By: Talton H.B. No. 3172

A BILL TO BE ENTITLED

AN ACT

relating to limits on the appropriations by the Legislature.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter A of Chapter 316, Government Code, is amended to read as follows:

SUBCHAPTER A. LIMIT ON GROWTH OF APPROPRIATIONS

Sec. 316.001. LIMIT. The rate of growth of appropriations in a biennium from state tax revenues not dedicated by the constitution may not exceed the estimated rate of growth of the state's economy, calculated as gross state product (GSP), not state personal income, nor any other measure.

Sec. 316.002. DUTIES OF LEGISLATIVE BUDGET BOARD. (a) Before the Legislative Budget Board submits the budget as prescribed by Section 322.008(b), the board shall establish:

(1) the estimated rate of growth of the state's economy from the current biennium to the next biennium;

(2) the level of appropriations for the current biennium from state tax revenues not dedicated by the constitution; and

(3) the amount of state tax revenues not dedicated by the constitution that could be appropriated for the next biennium within the limit established by the estimated rate of growth of the state's economy.

(b) The [Except as provided by Subsection (c), the] board shall determine the estimated rate of growth of the state's economy by dividing the estimated Texas total gross state product [personal income] for the next biennium by the estimated Texas total gross state product [personal income] for the current biennium. Using standard statistical methods, the board shall make the estimate by projecting through the biennium the estimated Texas total gross state product [personal income] reported by the United States Department of Commerce or its successor in function.

(c) The [If a more comprehensive definition of the rate of growth of the state's economy is developed and is approved by the committee established by Section 316.005, the] board may not use any other [that] definition in calculating the limit on appropriations.

(d) To ensure compliance with Article VIII, Section 22, of the Texas Constitution, the Legislative Budget Board may not transmit in any form to the governor or the legislature the budget as prescribed by Section 322.008(c) or the general appropriations bill as prescribed by Section 322.008(d) until the limit on the rate of growth of appropriations has been adopted as required by this subchapter.

(e) In the absence of an action by the Legislative Budget Board to adopt a spending limit as provided in Subsections (a) and (b), the estimated rate of growth in the state's economy from the current biennium to the next biennium shall be treated as if it were zero, and the amount of state tax revenues not dedicated by the constitution that could be appropriated within the limit established by the estimated rate of growth in the state's economy shall be the same as the level of appropriations for the current biennium.

(f) The board must adjust the spending limit in each biennium by correcting errors in growth projections from the preceding biennium by replacing estimated projected GSP for the previous biennium with actual GSP as reported by the United States Department of Commerce or its successor agency. The board shall treat the revised rate of growth of the state's economy as the projected rate of growth for purposes of calculating the previous biennium's budget cap, and for the following session's cap going forward, so that errors in projections are not compounded over time.

Sec. 316.003. PUBLICATION. Before the Legislative Budget Board approves the items of information required by Section 316.002, the board shall publish in the Texas Register the proposed items of information and a description of the methodology and sources used in the calculations.

Sec. 316.004. PUBLIC HEARING. Not later than December 1 of each even-numbered year, the Legislative Budget Board shall hold a public hearing to solicit testimony regarding the proposed items of information and the methodology used in making the calculations required by Section 316.002.

Sec. 316.005. ADOPTION BY COMMITTEE. (a) After the Legislative Budget Board approves the items of information required by Section 316.002, the board shall submit the information to a committee composed of the governor, lieutenant governor, speaker of the house of representatives, and comptroller of public accounts.

(b) Not later than the 10th day after the date on which the board submits the items, the committee shall meet and finally adopt the items, either as submitted by the board or as amended by the committee.

(c) If the committee fails to act within the 10-day period prescribed by Subsection (b), the items of information submitted by the board are treated as if the committee had adopted them as submitted.

Sec. 316.006. LIMIT ON BUDGET RECOMMENDATIONS. Unless authorized by majority vote of the members of the board from each house, the Legislative Budget Board budget recommendations relating to the proposed appropriations of state tax revenues not dedicated by the constitution may not exceed the limit adopted by the committee under Section 316.005.

Sec. 316.007. TRANSMISSION OF RECOMMENDATIONS. (a) The Legislative Budget Board shall include in its budget recommendations the proposed limit of appropriations from state tax revenues not dedicated by the constitution.

(b) The board shall transmit the recommendations to the governor and to each member of the legislature.

Sec. 316.008. EFFECT OF LIMIT; ENFORCEMENT. (a) Unless the legislature adopts a resolution under Article VIII, Section 22(b), of the Texas Constitution raising the proposed limit on appropriations, the proposed limit is binding on the legislature with respect to all appropriations for the next biennium made from state tax revenues not dedicated by the constitution.

(b) The rules of the house of representatives and senate shall provide for enforcement of Subsection (a).

Sec. 316.0081. APPROVAL OF THE BUDGET LIMIT BY THE LEGISLATURE. The legislature shall approve the budget limit by a record vote of both houses. If either house does not approve the budget limit, the estimated rate of growth in the state's economy from the current biennium to the next biennium shall be treated as if it were zero, and the amount of state tax revenues not dedicated by the constitution that could be appropriated within the limit established by the estimated rate of growth in the state's economy shall be the same as the level of appropriations for the current biennium.

Sec. 316.009. SUBMISSION OF BILL BY GOVERNOR. The governor may prepare a general appropriation bill and submit printed copies of it to the lieutenant governor, speaker of the house of representatives, and each member of the legislature. The bill must be submitted not later than the 30th day of the legislature's regular session, except that if a person is inaugurated as governor who was not governor preceding the inauguration, the bill must be submitted not later than the 20th day after the date of that inauguration.

SECTION 2. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2007.