80R1516 JJT-D

By: Paxton H.J.R. No. 53

A JOINT RESOLUTION

proposing a constitutional amendment regarding limitations on taxation and expenditures by the state government and local governments.

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) The [In no biennium shall the] rate of growth of appropriations from the state treasury for a fiscal biennium, as compared to the previous fiscal biennium, from all available sources of revenue except federal pass-through grants may not [state tax revenues not dedicated by this constitution] exceed the [estimated] rate of growth during the fiscal biennium of this [the] state's economy as estimated by the comptroller of public accounts. The comptroller shall estimate the rate of growth to be the lesser of:

(1) the sum of:

(A) the estimated rate of growth of this state's population during the fiscal biennium; and

(B) the estimated rate of monetary inflation during the fiscal biennium;

(2) the estimated rate of growth in the gross state product during the fiscal biennium; or

(3) the estimated rate of growth of personal income of residents of this state during the fiscal biennium.

(b) During the first week of each regular legislative session, the comptroller of public accounts shall specify the limit under this section on the amount of permissible appropriations from all available sources of revenue, except federal pass-through grants, for the next fiscal biennium. The comptroller shall determine the limit by multiplying the amount of appropriations for the then-current fiscal biennium by the sum of one plus the comptroller's estimated rate of growth of this state's economy during the next fiscal biennium.

(c) During the first week of each regular legislative session, the comptroller also shall:

(1) report to the legislature a revised figure for the rate of growth of this state's economy during the then-current fiscal biennium computed as provided by Subsection (a) of this section and based on then-current information; and

(2) specify the revised limit under this section on the amount of permissible appropriations from all available sources of revenue, except federal pass-through grants, for the then-current fiscal biennium, determined by multiplying the amount of appropriations for the previous fiscal biennium by the sum of one plus the revised figure for the rate of growth.

(d) During each regular legislative session in which the comptroller's revised limit on the amount of permissible appropriations for the then-current fiscal biennium is less than the limit for that biennium as specified during the previous regular legislative session, the legislature shall adopt one or more supplemental appropriations acts to adjust the amount of appropriations for the then-current fiscal biennium to conform to the decreased permissible amount of appropriations. [The legislature shall provide by general law procedures to implement this subsection.]

(e) [(b)] If the legislature by adoption on a record vote of a resolution approved by four-fifths [a record vote of a majority] of the members of each house during a regular legislative session or during a special legislative session finds that an emergency exists and identifies the nature of the emergency, the legislature may provide for appropriations in excess of the applicable amount the comptroller of public accounts specifies under [authorized by] Subsection (b) or (c) [(a)] of this section as the limit on the permissible amount of appropriations. The total of the excess appropriations authorized by resolutions approved under this subsection may not exceed the total of the amounts [amount] specified in those resolutions [the resolution].

(f) If the comptroller of public accounts, acting under Subsection (c) of this section, reports to the legislature a revised limit on the permissible amount of appropriations for the then-current biennium that is less than the limit for that biennium specified during the previous regular legislative session, the legislature may waive the legislature's duty under Subsection (d) of this section to adjust the amount of appropriations to conform to the decreased permissible amount by adopting a resolution finding that an emergency exists and identifying the nature of the emergency. A resolution under this subsection must be adopted on a record vote and approved by four-fifths of the members of each house.

(g) If the legislature acting in accordance with a resolution adopted under Subsection (e) or (f) of this section appropriates an amount that exceeds the most-current specified limit under this section on the permissible amount of appropriations, the comptroller of public accounts, in determining the limit on the permissible amount of appropriations for the next biennium under Subsection (b) of this section, shall substitute for the amount of appropriations for the then-current fiscal biennium the most-current specified limit for that biennium.

(h) [(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.

(i) Any appropriations from the budget stabilization fund or the property tax relief fund that are made for purposes of reducing or refunding payments of state or local taxation do not count against the limit on the permissible amount of appropriations under this section.

SECTION 2. Article VIII, Texas Constitution, is amended by adding Section 22-a to read as follows:

Sec. 22-a. (a) In this section:

(1) "Local government" means a county, municipality, or school district.

(2) "Standard fiscal year" means the period from September 1 of a calendar year through August 31 of the following calendar year.

(b) Except as provided by this section, the rate of growth in a local government's expenditures for a standard fiscal year as compared to the previous standard fiscal year from all available sources of revenue except federal pass-through grants may not exceed the rate of growth during the standard fiscal year of the economy of the local government's geographic jurisdiction as estimated by the comptroller of public accounts. The comptroller shall estimate the rate of growth to be the lesser of:

(1) the sum of:

(A) the estimated rate of growth of the population of the local government's geographic jurisdiction during the standard fiscal year; and

(B) the estimated rate of monetary inflation during the standard fiscal year;

(2) the estimated rate of growth in the gross state product during the standard fiscal year; or

(3) the estimated rate of growth of personal income of residents of the local government's geographic jurisdiction during the standard fiscal year.

(c) On or before January 31 of each year, the comptroller shall specify for each local government a limit on the permissible rate of growth for the local government's expenditures from all available sources of revenue, except federal pass-through grants, for the next standard fiscal year.

(d) On or before January 31 of each year, the comptroller also shall report to each local government a revised figure for the rate of growth of the economy of the local government's geographic jurisdiction during the then-current standard fiscal year computed as provided by Subsection (b) of this section and based on then-current information. The governing body of each local government shall redetermine the amount of permissible expenditures for the then-current fiscal year as provided by this section and:

(1) revise the local government's budget as necessary to prevent the local government's expenditures during that standard fiscal year from exceeding the limitation imposed by this section; or

(2) authorize expenditures that exceed that limit in the manner provided by this section.

(e) A local government, in determining its amount of permissible expenditures for a standard fiscal year, shall compute that amount by multiplying the amount of its authorized expenditures for the preceding standard fiscal year by the sum of one plus the comptroller's reported estimated rate of growth of the economy of the local government's geographic jurisdiction. If the local government authorized expenditures under Subsections (f) through (i) of this section for the preceding standard fiscal year that exceeded the amount otherwise permissible under this section, the local government in determining its amount of permissible expenditures for the standard fiscal year shall compute that amount by multiplying the amount of expenditures for the preceding standard fiscal year that would have been authorized but for the extraordinary expenditures by the sum of one plus the comptroller's reported estimated rate of growth of the economy of the local government's geographic jurisdiction.

(f) The governing body of a local government may authorize expenditures that exceed the amount authorized under Subsection (e) of this section only on the approval of at least four-fifths of the members of the governing body.

(g) Before the governing body votes on a proposal to authorize expenditures in a total amount that exceeds the amount authorized under Subsection (e) of this section, the governing body must hold two public hearings on the proposal. The first public hearing may not be held before the seventh day after the date the local government gives notice of the public hearing. The second public hearing may not be held before the third day after the date of the first public hearing. Each hearing must be held on a weekday that is not a public holiday. Each hearing must be held inside the local government's boundaries and in a publicly owned building or, if a suitable publicly owned building is not available, in a suitable building to which the public normally has access. At the hearings, the governing body of the local government must provide adequate opportunity for proponents and opponents of the proposal to exceed the limit on expenditures to express their views.

(h) The governing body of a local government shall vote on a proposal to authorize expenditures that exceed the amount authorized under Subsection (e) of this section at a meeting held not before the third day and not later than the 14th day after the date of the second public hearing held under Subsection (g) of this section.

(i) The governing body of a local government shall give notice of the date, time, and place of a hearing held under Subsection (g) of this section or a meeting held under Subsection (h) of this section by publishing the notice in a newspaper of general circulation in each county in which the local government's territory lies. The notice may not be smaller than one-quarter page of a standard-size or a tabloid-size newspaper. The headline on the notice must be in 24-point or larger type. The notice must describe the nature and purpose of the hearing or meeting and invite the public.

(j) The governing body of each local government shall determine whether estimated revenues from all sources, except federal pass-through grants, during a standard fiscal year will total an amount that exceeds the maximum amount of expenditures authorized under this section for that standard fiscal year. If the estimated relevant revenues total an amount that exceeds the authorized amount of expenditures and the local government has a property tax rate greater than zero, the governing body shall reduce its property tax rate to the greater of:

(1) a rate estimated to reduce property tax revenues by an amount necessary to reduce the total relevant revenues to an amount that does not exceed the amount of the limit on expenditures; or

(2) zero.

(k) A local government may use any fiscal year otherwise permissible by law, but the local government in managing its expenditures shall ensure that its expenditures for a standard fiscal year conform to the requirements of this section.

SECTION 3. Section 49a, Article III, Texas Constitution, is amended by adding Subsection (c) to read as follows:

(c) A bill containing an appropriation of money from any source except for a federal pass-through grant may not be considered as passed and may not be sent to the Governor for consideration until and unless the Comptroller of Public Accounts endorses on the bill the Comptroller's certificate 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 4. Section 49-g, Article III, Texas Constitution, is amended to read as follows:

Sec. 49-g. (a) The budget [economic] stabilization fund is established as a special fund in the state treasury.

(b) For purposes of this section, general revenue is encumbered on the last day of a fiscal biennium only to the extent that the revenue is subject to payment for particular identifiable and legally enforceable obligations of the state that were incurred on or before that day and intended to be paid from appropriations for that fiscal biennium.

(c) Not [The comptroller shall, not] later than the 90th day of each fiscal biennium, the comptroller shall:

(1) transfer to the budget [economic] stabilization fund one-half of any unencumbered positive balance of general revenues on the last day of the preceding fiscal biennium; and

(2) transfer the remaining unencumbered positive balance of general revenues on the last day of the preceding fiscal biennium to the property tax relief fund. [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.]

(d) To the extent that the reports of payables and binding encumbrances on which the transfers under Subsection (c) of this section were based prove to have been underestimated, the comptroller may reclaim money transferred under Subsection (c) of this section in an amount that 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.

(e) [(c)] Not later than the 90th day of each fiscal year, the comptroller of public accounts shall transfer from general revenue to the budget [economic] stabilization fund the amounts prescribed by Subsections (f) and (g) [(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.]

(f) [(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 budget [economic] stabilization fund an amount equal to 75 percent of the difference between those amounts. 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.

(g) [(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 budget [economic] stabilization fund an amount equal to 75 percent of the difference between those amounts. The comptroller shall retain the remaining 25 percent of the difference as general revenue. For the purposes of this subsection, the comptroller shall adjust his computation of revenues to reflect only 12 months of collection.

(h) [(f)] The legislature by general law or in a general appropriations act may transfer to the budget [appropriate additional amounts to the economic] stabilization fund or to the property tax relief fund additional amounts of money. A transfer made under this subsection is not an appropriation for purposes of Section 22, Article VIII, of this constitution.

[(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.]

(i) [(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 (c), (f), and (g) [(b), (d), and (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 budget [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 budget [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 budget [economic] stabilization fund is in general revenue, the comptroller shall state that the transferred money is not available for appropriation from general revenue.

(k) Except as otherwise provided by this section, amounts [Amounts] from the budget [economic] stabilization fund for the then-current biennium may be appropriated 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 legislative session of the same legislature. An appropriation from the budget [economic] stabilization fund under this subsection may be made only if the comptroller certifies that appropriations from general revenue made by the preceding legislature for the then-current [current] biennium exceed available general revenues and cash balances for the remainder of that biennium. The amount of an appropriation from the budget [economic] stabilization fund under this subsection may not exceed the difference between the comptroller's estimate of general revenue for the then-current [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 budget [economic] stabilization fund under this subsection may not extend beyond the last day of the then-current [current] biennium. An appropriation from the budget [economic] stabilization fund under this subsection 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 then-current [current] biennium, the legislature may, by a three-fifths vote of the members present in each house, appropriate for the succeeding biennium from the budget [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 budget [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 the budget [economic] stabilization fund is subject to being withheld or transferred, within any limits provided by statute, by any person or entity authorized to exercise the power granted by Article XVI, Section 69, of this constitution.

(n) [(o)] The comptroller of public accounts shall disburse revenue deposited in the property tax relief fund under this section to public school districts to reduce public school district property tax rates as provided by rules of the comptroller adopted to implement this subsection. The comptroller's rules adopted under this subsection must be designed to provide for property tax relief in accordance with any general law provisions for use of money from the property tax relief fund. On the last day of each fiscal biennium during which property tax rates for public schools are set at zero percent as a result of property tax relief fund and any other state disbursements, the comptroller shall transfer to the budget stabilization fund the unencumbered balance of the property tax relief fund.

(o) If on the last day of a fiscal biennium the unencumbered balance of the budget stabilization fund exceeds five percent of the total amount of appropriations for that fiscal biennium, the comptroller of public accounts shall transfer one-half of that unencumbered excess balance to a special fund in the state treasury to be known as the state sales tax relief fund. The state sales tax relief fund may be used only for a state sales tax relief period as provided by this subsection and rules of the comptroller. If the comptroller determines that the balance of the state sales tax relief fund will support a state sales tax relief period of at least three days, the comptroller shall declare a period during which state sales tax rates are reduced by one-eighth of a cent for a period the comptroller determines to be long enough so that the difference between state sales tax receipts during the relief period and the state sales tax receipts that would otherwise have been collected during that period will equal not more than the balance of the state sales tax relief fund. The comptroller shall transfer to the general revenue fund from the state sales tax relief fund an amount equal to the amount of revenue foregone as a result of the state sales tax relief period at any time during that state fiscal biennium that the comptroller determines appropriate. If the comptroller determines that the balance of the state sales tax relief fund will not support a state sales tax relief period of at least three days, the comptroller may not declare a relief period and shall retain the entire balance of the state sales tax relief fund in the fund for use only for a future state sales tax relief period. The comptroller may recover from the state sales tax relief fund expenses incurred in administering this subsection without the necessity of an appropriation.

(p) If on the last day of a fiscal biennium the unencumbered balance of the budget stabilization fund exceeds five percent of the total amount of appropriations for that fiscal biennium, the comptroller of public accounts shall transfer one-half of that unencumbered excess balance to a special fund in the state treasury to be known as the state franchise tax relief fund. The state franchise tax relief fund may be used only to provide a proportional rebate to payers of the state franchise tax in accordance with rules of the comptroller. The comptroller by rule shall provide for a biennial rebate from any amounts in the state franchise tax relief fund to payers of the state franchise tax. The rebates must be paid in amounts directly proportional to the amounts paid by those taxpayers during the fiscal biennium preceding the biennium in which the rebates are made. The comptroller may recover from the state franchise relief fund expenses incurred in administering this subsection without the necessity of an appropriation.

(q) 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 5. 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, and to the addition of Section 22-a, Article VIII, to this constitution, proposed by the 80th Legislature, Regular Session, 2007, regarding limitations on taxation and expenditures by the state government and local governments. This temporary provision expires December 1, 2010.

(b) The changes made to Section 22, Article VIII, and Section 49a, 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, and Section 49a, Article III, as they existed on January 1, 2007.

(c) In relation to appropriations made for the state fiscal biennium beginning September 1, 2009, and subsequent state fiscal bienniums, the changes made to Section 22, Article VIII, of this constitution by the amendments invalidate conflicting or inconsistent general laws of this state, including Sections 316.001 through 316.008, Government Code, as that law existed on January 1, 2007.

(d) Section 22-a, Article VIII, of this constitution applies only in relation to expenditures made by a municipality, county, or school district on or after September 1, 2009. Expenditures made by a municipality, county, or school district before September 1, 2009, are governed by the provisions of this constitution in effect immediately before the amendment adding Section 22-a, Article VIII, of this constitution was approved by the voters.

(e) The changes made by the amendments to Section 49-g, Article III, of this constitution apply beginning with any unencumbered positive balance of general revenues on August 31, 2009.

SECTION 6. This proposed constitutional amendment shall be submitted to the voters at an election to be held November 6, 2007. The ballot shall be printed to provide for voting for or against the proposition: "The constitutional amendment regarding limitations on taxation and expenditures by the state government and local governments."