CSHJR 1, a Joint Resolution proposing a constitutional
amendment relating to establishing the Texas Great Classroom Fund
as a sequestered fund, funded by a Reformed Franchise Tax and a
portion of the sales tax, a portion of the taxon motor vehicles and
a portion of the sales tax on cigarettes and dedicated exclusively
to school finance; prohibiting any other statewide business tax;
providing for mandatory ad valorem property tax relief, and
providing that 10% of any locally approved increase in property tax
after the mandatory property tax relief must be remitted to the
state for use in teaching and instruction in those school districts
whose average annual household income falls within the lowest 25%
of average annual household incomes of school districts within this
State.
SECTION 1. Section 5, Article VII, Texas Constitution, is
amended to read as follows:
§ 5. Permanent school fund; available school fund; Texas
Great Classroom Fund, use of funds; distributions; investments;
Texas growth fund
Sec. 5. (a) The principal of all bonds and other funds, and
the principal arising from the sale of the lands hereinbefore set
apart to said school fund, shall be the permanent school fund, and
all the interest derivable therefrom and the taxes herein
authorized and levied shall be the available school fund. The
available school fund shall be applied annually to the support of
the public free schools. Except as provided by this section, no law
shall ever be enacted appropriating any part of the permanent or
available school fund to any other purpose whatever; nor shall the
same, or any part thereof ever be appropriated to or used for the
support of any sectarian school[; and the available school fund
herein provided shall be distributed to the several counties
according to their scholastic population and applied in such manner
as may be provided by law].
(b) The legislature by law may provide for using the
permanent school fund and the income from the permanent school fund
to guarantee bonds issued by school districts or by the state for
the purpose of making loans to or purchasing the bonds of school
districts for the purpose of acquisition, construction, or
improvement of instructional facilities including all furnishings
thereto. If any payment is required to be made by the permanent
school fund as a result of its guarantee of bonds issued by the
state, an amount equal to this payment shall be immediately paid by
the state from the treasury to the permanent school fund. An amount
owed by the state to the permanent school fund under this section
shall be a general obligation of the state until paid. The amount of
bonds authorized hereunder shall not exceed $750 million or a
higher amount authorized by a two-thirds record vote of both houses
of the legislature. If the proceeds of bonds issued by the state
are used to provide a loan to a school district and the district
becomes delinquent on the loan payments, the amount of the
delinquent payments shall be offset against state aid to which the
district is otherwise entitled.
(c) The legislature may appropriate part of the available
school fund for administration of the permanent school fund or of a
bond guarantee program established under this section.
(d) Notwithstanding any other provision of this
constitution, in managing the assets of the permanent school fund,
the State Board of Education may acquire, exchange, sell,
supervise, manage, or retain, through procedures and subject to
restrictions it establishes and in amounts it considers
appropriate, any kind of investment, including investments in the
Texas growth fund created by Article XVI, Section 70, of this
constitution, that persons of ordinary prudence, discretion, and
intelligence, exercising the judgment and care under the
circumstances then prevailing, acquire or retain for their own
account in the management of their affairs, not in regard to
speculation but in regard to the permanent disposition of their
funds, considering the probable income as well as the probable
safety of their capital.
(e) A separate fund, to be known as the Texas Great
Classroom Fund, shall be applied annually for the support of
teaching, instruction, and the construction or maintenance of
instructional facilities in the public free schools. No law shall
ever be enacted appropriating any part of the Texas Great Classroom
Fund to any other purpose whatever; nor shall the same, or any part
thereof, ever be appropriated to or used for the support of any
sectarian school. Any unused portion of such revenue shall be
applied annually to the support of public free schools, and
distributed in such manne ras may be provided by law.
(f) The following revenue sources shall be dedicated to the
Texas Great Classroom Fund:
(i) 100 % of the net revenue collected from a Reformed
Franchise Tax, consisting of a 3.60% tax on employers,
including municipals, based on compensation paid to
employees performing services for in this state and a
tax on the net earnings from self employment on
partnerships and individuals, other than partners of a
partnership;
(ii) 100% of gross receipts collected by a tax on
cigarettes of $83.00 per thousand cigarettes;
(iii) 34.62% of gross receipts collected by a sales
tax of 6.50%, and
(iv) 29.03% of total consideration or gross rental
receipts on a tax on the sale, rental, or use of a motor
vehicle in this state at a rate of 7.75%.
(g) To the extent that The Texas Great Classroom Fund
requires additional revenues to fully fund expenditures for
teaching, instruction, and the construction or maintenance of
educational facilities, monies from the available school fund and
the Foundation school fund shall be dedicated to fully funding the
Texas Great Classroom Fund. If the available school fund receives
more revenue than is needed to fully fund the Texas Great Classroom
Fund, the unused portion of that revenue shall be applied annually
to the support of public free schools, and distributed in such
manner as may be provided by law.
(h) Subject to ad valorem tax increases for local
supplementation provided for in § (i), in the first year in which
the Texas Great Classroom Fund is created, no independent school
district shall receive more in combined state aid and local ad
valorem revenue than 100% of such amount received in the prior year.
Each school district shall reduce its local ad valorem tax
assessments by whatever amount is necessary to meet the
requirements of this section. A school district shall be deemed to
have complied with the requirements of this section if it reduces
its local ad valorem tax assessments to zero.
(i) After the reduction, if any, in local ad valorem tax
assessment have been made as provided in § 5(h), a school district
may subsequently increase the ad valorem maintenance and operation
tax rate, by an election called and held for that purpose, if
approved by a majority of those actually voting in the election;
provided, however, that 10% of any such increase must be remitted
annually to a state fund as may be provided by law and is thereafter
used solely for the support of teaching and instruction in the
public schools within those school districts whose annual average
household incomes falls within the lowest 25% of the annual average
household incomes of school districts within this State. A school
district that qualifies to receive such funds is not required to
remit such excess to the fund.
(j) No school district shall impose an ad valorem tax at
arate exceeding $1.25 per $100 of taxable property within the
district.
SECTION 2. Section 1(c), Article VIII, Texas Constitution,
is amended to read as follows:
(c) The Legislature may provide for the taxation of
intangible property and may also impose occupation taxes, both upon
natural persons, partnerships, and upon corporations, other than
municipal, doing any business in this State. Notwithstanding the
preceding sentence, no franchise, income, or similar tax shall be
imposed on the earnings retained, the stock value, or the income
earned by a corporation, a partnership, a limited liability
company, unincorporated association, or other business entity
except for the Reformed Franchise Tax as provided for in section
5(f)(i), Article VII of this Constitution and there shall be no
other tax on employers, including municipal, based on compensation
paid to employees performing services for employers in this state
or a tax on the net earnings from self employment on partnerships
and individuals, other than partners of a partnership. Subject to
the restrictions of Section 24 of this Article, it may also tax
incomes of both natural persons and corporations other than
municipal. Increases in the Reformed Franchise Tax must be used to
fund education. Persons engaged in mechanical and agricultural
pursuits shall never be required to pay an occupation tax.
SECTION 3. Section 1, Article XVII, Texas Constitution, is
amended to read as follows:
§ 1. Proposed amendments; submission to voters; adoption
Sec. 1. (a) The Legislature, at any regular session, or at
any special session when the matter is included within the purposes
for which the session is convened, may propose amendments revising
the Constitution, to be voted upon by the qualified voters for
statewide offices and propositions, as defined in the Constitution
and statutes of this State. The date of the elections shall be
specified by the Legislature. The proposal for submission must be
approved bya vote of two-thirds of all the members elected to each
House, entered by yeas and nays on the journals.
(b) A brief explanatory statement of the nature of a
proposed amendment, together with the date of the election and the
wording of the proposition as it is to appear on the ballot, shall
be published twice in each newspaper in the State which meets
requirements set by the Legislature for the publication of official
notices of officers and departments of the state government. The
explanatory statement shall be prepared by the Secretary of State
and shall be approved by the Attorney General. The Secretary of
State shall send a full and complete copy of the proposed amendment
or amendments to each county clerk who shall post the same in a
public place in the courthouse at least 30 days prior to the
election on said amendment. The first notice shall be published not
more than 60 days nor less than 50 days before the date of the
election, and the second notice shall be published on the same day
in the succeeding week. The Legislature shall fix the standards for
the rate of charge for the publication, which may not be higher than
the newspaper's published national rate for advertising per column
inch.
(c) The election shall be held in accordance with procedures
prescribed by the Legislature, and the returning officer in each
county shall make returns to the Secretary of State of the number of
legal votes cast at the election for and against each amendment.
Except in the case of a proposed amendment that seeks to alter,
repeal, or modify any portion of Article XVII, Section 5,
subsections (e) through (j), or in the case of an amendment that
seeks to alter the manner in which this constitution may be amended,
if [If] it appears from the returns that a majority of the votes
cast have been cast in favor of an amendment, it shall become a part
of this Constitution, and proclamation thereof shall be made by the
Governor. In the case of a proposed amendment that seeks to alter,
repeal, or modify any portion of Article XVII, Section 5,
subsections (e) through (j), or in the case of an amendment that
seeks to alter the manner in which this constitution may be amended,
if 80% of the votes cast have been cast in favor of such an
amendment, it shall become part of this Constitution, and a
proclamation thereof shall be made by the Governor.
SECTION 4. (a) This proposed constitutional amendment shall
be submitted to the voters at an election held ______________,
200__. The ballot shall be printed to permit voting for or against
the proposition: "The constitutional amendment to establish the
Texas Great Classroom Fund as a sequestered fund, funded by the
Reformed Franchise Tax and a portion of the sales tax, a portion of
the tax on motor vehicles and a portion of the sales tax on
cigarettes, with net proceeds dedicated exclusively to funding of
the Texas Great Classroom Fund; to prohibit any other statewide
business tax; and to provide for mandatory ad valorem property tax
relief, and providing that 10% of any locally approved increase in
property tax after the mandatory property tax relief must be
remitted to the state for use in teaching and instruction in those
school districts whose average household income falls within the
lowest 25% of average annual household incomes of school districts
within this State."