By Craddick H.J.R. No. 4
75R5548 JBN-D
A JOINT RESOLUTION
1-1 proposing a constitutional amendment to provide a school property
1-2 tax cut, create the Texas School Trust Fund, authorize the
1-3 replacement of certain taxes, and dedicate certain revenue for
1-4 primary and secondary public schools.
1-5 BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Article VII, Texas Constitution, is amended by
1-7 adding Section 5-a to read as follows:
1-8 Sec. 5-a. (a) The Texas School Trust Fund is created and
1-9 subject to administration and investment, as provided by general
1-10 law, by the comptroller of public accounts. Money credited to the
1-11 trust fund shall be paid, at the time and in the manner provided by
1-12 general law, to each school district of this state imposing ad
1-13 valorem taxes for elementary and secondary public school purposes
1-14 to reimburse that school district for:
1-15 (1) the local tax revenue lost by that school district
1-16 because of the exemptions or reductions granted by Subsection (g),
1-17 Section 1-b, Article VIII, or Subsection (d)(2), Section 1, Article
1-18 VIII, of this constitution; and
1-19 (2) revenue losses resulting directly from a rate
1-20 reduction required by law effective in the 1998 tax year.
1-21 (b) In addition to any money transferred to the credit of
1-22 the Texas School Trust Fund under Subsection (c) of this section,
1-23 the trust fund is composed of:
1-24 (1) the net revenue received by this state from the
2-1 collection of a tax on the business activities of a business
2-2 otherwise not excluded by Section 25, Article VIII, of this
2-3 constitution;
2-4 (2) an amount equal to the total net revenue received
2-5 by this state, after deducting the amounts dedicated under Section
2-6 7-a, Article VIII, of this constitution, from the imposition of
2-7 general sales and use taxes, including a sales and use tax on the
2-8 sale, rental, or use of motor vehicles, at the rate of one-half of
2-9 one percent of the taxable sales or purchase price or taxable
2-10 receipts;
2-11 (3) interest earned on money credited to the trust
2-12 fund; and
2-13 (4) any other revenue that the legislature provides by
2-14 law for deposit to the credit of or transfer to the trust fund.
2-15 (c) If the amount of money credited to the trust fund is
2-16 insufficient to reimburse any school district for lost local tax
2-17 revenue in the amount required by Subsection (a) of this section,
2-18 the comptroller of public accounts shall transfer other state tax
2-19 revenue, not otherwise dedicated by this constitution, to the
2-20 credit of the trust fund as necessary to make the reimbursement
2-21 payments at the time and in the manner the payments become due.
2-22 If, in the same biennium in which a transfer is made to the trust
2-23 fund from other state tax revenue, money in the trust fund becomes
2-24 available in excess of the amount necessary to make reimbursement
2-25 payments to school districts as required by Subsection (a) of this
2-26 section, the comptroller of public accounts shall transfer, to the
2-27 extent of the excess, from the trust fund to the fund or funds to
3-1 which the transferred tax revenue was credited or would have been
3-2 credited an amount equal to the amount of the transfer to the trust
3-3 fund.
3-4 (d) After the payments required by Subsection (a) of this
3-5 section have been made or sufficient funds for the payments in a
3-6 biennium have been set aside, and after any transfers from the
3-7 trust fund have been made as required by Subsection (c) of this
3-8 section, the legislature may appropriate from the trust fund any
3-9 remaining money for elementary and secondary public school
3-10 purposes.
3-11 SECTION 2. Section 1-b, Article VIII, Texas Constitution, is
3-12 amended by adding Subsections (g) and (h) to read as follows:
3-13 (g) In addition to any other exemption granted or authorized
3-14 by this section, beginning January 1, 1997, $20,000 of the market
3-15 value of the residence homestead of a married or unmarried adult,
3-16 including one living alone, is exempt from ad valorem taxation for
3-17 the maintenance and operations of elementary and secondary public
3-18 schools. The exemption does not apply to the taxable value of a
3-19 residence homestead for ad valorem taxes for debt service. For the
3-20 1998 tax year, a person who in that tax year is qualified for the
3-21 tax limitation under Subsection (d) of this section is entitled to
3-22 a reduction in the amount of ad valorem taxes imposed on the
3-23 residence homestead for purposes of maintenance and operations of
3-24 elementary and secondary public schools. The reduction is an
3-25 amount equal to $20,000 times the sum of the tax rate of the
3-26 school district, expressed in dollars and cents per $100 of value,
3-27 for the 1998 tax year for the maintenance and operations of
4-1 elementary and secondary public schools and the tax rate reduction
4-2 required by law effective in the 1998 tax year, less any amount by
4-3 which the taxes for the maintenance and operations of elementary
4-4 and secondary public schools were actually reduced in the 1997 tax
4-5 year due to the homestead exemption granted under this subsection.
4-6 A person who is otherwise entitled to the reduction and who first
4-7 qualifies for the tax limitation under Subsection (d) of this
4-8 section in the 1998 tax year is not entitled to both the reduction
4-9 and the $20,000 exemption authorized by this subsection on the
4-10 residence homestead to which the limitation applies. For a tax
4-11 year subsequent to the 1998 tax year, the limitation provided by
4-12 Subsection (d) of this section includes the amount of the reduction
4-13 required by this subsection, subject to a value that increases by
4-14 an improvement in the manner provided by Subsection (d) of this
4-15 section. The application of the exemption or a reduction
4-16 authorized by this section does not entitle the owner of property
4-17 to a tax credit or refund if the assessed value of the property for
4-18 ad valorem tax purposes or the ad valorem tax liability of the
4-19 person computes to an amount less than zero.
4-20 (h) The legislature by general law may limit the authority
4-21 of, and provide procedures for, the governing body of a school
4-22 district to reduce the amount of or repeal any local tax exemption
4-23 from ad valorem taxes for elementary and secondary public school
4-24 purposes on homesteads and that the school district may otherwise
4-25 reduce or repeal.
4-26 SECTION 3. Subsections (c), (d), and (e), Section 1, Article
4-27 VIII, Texas Constitution, are amended to read as follows:
5-1 (c) The Legislature may provide for the taxation of
5-2 intangible property and may also impose occupation taxes, both upon
5-3 natural persons and upon corporations, other than municipal, doing
5-4 any business in this State. Subject to the restrictions of Section
5-5 24 of this article, it may also tax incomes of both natural persons
5-6 and corporations other than municipal. Persons engaged in
5-7 mechanical and agricultural pursuits shall never be required to pay
5-8 an occupation tax, other than a tax to which Section 25 of this
5-9 article applies.
5-10 (d) The Legislature by general law shall exempt from ad
5-11 valorem taxation household goods not held or used for the
5-12 production of income and personal effects not held or used for the
5-13 production of income. The Legislature by general law may exempt:
5-14 (1) from ad valorem taxation:
5-15 (A) [(1)] all or part of the personal property
5-16 homestead of a family or single adult, "personal property
5-17 homestead" meaning that personal property exempt by law from forced
5-18 sale for debt; and
5-19 (B) [(2)] subject to Subsections (e) and (g) of
5-20 this section, all other tangible personal property, except
5-21 structures which are personal property and are used or occupied as
5-22 residential dwellings and except property held or used for the
5-23 production of income; and
5-24 (2) from ad valorem taxation for the maintenance and
5-25 operations of elementary and secondary public schools, but not from
5-26 ad valorem taxation for debt service, tangible personal property
5-27 held for sale or consumption as inventory, as may be defined by law
6-1 and subject to conditions and limitations prescribed by law.
6-2 (e) The governing body of a political subdivision[, other
6-3 than a county education district,] may provide for the taxation of
6-4 all property exempt under a law adopted under Subdivision (1)(B)
6-5 [(2)] of Subsection (d) of this section and not exempt from ad
6-6 valorem taxation by any other law. [In the manner provided by law,
6-7 the voters of a county education district at an election held for
6-8 that purpose may provide for the taxation of all property exempt
6-9 under a law adopted under Subdivision (2) of Subsection (d) of this
6-10 section and not exempt from ad valorem taxation by any other law.]
6-11 SECTION 4. Article VIII, Texas Constitution, is amended by
6-12 adding Section 25 to read as follows:
6-13 Sec. 25. (a) Taxes on the business activities of a business
6-14 are not subject to Section 24 of this article, and the dedication
6-15 of revenue under Section 3, Article VII, of this constitution does
6-16 not apply to a tax imposed on those activities.
6-17 (b) Unless by law enacted by an affirmative vote of at least
6-18 three-fifths of the membership of each house, the established rate
6-19 of a tax on business activities may not be increased.
6-20 (c) This section does not apply to a sales and use tax,
6-21 gross receipts tax, license tax, severance tax, or regulatory tax.
6-22 SECTION 5. This proposed constitutional amendment shall be
6-23 submitted to the voters at an election to be held August 9, 1997.
6-24 The ballot shall be printed to permit voting for or against the
6-25 proposition: "The constitutional amendment providing property tax
6-26 cuts, reducing property taxes on homesteads, creating the Texas
6-27 School Trust Fund, limiting the tax rate of a tax on all types of
7-1 business entities, and dedicating revenue to fund Texas primary and
7-2 secondary public schools."