HB5449 - Relating to a limitation on the rate of growth in state and local appropriations with the return of over-collected taxpayer money by reducing taxes.

      By: Toth H.B. No. 5449       A BILL TO BE ENTITLED   AN ACT   relating to a limitation on the rate of growth in state and local   appropriations with the return of over-collected taxpayer money by   reducing taxes.          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.   (a) For purposes of this section, "all funds   appropriations" means appropriations from:             (1)  the general revenue fund in the state or local treasury;             (2)     a dedicated account in the general revenue fund in the   state or local treasury;             (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; and           (4)     the other state funds, other local funds, and federal   funds in the state or local treasury.             (b)   In each state fiscal biennium, the rate of growth of   appropriations from all revenue sources, and each local fiscal year   may not exceed the average taxpayer's ability to pay for the cost of   funding government.           (c)     The rates of growth of state funds appropriations in a   state fiscal biennium or political subdivisions shall not exceed   the estimated prior three-year average annual rate of growth of   this state's population during the three calendar years preceding   the regular session for which appropriations are made, adjusted by   the estimated prior three-year average annual rate of inflation   during the same period, as determined under Section 316.002.             (d)     The Legislative Budget Board shall determine the rates   described by Subsection (e) using the most recent information   available from the United States Bureau of Labor Statistics and the   United States Census Bureau.          Sec. 316.002.  DUTIES OF LEGISLATIVE BUDGET BOARD. (a)   Before the Legislative Budget Board transmits 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   from state tax revenues for that state fiscal biennium, as compared   to the previous state fiscal biennium, and the limit on the rate of   growth of appropriations for political subdivisions for that local   fiscal year based on :                (2)   the limit on the rate of growth of all funds   appropriations for that state fiscal biennium or political   subdivision fiscal year, as compared to the previous period, by   summing:                         (A)     the prior three-year average annual rate of   growth of this state's population preceding the regular session for   which appropriations are made; and                         (B)     the prior three-year average annual rate of   inflation using the chained-consumer price index preceding the   regular session before appropriations.   (d) Except as provided by   Subsection (e), the board shall determine for the next state fiscal   biennium a limit on the amount of:                 (1)     state fund appropriations from all revenues by   multiplying the amount of all fund appropriations from all tax   revenues for the current state fiscal biennium by the sum of one and   the limit on the rate of growth of appropriations from all tax   revenues established by the board under Subsection (a)(1); and             (e)     If the rate determined under Subsection (a)(2) is a   negative number, the amount of state funds appropriations for the   next state fiscal biennium may not exceed the amount of state funds   appropriations in the current state fiscal biennium nor could a   political subdivision.             (f)   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   from state tax revenues not dedicated by the constitution under   Section 316.001(b); and                   (2)     the limit on the rate of growth of al funds   appropriations under Section 316.001(c) [ has been adopted as   required by this subchapter ].           (g)  [ (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 of [ 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 of [ in ] the   state's economy shall be the same as the amount [ level ] of those   appropriations for the current state fiscal biennium ; and                   (2)  for purposes of Section 316.001(c):                         (A)     the estimated average biennial rates of   growth of this state's population and of monetary inflation shall   be treated as if they were zero; and                         (B)     the amount of all funds appropriations that   could be appropriated within the limit established by that   subsection shall be the same as the amount of those appropriations   for the current state 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 from [ 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 state funds   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 all funds 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 state fiscal biennium made from those   [ state tax ] revenues [ not dedicated by the constitution ]. The   proposed limit on all funds appropriations is binding on the   legislature with respect to all appropriations for the next state   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-fourths of the members of each house of the   legislature or a political subdivision. The resolution must find   that an emergency exists, identify the nature of the emergency, and   specify the amount authorized. The excess amount authorized under   this subsection may not exceed the amount specified in the   resolution.          (b)  Any over-collected taxpayer money shall be returned by   reducing taxes.          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, 2025, and subsequent state fiscal bienniums.          SECTION 5.  This Act takes effect September 1, 2025.