85R4924 CJC-F

By: Taylor of Collin S.B. No. 943

A BILL TO BE ENTITLED

AN ACT

relating to limitations 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, 316.004, 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 state tax revenues not dedicated by the constitution may not exceed the estimated rate of growth of the state's economy.

(b) The rate of growth of appropriations in a state fiscal biennium from all sources of revenue, including the federal government, may not exceed the least of the following rates, calculated for the preceding state fiscal biennium:

(1) a rate equal to the sum of:

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

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

(2) the rate of growth of personal income of this state's residents; or

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

Sec. 316.002. DUTIES OF LEGISLATIVE BUDGET BOARD. (a) Before the Legislative Budget Board transmits [submits] the budget as prescribed by Section 322.008(c), the board shall determine [establish]:

(1) for purposes of Section 316.001(a):

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

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

(C) [(3)] the amount of state tax revenues not dedicated by the constitution that could be appropriated for the next state fiscal biennium within the limit established under that subsection; and

(2) for purposes of Section 316.001(b):

(A) the lesser of the rates calculated as provided under that subsection;

(B) the appropriations for the current state fiscal biennium from all sources of revenue, including the federal government; and

(C) the amount of revenue from all sources, including the federal government, that could be appropriated for the next state fiscal biennium within the limit established under that subsection [by the estimated rate of growth of the state's economy].

(b) Except as otherwise provided by this subsection [Subsection (c)], for purposes of Section 316.001(a), 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 method [definition] of determining 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 method for purposes of Section 316.001(a) [definition in calculating the limit on appropriations].

(c) For purposes of Section 316.001(b), the board shall determine:

(1) the rate of growth of this state's population during the preceding state fiscal biennium using the most recent estimates published by the United States Census Bureau;

(2) the rate of monetary inflation in this state during the preceding state fiscal biennium using the effective consumer price index for all items for this state as determined by the board based on information published by the Bureau of Labor Statistics of the United States Department of Labor; and

(3) the rate of growth of personal income of this state's residents during the preceding state fiscal biennium and the rate of growth of this state's gross state product during the preceding state fiscal biennium using information provided by the Bureau of Economic Analysis of the United States Department of Commerce.

(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(a); and

(2) the limit on the rate of growth of appropriations from all sources of revenue, including the federal government, under Section 316.001(b) [has been adopted as required by this subchapter].

(e) In the absence of an action by the Legislative Budget Board to adopt the limitations [a spending limit as] provided by this section:

(1) for purposes of Section 316.001(a):

(A) [in Subsections (a) and (b),] the estimated rate of growth in the state's economy from the current state fiscal biennium to the next state 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 state fiscal biennium; and

(2) for purposes of Section 316.001(b):

(A) the rate of growth shall be treated as if it were zero; and

(B) the amount of revenue from all sources, including the federal government, that could be appropriated within the limit established by that subsection shall be the same as the level of appropriations 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.

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 from the state treasury for the next state fiscal biennium [of state tax revenues not dedicated by the constitution] may not exceed the limit on appropriations of state tax revenues not dedicated by the constitution adopted by the committee under Section 316.005 and may not exceed the limit on appropriations of revenue from all sources, including the federal government, adopted by the committee under that section [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 appropriations from all sources of revenue, including the federal government.

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 state fiscal biennium made from those [state tax] revenues [not dedicated by the constitution]. The proposed limit on appropriations from all sources of revenue, including the federal government, is binding on the legislature with respect to all appropriations for the next state fiscal biennium made from those revenues unless the legislature adopts a resolution raising the proposed limit that is approved by a record vote of two-thirds of the members of each house of the legislature. A resolution described by this subsection 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. (a) The changes in law made by this Act apply only in relation to an appropriation made for a state fiscal biennium beginning on or after September 1, 2019.

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

SECTION 5. This Act takes effect September 1, 2017.