The Texas Constitution of 1876 has been amended 440 times, and Texas voters are faced with 16 more proposed amendments at the polls this fall. Early voting began Monday and ends November 2 for the November 6 general election.
Texas had six constitutions prior to the current February 15, 1876, document. Its 1876 Constitution reflected the lack of faith in government the delegates had formed over the Reconstruction years. They slashed the power of officials along with their salaries and terms of office.
Although a somewhat lengthy and chaotic document, the Texas Constitution is not nearly as long and chaotic as the Alabama Constitution, which has been amended almost 800 times despite having been adopted 25 years after Texas' current constitution.
In 1974, the Texas Legislature met in joint session as a Constitutional Convention, but failed to propose a new constitution. In 1975, the Legislature, meeting in regular session, revived much of the work of the 1974 convention and proposed it as a set of eight amendments to the existing constitution. All eight of the amendments were rejected by the voters.
The constitution limits the authority of the State of Texas to those powers explicitly granted to it; there is no state equivalent of the “necessary-and-proper clause” which facilitates change in government by legislative action.
Consequently, this year voters will be asked to enact such changes as shifting Angelo State University from the Texas State University System to the Texas Tech University System. Amendment No. 1 is merely housekeeping. The only legislative opposition to the amendment was targeted to the House Bill that transferred Angelo State to the Texas Tech system that took effect in September. The amendment is to move the name of the university from one constitutional list to another.
Amendment No. 2 asks for approval of $500 million in bonds to finance educational loans. Since the initiation of the student loan program in 1965, voters have approved 5 additional constitutional amendments authorizing bonds to finance educational loans. The student loan program is designed to be self-supporting. Historically, the loan program has not required financial support from the state’s general revenue fund.
Proponents of Amendment No. 2 say student loans are critical to ensure that Texans can obtain the education necessary to be productive contributors to the state’s workforce. Using bonds to generate student loan funds allows the state to obtain those funds at the lowest cost by leveraging the state’s credit without actually drawing on state funds.
Opponents way the state should be wary of adding to its debt by issing $500 million in bonds, the largest authorization for the program thus far. Although the program has not required general revenue bailout in the past, unexpected circumstances such as a sudden increase in student loan default rates could require taxpayers to foot part of the bill to repay the bonds.
Supporters of Amendment No. 3 say it is necessary to effectuate the intent of the legislature and the voters regarding the 10% cap on homestead valuations by appraisal districts. The amendment is of little practical affect for residents of Llano and Burnet Counties as both counties appraise real estate every year. Some appraisal districts who do not appraise every year have construed the 10% cap in such a way as to aauthorrize increases up to 30% in a year in which a residence is reappraised for tax purposes.
Opponents of Amendment No. 3 say it is unnecessary because appraisal districts in most counties that are experiencing rapid increases in property values already appraise property annually. Critics say that while the amendment is intended to protect homeowners from increases of 20 to 30 percent as currently allowed in districts that appraise property only every two or three years, in reality those increases are uncommon because property values tend to increase more slowly in those districts.
Amendment No. 4 asks voters to approve $1 billion in general revenue bonds to pay for maintenance, improvement, repair or construction projects authorized by the legislature and to purchase needed equipment.
Proponents of Amendment No. 4 say the funds will provide necessary projects for state infrastructure and homeland security. Project funds would pay for deferred maintenance and asbestos abatement, courthouse renovations and historic sites, state mental health hospitals, mental health state schools, readiness centers for emergency response, repairs at the Texas national Guard’s Camp Mabry in Austin, new state prison facilities and repair of exisiting facilities, a new regional crime lab and office in Lubbock for the Department of Public Safety, DPS offices in McAllen and Rio Grande City, new and existing facilities at the Texas Youth Commission, and Parks and Wildlife Department projects such as the Battleship Texas and statewide park repairs.
Opponents say that the chosen uses of the bond proceeds have not been publicly reviewed and evaluated adequately to ensure that the uses fulfill valid needs of the state. Some opponents claim that additional prison facilities are not necessary and that the state has difficulty maintaining adequate staff for prisons already constructed.
The Texas Constitution requires that taxation be equal and that all real property be taxed in proportion to its current market value. Neither the state legislature nor a local political subdivision may limit the amount of a property owner’s taxes without constitutional authority. Amendment 5 proposes that small cities who have been approved for funding under the Downtown Revitalization Program or the Main Street Improvements Program be allowed to temporarily limit tax increases for property in or adjacent to the designated area.
Proponents of the amendment say it would provide eligible small cities with a tool to create incentives for private property owners to renovate downtown buildings in conjunction with other downtown revitalization efforts undertaken by those cities. They say the potential 5 year tax freeze would not negatively affect the city’s property tax revenue stream because only a small number of properties would be eligible for the limitation on tax increases, yet would provide property owners with an incentive to invest realized tax savings into revitalization efforts.
Supporters predict that after the expiration of the tax freeze, all political subdivisions who tax those buildings are expected to see a positive fiscal impact because taxes will be increased by the enhanced values of the properties.
Opponents of Amendment 5 say it will shift the tax burden to other property owners, which would be more pronounced in smaller cities because the shifted tax burden would be borne by a smaller number of taxpayers. Opponents maintain that property owners who receive the benefit of infrastructure improvements funded through the Downtown Revitalization Program or the Main Street Improvements Program should be required to pay taxes imposed on any resulting increase in the value of their property.
Voters should be aware that the ballot language for Amendment 5 does not mention either the Downtown Revitalization or Main Street Improvements Programs, but cites “certain programs administered by the Texas Department of Agriculture.” Even if Amendment 5 is passed, it will not take effect unless the legislature enacts enabling legislation. During the 2007 session, SB 1336, which was intended to implement the proposed amendment, was passed by the Senate but was not approved by the House of Representatives.
Proposed Amendment 6 would exempt one vehicle per individual from ad valorem taxation even if the vehicle is used in the course of the owner’s occupation. Interpretations of the Texas Tax Code, the Texas Constitution and a recent Attorney General’s opinion have muddied the waters on when a business vehicle can be exempt from ad valorem taxes.
Supporters of the amendment say it would remedy the inconsistency in the taxation of personal motor vehicles also used for the production of income, and give effect to 2005 legislation aimed at providing tax relief to real estate agents, accountants, lawyers, doctors and other small business owners and contractors who use their personal vehicles for incidental commercial purposes.
Opponents of Amendment 6 say it would exempt many vehicles used in the production of income by their owners and run counter to the long standing public policy in Texas that all personal property used for the production of income be taxed.
At least Amendment 7’s ballot language is brief. “The constitutional amendment to allow governmental entities to sell property acquired through eminent domain back to the previous owners at the price the entities paid to acquire the property.” The explanation is not so brief.
The United States Constitution requires governmental entities to pay just and adequate compensation to property owners when taking private property for public use by the process called eminent domain.
Under Texas law, if the public use for which the property was acquired is canceled before the 10th anniversary of the date it was taken, the governmental entity must offer to sell the property back to the original owner for the fair market value of the property at the time the public use is canceled.
During the last session, the legislature proposed bills that would require governmental entities to offer to sell back the property acquired through eminent domain for the price the entity paid to acquire the property under certain circumstances, including the cancellation of or lack of actual progress toward the public use purposes cited for acquiring the property by eminent domain. If the property increased in value during the time it was owned by the government, such a sale would be unconstitutional because a sale of public property at less than its current fair market value is considered a grant of public money to a private purchaser in violation of the Texas Constitution.
Proponents of Amendment 7 say it is a matter of fairness. They contend that if the amendment results in giving certain property owners a windfall from any increase in the value of the property, the amendment is still fair because it would be a disincentive to governmental entities taking property they may not need and may indirectly reduce instances in which property is taken through eminent domain.
Because private property rights are fundamental to our country’s laws, supporters say that if there is going to be an imbalance related to acquiring private property for public use, then the balance should be in favor of the private property owner, not the government. They say the concept of “just compensation” should allow the owner to be compensated for not being able to market the property during the time the government owned the property.
Opponents of Amendment 7 say it gives the property owner a financial windfall, does not account for the increased value of the property or the taxes and other maintenance costs for the property that have accrued before the repurchase, and doesn’t allow the governmental entity to recoup its costs such as interest on the purchase price or the cost of any improvements it makes to the property.
Opponents say the amendment would create a disincentive for a property owner facing possible eminent domain to negotiate a deal with the government because the option of repurchase is only available to a property owner whose property was condemned by eminent domain, not to an owner who negotiated a deal in a voluntary transaction.
Some opponents contend that even if Amendment 7 passes, it would have no effect until the legislature adopts a general law authorizing the repurchase at the price paid at condemnation.
Amendment 8 is proposed to “clarify certain provisions relating to the making of a home equity loan and use of home equity loan proceeds.”
Proponents say the amendment will more closely reflect the actual business practices of lenders while protecting borrowers from unscrupulous practices. They cite recent hurricane disasters as showing that flexibility is needed in the one-year waiting period between home equity loans so that borrowers can access the equity in their homes to finance repair of damages caused during a declared state of emergency.
Opponents agree that an amendment is needed to address uncertainties in the law but they disagree as to what uncertainties should be addressed and how the law should be changed. They oppose the amendment because it does not address loan fee caps, whether an application for a home equity loan may be taken orally and does not contain sufficient protection to home equity line of credit borrowers.
See Part 2 of this article in next week’s Blanco County News