82R103 JJT-F     By: Paxton H.B. No. 756       A BILL TO BE ENTITLED   AN ACT   relating to the maximum rate of growth of appropriations.          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.  MAXIMUM RATE OF GROWTH OF APPROPRIATIONS   [LIMIT]. The maximum rate of growth of appropriations from the   state treasury for a biennium, as compared to the previous [in a]   biennium, from all available sources of revenue and for any purpose   but excluding appropriations of revenue received from the federal   government and appropriations from any source of revenue made for   the sole purpose of reducing the imposition of ad valorem taxes by a   political subdivision of this state or otherwise providing ad   valorem tax relief, is the least of the following rates:                (1)  [from state tax revenues not dedicated by the   constitution may not exceed] the estimated rate of growth of this   [the] state's economy;                (2)  a rate equal to the sum of:                      (A)  the estimated biennial rate of growth of this   state's population; and                      (B)  the estimated biennial rate of monetary   inflation in this state; and                (3)  the estimated biennial rate of growth of this   state's gross state product.          SECTION 2.  Section 316.002, Government Code, is amended to   read as follows:          Sec. 316.002.  DUTIES OF LEGISLATIVE BUDGET BOARD.   (a)  Before the Legislative Budget Board submits the budget as   prescribed by Section 322.008 [322.008(b)], the board shall   determine [establish]:                (1)  the estimated rate of growth of this [the] state's   economy from the current biennium to the next biennium, determined   as provided by Subsection (b);                (2)  a rate equal to the sum of:                      (A)  the estimated biennial rate of growth of this   state's population, determined as provided by Subsection (c); and                      (B)  the estimated biennial rate of monetary   inflation in this state, determined as provided by Subsection (d);                (3)  the estimated biennial rate of growth of this   state's gross state product, determined as provided by Subsection   (e);                (4)  the amount [level] of appropriations for the   current biennium from all available sources of revenue, excluding:                      (A)  appropriations of revenue from the federal   government; and                      (B)  appropriations from any source of revenue   made for the sole purpose of:                            (i)  reducing the imposition of ad valorem   taxes by a political subdivision of this state; or                            (ii)  otherwise providing ad valorem tax   relief [state tax revenues not dedicated by the constitution]; and                (5) [(3)]  the maximum permissible amount of   appropriations of revenue from all available sources [state tax   revenues not dedicated by the constitution that could be   appropriated] for the next biennium, excluding appropriations of   revenue from the federal government and appropriations from any   source of revenue made for the sole purpose of reducing the   imposition of ad valorem taxes by a political subdivision of this   state or otherwise providing ad valorem tax relief, [within the   limit established] by multiplying the total amount of   appropriations for the current biennium determined as provided by   Subdivision (4) by the sum of one and the maximum rate of growth of   appropriations as provided by Section 316.001 [the estimated rate   of growth of the state's economy].          (b)  The Legislative Budget Board [Except as provided by   Subsection (c), the board] shall determine the estimated rate of   growth of this [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)  The Legislative Budget Board shall determine the   estimated biennial rate of growth of the state's population based   on the average rate of growth during the preceding six years   according to estimates provided by the state demographer [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)  The Legislative Budget Board shall determine the   estimated biennial rate of monetary inflation in this state based   on the average rate of change during the preceding six years of the   effective consumer price index for this state. For purposes of this   subsection, the effective consumer price index for this state is   the average of the consumer price indexes, as determined by the   United States Department of Labor, for:                (1)  the Houston metropolitan area; and                (2)  the Dallas/Fort Worth metropolitan area.          (e)  The Legislative Budget Board shall determine the   estimated biennial rate of growth of this state's gross state   product by dividing the estimated gross state product for the then   current state fiscal year by the average of the gross state products   for the preceding four state fiscal years. In determining the   estimated gross state product for the then current state fiscal   year and the average of the gross state products for the preceding   four state fiscal years, the board shall consider information and   analysis provided by:                (1)  the Bureau of Economic Analysis of the United   States Department of Commerce, or its successor in function; and                (2)  the comptroller.          (f)  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 maximum permissible amount [limit on the rate of growth]   of appropriations for the next biennium has been adopted as   required by this subchapter.          (g) [(e)]  In the absence of an action by the Legislative   Budget Board to adopt a maximum permissible amount of   appropriations for the next biennium [spending limit] as provided   by this section, the maximum permissible amount of appropriations   for the next biennium, excluding appropriations of revenue from the   federal government and appropriations from any source of revenue   made for the sole purpose of reducing the imposition of ad valorem   taxes by a political subdivision of this state or otherwise   providing ad valorem tax relief, is [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 within the limit   established by the estimated rate of growth in the state's economy   shall be] the same as the amount [level] of those appropriations for   the current biennium, determined as provided by Subsection (a)(4).          SECTION 3.  Section 316.003, Government Code, is amended to   read as follows:          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].          SECTION 4.  Section 316.004, Government Code, is amended to   read as follows:          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 5.  Section 316.006, Government Code, is amended to   read as follows:          Sec. 316.006.  LIMIT ON BUDGET RECOMMENDATIONS. Unless   authorized by a two-thirds majority vote of the members of the board   from each house, the Legislative Budget Board budget   recommendations relating to the proposed appropriations of revenue   for the next biennium from any available source, excluding   appropriations of revenue from the federal government and   appropriations from any source of revenue made for the sole purpose   of reducing the imposition of ad valorem taxes by a political   subdivision of this state or otherwise providing ad valorem tax   relief, [state tax revenues not dedicated by the constitution] may   not exceed the maximum permissible amount of those appropriations   [limit] adopted by the committee under Section 316.005.          SECTION 6.  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 maximum permissible amount [limit] of   appropriations of revenue from all available sources for the next   biennium, excluding appropriations of revenue from the federal   government and appropriations from any source of revenue made for   the sole purpose of reducing the imposition of ad valorem taxes by a   political subdivision of this state or otherwise providing ad   valorem tax relief [from state tax revenues not dedicated by the   constitution].          SECTION 7.  Section 316.008(a), Government Code, is amended   to read as follows:          (a)  Unless the legislature adopts a resolution under   Section 22(f), Article VIII, [Section 22(b), of the] Texas   Constitution, raising the proposed maximum permissible amount of   [limit on] appropriations for the next biennium, the proposed   maximum permissible amount [limit] is binding on the legislature   with respect to all appropriations for the next biennium made from   all available sources of revenue, excluding:                (1)  appropriations of revenue from the federal   government; and                (2)  appropriations from any source of revenue made for   the sole purpose of:                      (A)  reducing the imposition of ad valorem taxes   by a political subdivision of this state; or                      (B)  otherwise providing ad valorem tax relief   [state tax revenues not dedicated by the constitution].          SECTION 8.  (a) The changes in law made by this Act apply   only in relation to appropriations made for the state fiscal   biennium beginning September 1, 2013, and subsequent state fiscal   bienniums.          (b)  Appropriations for the state fiscal biennium that   begins September 1, 2011, are governed by Subchapter A, Chapter   316, Government Code, as that subchapter read immediately before   the effective date of this Act, and the former law is continued in   effect for that purpose.          SECTION 9.  This Act takes effect on the date on which the   constitutional amendment proposed by the 82nd Legislature, Regular   Session, 2011, regarding the maximum rate of growth of   appropriations and the use of unencumbered surplus general revenues   to fund the state's rainy day fund and a public school property tax   relief fund, takes effect. If that amendment is not approved by the   voters, this Act has no effect.