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May 18, 2007 (512) 463-0300

WEEK IN REVIEW: MARGINS TAX TWEAK TENTATIVELY APPROVED

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The Senate took time to honor the contributions of Lance Armstrong and his mother in the search for a cure for cancer.

(AUSTIN) -- The Senate gave preliminary approval to a bill Friday intended to fix some issues with the margins tax created in the summer of 2005. The Legislature approved a tax on gross receipts to offset revenue lost by the one-third local school property tax cut that was part of the school finance reform package from last session. Since then, lawmakers have looked at this tax to see if it could be improved. Some of the changes proposed by the house caused concern in the business community, so the Senate version tries to address those. "This is an attempt to take away some of the concerns from the business groups of un-intended consequences if parts of the gross receipt tax are struck down," said Lt. Governor David Dewhurst.

The bill, sponsored by Finance Committee Chair Steve Ogden, creates a new graded system of tax rates based on total gross receipts. In current law, businesses that gross less than $300,000 annually are exempt from the business tax, but those that only make a little more than that have to pay the same rate as a business that makes millions. The Senate version of the bill creates a system where only companies that gross more than $900,000 annually pay the full tax, and businesses under that get a discount based on how much they gross. Those that gross less than $300,000 are still exempt from the tax. The bill also fixes some oversights in the old tax policy, such as requiring real estate partnerships to pay based on gross rather than net receipts, and changing some of the requirements for interstate securities. It also lowered the receipts tax rate from 0.7 to 0.575. The bill should see a final vote on Monday.

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Senator Steve Ogden signifies his support for a bill by showing one finger. Senators vote no by holding up two fingers.

Also this week, the Senate sent Texas' version of Jessica's Law to the Governor's desk with the approval of the conference committee report on HB 8. This report reflects the compromise reached between the Senate and House versions of the bill. The compromise language makes some changes, but the major parts of the bill are still there. Aggravated sexual assault of a child under 14 still brings a 25-year minimum penalty, and prosecutors could seek the death penalty for a second offense. "We have a product we can all be proud of," said bill sponsor Senator Robert Deuell.

Dog owners would have to keep a tighter rein on their pets, or face harsher penalties if they hurt someone under a bill passed Thursday. The bill, by El Paso Senator Eliot Shapleigh, would make it a 3rd degree felony for the owner if a dangerous dog roams free and causes serious bodily harm to another person. If the dog kills a person, that penalty goes to a 2nd degree felony. Shapleigh dedicated the bill to the family of Lillian Stiles, who was killed when a pack of dogs mauled her in her front yard. He resisted amendments to decrease the penalty from a felony to a high-level misdemeanor. "We have to consider what penalty range will actually make a deterrent in this case," said Shapleigh. "I don't think we can go to the Stiles family and say to them after their mother has been killed by six pit bulls, mauled and put in the yard, that that life is worth a class-A misdemeanor." If the House concurs Senate amendments, the bill will go immediately to the Governor for his signature.

The Senate will reconvene Monday, May 21, at 10:30 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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