- The Washington Times - Monday, February 12, 2007

RICHMOND (AP) — A Republican-crafted compromise transportation bill cleared a Senate committee on a party-line vote yesterday and was sent to another panel that already has rejected the measure once.

The Transportation Committee made a few minor changes in the House-passed measure, then voted 9-5 to send it to the Finance Committee. The bill includes a small diesel fuel tax increase, a $10 annual increase in car registration fees, sharply higher penalties on abusive drivers and $2 billion in borrowing over several years.

The most hotly contested provision would drain $250 million annually that otherwise would go to public schools, health care, public safety and other state priorities.

“I’m disappointed we’re still trying to go down that road,” said Sen. R. Edward Houck, Spotsylvania Democrat. “That is the one sticking point we still have.”

Supporters of the bill argue that state revenues are growing fast enough that $250 million in general operating funds can be spent on transportation without hurting other core services.

The Finance Committee last week rejected the bill — a product of behind-the-scenes negotiations by a small group of Republican delegates and senators — and embraced a rival plan that would have imposed a 5 percent sales tax on gasoline.

That bill later was withdrawn by its sponsor, Sen. H. Russell Potts Jr., Winchester Republican, in the face of a likely parliamentary challenge on the Senate floor and insurmountable opposition by the anti-tax House Republican majority.

Sen. Marty E. Williams, Newport News Republican, noted that the Potts bill would have taken $66 million a year in general funds for transportation. That illustrates that the disagreement is based not on principle but on the appropriate amount of the withdrawal, Mr. Williams suggested.

House Majority Leader H. Morgan Griffith, Salem Republican, said the general fund appropriation was set at $250 million to match the revenue from fee increases, so changing one side of the equation would upset the delicate balance of the compromise.

“You start backing one down then you have to back the other down, and the next thing you know you have no plan,” Mr. Griffith said.

The compromise bill, which also allows local governments in Hampton Roads and Northern Virginia to raise various fees and taxes to pay for regional transportation projects, will be considered again by the Finance Committee today.

Among the changes approved yesterday were provisions earmarking 20 percent of the borrowed money for transit and rail projects and ensuring that bonds would be issued only if an existing tax on insurance premiums provides enough revenue to pay the debt.

• Payday lending

The sponsor of the last surviving piece of legislation to rein in the payday-loan industry threatened yesterday to pull his bill if opponents try to place harsher restrictions on the short-term, high-interest lenders.

Sen. Richard L. Saslaw’s industry-backed bill is the only one remaining out of more than a dozen introduced this year to either reform the industry or repeal the 2002 law that allowed payday lenders to sidestep the state’s 36 percent annual interest rate limit.

Efforts in the House to reform the industry died last week when the bill’s sponsor struck his legislation after an amendment was added to cap the annual interest rate that payday lenders could charge at 72 percent.

Mr. Saslaw, Fairfax County Democrat, said he would follow suit, killing all hopes of reform this year.

“If any amendment gets put on it that I don’t like, I certainly will” strike the bill, he said.

Delegate Jennifer L. McClellan, Richmond Democrat, who fought for the 72 percent interest rate cap on the House version of the bill, said legislators were hoping for a compromise before today, when a House committee is scheduled to hear the bill.

Miss McClellan said she could support a bill without the 72 percent interest rate cap as long as measures were added to protect repeat borrowers, such as a cap on the number of loans a person could take out in a year.

The bill would create a statewide database to track payday loans and limit to three the number a person can have out at one time. It also would require a 24-hour cooling-off period between loans and allow borrowers with three loans to have 60 days to pay them off.

Payday loans work by allowing a borrower to write a check up to $500, plus a $15 fee for every $100 borrowed. The company holds the check until the customer’s next payday, when either the borrower pays off the loan or the lender cashes the check.

The average payday-loan customer in Virginia took out seven loans in 2005, but opponents say that number is deceiving because most customers borrow from one lender to pay off another.

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