By: Hancock, et al. S.B. No. 9
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the constitutional limit on the rate of growth of
  appropriations.
         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)  For purposes of this subchapter,
  "consolidated general revenue appropriations" means appropriations
  from:
               (1)  the general revenue fund in the state treasury;
               (2)  a dedicated account in the general revenue fund in
  the state treasury; or
               (3)  a general revenue-related fund in the state
  treasury as identified in the biennial statement required of the
  comptroller under Section 49a, Article III, Texas Constitution.
         (b)  The rate of growth of appropriations in a state fiscal
  biennium from state tax revenues not dedicated by the constitution
  may not exceed the estimated rate of growth of the state's economy.
         (c)  The rate of growth of consolidated general revenue
  appropriations in a state fiscal biennium may not exceed the
  estimated rate of growth of the state's economy.
         (d)  For purposes of this subchapter, the estimated rate of
  growth of the state's economy is the average biennial rate of growth
  of this state's population during the state fiscal biennium
  preceding the biennium for which appropriations are made and during
  the state fiscal biennium for which appropriations are made,
  adjusted by the average biennial rate of monetary inflation in this
  state during the same period, as determined under Section 316.002.
         (e)  The legislature finds that, for purposes of Section 22,
  Article VIII, Texas Constitution, the average biennial rate of
  growth of this state's population during the state fiscal biennium
  preceding the biennium for which appropriations are made and during
  the state fiscal biennium for which appropriations are made,
  adjusted by the average biennial rate of monetary inflation in this
  state during the same period, is an appropriate measure of the
  estimated rate of growth of this state's economy.
         (f)  For purposes of this subchapter, an appropriation to pay
  for a rebate of state taxes must be excluded from computations used
  to determine whether appropriations exceed the amount authorized by
  Subsection (b) or (c).
         (g)  The Legislative Budget Board shall determine the rates
  described by Subsection (d) using the most recent information
  available from sources the board considers reliable, including the
  United States Bureau of Labor Statistics Consumer Price Index and
  the Texas Demographic Center.
         Sec. 316.002.  DUTIES OF LEGISLATIVE BUDGET BOARD.
  (a)  Before the Legislative Budget Board transmits [submits] the
  budget for the next state fiscal biennium as prescribed by Section
  322.008(c), the board shall establish:
               (1)  the limit on the rate of growth of appropriations
  of state tax revenues not dedicated by the constitution for that
  state fiscal biennium, as compared to the previous state fiscal
  biennium, by subtracting one from the product of:
                     (A)  the sum of one and the estimated average
  biennial rate of growth of this state's population during the state
  fiscal biennium preceding the biennium for which appropriations are
  made and during the state fiscal biennium for which appropriations
  are made; and
                     (B)  the sum of one and the estimated average
  biennial rate of monetary inflation during the state fiscal
  biennium preceding the biennium for which appropriations are made
  and during the state fiscal biennium for which appropriations are
  made; and
               (2)  the limit on the rate of growth in consolidated
  general revenue appropriations for that state fiscal biennium, as
  compared to the previous state fiscal biennium, by subtracting one
  from the product of:
                     (A)  the sum of one and the estimated average
  biennial rate of growth of this state's population during the state
  fiscal biennium preceding the biennium for which appropriations are
  made and during the state fiscal biennium for which appropriations
  are made; and
                     (B)  the sum of one and the estimated average
  biennial rate of monetary inflation during the state fiscal
  biennium preceding the biennium for which appropriations are made
  and during the state fiscal biennium for which appropriations are
  made [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 a limit on the amount
  of:
               (1)  appropriations of state tax revenues not dedicated
  by the constitution by multiplying the amount of appropriations of
  state tax revenues not dedicated by the constitution for the then
  current state fiscal biennium by the sum of one and the limit on the
  rate of growth of appropriations of state tax revenues not
  dedicated by the constitution established by the board under
  Subsection (a)(1); and
               (2)  consolidated general revenue appropriations by
  multiplying the amount of consolidated general revenue
  appropriations for the then current state fiscal biennium by the
  sum of one and the limit on the rate of growth of consolidated
  general revenue appropriations established by the board under
  Subsection (a)(2) [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 the rate determined under Subsection (a)(1) is a
  negative number, the amount of appropriations of state tax revenues
  not dedicated by the constitution for the next state fiscal
  biennium may not exceed the amount of appropriations of state tax
  revenues not dedicated by the constitution in the current state
  fiscal biennium.  If the rate determined under Subsection (a)(2) is
  a negative number, the amount of consolidated general revenue
  appropriations for the next state fiscal biennium may not exceed
  the amount of consolidated general revenue appropriations in the
  current state fiscal biennium [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 this subchapter and 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 board adopts:
               (1)  the limit on the rate of growth of appropriations
  of state tax revenues not dedicated by the constitution under
  Section 316.001(b); and
               (2)  the limit on the rate of growth of consolidated
  general revenue appropriations under Section 316.001(c) [has been
  adopted as required by this subchapter].
         (e)  In the absence of an action by the Legislative Budget
  Board to adopt the limits [a spending limit] as provided by this
  section:
               (1)  for purposes of Section 316.001(b):
                     (A)  [in Subsections (a) and (b),] the estimated
  rate of growth in the state's economy from the current fiscal
  biennium to the next fiscal biennium shall be treated as if it were
  zero;[,] and
                     (B)  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 level of appropriations for the
  current fiscal biennium; and
               (2)  for purposes of Section 316.001(c):
                     (A)  the estimated rate of growth in the state's
  economy from the current fiscal biennium to the next fiscal
  biennium shall be treated as if it were zero; and
                     (B)  the amount of consolidated general revenue
  appropriations that could be appropriated within the limit
  established by that subsection shall be the same as the level of
  appropriations for the current fiscal 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:
               (1)  relating to the proposed appropriations of state
  tax revenues not dedicated by the constitution may not exceed the
  limit on appropriations from those sources adopted by the committee
  under Section 316.005; and
               (2)  relating to the proposed consolidated general
  revenue appropriations may not exceed the limit on appropriations
  from those sources 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:
               (1)  the proposed limit of appropriations from state
  tax revenues not dedicated by the constitution; and
               (2)  the proposed limit of consolidated general revenue
  appropriations.
         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 from
  state tax revenues not dedicated by the constitution, the proposed
  limit is binding on the legislature with respect to all
  appropriations for the next fiscal biennium made from those [state
  tax] revenues [not dedicated by the constitution]. The proposed
  limit on consolidated general revenue appropriations is binding on
  the legislature with respect to all appropriations for the next
  fiscal biennium made from those sources unless the legislature
  adopts a resolution raising the proposed limit that is approved by a
  record vote of three-fifths of the members of each house of the
  legislature. The resolution must find that an emergency exists,
  identify the nature of the emergency, and specify the amount
  authorized. The excess authorized under this subsection may not
  exceed the amount specified in the resolution.
         SECTION 4.  The changes in law made by this Act apply only in
  relation to appropriations made for the state fiscal biennium
  beginning September 1, 2019, and subsequent state fiscal bienniums.  
  Appropriations for the state fiscal biennium beginning September 1,
  2017, are governed by Sections 316.001, 316.002, 316.006, 316.007,
  and 316.008, Government Code, as those sections existed on December
  1, 2016, and the former law is continued in effect for that purpose.
         SECTION 5.  This Act takes effect December 1, 2017.