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May 5, 2005     (512) 463-0300
The Albany High School band, including eighth graders, from Albany, Texas, play a selection of songs for visitor's to the Capitol rotunda
The Albany High School band, including eighth graders, from Albany, Texas, play a selection of songs for visitors to the Capitol rotunda.

FINANCE COMMITTEE CONSIDERS AMENDMENTS TO TAX PLAN

Amendments to the Senate's plan for reforming the state's tax structure, lowering property taxes, and expanding the franchise tax were before the Senate Finance Committee today. More than 70 amendments are proposed to the Committee Substitute to House Bill 3, but its author, Chairman Steve Ogden, says the fundamental structure of the bill will remain the same. "I think the basic bill, as written, will pass the committee. I think the amendments can improve the bill, but it will still look basically the same as it is now," said Ogden. That means the bill will close all loopholes that currently exclude the majority of Texas businesses from paying franchise taxes, while lowering property taxes by almost a third.

One important change to the bill could be modifications to the rates of the franchise tax. As written, CSHB 3 would reduce the franchise tax rate from 4.5 percent to 2.5 percent, to be assessed on half of a business' payroll and all of its yearly net receipts. Lt. Governor David Dewhurst said the Senate is still considering changes to this rate, such as lowering the portion of the payroll that is taxable, while slightly increasing the tax rate. Dewhurst said the Senate is still committed, however, to eliminating loopholes and lowering the rate below where it stands today. "I think you've got to close loopholes in order to have meaningful reform," said Dewhurst. "You've got to close loopholes in order to have a broad-based plan, and most importantly, we've got to close loopholes or the Legislature very likely will be back here in two years on the same subject."

The Finance Committee began considering the amendments to CSHB 3 early this afternoon. Ogden asked that all amendments be revenue neutral, meaning that any proposed increases in revenue must be accompanied by a corresponding reduction in property taxes. He added that the bill will likely not be voted on before Friday. Dewhurst said that CSHB 3 and its companion bill, CSHB 2, which includes the education reform components of the Senate plan, will be ready to come to the floor on Monday.

The Senate tentatively passed a measure today intended to combat the obesity epidemic afflicting Texas school children. Senate Bill 1379, by Brownsville Senator Eddie Lucio, would put restrictions on what kind of food and drinks can be stocked in school vending machines, and require the state commissioners of agriculture, education and state health services to analyze and improve health incentives and programs each year. It would also create a mentor program where students are trained on how to help their peers lose weight. The bill is awaiting final passage before it is sent over to the House.

The Senate will reconvene Friday, May 6, at 9:30 a.m.

Session video and all other webcast recordings can be accessed from the Senate website's audio and video archive pages.

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