75R10578 JBN-D
By Craddick, Junell, et al. H.J.R. No. 4
Substitute the following for H.J.R. No. 4:
By Sadler, Hilbert, Brimer, Chisum, C.S.H.J.R. No. 4
Craddick, Hernandez, Hochberg, Junell,
Stiles, Williamson, Wilson
A JOINT RESOLUTION
1-1 proposing a constitutional amendment providing financial support
1-2 for elementary and secondary public education, dedicating revenue
1-3 and authorizing priority allocations of certain revenue,
1-4 authorizing a state property tax and certain taxes on entities,
1-5 providing property tax relief and reduced school taxes on
1-6 residential property, including certain homestead property, and
1-7 making implementation and conforming amendments.
1-8 BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-9 SECTION 1. Section 1, Article VII, Texas Constitution, is
1-10 amended to read as follows:
1-11 Sec. 1. (a) A general diffusion of knowledge being
1-12 essential to the preservation of the liberties and rights of the
1-13 people, it shall be the duty of the Legislature of the State to
1-14 establish and make suitable provision for the support and
1-15 maintenance of an efficient system of public free schools.
1-16 (b) The financial support of elementary and secondary public
1-17 school education shall be the first priority among State spending
1-18 and appropriations, subject only to the dedication of revenue
1-19 otherwise provided by this Constitution and to the payment of
1-20 lawfully incurred State debt. The Legislature, notwithstanding
1-21 Sections 6 and 22 of Article VIII of this Constitution, by general
1-22 law may, to fulfill its obligations under this subsection, provide
1-23 spending priorities and minimum financial effort, including
1-24 guaranteed draws against the revenue of this State not dedicated by
2-1 this Constitution.
2-2 SECTION 2. Section 1-e, Article VIII, Texas Constitution, is
2-3 amended to read as follows:
2-4 Sec. 1-e. 1. Except as provided by Subsection 2 of this
2-5 section, no [No] State ad valorem taxes shall be levied upon any
2-6 property within this State.
2-7 2. Ad valorem taxes may be imposed by the legislature at a
2-8 rate not to exceed $1.05 for each $100 of taxable value for
2-9 elementary and secondary public school purposes on property not
2-10 subject to taxation for maintenance and operations purposes by a
2-11 school district and not otherwise exempted by this constitution or
2-12 by the legislature under the authority of this constitution. The
2-13 legislature may provide for the appraisal of property subject to
2-14 State ad valorem taxes, for the equalization of the taxable values
2-15 of that property, and for the collection of the State ad valorem
2-16 taxes imposed on that property [All receipts from previously
2-17 authorized State ad valorem taxes that are collected on or after
2-18 the effective date of the 1982 amendment to this section shall be
2-19 deposited to the credit of the general fund of the county
2-20 collecting the taxes and may be expended for county purposes.
2-21 Receipts from taxes collected before that date shall be distributed
2-22 by the legislature among institutions eligible to receive
2-23 distributions under prior law. Those receipts and receipts
2-24 distributed under prior law may be expended for the purposes
2-25 provided under prior law or for repair and renovation of existing
2-26 permanent improvements].
2-27 3. The legislature by general law may exempt from ad valorem
3-1 taxes imposed under Subsection 2 of this section in any tax year
3-2 all or a portion of the value of property exempt in that tax year
3-3 from ad valorem taxation by a school district pursuant to a tax
3-4 abatement agreement entered into by the school district before
3-5 January 1, 1997.
3-6 4. State ad valorem taxes shall be assessed on the valuation
3-7 of property subject to those taxes as determined by the appraisal
3-8 officials in the county in which the property is located. If an
3-9 appraisal official uses generally accepted appraisal standards and
3-10 practices to appraise property subject to the State ad valorem tax
3-11 and the valuation of the property subject to that tax conforms to
3-12 or is equalized by the local appraisal review process to conform to
3-13 the accepted standards and practices, the assessment of the State
3-14 ad valorem tax on that valuation is not invalid. This subsection
3-15 expires at the end of the 1999 ad valorem tax year.
3-16 SECTION 3. Section 3, Article VII, Texas Constitution, is
3-17 amended to read as follows:
3-18 Sec. 3. (a) One-fourth of the revenue derived from the
3-19 State occupation taxes [and poll tax of one dollar on every
3-20 inhabitant of the State, between the ages of twenty-one and sixty
3-21 years,] shall be set apart annually for the benefit of the public
3-22 [free] schools; and in addition thereto, there shall be levied and
3-23 collected an annual ad valorem State tax as provided by Subsection
3-24 2, Section 1-e, Article VIII, of this constitution [of such an
3-25 amount not to exceed thirty-five cents on the one hundred
3-26 ($100.00) dollars valuation, as with the available school fund
3-27 arising from all other sources, will be sufficient] to maintain and
4-1 support the public schools of this State. Money received by the
4-2 State from the operation of lotteries authorized by Section 47(e),
4-3 Article III, of this constitution, less amounts paid for lottery
4-4 prizes and administrative costs, may be spent only for elementary
4-5 and secondary public education. The [for a period of not less
4-6 than six months in each year, and it shall be the duty of the]
4-7 State Board of Education shall [to] set aside a sufficient amount
4-8 of State funds [out of the said tax] to provide free text books for
4-9 the use of children attending the public [free] schools of this
4-10 State. If[; provided, however, that should the limit of] taxation
4-11 and revenue described by this subsection are [herein named be]
4-12 insufficient, the deficit may be met by appropriation from the
4-13 general funds of the State.
4-14 (b) The [and the] Legislature may [also] provide for the
4-15 formation of school districts [district] by general laws. All[;
4-16 and all] such school districts may embrace parts of two or more
4-17 counties. The[, and the] Legislature may by general law provide
4-18 [shall be authorized to pass laws for the assessment and collection
4-19 of taxes in all said districts and] for the management and control
4-20 of the public [school or] schools of such districts.
4-21 (c) The[, whether such districts are composed of territory
4-22 wholly within a county or in parts of two or more counties, and
4-23 the] Legislature, subject to rate limitations as provided by law,
4-24 may provide for school districts to impose [authorize] an
4-25 [additional] ad valorem tax on all residential property as defined
4-26 by general law [to be levied and collected within all school
4-27 districts heretofore formed or hereafter formed,] for the further
5-1 maintenance and operations of public [free] schools. The
5-2 Legislature may provide for school districts to impose an
5-3 additional ad valorem tax on all property not otherwise exempted by
5-4 this constitution or by the Legislature under the authority of this
5-5 constitution[, and] for the erection and equipment of school
5-6 buildings if [therein; provided that] a majority of the qualified
5-7 [property taxpaying] voters of the district voting at an election
5-8 to be held for that purpose[,] shall vote such tax [not to exceed
5-9 in any one year one ($1.00) dollar on the one hundred dollars
5-10 valuation of the property subject to taxation in such district, but
5-11 the limitation upon the amount of school district tax herein
5-12 authorized shall not apply to incorporated cities or towns
5-13 constituting separate and independent school districts, nor to
5-14 independent or common school districts created by general or
5-15 special law].
5-16 SECTION 4. Section 1, Article VIII, Texas Constitution, is
5-17 amended by amending Subsection (c) and adding Subsection (c-1) to
5-18 read as follows:
5-19 (c) The Legislature may provide for the taxation of
5-20 intangible property and may also impose occupation taxes, both upon
5-21 natural persons and upon corporations, other than municipal, doing
5-22 any business in this State. Subject to the restrictions of Section
5-23 24 of this article, it may also tax incomes of both natural persons
5-24 and corporations other than municipal. It may also impose
5-25 privilege or franchise taxes measured by the income or taxable
5-26 capital of a corporation, partnership, or business entity other
5-27 than a sole proprietorship. A sole proprietorship [Persons] engaged
6-1 in mechanical or [and] agricultural pursuits shall never be
6-2 required to pay an occupation tax. This subsection does not
6-3 prohibit the imposition of taxes on a gas, electric, or water
6-4 utility of a municipal corporation.
6-5 (c-1) The use of income earned or receipts after December
6-6 31, 1997, to measure or apportion to this State a privilege or
6-7 franchise tax authorized by Subsection (c) of this section is not
6-8 prohibited. This section expires January 1, 2000.
6-9 SECTION 5. Section 1-b, Article VIII, Texas Constitution, is
6-10 amended by amending Subsections (b), (d), and (e) and adding
6-11 Subsection (b-1) to read as follows:
6-12 (b) The governing body of any county, city, town, [school
6-13 district,] or other political subdivision of the State, other than
6-14 a school [county education] district, may exempt by its own action
6-15 not less than Three Thousand Dollars ($3,000) of the market value
6-16 of residence homesteads of persons, married or unmarried, including
6-17 those living alone, who are under a disability for purposes of
6-18 payment of disability insurance benefits under Federal Old-Age,
6-19 Survivors, and Disability Insurance or its successor or of married
6-20 or unmarried persons sixty-five (65) years of age or older,
6-21 including those living alone, from all ad valorem taxes thereafter
6-22 levied by the political subdivision. As an alternative, upon
6-23 receipt of a petition signed by twenty percent (20%) of the voters
6-24 who voted in the last preceding election held by the political
6-25 subdivision, the governing body of the subdivision shall call an
6-26 election to determine by majority vote whether an amount not less
6-27 than Three Thousand Dollars ($3,000) as provided in the petition,
7-1 of the market value of residence homesteads of disabled persons or
7-2 of persons sixty-five (65) years of age or over shall be exempt
7-3 from ad valorem taxes thereafter levied by the political
7-4 subdivision. The governing body of a school district or, in [In]
7-5 the manner provided by this subsection for other political
7-6 subdivisions [law], the voters of a school [county education]
7-7 district, at an election held for that purpose, may exempt an
7-8 amount not less than Three Thousand Dollars ($3,000), as provided
7-9 in the petition, of the market value of residence homesteads of
7-10 disabled persons or of persons sixty-five (65) years of age or over
7-11 from ad valorem taxes thereafter levied by the school [county
7-12 education] district for payment of principal and interest on bonds
7-13 and similar debt of the school district. An eligible disabled
7-14 person who is sixty-five (65) years of age or older may not receive
7-15 both exemptions from the same political subdivision in the same
7-16 year but may choose either if the subdivision has adopted both.
7-17 Where any ad valorem tax has theretofore been pledged for the
7-18 payment of any debt, the taxing officers of the political
7-19 subdivision shall have authority to continue to levy and collect
7-20 the tax against the homestead property at the same rate as the tax
7-21 so pledged until the debt is discharged, if the cessation of the
7-22 levy would impair the obligation of the contract by which the debt
7-23 was created. An exemption adopted under this subsection based on
7-24 assessed value is increased, effective January 1, 1979, to an
7-25 amount that, when converted to market value, provides the same
7-26 reduction in taxes, except that the market value exemption shall be
7-27 rounded to the nearest $100.
8-1 (b-1) The adoption of an exemption by a school district
8-2 under Subsection (b) or (e) of this section before the date this
8-3 subsection became part of this constitution and in effect on that
8-4 date continues to apply to taxation by the school district on or
8-5 after that date for the payment of principal and interest on bonds
8-6 and similar debt of the school district until the exemption is
8-7 increased, decreased, or repealed as otherwise provided.
8-8 (d) Except as otherwise provided by this subsection, if a
8-9 person receives the residence homestead exemption prescribed by
8-10 Subsection (c) of this section for homesteads of persons sixty-five
8-11 (65) years of age or older, the total amount of ad valorem taxes
8-12 imposed on that homestead for general elementary and secondary
8-13 public school purposes may not be increased while it remains the
8-14 residence homestead of that person or that person's spouse who
8-15 receives the exemption. If a person sixty-five (65) years of age
8-16 or older dies in a year in which the person received the exemption,
8-17 the total amount of ad valorem taxes imposed on the homestead for
8-18 general elementary and secondary public school purposes may not be
8-19 increased while it remains the residence homestead of that person's
8-20 surviving spouse if the spouse is fifty-five (55) years of age or
8-21 older at the time of the person's death, subject to any exceptions
8-22 provided by general law. The legislature, by general law, may
8-23 provide for the transfer of all or a proportionate amount of a
8-24 limitation provided by this subsection for a person who qualifies
8-25 for the limitation and establishes a different residence homestead.
8-26 However, taxes otherwise limited by this subsection may be
8-27 increased to the extent the value of the homestead is increased by
9-1 improvements other than repairs or improvements made to comply with
9-2 governmental requirements and except as may be consistent with the
9-3 transfer of a limitation under this subsection. If the total
9-4 amount of a school district's taxes imposed in the 1997 tax year
9-5 for elementary and secondary public school purposes on a residence
9-6 homestead subject to a limitation provided by this subsection is
9-7 less than the total amount of the school district's taxes on that
9-8 residence homestead for those purposes in the first year that the
9-9 residence homestead qualified for the limitation, in a subsequent
9-10 tax year the total amount of taxes the school district may impose
9-11 on the residence homestead for elementary and secondary public
9-12 school purposes while it remains the residence homestead of a
9-13 person entitled to the limitation may not exceed the amount of the
9-14 1997 school district taxes, except as otherwise provided by this
9-15 subsection.
9-16 (e) The governing body of a political subdivision, other
9-17 than a school [county education] district, may exempt from ad
9-18 valorem taxation a percentage of the market value of the residence
9-19 homestead of a married or unmarried adult, including one living
9-20 alone. The governing body of a school district [In the manner
9-21 provided by law, the voters of a county education district at an
9-22 election held for that purpose] may exempt from ad valorem taxation
9-23 for payment of principal and interest on bonds and similar debt of
9-24 the school district a percentage of the market value of the
9-25 residence homestead of a married or unmarried adult, including one
9-26 living alone. The percentage may not exceed twenty percent.
9-27 However, the amount of an exemption authorized pursuant to this
10-1 subsection may not be less than Five Thousand Dollars ($5,000)
10-2 unless the legislature by general law prescribes other monetary
10-3 restrictions on the amount of the exemption. An eligible adult is
10-4 entitled to receive other applicable exemptions provided by law.
10-5 Where ad valorem tax has previously been pledged for the payment of
10-6 debt, the governing body of a political subdivision may continue to
10-7 levy and collect the tax against the value of the homesteads
10-8 exempted under this subsection until the debt is discharged if the
10-9 cessation of the levy would impair the obligation of the contract
10-10 by which the debt was created. The legislature by general law may
10-11 prescribe procedures for the administration of residence homestead
10-12 exemptions.
10-13 SECTION 6. Section 1-j, Article VIII, Texas Constitution, is
10-14 amended by amending Subsection (a) and adding Subsection (a-1) to
10-15 read as follows:
10-16 (a) Except as provided by Subsections (a-1) and (b) of this
10-17 section, to [To] promote economic development in this [the] State,
10-18 goods, wares, merchandise, other tangible personal property, and
10-19 ores, other than oil, natural gas, and other petroleum products,
10-20 are exempt from ad valorem taxation if:
10-21 (1) the property is acquired in or imported into this
10-22 State to be forwarded outside this State, whether or not the
10-23 intention to forward the property outside this State is formed or
10-24 the destination to which the property is forwarded is specified
10-25 when the property is acquired in or imported into this State;
10-26 (2) the property is detained in this State for
10-27 assembling, storing, manufacturing, processing, or fabricating
11-1 purposes by the person who acquired or imported the property; and
11-2 (3) the property is transported outside of this State
11-3 not later than 175 days after the date the person acquired or
11-4 imported the property in this State.
11-5 (a-1) Property described by Subsection (a) of this section
11-6 is not exempt from ad valorem taxes imposed under Section 1-e of
11-7 this article if the property is located in a school district that
11-8 for the tax year taxes the property.
11-9 SECTION 7. Section 22, Article VIII, Texas Constitution, is
11-10 amended by adding Subsection (d) to read as follows:
11-11 (d) Subsection (a) of this section does not apply to
11-12 appropriations to the extent made in furtherance of the powers
11-13 authorized by Section 1(b), Article VII, of this constitution.
11-14 SECTION 8. Section 24, Article VIII, Texas Constitution, is
11-15 amended by adding Subsection (k) to read as follows:
11-16 (k) This section does not apply to a privilege or franchise
11-17 tax measured by the income of a corporation, partnership, or other
11-18 entity, other than a sole proprietorship.
11-19 SECTION 9. This proposed constitutional amendment shall be
11-20 submitted to the voters at an election to be held August 9, 1997.
11-21 The ballot shall be printed to permit voting for or against the
11-22 proposition: "The constitutional amendment authorizing changes in
11-23 law to reduce local property taxes and increase the state's share
11-24 of public education funding, including the dedication of lottery
11-25 revenue to the public schools, authorization of a limited state
11-26 property tax on nonresidential property, authorization of a
11-27 privilege or franchise tax on the income and capital of business
12-1 organizations other than sole proprietorships, providing for the
12-2 transfer to a different homestead of the school property tax freeze
12-3 on homesteads of the elderly, and establishment of public schools
12-4 as the first priority of state spending."