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Clashes Looming On Immigration, Taxes, Lending

By Sandhya Somashekhar and Anita Kumar
Washington Post Staff Writers

RICHMOND, Feb. 12 -- The Virginia House and Senate took sharply different paths Tuesday on immigration, tax increases and payday lending reform, setting up what could be a bitter fight over some of the year's most controversial issues.

Tuesday, the midpoint of the legislative session, was the deadline for each chamber to finish work on its own legislation, leading to action on a flurry of bills. The differences were evident as a committee in the Democratic-led Senate approved legislation to allow the state to sell $2.6 billion in construction bonds to build or improve dozens of colleges, parks and medical buildings. The Republican-led House passed a more modest version of the bond proposal that would allow the state to borrow closer to $1.8 billion.

Delegates and senators are likely to haggle over the legislation before it reaches Gov. Timothy M. Kaine (D), who has said approval of a large bond package is one of his priorities.

House Majority Leader H. Morgan Griffith (R-Salem) said Tuesday the House would consider the Senate bond plan closely.

"I would say they are probably going further than we would be willing to go,'' Griffith said. "But I don't want to say there is a line in the sand. If they've got some things responsibly planned out and it works, we may agree to some of it."

Earlier in the day, a Senate committee advanced a bill that would raise the state gasoline tax for the first time in more than two decades. Under the bill, proposed by Senate Majority Leader Richard L. Saslaw (D-Fairfax), the tax would go up by a nickel over five years to pump $250 million into a fund for road maintenance. House Republicans have already said they will not support a gas-tax increase.

Senate Democrats and several Republicans said it was necessary to take the politically risky position, especially because of the funding gap that will be left when the unpopular high fees for bad drivers are repealed.

The abusive-driver fees "simply didn't pan out," said Sen. R. Edward Houck (R-Spotsylvania). "I don't really want to vote for this bill, to be honest with you. Politically? No. But practically, heck, yeah."

Another showdown is likely over immigration. On Tuesday, the House passed a bill 70 to 29 that would protect employers who fire workers for speaking a language other than English at work. Del. Mark L. Cole (R-Fredericksburg), who sponsored the bill, said it was designed to protect employers from discrimination lawsuits and help small business owners.

But the Senate killed a similar bill in a committee last month, calling it and some other bills aimed at illegal immigrants mean-spirited. The Senate did approve a bill Tuesday that would prevent illegal immigrants arrested for certain crimes from being eligible for bail. The House passed a similar bill.

Payday lending reform is another potential battlefield. The Senate voted 37 to 2 Tuesday to further regulate payday lenders, but the bill differed from the version the House passed Monday.

The House proposal would limit the number of loans borrowers can obtain each year, extend the amount of time they would have to repay loans and cap the annual interest rate lenders could charge at 36 percent, although it would allow them to charge other fees.

A Senate proposal would also cap interest rates at 36 percent and allow lenders to charge other fees but does not cap the number of loans a borrower can take out in a year. Virginia law now allows lenders to charge annual interest rates of nearly 400 percent for a short-term loan.

Sen. Mamie E. Locke (D-Hampton) voted for the bill, although she said it does not go far enough. "This bill is in reality smoke and mirrors, but I am going to hold my nose and vote for it,'' she said.

Saslaw, who has opposed payday-lending reform in the past, said the Senate bill is superior to the House bill. Senators rejected a proposal to limit the number of loans a borrower could take out in a year but passed an amendment that says payday lenders must be at least 1.5 miles apart.

Saslaw argued against limiting the number of loans a person can get. "We have no business telling these people what they can do and how much they can use it,'' he said.

Jamie Fulmer, spokesman for Advance America, the largest payday loan company, said the industry prefers the Senate bill.

Senators also narrowly passed a bill that would overhaul the way developers pay for roads, schools and other services, despite strenuous opposition from Northern Virginia and Hampton Roads officials who say the changes will be devastating to taxpayers. Opponents will now be lobbying delegates to try to block the bill in the House.

Under the current system, local governments negotiate cash donations from developers to pay for roads, schools, libraries and other services that serve a development's new residents. The fees are especially high in such places as Loudoun County, which collects about $47,000 for each new home to build infrastructure for its fast-growing population.

Most of the senators from Northern Virginia voted against the bill, which passed 21 to 19. However, Saslaw, Sen. Mary Margaret Whipple (D-Arlington) and Sen. Janet D. Howell (D-Fairfax) voted for it.

Howell said she supported it because the building industry, which backed the bill, made concessions by increasing the fees by 50 percent over an earlier proposal and excluding Reston Town Center, Tysons Corner and other areas slated for urban redevelopment from the change.

"I wasn't going to support it unless they met my demands," she said. "But I negotiated in good faith, and when they made those adjustments, I felt I had to support them."

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