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Bill Summary · HB 115

HB 115 — Child Care Facility Tax Exemption (Summary)

Status (as provided): Passed 1st Reading. Filed in 2025.
Effective date in bill: Applies to taxes imposed for taxable years beginning on or after July 1, 2026.

Purpose

To create a new, dedicated property‑tax exemption class for qualifying child care facilities by excluding those facilities’ buildings and the land they occupy (and adjacent, reasonably necessary land) from local property taxation.

Key provisions

  • Adds a new statutory section (§ 105‑278.6B) that designates qualifying child care facilities as a special class of property and excludes them from taxation to the extent described in the section.
  • Scope of exempt property: buildings used by the facility, the land those buildings actually occupy, and additional adjacent land reasonably necessary for convenient use of the buildings.
  • Definitions:
    • “Child care” and “child care facility” follow the definitions in G.S. 110‑86.
    • “Properly licensed” means operating with a current license under Article 7 of Chapter 110.
    • “Qualifying child care facility” = a properly licensed child care facility.
  • Extent of exclusion:
    • Total exclusion where the qualifying facility is actually and exclusively used to provide child care.
    • Partial exclusion allowed for the portion of property used for qualifying child care purposes even if other parts are used for non‑qualifying purposes.
  • Limits and conditions:
    • The exemption is not available during any period the facility is placed on probation or has its license suspended or revoked by the Secretary of the Department of Health and Human Services; DHHS must notify the Department of Revenue of such disciplinary actions.
    • Application procedures follow the general application requirements in G.S. 105‑282.1 (i.e., owners must apply to receive the exclusion).

Who is affected

  • Directly affected: child care providers that hold and maintain a current license under Article 7 of Chapter 110 and use their property to operate a child care facility.
  • Indirectly affected: county and municipal governments and local taxing jurisdictions, which would experience reductions in taxable property valuations to the extent eligible properties are exempted.

Administrative and timeline aspects

  • Property owners must apply as required under existing statute (G.S. 105‑282.1) to claim the exclusion.
  • DHHS will play an enforcement role by notifying the Department of Revenue when a facility’s license is placed on probation, suspended, or revoked (which disqualifies the property from the exemption during that period).
  • Effective for taxable years beginning July 1, 2026 (properties taxed in those years would be eligible if they meet requirements).

Potential impact

  • Local property tax base: likely reductions in taxable values for counties/municipalities to the extent buildings/land used for qualifying child care are removed from assessment. The bill does not specify fiscal offsets.
  • Child care sector: lowers operating costs for qualifying facilities by removing property tax liability on eligible property portions while they remain properly licensed and in compliance.
  • Administrative: county tax offices and the Department of Revenue will need to process applications and exemptions and coordinate with DHHS regarding licensing status.

Notes

  • The exemption applies only while the facility is properly licensed and not under disciplinary restriction.
  • The bill authorizes partial exemptions for mixed‑use properties, which allows valuation exclusion only for the portion used for qualifying child care.

Compiled from official sources — confirm details with the bill’s official record.

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