By Maxey H.J.R. No. 108
Line and page numbers may not match official copy.
Bill not drafted by TLC or Senate E&E.
A JOINT RESOLUTION
1-1 proposing a constitutional amendment to implement the reform of the
1-2 state tax system to provide revenue for the support and operation
1-3 of the general government and the public school system.
1-4 BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Article VII, Texas Constitution, is amended by
1-6 adding Section 5-a to read as follows:
1-7 Sec. 5-a. (a) The Texas School Trust Fund is created and
1-8 subject to administration and investment, as provided by general
1-9 law, by the comptroller of public accounts. Money credited to the
1-10 trust fund shall be paid, at the time and in the manner provided by
1-11 general law, to each school district of this state imposing ad
1-12 valorem taxes for elementary and secondary public school purposes
1-13 to reimburse that school district for:
1-14 (1) the local tax revenue lost by that school district
1-15 because of the exemptions or reductions granted by Subsection (g),
1-16 Section 1-b, Article VIII, or Subsection (d)(2), Section 1, Article
1-17 VIII, of this constitution; and
1-18 (2) revenue losses resulting directly from a rate
1-19 reduction required by law effective in the 1998 tax year.
1-20 (b) In addition to any money transferred to the credit of
1-21 the Texas School Trust Fund under Subsection (c) of this section,
1-22 the trust fund is composed of:
1-23 (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
3-1 extent of the excess, from the trust fund to the fund or funds to
3-2 which the transferred tax revenue was credited or would have been
3-3 credited an amount equal to the amount of the transfer to the trust
3-4 fund.
3-5 (d) After the payments required by Subsection (a) of this
3-6 section have been made or sufficient funds for the payments in a
3-7 biennium have been set aside, and after any transfers from the
3-8 trust fund have been made as required by Subsection (c) of this
3-9 section, the legislature may appropriate from the trust fund any
3-10 remaining money for elementary and secondary public school
3-11 purposes.
3-12 SECTION 2. Section 1-b, Article VIII, Texas Constitution, is
3-13 amended by adding Subsections (g) and (h) to read as follows:
3-14 (g) In addition to any other exemption granted or authorized
3-15 by this section, beginning January 1, 1997, $20,000 of the market
3-16 value of the residence homestead of a married or unmarried adult,
3-17 including one living alone, is exempt from ad valorem taxation for
3-18 the maintenance and operations of elementary and secondary public
3-19 schools. The exemption does not apply to the taxable value of a
3-20 residence homestead for ad valorem taxes for debt service. For the
3-21 1998 tax year, a person who in that tax year is qualified for the
3-22 tax limitation under Subsection (d) of this section is entitled to
3-23 a reduction in the amount of ad valorem taxes imposed on the
3-24 residence homestead for purposes of maintenance and operations of
3-25 elementary and secondary public schools. The reduction is an
3-26 amount equal to $20,000 times the sum of the tax rate of the school
4-1 district, expressed in dollars and cents per $100 of value, for the
4-2 1998 tax year for the maintenance and operations of elementary and
4-3 secondary public schools and the tax rate reduction required by law
4-4 effective in the 1998 tax year, less any amount by which the taxes
4-5 for the maintenance and operations of elementary and secondary
4-6 public schools were actually reduced in the 1997 tax year due to
4-7 the homestead exemption granted under this subsection. A person
4-8 who is otherwise entitled to the reduction and who first qualifies
4-9 for the tax limitation under Subsection (d) of this section in the
4-10 1998 tax year is not entitled to both the reduction and the $20,000
4-11 exemption authorized by this subsection on the residence homestead
4-12 to which the limitation applies. For a tax year subsequent to the
4-13 1998 tax year, the limitation provided by Subsection (d) of this
4-14 section includes the amount of the reduction required by this
4-15 subsection, subject to a value that increases by an improvement in
4-16 the manner provided by Subsection (d) of this section. The
4-17 application of the exemption or a reduction authorized by this
4-18 section does not entitle the owner of property to a tax credit or
4-19 refund if the assessed value of the property for ad valorem tax
4-20 purposes or the ad valorem tax liability of the person computes to
4-21 an amount less than zero.
4-22 (h) The legislature by general law may limit the authority
4-23 of, and provide procedures for, the governing body of a school
4-24 district to reduce the amount of or repeal any local tax exemption
4-25 from ad valorem taxes for elementary and secondary public school
4-26 purposes on homesteads and that the school district may otherwise
5-1 reduce or repeal.
5-2 SECTION 3. Subsections (c), (d), and (e), Section 1, Article
5-3 VIII, Texas Constitution, are amended to read as follows:
5-4 (c) The Legislature may provide for the taxation of
5-5 intangible property and may also impose occupation taxes, both upon
5-6 natural persons and upon corporations, other than municipal, doing
5-7 any business in this State. Subject to the restrictions of Section
5-8 24 of this article, it may also tax incomes of both natural persons
5-9 and corporations other than municipal. Persons engaged in
5-10 mechanical and agricultural pursuits shall never be required to pay
5-11 an occupation tax, other than a tax to which Section 25 of this
5-12 article applies.
5-13 (d) The Legislature by general law shall exempt from ad
5-14 valorem taxation household goods not held or used for the
5-15 production of income and personal effects not held or used for the
5-16 production of income. The Legislature by general law may exempt:
5-17 (1) from ad valorem taxation:
5-18 (A) [(1)] all or part of the personal property
5-19 homestead of a family or single adult, "personal property
5-20 homestead" meaning that personal property exempt by law from forced
5-21 sale for debt; and
5-22 (B) [(2)] subject to Subsections (e) and (g) of
5-23 this section, all other tangible personal property, except
5-24 structures which are personal property and are used or occupied as
5-25 residential dwellings and except property held or used for the
5-26 production of income; and
6-1 (2) from ad valorem taxation for the maintenance and
6-2 operations of elementary and secondary public schools, but not from
6-3 ad valorem taxation for debt service, tangible personal property
6-4 held for sale or consumption as inventory, as may be defined by law
6-5 and subject to conditions and limitations prescribed by law.
6-6 (e) The governing body of a political subdivision[, other
6-7 than a county education district,] may provide for the taxation of
6-8 all property exempt under a law adopted under Subdivision (1)(B)
6-9 [(2)] of Subsection (d) of this section and not exempt from ad
6-10 valorem taxation by any other law. [In the manner provided by law,
6-11 the voters of a county education district at an election held for
6-12 that purpose may provide for the taxation of all property exempt
6-13 under a law adopted under Subdivision (2) of Subsection (d) of this
6-14 section and not exempt from ad valorem taxation by any other law.]
6-15 SECTION 4. Article VIII, Texas Constitution, is amended by
6-16 adding Section 25 to read as follows:
6-17 Sec. 25. (a) Taxes on the business activities of a business
6-18 are not subject to Section 24 of this article, and the dedication
6-19 of revenue under Section 3, Article VII, of this constitution does
6-20 not apply to a tax imposed on those activities.
6-21 (b) Unless by law enacted by an affirmative vote of at least
6-22 three-fifths of the membership of each house, the established rate
6-23 of a tax on business activities may not be increased.
6-24 (c) This section does not apply to a sales and use tax,
6-25 gross receipts tax, license tax, severance tax, or regulatory tax.
6-26 SECTION 5. This proposed constitutional amendment shall be
7-1 submitted to the voters at an election to be held August 9, 1997.
7-2 The ballot shall be printed to permit voting for or against the
7-3 proposition: "The constitutional amendment providing property tax
7-4 cuts, reducing property taxes on homesteads, creating the Texas
7-5 School Trust Fund, limiting the tax rate of a tax on all types of
7-6 business entities, and dedicating revenue to fund Texas primary and
7-7 secondary public schools."