81R2717 JJT-D

By: Patrick, Dan, et al. S.B. No. 928

A BILL TO BE ENTITLED

AN ACT

relating to the limitation on the rate of growth of appropriations.

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

SECTION 1. Section 316.001, Government Code, is amended to read as follows:

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 lesser of:

(1) the estimated rate of growth of the state's economy as represented by the rate of growth in Texas personal income determined under Section 316.002(b); and

(2) the sum of the estimated average biennial rate of the state's population growth and the estimated average biennial rate of monetary inflation in this state, determined under Section 316.002(c).

SECTION 2. Section 316.002, Government Code, is amended to read as follows:

Sec. 316.002. DUTIES OF LEGISLATIVE BUDGET BOARD. (a) Before the Legislative Budget Board submits the budget as prescribed by Section 322.008 [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 sum of the estimated average biennial rate of the state's population growth and the estimated average biennial rate of monetary inflation in this state;

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

(4) [(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 lesser of the estimated rate of growth of the state's economy as determined under Subsection (b) and the sum of the estimated average biennial rate of the state's population growth and the estimated average biennial rate of monetary inflation in this state as determined under Subsection (c).

(b) The [Except as provided by Subsection (c), the] board shall determine the estimated rate of growth of the state's economy from the current biennium to the next biennium by dividing the estimated Texas total personal income for the next biennium by the estimated Texas total 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 personal income reported by the United States Department of Commerce or its successor in function.

(c) Using information and analysis obtained from the United States Department of Labor or its successor in function, the state demographer or the demographer's successor in function, the United States Census Bureau or its successor in function, and other relevant sources the board considers reliable, the board shall determine the sum of the estimated average biennial rate of the state's population growth and the estimated average biennial rate of monetary inflation in this state by:

(1) determining the estimated average biennial rate of the state's population growth over the current and the two previous state fiscal bienniums;

(2) determining the estimated average biennial rate of monetary inflation in this state over the current and the two previous state fiscal bienniums; and

(3) adding the rate determined under Subdivision (1) to the rate determined under Subdivision (2). [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 use 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 by this section [in Subsections (a) and (b)], the limit on the rate of growth of appropriations under this subchapter is [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 may [could] be appropriated within the limit is [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.

SECTION 3. Section 316.008, Government Code, is amended to read as follows:

Sec. 316.008. EFFECT OF LIMIT; ENFORCEMENT. (a) In this section:

(1) "Constitutional limit on the rate of growth of appropriations" means the limit on the rate of growth of appropriations determined by the Legislative Budget Board under Section 316.002(b) as finally adopted by the committee under Section 316.005(b) or as considered adopted under Section 316.005(c).

(2) "Statutory limit on the rate of growth of appropriations" means the limit on the rate of growth of appropriations determined by the Legislative Budget Board under Section 316.002(c) as finally adopted by the committee under Section 316.005(b) or as considered adopted under Section 316.005(c).

(b) With respect to the constitutional limit on the rate of growth of appropriations, unless [Unless] the legislature adopts a resolution under Article VIII, Section 22(b), of the Texas Constitution raising the proposed constitutional limit on appropriations, the proposed constitutional 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.

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

(d) When the statutory limit on the rate of growth of appropriations is lower than the constitutional limit on the rate of growth of appropriations or is lower than the constitutional limit as raised by a resolution described by Subsection (b), the proposed statutory 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 unless the legislature by general law provides that the statutory limit does not apply to appropriations for that biennium.

(e) If the Legislative Budget Board does not adopt a spending limit as provided by Section 316.002, both the constitutional limit on the rate of growth of appropriations and the statutory limit on the rate of growth of appropriations are considered to be zero.

SECTION 4. The changes in law made by this Act apply only with respect to appropriations for the state fiscal biennium beginning September 1, 2011, and subsequent state fiscal bienniums.

SECTION 5. This Act takes effect September 1, 2009.