SENATE APPROVES FRANCHISE TAX CUT

(AUSTIN) — The Senate passed a $600 million franchise tax cut for businesses in Texas and approved a permanent exemption for small businesses late Tuesday night. HB 500 would permanently raise the floor for the franchise tax to exempt businesses that make less than $1 million in revenue, up from the previous floor of $600,000. It would also implement a two-year, five percent across the board tax cut for all businesses in Texas, regardless of size. "It's simple, equitable, and these provisions will deliver meaningful tax relief for all businesses in Texas," said bill sponsor Senator Glenn Hegar of Katy.

Governor Rick Perry made tax relief one of his top priorities this session. Many around the Capitol worried that the governor might call a special session specifically to deal with a franchise tax cut, but the passage of HB 500 through the Senate makes that less likely. The bill still has to go to a conference committee, as the Senate significantly changed it from the House version.

Also passing Tuesday was a bill to reduce the number of assessment tests for elementary and middle school students. Testing reform has been a hot topic this session, with the primary focus from lawmakers on cutting the number of end-of-course exams for high school students. HB 866, by Senator Kel Seliger of Amarillo, would exempt high performing students from assessment tests in grades 4, 6, and 7. "Testing data demonstrates that a student who performs well on a standardized test one year is ... likely to perform that well in the next year," he said. " This allows high performing students to focus their time and energy on learning new things rather than focusing on a test every year in which we know what the result will be."

Currently, students take assessments seventeen times between the third and eighth grade for math, science, social studies and reading. Under HB 866, that number will be cut to ten for students that perform well enough on standardized tests. Fourteen of the tests are mandated by federal No Child Left Behind standards, so even if the Governor should sign the bill into law, it will not go into effect until the state can receive a waiver from federal education officials.

The Senate will reconvene Wednesday, May 22 at 10:30 a.m.

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