Texas Government Code - GOV'T § 659.261. Salary Cap

(a) The maximum amount a state agency spends for merit salary increases in and promotions to classified positions during a fiscal year may not exceed, without the written approval of the budget division of the governor's office and the Legislative Budget Board, the amount computed by multiplying the total amount spent by the agency in the preceding fiscal year for classified salaries times the percentage set by the General Appropriations Act for purposes of this computation.

(b) The maximum amount that may be spent for merit salary increases in and promotions to classified positions shall be computed separately for each year of the state fiscal biennium.  Merit salary increases and promotions awarded in the first fiscal year of a biennium do not count against the maximum amount that may be spent for those increases in the second fiscal year of that biennium.

(c) Money spent to pay a salary increase for an employee who is promoted to a classified position title counts against the limitation prescribed by this section only if, as a result of the promotion, the number of agency employees in that position title exceeds the maximum number of agency employees who have been in that position title at any time during the preceding six-month period.

(d) A request to exceed the limitation prescribed by this section must be submitted by the governing body of the agency, or by the head of the agency if the agency is not governed by a multimember governing body, and must include at least:

(e) The comptroller shall prescribe accounting and reporting procedures necessary to ensure that the amount spent for merit salary increases and promotions does not exceed the limitations established by this section.