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.