LEGISLATIVE BUDGET BOARD
                                   Austin, Texas
         
                                   FISCAL NOTE
                               75th Regular Session
         
                                  April 28, 1997
         
         
      TO: Honorable Kenneth Armbrister, Chair            IN RE:  House Joint Resolution
                                                                No. 4, As Engrossed
          Committee on Tax Reform & Public 
School Finance                              By: Craddick/et al.
          Senate
          Austin, Texas
         
         
         
         
         FROM:  John Keel, Director    
         
In response to your request for a Fiscal Note on HJR4 ( proposing 
a constitutional amendment providing financial support for elementary 
and secondary public education, dedicating revenue and authorizing 
priority allocations of certain revenue, authorizing a state 
property tax and certain taxes on entities, providing property 
tax relief and reduced school taxes on residential property, 
including certain homestead property, and making implementation 
and conforming amendments.) this office has detemined the following:
         
         Biennial Net Impact to General Revenue Funds by HJR4-As Engrossed
         
The fiscal implication would depend on the enabling legislation. 
 The effects of House Joint Resolution 4, as engrossed, are 
included in the fiscal note on the Engrossed version of House 
Bill 4.

The cost to the State for publication of the resolution 
is $71,000.
         
The resolution proposes a constitutional amendment which, if 
adopted, would do the following:

(1) provide that support 
of elementary and secondary public education is the first priority 
for State spending; 

(2) establish a constitutional equity 
standard for public school funding; 

(3) prohibit the Legislature 
from appropriating less per student for public schools in a 
biennium than in the prior biennium.

(4)  authorize the Legislature 
to impose a state property tax not to exceed $1.05 per $100 
of valuation on non-residential property and dedicated the tax 
for of elementary and secondary public schools;

(5)  allow 
the Legislature to exempt, from the state property tax, property 
exempt from school district maintenance and operation taxes 
under an abatement granted before January 1, 1997 or in a reinvestment 
zone created by municipal ordinance before April 1, 1997 for 
which an abatement agreement is entered into before July 1, 
1997. 

(6)  dedicate net lottery revenue to elementary and 
secondary public education;

(7)  exempt non-residential property 
from school district maintenance and operation taxes;

(8) 
 authorize the Legislature to impose a franchise or privilege 
tax measured by income or taxable capital on corporations, partnerships, 
and business entities other than sole proprietorships;

(9) 
authorize the Legislature to limit increases in appraised value 
of homesteads and limit the frequency of appraisals; 

(10) 
 allow the Legislature to provide for the transfer of the sixty-five 
or over tax freeze to a different homestead and set the freeze 
level at the lower of the current freeze level and the amount 
of 1997 school district taxes;

(11) require the notification 
of homeowners of the property tax decrease granted by the Seventy-fifth 
Legislature and require notification related to the effects 
of the tax reduction on mortgage escrow payments;  

(12) 
 provide that freeport property currently taxed by school districts 
is subject to the state property tax;

(13)  allow the Legislature 
to provide for payment of a gross receipts tax on oil and natural 
gas in lieu of property taxes;
  
(14) allow the Legislature 
impose a franchise tax on river authority electric business;

(15) 
exclude revenue resulting from House Bill 4 from the Article 
VIII, Section 22, appropriations limit for the 1998-99 and 2000-01 
biennia; 

(16) exempt a franchise or privilege tax, other 
than one imposed on a sole proprietor, from the Article VIII, 
Section 24, requirements relating to the imposition of a net 
income tax.

(17) allow the Legislature to establish a commission 
that would make recommendations regarding abolition or modification 
of executive agencies, the recommendations to be accepted or 
rejected by the Legislature without amendment.
 
The proposed 
amendment would be submitted to the voters on August 9, 1997.
         
 
          
   Source:            Agencies:   304   Comptroller of Public Accounts
                                         
                      LBB Staff:   JK ,RR ,RS ,BR