The Senate wasn't willing, but the House voted to reconsider the law that requires state universities to show preference in admissions to students who finished in the top 10 percent of their high school classes (in Texas schools).Some of the universities -- particularly that big just to the north of the state Capitol -- complain that they're hamstrung by the rule. Some folks in highly rated school districts say the rule is unfair to good students who weren't in the top rank but would have been in a lower quality district (that was a side issue in the school finance lawsuit that's still running through the courts). But proponents say it's producing a more ethnically and racially diverse population of students with better brains, on average, than their predecessors. The Senate left it be, but the House voted -- with a margin of just four votes -- to halve the number of 10s the schools admit. Under the House version, only half of a given incoming class would have to be filled solely by top students. Rep. Harold Dutton, D-Houston, offered an amendment that would have required schools to have the same racial ratios in their incoming classes as on their football teams.

Proposals and ideas are starting to wither as the session-ending rules begin to kick in. Sort-of. Lawmakers are busy looking for viable legislation that will accommodate non-viable legislation; if a bill dies, there's often a semi-related bill that can be amended to reanimate the dead one.Publicly funded vouchers for private schools took a huge hit in the Senate, when Sen. Mike Jackson, R-La Porte, promised his colleagues that he would block efforts to add vouchers to the Texas Education Agency's sunset bill. That bill has to pass -- it keeps the agency in business after this year -- and it's an easy vehicle for vouchers. But before voting it out, Democratic senators peppered Jackson with questions to nail down the Senate's intentions: If the House insists on adding vouchers, the bill won't be approved in the upper chamber. (We'll be adding to this...)

The Texas Senate is running an obstacle course on the way to a school finance fix... or to a brick wall.The three pieces of legislation in the Senate's school finance package share an attribute unacceptable to the Texas House: a state property tax to pay for public education. But any senator nervous about voting for a big fix can find any number of reasons to remain spooked. • Last week, when Senate Finance Committee moved the bills, four members voted no, and one -- Sen. Jane Nelson, R-Lewisville, unfurled an argument against the tax that had some of her colleagues nodding in unison. House Speaker Tom Craddick has said repeatedly that the House won't support a state property tax; senators are debating whether they want to offer their support to something that's in trouble on the other side of the building, or to let it die without taking a position on it. • The Center for Public Policy Priorities pounced on a Legislative Budget Board analysis of the legislation that concludes the so-called "tax swap" would raise taxes on people making less than $140,000 annually. There's a trick to that: The numbers are averages and assume, for instance, that the average taxpayer smokes and drinks. Taxes on those unrepentant hedonists would go up a lot, while taxes on teetotalers and clean breathers would not; but on average, it's a tax hike on the average Texan. The CPPP says the tax bill would make Texas taxes harder on the poor. • And the comptroller, at the separate requests of several senators, cranked some numbers showing the legislation would actually cost some school districts money. Comptroller Carole Keeton Strayhorn later issued a letter saying the "legally binding" estimates on the bill are to be found in the Legislative Budget Board's official fiscal note. Her numbers were based, she said, on different assumptions.

The campaign finance agitators at Campaigns for People take on highway contractors in a report showing how the beneficiaries of new highway spending gave financial backing to some of the politicos who have made and continue to make highway spending a state priority.According to their report, the top five state officials -- Gov. Rick Perry, Lt. Gov. David Dewhurst, House Speaker Tom Craddick, Attorney General Greg Abbott, and Comptroller Carole Keeton Strayhorn -- got $1.2 million in contributions from the biggest highway builders and from companies bidding to build parts of the Trans-Texas Corridor over the past four years. The legislators on the committees doing the decision-making got $215,000 from those contributors. The report, called Big Money Paves the Way for the Trans Texas Corridor: How Big Money Bought Texans the Nation's Most Expensive Toll Road Project, can be downloaded: www.cleanuptexaspolitics.com/images/TollCorridorMoney.pdf

Asbestos legislation that stymied lawmakers for years finally gets through both the Senate and the House.The House quietly went along with a deal worked out on the Senate side between trial lawyers who represent people suffering from asbestos- and silica-related diseases and the companies liable for causing those illnesses. The legislation puts limits who can file suit, and at what stage of their illness. It's been bottled up in negotiations for a couple of legislative sessions, but after tort reformers and trial lawyers worked out a deal in Lt. Gov. David Dewhurst's private conference room, both the Senate and the House signed off on it.

Residency in politics is whatever they say it isThe House tentatively approved -- and then killed, by a teensy margin -- a bill by Rep. Joe Nixon, R-Houston, that would have disqualified legislative candidates who have homestead exemptions outside the districts where they're running for office. One veteran lawmaker who ought to know told us that would jeopardize the political futures of dozens of incumbent legislators.

When the Senate started on the school half of the school finance bill, funding formulas, student testing and the start and stop dates for the school year were among the biggest differences between the House and Senate versions of the bill. When the Senate was done, dates had been taken care of, but the other two obstacles were left to the still-to-be-named conference committee.The state gives school districts more money for students with special needs, whether those are language problems, physical handicaps, or a number of other things. The Senate wants to keep those "weights" for funding; the House wants to get rid of them. Where Rep. Kent Grusendorf, R-Arlington, wants to test students as they exit courses of study, Sen. Florence Shapiro, R-Plano, has shown a preference for the TAKS test given now to measure student achievement. They're the leaders of the respective education committees in the House and Senate and the likely heads of the conference committee that will hammer out these differences. The House and Senate didn't have the same things in mind when it comes to the beginning and ending dates for schools in Texas. Businesses that depend on that timing -- from summer camps to amusement parks to the joints that sell t-shirts and wave boards on the Texas Coast -- want the school year to start later than it does now (some Texas school districts begin in the first week of August). And they'd like the school districts around the state to sync up, so as to encourage family vacations and such. Call this one a win (so far) for Shamu: The Senate agreed to order districts to start the school year after Labor Day each year, as the House did earlier. And they have to finish by June 7, putting everybody in the state on the same nine-months-mostly-on, three-months-off calendar. That's unpopular in some districts -- we've talked to legislators on both sides who'd like to get their votes back -- but the change is in the bills headed for conference committee.

Parental consent for minors seeking abortions stalled in the House, but is moving in the Senate.A controversial parental consent bill was set aside in the House, but the Senate moved forward with a less dramatic set of changes. The Senate's bill would turn the state's current law -- which requires minors seeking abortions to notify their parents or, in extraordinary cases, to seek permission from the courts -- into a consent law, where parents (or judges) would have to approve before the operations could proceed. Rep. Phil King, R-Weatherford, withdrew his bill from consideration when it came up in the House; Sen. Chris Harris, R-Arlington, has a similar bill moving on the East End of the Pink Building.

Nothing's ever dead while the Lege is still working, but retirement requirements for teachers apparently won't change this year.Rep. Yvonne Davis, D-Dallas, using the old point-of-order gambit, killed House legislation that would have changed retirement requirements for Texas teachers. But that assassination didn't kill a Senate bill that would do many of the same things. Teachers would still be eligible for benefits when their age and years on the job add up to 80 -- that's called the Rule of 80, logically enough -- but only if they were also at least 60 years old. A 55-year-old teacher with 25 years on the job is eligible for retirement and currently, for full benefits. With the proposed revisions, that educator would be eligible, but would have seen a five percent cut in the retirement annuity for each year short of 60.

Some numbers couldn't possibly make any difference outside the halls of the Texas Capitol, but they matter much to some of the more self-absorbed politicos in both chambers of the Legislature. To wit: One of the elves in the Pink Building -- one whose sympathies lie with the upper chamber -- compiled numbers showing the Senate is ahead of last session's pace while the House is behind.Officeholders in both places have filed fewer bills: 3,692 in the House, as against 3,735 two years ago; 1,926 in the Senate, up from 2,007 two years back. So far, the House has approved 744 bills, including 47 with Senate authors. Two years ago at this point, they'd passed 1,029, including 117 Senate bills. The Senate so far has passed 779 bills, including 44 House bills. Two years back, the numbers were 746 and 53, respectively.

New briefs from the school districts whose successful lawsuits prompted the Legislature's search for a school finance fix.As you'd expect, they want the Texas Supreme Court to find that the current system is: 1) hitting Texans with an unconstitutional state property tax, since most districts are at or near the state's $1.50 maximum and can't make cuts, given the state's rising education standards; 2) "constitutionally inadequate or unsuitable," since they contend the current system doesn't provide schools with the resources they need to provide the results the state demands; and 3) that the courts should rush in where the Legislature fears to tread, interpreting current statutes against constitutional guarantees instead of leaving the whole mess to the House, the Senate and the Governor. The new legal briefs and earlier filings from both sides can be found on the Supreme Court's website: www.supreme.courts.state.tx.us/ebriefs/files/20041144.HTM The court will hear oral arguments in the case on July 6 and can rule anytime after that. "Anytime" in this context usually means anything from a few months to many.

Most Texas senators don't want slots, and now there's proof.Slot machines (or, if you prefer, video lottery terminals, or VLTs) finally made it to the full Senate, in the form of an amendment on the tax bill that goes with the school finance package. And they got there in the best possible form for the promoters, when Sen. Mario Gallegos, D-Houston, offered a 90-page bill packaged as an amendment, which needs only a simple majority to pass. But even with the Senate looking for money and only 16 votes needed, the measure fell short. By one vote. Senators did add a gambling amendment -- allowing electronic bingo in places where bingo is already legal -- but that's not in the House version of the bill and could still come out.

The Texas Senate dropped its state property tax, overhauled its overhaul of business taxes, and approved a school finance bill more in line with what the Texas House approved earlier this year. Big differences remain to be worked out in that package, and also in companion legislation that includes some school finance and some new education law. But the Legislature is closer to a deal on school finance now than it was a day, a week, or a year ago. Upgrade the condition of the patient from impossible to merely improbable. That's an improvement, and previous legislatures have overcome bigger differences.Trouble spots include a gross receipts tax that was included in the Senate's tax bill, and large but vague differences in the amounts of money raised in the House and Senate versions of the bills. The analysts are still working on the tax and school bills approved by the Senate, and the fiscal effects of the bills will (hopefully) be clearer when they're finished. This is already clear: Lawmakers have about two weeks to reconcile differences in several pieces of interlocking legislation at the same time: the tax bill, the school bill, the budget, the supplemental budget, and a "clean-up" bill that amounts to a bagful of taxes, fees, and accounting tricks that allow the state to spend more money. Instead of a state property tax to replace local school taxes, the Senate voted to lower the state's cap on school taxes to $1.15 per $100 in valuation from the current $1.50. The next night, on the tax bill's conjoined school bill twin, they voted to lower the rate another nickel, to $1.10. Either way would leave the so-called "Robin Hood" system in place, where school districts with more wealth export local tax money to districts with less. It's unpopular, but it has survived constitutional challenges and it turned out, in the end, to have more Senate votes than the state property tax. Lt. Gov. David Dewhurst, along with the heads of the Finance and Education committees, Sens. Steve Ogden, R-Bryan, and Florence Shapiro, R-Plano, wanted the state tax. That levy would have squelched persistent legal attacks on the current system in which locally set taxes are subject to state caps. When the state's requirements for schools push districts to raise taxes, the system eventually reaches a point -- it's there now, according to the courts -- where what is called a local tax is in fact set by the state. That's unconstitutional, and installing a state tax in the constitution would end that particular problem. But the House doesn't like state property taxes, and Dewhurst couldn't get two-thirds of the Senate to go along. It's safe to call it dead. The Senate's new plan would lower the state cap on local school property taxes to $1.10 next fall. That's a 26.6 percent cut in districts where the tax rate is currently capped out at $1.50. Some districts have lower tax rates, and a few have tax rates below both the current and the proposed caps. And local districts could, over time, increase the rates for "local enrichment," bringing the total up another 15 cents by 2010. (Caveat: We're talking about maintenance and operation taxes here, and many districts have additional school taxes to pay for bonds and facilities and so on.) To pay for the cuts in local taxes -- each dime decrease costs about $1.1 billion at the state level -- the Senate installed a "choose your poison" tax for businesses that would replace the current state franchise tax. Right now, Texas only taxes one business in six; lawmakers looking for school money want to lower the rate from 4.5 percent and to expand the franchise tax to include more businesses. Senators have been talking about variations on a business activity tax, but that finally stalled for a couple of reasons. It included a tax on compensation that, when applied to some partnerships and other businesses, amounted to a potentially unconstitutional personal income tax (one version of the legislation included the tax those partners would pay if the courts said the first tax was illegal). And the alternative on the table -- the House's idea of letting each business choose which tax it wants to pay -- was more attractive to businesses and to their persistent lobsters. In the Senate's version of tax choice, businesses will pay the lower of two taxes (this item has been corrected): ? A 2.5 percent tax on a company's earned surplus (taxable income plus pay to officers) added to its compensation for employees, with a deduction for the lesser of a 50 percent or $30,000 per employee deduction; or • A 1.75 percent tax on payrolls, not to exceed $1,500 per employee. The first is similar to the state's current franchise tax, but includes compensation for all employees; the current version only adds back the compensation of a corporation's big dogs. In either case, the companies would also compute a state minimum tax -- one-quarter of one percent of their gross receipts -- and would have to pay at least that amount to the state no matter how the computations came out on the "choice" taxes. The new business taxes would not apply to sole proprietorships or to "passive" real estate, oil & gas, or investment trusts. Companies would get a deduction for providing health benefits to employees. Small businesses -- those with gross receipts under $150,000 a year -- would be exempt from the tax. The business lobby has problems with the options and especially with the gross receipts tax. Dewhurst and Sen. Kim Brimer, R-Fort Worth, met with trade groups the morning after the school bill passed to calm people down and gauge reactions. The lobbyists we've talked to say the choices in the Senate version are too much alike; both rely in some measure on payroll. And the gross receipts tax makes them weak. It would apply when companies are losing money. For some businesses, it would compound: They'd have to pay it on transactions with affiliated companies. And it works, in some ways, like a sales tax. It is a levy on a company's sales that is paid by the company instead of by the customer, who'd be paying it if you called it a sales tax. Either way, it adds to the price of a purchase, and Bidness don't like it. It does, however, fill a hole that was left in the House's tax plan. If companies can choose their tax, they'll go low. No kidding. But the House didn't put in a minimum tax, and Comptroller Carole Keeton Strayhorn said that and other problems left the House plan billions out of balance. One alternative getting some attention would require businesses to pay the lower of two taxes, but not less than an amount equal to half of the higher tax. If Option One was $10,000, and Option Two was $3,000, the taxpayer would pay $5,000, or half of Option One. Keep watching. Consumer levies remain in the Senate's bill, including a half-cent increase in sales taxes (phased in over two years), a 75-cent per pack tax on cigarettes, and a 25 percent increase in taxes on alcoholic beverages. The House's version includes a full one-cent rise in sales taxes, a $1.01 increase in the tax on a pack of smokes, and no alcohol tax increase. A 3 percent "snack tax" approved by the House was not included in the Senate bill. • The Senate voted 20-11 on straight party lines to deny passing property tax relief directly to renters. The folks on the winning side of that vote say The Market will take care of renters and that landlords will pass along the savings, or not, depending on what their competitors do. • They expanded what began as a back-to-school sales tax holiday, killing sales taxes on clothing items priced under $100 during the first full weekends of August and December. • The 21 votes for the bill: Armbrister, Averitt, Brimer, Carona, Deuell, Duncan, Estes, Fraser, Harris, Hinojosa, Jackson, Mike, Janek, Lindsay, Lucio, Madla, Ogden, Shapiro, Staples, Wentworth, Whitmire, and Zaffirini. And the 10 votes against: Barrientos, Ellis, Rodney, Eltife, Gallegos, Nelson, Seliger, Shapleigh, Van de Putte, West, Royce, and Williams.