Floor Packet Page No. 47 Amend CSHJR 4 by striking all below the resolving clause and substituting the following: SECTION 1. Section 1, Article VII, Texas Constitution, is amended to read as follows: Sec. 1. (a) A general diffusion of knowledge being essential to the preservation of the liberties and rights of the people, it shall be the duty of the Legislature of the State of Texas to establish and make suitable provision for the support and maintenance of an efficient system of public free schools. (b) The financial support of elementary and secondary public school education shall be the first priority among State spending and appropriations, subject only to the dedication of revenue otherwise provided by this Constitution and to the payment of lawfully incurred State debt. SECTION 2. Article VII, Texas Constitution, is amended by adding Section 5-a to read as follows: Sec. 5-a. (a) The Texas School Property Tax Relief Fund is created as a trust fund in the state treasury, subject to administration and investment by the comptroller of public accounts as provided by general law. Money credited to the fund shall be paid to each school district of this state imposing ad valorem taxes for elementary and secondary public school purposes to provide relief from school district ad valorem taxation of residence homesteads as provided by this section. (b) The Texas School Property Tax Relief Fund is composed of: (1) any revenue that the legislature provides by law for deposit to the credit of or transfer to the fund; (2) the portion of any unencumbered positive balance of general revenues on the last day of the preceding biennium in the amount necessary to provide the residence homestead tax relief required by this section for the next biennium considering all other amounts in the fund or to be deposited in the fund during the next biennium; (3) interest earned on money credited to the fund; and (4) the additional amount of money, to be transferred or deposited to the fund from the first revenues coming into the treasury as necessary, that when added to other money in the fund is sufficient to provide the residence homestead tax relief required by this section at the time and in the manner provided by law. (c) The amount transferred to a school district each fiscal year from the fund is the amount necessary to provide school district tax relief for residence homesteads in an amount equal to the school district taxes that would be imposed on each resident homestead at a rate of 20 cents per $100 of taxable value for the school district tax year that ends in the state fiscal year of the transfer. The legislature by a two-thirds vote of the members elected to each house may in a general appropriations act that covers public school funding provide for resident homestead school district tax relief under this section at a lower rate for one or both years of the state fiscal biennium covered by that general appropriations act. Each school district that receives revenue for residence homestead tax relief under this section shall reduce the school district ad valorem tax imposed on each residence homestead in the district in the appropriate amount per $100 of taxable value, and shall credit or refund that amount to the owner of each residence homestead. (d) After the payments required by Subsection (a) of this section have been made or sufficient funds for the payments in a state fiscal biennium have been set aside, the legislature may appropriate from the trust fund any remaining money for elementary and secondary public school purposes. (e) This section is self-enacting. The legislature may by general law provide for the administration of this section. SECTION 3. Section 47, Article III, Texas Constitution, is amended by adding Subsection (f) to read as follows: (f) Money received by the State from the operation of lotteries authorized by Subsection (e) of this section, less amounts paid for lottery prizes and administrative costs, may be spent only for elementary and secondary public education. SECTION 4. Subsection (b), Section 49-g, Article III, Texas Constitution, as proposed by H.J.R. No. 2, 70th Legislature, Regular Session, 1987, is amended to read as follows: (b) The comptroller shall, not later than the 90th day of each biennium, transfer to the economic stabilization fund one-half of any unencumbered positive balance of general revenues on the last day of the preceding biennium in excess of the amount of those revenues transferred on that date to the Texas School Property Tax Relief Fund under Section 5-a, Article VII, of this constitution. If necessary, the comptroller shall reduce the amount transferred in proportion to the other amounts prescribed by this section to prevent the amount in the fund from exceeding the limit in effect for that biennium under Subsection (g) of this section. SECTION 5. Article III, Texas Constitution, is amended by adding Section 31a to read as follows: Sec. 31a. (a) The legislature by general law may create a Texas Grace Commission to study state agencies, institutions, and programs in the executive department of state government and recommend that certain of those agencies, institutions, or programs be abolished or reduced to a specified size or otherwise modified to make them more cost-effective. (b) Notwithstanding Sections 1, 11, and 31 of this article, the legislature must accept or reject, but may not amend, each substantive recommendation presented to the legislature by the commission. (c) This section is repealed on September 1, 1999. SECTION 6. Article XVII, Texas Constitution, is amended by adding Section 3 to read as follows: Sec. 3. The constitutional amendment proposed by H.J.R. No. 4, 75th Legislature, Regular Session, 1997, has no effect, and the changes to this constitution proposed by that resolution expire immediately after the adoption of the amendment, if at the election at which the amendment is submitted to the voters less than 25 percent of the registered voters vote on the proposition to adopt the amendment. This subsection expires January 1, 1998. SECTION 7. This proposed constitutional amendment shall be submitted to the voters at an election to be held August 9, 1997. The ballot shall be printed to permit voting for or against the proposition: "The constitutional amendment creating the Texas School Property Tax Relief Fund, dedicating revenue to fund Texas primary and secondary public schools for the purpose of property tax relief, and authorizing the Texas Grace Commission."