LEGISLATIVE BUDGET BOARD
                                   Austin, Texas
         
                                   FISCAL NOTE
                               75th Regular Session
         
                                  May 7, 1997
         
         
      TO: Honorable Kenneth Armbrister, Chair            IN RE:  House Joint Resolution
                                                                No. 4, Committee Report 2nd House, Substituted
          Committee on Tax Reform & Public School Finance                              By: Craddick
          Senate
          Austin, Texas
         
         
         
         
         FROM:  John Keel, Director    
         
In response to your request for a Fiscal Note on HJR4 ( proposing 
a constitutional amendment dedicating lottery proceeds to public 
education, authorizing certain taxes on entities, and providing 
for the transfer or further reduction of a limitation of school 
tax on homesteads of the elderly.) this office has detemined 
the following:
         
         Biennial Net Impact to General Revenue Funds by HJR4-Committee Report 2nd House, Substituted
         
The fiscal implication to the State and units of local government 
would depend on the enabling legislation.  The effects of the 
Senate Committee Substitute for House Joint Resolution 4 are 
included in the fiscal note for the Senate Committee Substitute 
for House Bill 4.

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

(1) 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.

(2) 
dedicate net lottery revenue to elementary and secondary public 
education;

(3) provide that support of elementary and secondary 
public education is the first priority for State spending; and 
prohibit the Legislature from appropriating less for public 
schools in a biennium than in the prior biennium as adjusted 
for student population growth and inflation in the cost of educational 
goods and services;

(4) 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; and allow income earned after December 
31, 1996 to measure or apportion the franchise tax;

(5) 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; and

(6) 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.

The proposed amendment 
would be submitted to the voters on August 9, 1997.

The fiscal 
implication to the State and units of local government would 
depend on the enabling legislation.

The cost to the state 
for publication of the resolution is $71,000.
         
 
          
   Source:            Agencies:   302   Office of the Attorney General
                                         307   Secretary of State
                                         304   Comptroller of Public Accounts
                                         
                      LBB Staff:   JK ,BR ,RS