Friends and Neighbors,

This November, Texas voters will be asked to evaluate and vote on 14 proposed constitutional amendments. This is a serious matter, where the citizens of our state are asked to directly determine the laws we will live under.

Our fifth and current constitution, known as the 1876 Constitution has seen 700 proposed amendments, of which 517 have passed. We don’t have any rules or restrictions that put a limit on the number of proposals, so long as a proposal receives a 2/3 vote in the House, a 2/3 vote in the Senate, and is approved by voters.

By requiring a 2/3 vote of each chamber, it means that any joint resolution requires the support of both republicans and democrats for passage. Each proposition on your ballot is bipartisan and garnered strong support from the legislature.

When the legislature wishes to amend the constitution, it does so through a joint resolution. A joint resolution requires the 2/3 vote threshold of each chamber, and cannot be vetoed by the governor. In fact, they do not even require the signature of the Governor before being filed with the Secretary of State for placement on the ballot.

Some amendments take effect with no further legislation. Others provide the legislature with discretionary powers, and the legislature must pass a bill to fill in the details of how an amendment would operate.

This edition of the e-newsletter and next week’s will focus on the fourteen proposed constitutional amendments to the state constitution. The first seven will appear here, and the next seven will be covered next week. If you have any questions about the contents of a proposition, I have included links to some more in-depth discussions. Also, my capitol staff is ready and willing to help - feel free to contact my office. Early voting starts October 23, and election day is November 7^th.

Proposition 1- Farm and Ranching Practices

Proposition 1 would establish the right to engage in generally accepted farm, ranch, timber production, horticulture, or wildlife management practices on real property a person owned or leased.

The proposition would not affect the authority of the Legislature to authorize regulation of these practices by:

The proposition would not affect the authority of the Legislature to authorize the use or acquisition of property for a public use, including the development of the state’s natural resources, including water quality.

HJR 126 passed the Senate 31-0, and passed the House 144-0

Proposition 2-

"The constitutional amendment authorizing a local option exemption from ad valorem taxation by a county or municipality of all or part of the appraised value of real property used to operate a child-care facility."

The Texas Constitution requires all real and tangible personal property be taxed in proportion to its value unless the property is exempt as required or permitted by the constitution.

Proposition 2 would allow the governing body of a county or municipality to exempt from property taxation all or part of the appraised value of real property used to operate a child-care facility. The exemption could be a percentage of appraised value but could not be less than 50 percent. The Legislature could define “child-care facility” and provide additional eligibility requirements for the exemption.

The enabling legislation for Proposition 2, SB 1145, will take effect on January 1, 2024, if Proposition 2 is approved by voters. The bill defines "child-care facility" and requires that at least 20 percent of the children enrolled at the facility received subsidized child-care services through the Texas Workforce Commission in order to qualify for the exemption.

SJR 64 passed the Senate 25-6, and passed the House 114-31

SB 1145 passed the Senate 25-6 and passed the House 109-33

Proposition 3 – Wealth Tax

“The constitutional amendment prohibiting the imposition of an individual wealth or net worth tax, including a tax on the difference between the assets and liabilities of an individual or family."

HJR 132 Passed the Senate 22-9, and passed the House 101-45

Proposition 4 – Property Tax Relief

"The constitutional amendment to authorize the legislature to establish a temporary limit on the maximum appraised value of real property other than a residence homestead for ad valorem tax purposes; to increase the amount of the exemption from ad valorem taxation by a school district applicable to residence homesteads from $40,000 to $100,000; to adjust the amount of the limitation on school district ad valorem taxes imposed on the residence homesteads of the elderly or disabled to reflect increases in certain exemption amounts; to except certain appropriations to pay for ad valorem tax relief from the constitutional limitation on the rate of growth of appropriations; and to authorize the legislature to provide for a four-year term of office for a member of the board of directors of certain appraisal districts."

Neither the legislature nor a local government that imposes property taxes may exempt property from ad valorem taxation or otherwise limit the amount of taxes a property owner is required to pay without constitutional authority.

As originally adopted in 1978, the first homestead exemption was $5,000 from school district taxes. Subsequent constitutional amendments have increased the amount of the school tax homestead exemption from $5,000 to $15,000 in 1997, from $15,000 to $25,000 in 2015, and from $25,000 to $40,000 in 2022.

While there is currently an appraised value growth cap in place for homesteads, no other property classification has an appraisal growth cap available to them.

In the past, if a person 65+ or disabled had a ceiling or "tax freeze" on their property, depending on where that freeze was set, they may not have benefitted from prior homestead exemption increases. Prop 4 makes sure that they benefit as equally as any other taxpayer from the 2022, 2023, and any future tax relief efforts.

Lastly, the Board of Directors of an appraisal district are currently appointed solely by the taxing units of that appraisal district. Prop 4 will, for the first time, give taxpayers (instead of tax collectors) a say in who is running the appraisal district.

HJR 2 passed the Senate 31-0, and passed the House 132-5

SB 2 passed the Senate 31-0, and passed the House 133-4

Proposition 5 – Texas University Fund

"The constitutional amendment relating to the Texas University Fund, which provides funding to certain institutions of higher education to achieve national prominence as major research universities and drive the state economy."

In 2009 voters approved a constitutional amendment to establish the national research university fund (NRUF) to provide a dedicated, independent, and equitable source of funding to enable emerging research universities in this state to achieve national prominence as major research universities. The NRUF is constrained by the constitutional spending limits and excludes A&M and UT who have access to the Permanent University Fund (PUF.)

Prop 5 renames the NRUF as the Texas University Fund (TUF.) The Texas University Fund will use interest income, dividends, and investment income from the economic stabilization fund (rainy day fund) up to $100 million per fiscal year as adjusted for inflation as a dedicated source of revenue for the universities supported by the fund. The TUF also excludes A&M and UT.

Because this expenditure will be constitutionally dedicated, Prop 5 also allows the TUF to be exempted from the constitutional spending limits. University Systems expected to benefit include: UH, Texas State, Texas Tech, and UNT.

HB 1595 would establish provisions regarding the naming and administration of the Texas University Fund, the allocation of a one-time $3.5 billion endowment to the fund, and eligibility criteria for higher education institutions to receive distributions from the fund. HB 1595 will go into effect January 1, 2024, if Proposition 5 is approved by voters.

HJR 3 passed the Senate 30-1, and passed the House 110-30

Proposition 6- Texas Water Fund

The proposed constitutional amendment would create the Texas Water Fund to assist in financing water projects across the state. These projects would be aimed at addressing inefficiencies caused by persistent drought, continued population growth, and aging and deteriorating water infrastructure.

Texas’ water systems have grown overburdened and depleted over time due to pressure from population growth and drought. Water loss and declining water quality has been a consistent result of aging infrastructure. All of these factors impact the quality of water delivered to customers.

Prop 6 creates the Texas Water Fund as a special fund in the state treasury outside the general revenue fund to address these critical water challenges across the state and improve our water system for generations to come. The fund would be administered by the Texas Water Development Board (TWDB.)

The proposition would authorize TWDB to transfer money from the fund to or restore the money from:

TWDB would be required to allocate at least 25 percent of the money initially appropriated to the Texas Water Fund to be used only for transfer to the New Water Supply for Texas Fund. Any unexpended and unobligated balance remaining in the fund at the end of a state fiscal biennium would be appropriated to TWDB for the following state fiscal biennium for purposes authorized by the proposition.

SB 30 will appropriate $1 billion from the general revenue fund to the Texas Water Fund if Proposition 6 is approved by voters.

SJR 75 passed the Senate 31-0 and passed the House 142-0

Proposition 7 – Texas Energy Fund

"The constitutional amendment providing for the creation of the Texas energy fund to support the construction, maintenance, modernization, and operation of electric generating facilities"

Proposition 7 would create the Texas Energy Fund as a special fund in the state treasury outside the general revenue fund. Money in the fund could be administered and used, without further appropriation, only by the Public Utility Commission of Texas (PUC.)

The fund could only be used to provide loans and grants to finance or incentivize the construction, maintenance, modernization, and operation of electric generating facilities necessary to ensure the reliability of the electric power grid in the state. PUC would be required to allocate money from the fund for loans and grants to eligible projects for electric generating facilities that served as backup power sources. Funds also would have to be allocated to eligible projects in each region of the state in proportion to that region’s load share within an electric power grid.

Upon approval of Proposition 7 by voters, HB 1 will direct the comptroller to transfer $5 billion from the general revenue fund to the Texas Energy Fund.

SJR 93 passed the Senate 27-4, and passed the House 103-35

If you would like to go in-depth on any of the constitutional propositions there are many resources to choose from. Here are a few suggestions:

"Analyses of Proposed Constitutional Amendments" The Texas Legislative Council

"Constitutional amendments proposed for the November 2023 ballot" - Texas House Research Organization

"Taxes, state parks, infrastructure: What you need to know about the Nov. 7 constitutional amendments election" Texas Tribune

"2023 Guide to Constitutional Amendments in Texas" Texas Public Policy Foundation

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