AUSTIN — A proposal for a Texas business tax based on the size of each firm's work force will soon be drafted again, a House leader said, even though the idea faded last year after Gov. Rick Perry objected.

It's a way to tax businesses that isn't included in the public school finance and tax plan floated last week by the Senate.

But Rep. Jim Keffer, R-Eastland, while crediting the Senate with having its "heart in the right place," said Monday that the House initially will chart its own path.

"We know the spotlight is on us," said Keffer, who is House Speaker Tom Craddick's likely choice to head the tax-writing Ways and Means Committee. "We're going to perform."

Republican leaders have vowed to overhaul the state's $30 billion public school system in the wake of a state district judge's order to increase funding by October or risk a court-ordered cutoff of state education aid.

Perry lately has said he would look at replacing the corporate franchise tax, which only one in six businesses currently pay, with a broad-based business tax.

The Senate plan, presented by Lt. Gov. David Dewhurst on the second day of the 140-day regular legislative session, envisions expanding the franchise tax to all businesses except sole proprietorships, which would net more than $3 billion a year.

Senators privately have discussed setting the rate at less than 2 percent of each firm's net income plus its payroll, minus a deduction for each employee.

Glen Garey of the Texas Restaurant Association said such deductions would soften the impact on restaurants, making a tax "not so significant as to damage business."

Yet Perry has repeatedly questioned per-employee tax ideas, last week calling a payroll tax "a very poor option."

Any tax lowering local school property taxes "must not harm the engine of growth — Texas jobs," Perry said.

Keffer, a legislator since 1997, admitted he might be "fearless, stupid (or) hardheaded" for sticking with the per-employee idea. But the iron foundry owner said manufacturers form the core of the state's economy, and that a per-employee tax is the simplest, fairest way to tax businesses.

"If the core group is healthy, everyone benefits from that health," he said.

Rep. Mike Villarreal, D-San Antonio, who served last year on a House select panel on taxes and education, said he would prefer a business tax based on each firm's net income and executive compensation.

"A payroll tax is a less effective business tax because it penalizes a certain type of organizational structure; it penalizes businesses that use labor," Villarreal said. "You shouldn't penalize companies that create jobs."

Dale Craymer of the Texas Taxpayers and Research Association, representing business interests, said a payroll tax would shift the burden from capital-intensive firms such as manufacturers to those that employ many people, such as retailers, restaurants and health care companies.

"Somewhere between the House and Senate, there may be something that works for the business community," Craymer said. "Any one-size-fits-all tax may be punitive to particular industries."

In last year's special session, Craddick yanked a proposal to replace the franchise tax with a payroll tax for an annual net gain of more than $1.5 billion after Perry criticized it.

Businesses would have been charged 1.25 percent of each employee's salary or $500, whichever was less. A House committee had hatched the proposal after little debate.

This year, "nobody's going to be rushed," Keffer said. "It's going to be open so everybody can see there are not hidden agendas."