82R103 JJT-F

By: Paxton H.B. No. 756

A BILL TO BE ENTITLED

AN ACT

relating to the maximum 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. MAXIMUM RATE OF GROWTH OF APPROPRIATIONS [LIMIT]. The maximum rate of growth of appropriations from the state treasury for a biennium, as compared to the previous [in a] biennium, from all available sources of revenue and for any purpose but excluding appropriations of revenue received from the federal government and appropriations from any source of revenue made for the sole purpose of reducing the imposition of ad valorem taxes by a political subdivision of this state or otherwise providing ad valorem tax relief, is the least of the following rates:

(1) [from state tax revenues not dedicated by the constitution may not exceed] the estimated rate of growth of this [the] state's economy;

(2) a rate equal to the sum of:

(A) the estimated biennial rate of growth of this state's population; and

(B) the estimated biennial rate of monetary inflation in this state; and

(3) the estimated biennial rate of growth of this state's gross state product.

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 determine [establish]:

(1) the estimated rate of growth of this [the] state's economy from the current biennium to the next biennium, determined as provided by Subsection (b);

(2) a rate equal to the sum of:

(A) the estimated biennial rate of growth of this state's population, determined as provided by Subsection (c); and

(B) the estimated biennial rate of monetary inflation in this state, determined as provided by Subsection (d);

(3) the estimated biennial rate of growth of this state's gross state product, determined as provided by Subsection (e);

(4) the amount [level] of appropriations for the current biennium from all available sources of revenue, excluding:

(A) appropriations of revenue from the federal government; and

(B) appropriations from any source of revenue made for the sole purpose of:

(i) reducing the imposition of ad valorem taxes by a political subdivision of this state; or

(ii) otherwise providing ad valorem tax relief [state tax revenues not dedicated by the constitution]; and

(5) [(3)] the maximum permissible amount of appropriations of revenue from all available sources [state tax revenues not dedicated by the constitution that could be appropriated] for the next biennium, excluding appropriations of revenue from the federal government and appropriations from any source of revenue made for the sole purpose of reducing the imposition of ad valorem taxes by a political subdivision of this state or otherwise providing ad valorem tax relief, [within the limit established] by multiplying the total amount of appropriations for the current biennium determined as provided by Subdivision (4) by the sum of one and the maximum rate of growth of appropriations as provided by Section 316.001 [the estimated rate of growth of the state's economy].

(b) The Legislative Budget Board [Except as provided by Subsection (c), the board] shall determine the estimated rate of growth of this [the] state's economy 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) The Legislative Budget Board shall determine the estimated biennial rate of growth of the state's population based on the average rate of growth during the preceding six years according to estimates provided by the state demographer [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) The Legislative Budget Board shall determine the estimated biennial rate of monetary inflation in this state based on the average rate of change during the preceding six years of the effective consumer price index for this state. For purposes of this subsection, the effective consumer price index for this state is the average of the consumer price indexes, as determined by the United States Department of Labor, for:

(1) the Houston metropolitan area; and

(2) the Dallas/Fort Worth metropolitan area.

(e) The Legislative Budget Board shall determine the estimated biennial rate of growth of this state's gross state product by dividing the estimated gross state product for the then current state fiscal year by the average of the gross state products for the preceding four state fiscal years. In determining the estimated gross state product for the then current state fiscal year and the average of the gross state products for the preceding four state fiscal years, the board shall consider information and analysis provided by:

(1) the Bureau of Economic Analysis of the United States Department of Commerce, or its successor in function; and

(2) the comptroller.

(f) To ensure compliance with Section 22, 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 maximum permissible amount [limit on the rate of growth] of appropriations for the next biennium has been adopted as required by this subchapter.

(g) [(e)] In the absence of an action by the Legislative Budget Board to adopt a maximum permissible amount of appropriations for the next biennium [spending limit] as provided by this section, the maximum permissible amount of appropriations for the next biennium, excluding appropriations of revenue from the federal government and appropriations from any source of revenue made for the sole purpose of reducing the imposition of ad valorem taxes by a political subdivision of this state or otherwise providing ad valorem tax relief, is [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 amount [level] of those appropriations for the current biennium, determined as provided by Subsection (a)(4).

SECTION 3. Section 316.003, Government Code, is amended to read as follows:

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 determinations [calculations].

SECTION 4. Section 316.004, Government Code, is amended to read as follows:

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 determinations [calculations] required by Section 316.002.

SECTION 5. Section 316.006, Government Code, is amended to read as follows:

Sec. 316.006. LIMIT ON BUDGET RECOMMENDATIONS. Unless authorized by a two-thirds majority vote of the members of the board from each house, the Legislative Budget Board budget recommendations relating to the proposed appropriations of revenue for the next biennium from any available source, excluding appropriations of revenue from the federal government and appropriations from any source of revenue made for the sole purpose of reducing the imposition of ad valorem taxes by a political subdivision of this state or otherwise providing ad valorem tax relief, [state tax revenues not dedicated by the constitution] may not exceed the maximum permissible amount of those appropriations [limit] adopted by the committee under Section 316.005.

SECTION 6. Section 316.007(a), Government Code, is amended to read as follows:

(a) The Legislative Budget Board shall include in its budget recommendations the proposed maximum permissible amount [limit] of appropriations of revenue from all available sources for the next biennium, excluding appropriations of revenue from the federal government and appropriations from any source of revenue made for the sole purpose of reducing the imposition of ad valorem taxes by a political subdivision of this state or otherwise providing ad valorem tax relief [from state tax revenues not dedicated by the constitution].

SECTION 7. Section 316.008(a), Government Code, is amended to read as follows:

(a) Unless the legislature adopts a resolution under Section 22(f), Article VIII, [Section 22(b), of the] Texas Constitution, raising the proposed maximum permissible amount of [limit on] appropriations for the next biennium, the proposed maximum permissible amount [limit] is binding on the legislature with respect to all appropriations for the next biennium made from all available sources of revenue, excluding:

(1) appropriations of revenue from the federal government; and

(2) appropriations from any source of revenue made for the sole purpose of:

(A) reducing the imposition of ad valorem taxes by a political subdivision of this state; or

(B) otherwise providing ad valorem tax relief [state tax revenues not dedicated by the constitution].

SECTION 8. (a) The changes in law made by this Act apply only in relation to appropriations made for the state fiscal biennium beginning September 1, 2013, and subsequent state fiscal bienniums.

(b) Appropriations for the state fiscal biennium that begins September 1, 2011, are governed by Subchapter A, Chapter 316, Government Code, as that subchapter read immediately before the effective date of this Act, and the former law is continued in effect for that purpose.

SECTION 9. This Act takes effect on the date on which the constitutional amendment proposed by the 82nd Legislature, Regular Session, 2011, regarding the maximum rate of growth of appropriations and the use of unencumbered surplus general revenues to fund the state's rainy day fund and a public school property tax relief fund, takes effect. If that amendment is not approved by the voters, this Act has no effect.