84R6245 MK-D
By: Hughes H.B. No. 3639
A BILL TO BE ENTITLED
AN ACT
relating to the limit on the rate of growth in appropriations and to
the authority of the comptroller to reduce the state sales and use
tax rates for designated periods.
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. LIMIT. The rate of growth of appropriations
in a biennium from all available sources of revenue except the
federal government [state tax revenues not dedicated by the
constitution] may not exceed the average biennial rate of growth of
this state's population during the three previous state fiscal
bienniums adjusted by the average biennial rate of monetary
inflation over the same period, as determined under Section 316.002
[estimated rate of growth of the state's economy].
SECTION 2. Sections 316.002(a), (b), (c), and (e),
Government Code, are amended to read as follows:
(a) Before the Legislative Budget Board submits the budget
as prescribed by Section 322.008(c), the board shall establish[:
[(1)] the limit on the rate of growth in
appropriations for that state fiscal biennium, as compared to the
previous state fiscal biennium, by subtracting one from the product
of:
(1) the sum of one and the estimated average biennial
rate of growth of this state's population during the three previous
fiscal bienniums; and
(2) the sum of one and the estimated average biennial
rate of monetary inflation during the three previous fiscal
bienniums [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 the maximum
permissible amount of appropriations from all available sources of
revenue except the federal government by multiplying the amount of
appropriations from those sources of revenue for the then current
biennium by the sum of one and the limit on the rate of growth of
appropriations determined by the board under Subsection (a) [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 a more effective method of computing the average
biennial [comprehensive definition of the] rate of growth of the
state's population adjusted for monetary inflation [economy] is
developed and is approved by the committee established by Section
316.005, the board may use that alternative method in computing
[definition in calculating] the limit on appropriations.
(e) In the absence of an action by the Legislative Budget
Board to adopt a spending limit as provided in Subsections (a) and
(b), the limit on the [estimated] rate of growth of appropriations
for the [in the state's economy from the current biennium to the]
next state fiscal biennium is [shall be treated as if it were] zero,
and the amount of revenue from all available sources except the
federal government appropriated for the next state fiscal biennium
may not exceed [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 appropriations from
those sources for the then current biennium.
SECTION 3. Section 151.051, Tax Code, is amended to read as
follows:
Sec. 151.051. SALES TAX IMPOSED. (a) A tax is imposed on
each sale of a taxable item in this state at a rate determined by the
comptroller as provided by this section.
(b) Except as provided by this section, the [The] sales tax
rate is 6-1/4 percent of the sales price of the taxable item sold.
(c) Each odd-numbered year, the comptroller shall determine
whether the amount of undedicated unencumbered anticipated revenue
is sufficient to permit, without resulting in a shortfall of
revenue, a reduction of the sales tax rate by at least one-tenth of
one percent for a period of two calendar years.
(d) If the comptroller determines under Subsection (c) that
the rate may be reduced, then not later than November 1 of that year
the comptroller shall declare a reduced sales tax rate that is one
or more increments of one-tenth of one percent lower than the rate
otherwise provided by Subsection (b). The comptroller shall
publish the declaration in the Texas Register, shall mail notice of
the declaration to each permit holder, and may provide notice by
other means the comptroller determines prudent. The reduced rate
applies beginning January 1 of the following year through December
31 of the second following year, except as provided by Subsection
(e).
(e) Not later than November 1 of the first year of the period
in which the reduced sales tax rate applies, the comptroller shall
determine from then current available information whether the
amount of undedicated unencumbered anticipated revenue is
sufficient to maintain the reduced sales tax rate for the second
year of the period without resulting in a shortfall of revenue. If
the comptroller determines that a revenue shortfall is likely to
occur, the comptroller shall declare the reduced rate rescinded for
the following year. The comptroller shall publish the declaration
in the Texas Register, shall mail notice of the declaration to each
permit holder, and may provide notice by other means the
comptroller determines prudent. For the period from January 1 to
December 31 of the year following a declaration under this
subsection, the sales tax rate is the rate otherwise provided by
Subsection (b).
(f) The comptroller shall adopt rules to implement this
section.
SECTION 4. Section 151.101(b), Tax Code, is amended to read
as follows:
(b) The tax is at the same percentage rate as is imposed
under [provided by] Section 151.051 [of this code] on the sales
price of the taxable item.
SECTION 5. This Act takes effect on the date on which the
constitutional amendment proposed by the 84th Legislature, Regular
Session, 2015, to limit the rate of growth of appropriations from
all sources of revenue except the federal government and to
authorize the legislature to appropriate money for tax rebates
takes effect. If that amendment is not approved by the voters, this
Act has no effect.