82R174 JJT-F

By: Bohac H.B. No. 2775

A BILL TO BE ENTITLED

AN ACT

relating to the constitutional limit on the rate of growth of appropriations and the use of surplus state revenues.

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

SECTION 1. Sections 316.001, 316.002, and 316.006, Government Code, are amended to read as follows:

Sec. 316.001. LIMIT. (a) The rate of growth of appropriations in a state fiscal biennium from all sources of revenue other than the federal government [state tax revenues not dedicated by the constitution] may not exceed a rate determined by adding the estimated rate of the increase or decrease in the state's population during the preceding state fiscal biennium and the estimated rate of inflation or deflation during that preceding biennium in this state in the prices of a set of goods determined to be representative of this [the estimated rate of growth of the] state's economy as a whole.

(b) If the sum of the estimated rates described by Subsection (a) is a negative number, appropriations for the state fiscal biennium from all sources of revenue other than the federal government must decrease as prescribed by this subchapter.

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

(1) the maximum allowable rate of growth of appropriations between the current state fiscal biennium and the next state fiscal biennium, in accordance with Section 22, Article VIII, Texas Constitution, expressed as a percentage, by adding the following estimated rates, as determined by the board:

(A) the estimated rate of change of the state's population during the current state fiscal biennium, expressed as a percentage; and

(B) the estimated rate of inflation or deflation in this state during the current state fiscal biennium in the price of a set of goods determined by the board to be representative of this state's economy as a whole during that [estimated rate of growth of the state's economy from the current biennium to the next] biennium, expressed as a percentage;

(2) the amount [level] of appropriations for the current state fiscal biennium from all sources of revenue except the federal government [state tax revenues not dedicated by the constitution]; and

(3) the amount of revenue from all sources except the federal government [state tax revenues not dedicated by the constitution] that could be appropriated for the next state fiscal biennium within the limit established in accordance with the maximum allowable rate of growth determined under Subdivision (1) and the amount of appropriations for the current state fiscal biennium determined under Subdivision (2) [by the estimated rate of growth of the state's economy].

(b) If the sum of the estimated rate of increase or decrease in the state's population and the estimated rate of inflation or deflation is a negative number, the amount of appropriations for the next state fiscal biennium from all sources of revenue other than the federal government may not exceed the amount of appropriations from those sources in the current state fiscal biennium reduced by the product of that amount and the sum of those rates. [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 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) [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 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 limit on the rate of growth of appropriations has been adopted as required by this subchapter.

(d) [(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 sum of the estimated rate of population growth and the estimated rate of inflation [in the state's economy from the current biennium to the next biennium] shall be treated as if that rate [it] were zero, and the amount of revenue from all sources other than the federal government that may [state tax revenues not dedicated by the constitution that could] be appropriated for the next state fiscal biennium is [within the limit established by the estimated rate of growth in the state's economy shall be] the same as the amount [level] of appropriations from those revenues for the current biennium.

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 revenue from all sources except the federal government [state tax revenues not dedicated by the constitution] may not exceed the limit adopted by the committee under Section 316.005.

SECTION 2. 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 limit of appropriations from all sources of revenue except the federal government [state tax revenues not dedicated by the constitution].

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

(a) Unless the legislature adopts a resolution under Section 22, 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 state fiscal biennium made from all sources of revenue except the federal government [state tax revenues not dedicated by the constitution].

SECTION 4. Chapter 171, Tax Code, is amended by adding Subchapter K to read as follows:

SUBCHAPTER K. SURPLUS REVENUE: REBATE OF FRANCHISE TAXES

Sec. 171.551. ISSUANCE OF INDIVIDUAL REBATES. (a) Not later than the 180th day of each state fiscal biennium, the comptroller shall issue to each payer of the franchise tax during the previous state fiscal biennium a rebate as provided by this section if the comptroller has determined under Subsection (a), Section 49-g-1, Article III, Texas Constitution, that there remains an unencumbered positive balance of general revenues from the preceding state fiscal biennium.

(b) The comptroller shall compute for each payer of the franchise tax during the preceding state fiscal biennium the fractional share of the franchise taxes to be rebated by dividing that franchise tax payer's total franchise taxes paid during the preceding state fiscal biennium by the total of all franchise taxes paid under this chapter during that preceding state fiscal biennium.

(c) The comptroller shall issue to each payer of the franchise tax during the preceding state fiscal biennium a rebate of franchise taxes paid in an amount equal to one-third of the amount of the unencumbered positive balance of general revenues determined under Subsection (a), Section 49-g-1, Article III, Texas Constitution, to be remaining after the economic stabilization fund transfer multiplied by the fraction determined for that payer under Subsection (b).

(d) The comptroller may issue a payer's rebate by warrant or by electronic funds transfer, as provided by rules of the comptroller.

SECTION 5. The changes in law made by this Act apply only, as applicable, in relation to appropriations made for the state fiscal biennium beginning September 1, 2013, and subsequent state fiscal bienniums. Appropriations for the state fiscal biennium that began September 1, 2011, are governed by Sections 316.001, 316.002, 316.006, 316.007, and 316.008, Government Code, as those sections existed on December 1, 2010, and the former law is continued in effect for that purpose.

SECTION 6. This Act takes effect on the date on which the constitutional amendment proposed by the 82nd Legislature, Regular Session, 2011, regarding the limitation on the rate of growth in appropriations and the use of unencumbered surplus state revenues to provide for a rebate of state franchise taxes, to reduce public school district property taxes, and to fund the state's rainy day fund takes effect. If that amendment is not approved by the voters, this Act has no effect.