempt from ad valorem taxation all or part of the property used to operate a child-care facility. It would also authorize the state legislature to define “child-care facility” and impose eligibility requirements for qualifying for the tax exemption.
The state legislature also passed Senate Bill 1145 (SB 1145), the implementing legislation, during the 2023 regular legislative session.
Background to Proposition 1
During the Texas 88th 2023 regular legislative session, the State Legislature passed Senate Bill 1145 (SB 1145) by a vote of 25-6 in the Senate and 109-33 in the House. SB 1145 authorizes counties and municipalities to enact a local option property tax exemption from ad valorem taxation (The ad valorem tax in Texas, also called property tax, is a type of locally assessed tax where the tax bill depends on the value of the property being taxed) on all or part of the appraised value of property used to operate a childcare facility. The law would prohibit the exemption from being less than 50% of the appraised value. For properties leased to operators of childcare facilities, the law requires the landlord to include with their exemption application an affidavit that certifies they have informed the operator of the childcare facility of the amount of the tax exemption and that rent charged will be decreased in proportion to the reduction of taxes either through a monthly or annual credit against the rent. The law also states that the exemption does not need to be claimed again once it is authorized unless the property changes ownership or the property no longer meets the qualifications for the exemption. The law would take effect on January 1, 2024, if the amendment is approved.
State Senator District 23, Royce West (Dem) who authored the bill said, “The Texas child-care shortage is likely to have devastating effects on early childhood education, economic growth, and employment opportunities for parents. According to the U.S. Chamber of Commerce Foundation, Texas’ economy loses more than $9 billion every year due to inadequate child care. S.J.R. 64 seeks to address this issue by allowing the legislature, by general law, to exempt from property taxation all or part of the appraised value of real property used to operate a child-care facility.”
To put a legislatively referred constitutional amendment before voters, a two-thirds (66.67%) vote is required in both the upper and lower chambers. This amendment was introduced as Senate Joint Resolution 64 on March 9, 2023. On May 3, 2023, the state Senate passed SJR 64 by a vote of 25-6. On May 19, the state House passed SJR 64 by a vote of 114-31 with four not voting.
A “YES” vote supports amending the state constitution to allow counties or municipalities to authorize a property tax exemption from ad valorem taxation on all or part of the appraised value of real property used to operate childcare facilities.
A “NO” vote opposes this constitutional amendment to authorize local property tax exemptions from ad valorem taxation on properties used to operate childcare facilities.
Disclaimer: TownTalk does not support or endorse a “YES” or a “NO” to these propositions. The information provided in this article is for informational purposes only.
