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SB 489

Relating to a requirement that a person provide or contribute to the cost of child care for the person's employees in order to be eligible to receive a limitation on the taxable value of the person's property for school district maintenance and operations ad valorem tax purposes.

89th Legislature (2025) Introduced by Carol Alvarado and 3 co-sponsors

Texas bill conditions business school property tax exemptions on employers providing or funding child care for employees, linking tax benefits to workforce support infrastructure.

Referred to Economic Development
#business&commerce--general(i0050) #daycare(i0209) #economic&industrialdevelopment--general(i0214) #education--primary&secondary--finance(i0250) #statefinances--management&control(i0748) #taxation--property-appraisals&appraisaldistricts(i0792) #taxation--property-exemptions(i0793) #taxation--property-stateadministration(i0791) #taxation--schooldistrict(i0785)
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Bill Summary · SB 489

Legislative bill overview

SB 489 proposes to condition Texas school property tax exemptions (specifically the M&O tax limitation for businesses) on employers providing or financially contributing to child care for their employees. Currently, businesses can receive significant property tax reductions without such requirements. This bill would add a new eligibility criterion linking tax benefits to workplace child care support.

Why is this important

Child care costs are a major barrier to workforce participation, particularly for lower-income workers. By tying tax incentives to child care provision, the bill attempts to address workforce development and family economic stability simultaneously. However, this could significantly impact business decision-making around property tax eligibility and alter the cost-benefit calculus for companies considering relocation or expansion in Texas.

Potential points of contention

  • Business burden and compliance: Requiring child care provision or contributions may increase operational costs for businesses, potentially making the tax exemption less attractive or pricing out smaller businesses from the benefit entirely
  • Definition and scope ambiguity: The bill doesn't specify what constitutes adequate "contribution," whether on-site care is required, which employees qualify, or how costs are calculated—leaving significant regulatory questions
  • School funding impact: Reducing property tax exemptions could decrease revenue available for school districts, potentially requiring offsetting measures or affecting education funding

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

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