85R952 CJC-F

By: Metcalf H.B. No. 541

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, 316.003, and 316.004, Government Code, are amended to read as follows:

Sec. 316.001. LIMIT. (a) The rate of growth of appropriations [in a biennium] from state tax revenues not dedicated by the constitution from one state fiscal biennium to the next state fiscal biennium may not exceed the lesser of the following rates:

(1) a rate equal to the sum of the estimated rates of:

(A) increase or decrease in the state's population during the current state fiscal biennium; and

(B) monetary inflation or deflation in the state during the current state fiscal biennium; or

(2) the estimated rate of growth of the state's economy as determined under Section 316.002.

(b) If the lesser of the rates described by Subsection (a) is a negative number, the amount of appropriations from state tax revenues not dedicated by the constitution for the next state fiscal biennium may not exceed the amount of appropriations from those revenues in the current state fiscal biennium reduced by the product of that amount and the additive inverse of that negative number.

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 determine [establish]:

(1) the estimated rate of growth of the state's economy from the current state fiscal biennium to the next state fiscal biennium;

(2) a rate equal to the sum of the estimated rates of:

(A) increase or decrease in the state's population during the current state fiscal biennium; and

(B) monetary inflation or deflation in the state during the current state fiscal biennium;

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

(4) [(3)] the amount of appropriations of state tax revenues not dedicated by the constitution that could be appropriated for the next state fiscal biennium within the limit established by Section 316.001 [the estimated rate of growth of the state's economy].

(b) 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 state fiscal biennium by the estimated Texas total personal income for the current state fiscal biennium. Using standard statistical methods, the board shall make the estimate by projecting through the state fiscal 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 under [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 for the next state fiscal biennium has been adopted as required by this subchapter.

(e) In the absence of an action by the Legislative Budget Board to adopt a rate of growth of appropriations for the next state fiscal biennium [spending limit] as provided by this section, that rate [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 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 state fiscal biennium.

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].

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 2. 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 for the next state fiscal biennium, the proposed limit is binding on the legislature with respect to all appropriations for the next state fiscal biennium made from state tax revenues not dedicated by the constitution.

SECTION 3. (a) 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.

(b) Appropriations for the state fiscal biennium that begins September 1, 2017, are governed by Subchapter A, Chapter 316, Government Code, as that subchapter provided immediately before the effective date of this Act, and the former law is continued in effect for that purpose.

SECTION 4. This Act takes effect on the effective date of the constitutional amendment proposed by the 85th Legislature, Regular Session, 2017, regarding the limitation on the rate of growth of appropriations. If that amendment is not approved by the voters, this Act has no effect.