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."