83R8812 JJT-D

By: Hughes H.B. No. 1609

A BILL TO BE ENTITLED

AN ACT

relating to the limit on the rate of growth in appropriations and to the authority of the comptroller to reduce the state sales tax rate for designated periods.

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 all available sources of revenue except the federal government [state tax revenues not dedicated by the constitution] may not exceed the average biennial rate of growth of this state's population during the three previous state fiscal bienniums adjusted by the average biennial rate of monetary inflation over the same period, as determined under Section 316.002 [estimated rate of growth of the state's economy].

SECTION 2. Sections 316.002(a), (b), (c), and (e), Government Code, are amended to read as follows:

(a) Before the Legislative Budget Board submits the budget as prescribed by Section 322.008(c), the board shall establish[:

[(1)] the limit on the rate of growth in appropriations for that state fiscal biennium, as compared to the previous state fiscal biennium, by subtracting one from the product of:

(1) the sum of one and the estimated average biennial rate of growth of this state's population during the three previous fiscal bienniums; and

(2) the sum of one and the estimated average biennial rate of monetary inflation during the three previous fiscal bienniums [the state's economy from the current biennium to the next biennium;

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

[(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 estimated rate of growth of the state's economy].

(b) Except as provided by Subsection (c), the board shall determine for the next state fiscal biennium the maximum permissible amount of appropriations from all available sources of revenue except the federal government by multiplying the amount of appropriations from those sources of revenue for the then current biennium by the sum of one and the limit on the rate of growth of appropriations determined by the board under Subsection (a) [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 effective method of computing the average biennial [comprehensive definition of the] rate of growth of the state's population adjusted for monetary inflation [economy] is developed and is approved by the committee established by Section 316.005, the board may use that alternative method in computing [definition in calculating] the limit on appropriations.

(e) In the absence of an action by the Legislative Budget Board to adopt a spending limit as provided in Subsections (a) and (b), the limit on the [estimated] rate of growth of appropriations for the [in the state's economy from the current biennium to the] next state fiscal biennium is [shall be treated as if it were] zero, and the amount of revenue from all available sources except the federal government appropriated for the next state fiscal biennium may not exceed [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 appropriations from those sources for the then current biennium.

SECTION 3. Section 151.051, Tax Code, is amended to read as follows:

Sec. 151.051. SALES TAX IMPOSED. (a) A tax is imposed on each sale of a taxable item in this state at a rate determined by the comptroller as provided by this section.

(b) Except as provided by this section, the [The] sales tax rate is 6-1/4 percent of the sales price of the taxable item sold.

(c) Each odd-numbered year, the comptroller shall determine whether the amount of undedicated unencumbered anticipated revenue is sufficient to permit, without resulting in a shortfall of revenue, a reduction of the sales tax rate by at least one-tenth of one percent for a period of two calendar years.

(d) If the comptroller determines under Subsection (c) that the rate may be reduced, then not later than November 1 of that year the comptroller shall declare a reduced sales tax rate for the next two calendar years that is at least one-tenth of one percent lower than the rate otherwise provided by Subsection (b). The comptroller shall publish the declaration in the Texas Register, shall mail notice of the declaration to each permit holder, and may provide notice by other means the comptroller determines prudent. The reduced rate applies beginning January 1 of the following year through December 31 of the second following year, except as provided by Subsection (e).

(e) Not later than November 1 of the first year of the period in which the reduced sales tax rate applies, the comptroller shall determine from then current available information whether the amount of undedicated unencumbered anticipated revenue is sufficient to maintain the reduced sales tax rate for the second year of the period without resulting in a shortfall of revenue. If the comptroller determines that a revenue shortfall is likely to occur, the comptroller shall declare the reduced rate rescinded for the following year. The comptroller shall publish the declaration in the Texas Register, shall mail notice of the declaration to each permit holder, and may provide notice by other means the comptroller determines prudent. For the period from January 1 to December 31 of the year following a declaration under this subsection, the sales tax rate is the rate otherwise provided by Subsection (b).

(f) The comptroller shall adopt rules to implement this section.

SECTION 4. This Act takes effect on the date on which the constitutional amendment proposed by the 83rd Legislature, Regular Session, 2013, to limit the rate of growth of appropriations from all sources of revenue except the federal government and to authorize the legislature to appropriate money for tax rebates takes effect. If that amendment is not approved by the voters, this Act has no effect.