1-1 By: Craddick, Junell H.J.R. No. 4
1-2 (Senate Sponsor - Armbrister, Bivins)
1-3 (In the Senate - Received from the House April 24, 1997;
1-4 April 24, 1997, read first time and referred to Select Committee on
1-5 Tax Reform and Public School Finance; May 8, 1997, reported
1-6 adversely, with favorable Committee Substitute by the following
1-7 vote: Yeas 10, Nays 1; May 8, 1997, sent to printer.)
1-8 COMMITTEE SUBSTITUTE FOR H.J.R. No. 4 By: Armbrister, Bivins
1-9 HOUSE JOINT RESOLUTION
1-10 proposing a constitutional amendment providing for certain priority
1-11 and minimum funding for public schools, dedicating certain lottery
1-12 proceeds to public education, authorizing certain taxes on
1-13 entities, authorizing the creation of a commission to study
1-14 efficiency in state government, and providing for transfer or
1-15 further reduction of a limitation of school tax on homesteads of
1-16 the elderly.
1-17 BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-18 SECTION 1. Article III, Texas Constitution, is amended by
1-19 adding Section 31a to read as follows:
1-20 Sec. 31a. (a) The legislature by general law may create a
1-21 Texas Grace Commission to study state agencies, institutions, and
1-22 programs in the executive department of state government and
1-23 recommend that certain of those agencies, institutions, or programs
1-24 be abolished or reduced to a specified size or otherwise modified
1-25 to make them more cost effective.
1-26 (b) Notwithstanding Sections 1, 11, and 31 of this article,
1-27 the legislature must accept or reject, but may not amend, each
1-28 substantive recommendation presented to the legislature by the
1-29 commission.
1-30 (c) This section expires on September 1, 1999.
1-31 SECTION 2. Section 47, Article III, Texas Constitution, is
1-32 amended by adding Subsection (f) to read as follows:
1-33 (f) Money received by the State from the operation of
1-34 lotteries, less amounts paid for lottery prizes and administrative
1-35 costs, may be spent only as provided by general law for public
1-36 education.
1-37 SECTION 3. Section 1, Article VII, Texas Constitution, is
1-38 amended to read as follows:
1-39 Sec. 1. (a) A general diffusion of knowledge being
1-40 essential to the preservation of the liberties and rights of the
1-41 people, it shall be the duty of the Legislature of the State to
1-42 establish and make suitable provision for the support and
1-43 maintenance of an efficient system of public free schools.
1-44 (b) The financial support of elementary and secondary public
1-45 school education shall be the first priority among State spending
1-46 and appropriations, subject only to the dedication of revenue
1-47 otherwise provided by this Constitution and to the payment of
1-48 lawfully incurred State debt.
1-49 (c) The Legislature may not appropriate, for any biennium,
1-50 an amount of State funds for the maintenance and operation of
1-51 public schools and for the erection and equipment of public school
1-52 buildings that is less than the amount appropriated for those
1-53 purposes in the prior biennium, adjusted for student population
1-54 growth and inflation in the cost of educational goods and services.
1-55 SECTION 4. Section 1, Article VIII, Texas Constitution, is
1-56 amended by amending Subsection (c) and adding Subsection (c-1) to
1-57 read as follows:
1-58 (c) The Legislature may provide for the taxation of
1-59 intangible property and may also impose occupation taxes, both upon
1-60 natural persons and upon corporations, other than municipal, doing
1-61 any business in this State. Subject to the restrictions of Section
1-62 24 of this article, it may also tax incomes of both natural persons
1-63 and corporations other than municipal. It may also impose
1-64 privilege or franchise taxes measured by the income or taxable
2-1 capital of a corporation, partnership, or other business entity
2-2 other than a sole proprietorship. A sole proprietorship [Persons]
2-3 engaged in mechanical or [and] agricultural pursuits shall never be
2-4 required to pay an occupation tax.
2-5 (c-1) The use of income earned or receipts after December
2-6 31, 1996, to measure or apportion to this State a privilege or
2-7 franchise tax authorized by Subsection (c) of this section is not
2-8 prohibited. This subsection expires January 1, 2000.
2-9 SECTION 5. Section 1-b(d), Article VIII, Texas Constitution,
2-10 is amended to read as follows:
2-11 (d) Except as otherwise provided by this subsection, if a
2-12 person receives the residence homestead exemption prescribed by
2-13 Subsection (c) of this section for homesteads of persons sixty-five
2-14 (65) years of age or older, the total amount of ad valorem taxes
2-15 imposed on that homestead for general elementary and secondary
2-16 public school purposes may not be increased while it remains the
2-17 residence homestead of that person or that person's spouse who
2-18 receives the exemption. If a person sixty-five (65) years of age
2-19 or older dies in a year in which the person received the exemption,
2-20 the total amount of ad valorem taxes imposed on the homestead for
2-21 general elementary and secondary public school purposes may not be
2-22 increased while it remains the residence homestead of that person's
2-23 surviving spouse if the spouse is fifty-five (55) years of age or
2-24 older at the time of the person's death, subject to any exceptions
2-25 provided by general law. The legislature, by general law, may
2-26 provide for the transfer of all or a proportionate amount of a
2-27 limitation provided by this subsection for a person who qualifies
2-28 for the limitation and subsequently establishes a different
2-29 residence homestead. However, taxes otherwise limited by this
2-30 subsection may be increased to the extent the value of the
2-31 homestead is increased by improvements other than repairs or
2-32 improvements made to comply with governmental requirements and
2-33 except as may be consistent with the transfer of a limitation
2-34 under this subsection. If the total amount of a school district's
2-35 taxes imposed in the 1997 tax year for elementary and secondary
2-36 public school purposes on a residence homestead subject to a
2-37 limitation provided by this subsection is less than the total
2-38 amount of the school district's taxes on that residence homestead
2-39 for those purposes in the first year that the residence homestead
2-40 qualified for the limitation, in a subsequent tax year the total
2-41 amount of taxes the school district may impose on the residence
2-42 homestead for elementary and secondary public school purposes while
2-43 it remains the residence homestead of a person entitled to the
2-44 limitation may not exceed the amount of the 1997 school district
2-45 taxes, except as otherwise provided by this subsection.
2-46 SECTION 6. Section 24, Article VIII, Texas Constitution, is
2-47 amended by adding Subsection (k) to read as follows:
2-48 (k) This section does not apply to a privilege or franchise
2-49 tax measured by the income of a corporation, partnership, or other
2-50 business entity, other than a sole proprietorship.
2-51 SECTION 7. This proposed constitutional amendment shall be
2-52 submitted to the voters at an election to be held August 9, 1997.
2-53 The ballot shall be printed to permit voting for or against the
2-54 proposition: "The constitutional amendment to dedicate lottery
2-55 revenue for public education, authorize a privilege or franchise
2-56 tax on the income and capital of business organizations other than
2-57 sole proprietorships, provide for the transfer to a different
2-58 homestead of the school property tax freeze on homesteads of the
2-59 elderly and the adjustment of the tax freeze for certain
2-60 homesteads, provide for the creation of a commission to study and
2-61 make recommendations on efficiency in state government, and
2-62 establish public schools as the first priority in state spending
2-63 and preserve the level of state funding of public schools."
2-64 * * * * *