80R913 JJT-D

By: Isett H.J.R. No. 29

A JOINT RESOLUTION

proposing a constitutional amendment concerning the restriction on the rate of growth of state appropriations and establishing three special funds to replace the economic stabilization fund.

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

SECTION 1. Section 22, Article VIII, Texas Constitution, is amended to read as follows:

Sec. 22. (a) In no biennium shall the rate of growth of appropriations from all sources of revenue except the federal government [state tax revenues not dedicated by this constitution] exceed a rate equal to the sum of the estimated rate of growth of the state's population and the estimated rate of inflation in the state [economy]. In this subsection, the rate of growth of appropriations from the current biennium to the next biennium is the percentage difference between:

(1) the lesser of:

(A) the amount of money appropriated for the current biennium from all sources of revenue other than the federal government, as cumulatively estimated by the comptroller at the times the comptroller endorsed, in accordance with Article III, Section 49a, of this constitution, the comptroller's certificate on the bills making the appropriations; and

(B) the amount of money actually appropriated for the current biennium from all sources of revenue other than the federal government, using the most recently available information; and

(2) the amount of money appropriated for the next biennium from all sources of revenue other than the federal government, as finally estimated by the comptroller at the times the Acts making appropriations are considered by the comptroller under Article III, Section 49a, of this constitution.

(b) The legislature shall provide by general law procedures to implement Subsection (a) of this section [subsection].

(c) [(b)] If the legislature by adoption of a resolution approved by a record vote of two-thirds [a majority] of the members of each house finds that an emergency exists and identifies the nature of the emergency, the legislature may provide for appropriations in excess of the amount authorized by Subsection (a) of this section. The excess authorized under this subsection may not exceed the amount specified in the resolution.

(d) Appropriations may not [(c) In no case shall appropriations] exceed revenues as provided in Article III, Section 49a, of this constitution. Nothing in this section shall be construed to alter, amend, or repeal Article III, Section 49a, of this constitution.

SECTION 2. Section 49a, Article III, Texas Constitution, is amended by adding Subsection (c) to read as follows:

(c) No bill containing an appropriation of money from any source except the federal government shall be considered as passed or be sent to the Governor for consideration until and unless the Comptroller of Public Accounts endorses the Comptroller's certificate thereon showing that the appropriation does not contravene the limitation on the rate of growth of appropriations imposed by Section 22, Article VIII, of this constitution. When the Comptroller finds that a bill contains an appropriation that contravenes the limitation on the rate of growth of appropriations, the Comptroller shall endorse that finding on the bill, return the bill to the House from which it originated, and immediately notify the House of Representatives and the Senate of the finding.

SECTION 3. Section 49-g, Article III, Texas Constitution, is amended to read as follows:

Sec. 49-g. (a) There are established as special funds [The economic stabilization fund is established as a special fund] in the state treasury an emergency expense fund, a budget stabilization fund, and a property tax payers rebate fund.

(b) For purposes of this subsection, general revenue is considered encumbered on the last day of a state fiscal biennium only to the extent that the revenue is subject to payment for particular identifiable and legally enforceable obligations of this state that were incurred on or before that day. Not [The comptroller shall, not] later than the 90th day of each state fiscal biennium, the comptroller shall transfer:

(1) to the emergency expense fund three percent [economic stabilization fund one-half] of any unencumbered positive balance of general revenues on the last day of the preceding biennium;

(2) to the budget stabilization fund 15 percent of any unencumbered positive balance of general revenues on the last day of the preceding biennium; and

(3) to the property tax payers rebate fund the unencumbered positive balance of general revenues on the last day of the preceding biennium that remains after the transfers under Subdivisions (1) and (2) of this subsection are performed. [If necessary, the comptroller shall reduce the amount transferred in proportion to the other amounts prescribed by this section to prevent the amount in the fund from exceeding the limit in effect for that biennium under Subsection (g) of this section.]

(c) Money in the emergency expense fund may be appropriated only on an affirmative vote of two-thirds of all members of each house of the legislature. Money in the emergency expense fund may not be appropriated or transferred from the fund except in accordance with an appropriation authorized by this subsection. Money appropriated from the emergency expense fund may be spent only for a purpose that the legislature finds:

(1) is related to preserving the health, safety, or general welfare of the residents of this state from a threat to their health, safety, or welfare caused by an extraordinary event or occurrence that could not reasonably have been foreseen or prevented; and

(2) requires an immediate expenditure to meet the purpose described by Subdivision (1) of this subsection.

(d) Money in the budget stabilization fund may be appropriated only on an affirmative vote of two-thirds of all members of each house of the legislature. Money in the budget stabilization fund may not be appropriated or transferred from the fund except in accordance with an appropriation authorized by this subsection. Money in the budget stabilization fund may be appropriated only for a purpose described by Subsection (l) of this section and only if:

(1) anticipated revenues for the then current state fiscal biennium are not sufficient to cover appropriations already made for the biennium; or

(2) anticipated revenues for the next state fiscal biennium are not sufficient to cover a current services budget.

(e) Money in the property tax payers rebate fund may be appropriated only for the purposes of making a rebate of the surplus revenues, interest, and other earnings or money held in the fund to this state's property tax payers and of paying administrative costs necessary to make the rebate. During each regular session of the legislature, the legislature shall determine whether the property tax payers rebate fund contains enough money to make a reasonably substantial rebate to property tax payers after the administrative costs of making the rebate are paid. The legislature may establish a procedure by general law for making rebates authorized by this subsection. Money in the property tax payers rebate fund may not be appropriated or transferred from the fund except in accordance with an appropriation authorized by this subsection.

(f) Not later than the 90th day of each fiscal year, the comptroller of public accounts shall transfer from general revenue [to the economic stabilization fund] the amounts prescribed by Subsections (g) and (h) [(d) and (e)] of this section. [However, if necessary, the comptroller shall reduce proportionately the amounts transferred to prevent the amount in the fund from exceeding the limit in effect for that biennium under Subsection (g) of this section.]

(g) [(d)] If in the preceding year the state received from oil production taxes a net amount greater than the net amount of oil production taxes received by the state in the fiscal year ending August 31, 1987, the comptroller shall transfer [to the economic stabilization fund] an amount equal to 75 percent of the difference between those amounts to the funds established by this section, distributed among the funds in the same proportions as provided by Subsection (b) of this section for transfers of surplus revenue under that subsection. The comptroller shall retain the remaining 25 percent of the difference as general revenue. In computing the net amount of oil production taxes received, the comptroller may not consider refunds paid as a result of oil overcharge litigation.

(h) [(e)] If in the preceding year the state received from gas production taxes a net amount greater than the net amount of gas production taxes received by the state in the fiscal year ending August 31, 1987, the comptroller shall transfer [to the economic stabilization fund] an amount equal to 75 percent of the difference between those amounts to the funds established by this section, distributed among the funds in the same proportions as provided by Subsection (b) of this section for transfers of surplus revenue under that subsection. The comptroller shall retain the remaining 25 percent of the difference as general revenue. For the purposes of this subsection, the comptroller shall adjust the comptroller's [his] computation of revenues to reflect only 12 months of collection.

(i) [(f)] The legislature may transfer or appropriate additional money [amounts] to a fund established by this section [the economic stabilization fund]. Interest and other earnings earned on money in a fund established by this section accrue to that fund. Notwithstanding Subsections (c), (d), and (e) of this section, an amount in a fund equal to the amount of unexpended money deposited in the fund by legislative transfer or appropriation and the amount of unexpended interest or other earnings on money deposited in the fund by legislative transfer or appropriation may be appropriated as provided by the General Appropriations Act or transferred from the fund as provided by general law. The legislature by general law may establish any necessary accounting principles applicable to the fund for purposes of this subsection.

(j) To the extent that the reports of payables and binding encumbrances on which the transfers under Subsection (b) of this section were based prove to have been underestimated, the comptroller may reclaim money transferred under Subsection (b) of this section to the extent the comptroller determines is necessary to pay a claim that is legally payable from an appropriation that was encumbered to pay the claim before the expiration of the appropriation but the balance of which is insufficient to pay the claim. The comptroller, in reclaiming money under this subsection, shall reclaim the money from each fund established by this section in the same proportion as the revenues were transferred to the funds.

(k) [(g) During each fiscal biennium, the amount in the economic stabilization fund may not exceed an amount equal to 10 percent of the total amount, excluding investment income, interest income, and amounts borrowed from special funds, deposited in general revenue during the preceding biennium.

[(h)] In preparing an estimate of anticipated revenues for a succeeding biennium as required by Article III, Section 49a, of this constitution, the comptroller shall estimate the amount of the transfers that will be made under Subsections (b), (g) [(d)], and (h) [(e)] of this section. The comptroller shall deduct that amount from the estimate of anticipated revenues as if the transfers were made on August 31 of that fiscal year.

[(i) The comptroller shall credit to general revenue interest due to the economic stabilization fund that would result in an amount in the economic stabilization fund that exceeds the limit in effect under Subsection (g) of this section.

[(j) The comptroller may transfer money from the economic stabilization fund to general revenue to prevent or eliminate a temporary cash deficiency in general revenue. The comptroller shall return the amount transferred to the economic stabilization fund as soon as practicable, but not later than August 31 of each odd-numbered year. The comptroller shall allocate the depository interest as if the transfers had not been made. If the comptroller submits a statement to the governor and the legislature under Article III, Section 49a, of this constitution when money from the economic stabilization fund is in general revenue, the comptroller shall state that the transferred money is not available for appropriation from general revenue.]

(l) Money [(k) Amounts from the economic stabilization fund] may be appropriated from the budget stabilization fund during a regular legislative session only for a purpose for which an appropriation from general revenue was made by the preceding legislature and may be appropriated in a special session only for a purpose for which an appropriation from general revenue was made in a preceding regular or special legislative session of the same legislature. [An appropriation from the economic stabilization fund may be made only if the comptroller certifies that appropriations from general revenue made by the preceding legislature for the current biennium exceed available general revenues and cash balances for the remainder of that biennium. The amount of an appropriation from the economic stabilization fund may not exceed the difference between the comptroller's estimate of general revenue for the current biennium at the time the comptroller receives for certification the bill making the appropriation and the amount of general revenue appropriations for that biennium previously certified by the comptroller. Appropriations from the economic stabilization fund under this subsection may not extend beyond the last day of the current biennium. An appropriation from the economic stabilization fund must be approved by a three-fifths vote of the members present in each house of the legislature.

[(l) If an estimate of anticipated revenues for a succeeding biennium prepared by the comptroller pursuant to Article III, Section 49a, of this constitution is less than the revenues that are estimated at the same time by the comptroller to be available for the current biennium, the legislature may, by a three-fifths vote of the members present in each house, appropriate for the succeeding biennium from the economic stabilization fund an amount not to exceed this difference. Following each fiscal year, the actual amount of revenue shall be computed, and if the estimated difference exceeds the actual difference, the comptroller shall transfer the amount necessary from general revenue to the economic stabilization fund so that the actual difference shall not be exceeded. If all or a portion of the difference in revenue from one biennium to the next results, at least in part, from a change in a tax rate or base adopted by the legislature, the computation of revenue difference shall be adjusted to the amount that would have been available had the rate or base not been changed.]

(m) [In addition to the appropriation authority provided by Subsections (k) and (l) of this section, the legislature may, by a two-thirds vote of the members present in each house, appropriate amounts from the economic stabilization fund at any time and for any purpose.

[(n)] Money appropriated from a fund established by this section [the economic stabilization fund] is subject to being withheld or transferred, within any limits provided by statute and this section, by any person or entity authorized to exercise the power granted by Article XVI, Section 69, of this constitution.

[(o) In this section, "net" means the amount of money that is equal to the difference between gross collections and refunds before the comptroller allocates the receipts as provided by law.]

SECTION 4. The following temporary provision is added to the Texas Constitution:

TEMPORARY PROVISION. (a) This temporary provision applies to the amendments to Section 22, Article VIII, Section 49a, Article III, and Section 49-g, Article III, of this constitution, proposed by the 80th Legislature, Regular Session, 2007, restricting the rate of growth of appropriations from all sources of revenue except the federal government to a rate equal to the sum of the estimated rate of growth of the state's population and the estimated rate of inflation in the state and establishing three special funds to replace the economic stabilization fund. This temporary provision expires December 1, 2009.

(b) On September 1, 2009, the comptroller shall transfer all money held in the economic stabilization fund to the funds established by the amendments to Section 49-g, Article III, of this constitution. The comptroller shall transfer:

(1) three percent of the money to the emergency expense fund;

(2) 15 percent of the money to the budget stabilization fund; and

(3) the remainder of the money to the property tax payers rebate fund.

(c) The changes made to Section 22, Article VIII, Section 49a, Article III, and Section 49-g, Article III, of this constitution by the amendments apply only in relation to appropriations made for the state fiscal biennium beginning September 1, 2009, and subsequent state fiscal bienniums. Appropriations for the state fiscal biennium that began September 1, 2007, are governed by Section 22, Article VIII, Section 49a, Article III, and Section 49-g, Article III, as they existed immediately before the amendment was approved by the voters.

(d) The changes made to Section 49-g, Article III, of this constitution by the amendments with regard to transferring money into the emergency expense fund, the budget stabilization fund, and the property tax payers rebate fund apply beginning with any unencumbered positive balance of general revenues on August 31, 2009, and with oil or gas production taxes received after that date.

SECTION 5. This proposed constitutional amendment shall be submitted to the voters at an election to be held November 4, 2008 . The ballot shall be printed to permit voting for or against the proposition: "The constitutional amendment to (1) replace the state's rainy day fund with funds reserved for emergency expenditures, budget stabilization, and rebates to property tax payers; and (2) limit the rate of growth of the state budget paid from all sources of revenue except the federal government to a rate equal to the sum of the rate of growth of the state's population and the rate of inflation."