Legislators Reverse Course On Car Tax

ANNAPOLIS, Md. (AP) -- Maryland lawmakers voted Saturday to require homeowners who live within 1,000 feet of tidal waterways to upgrade septic systems with new technology to prevent nitrogen pollution from entering the Chesapeake Bay.

In other action, lawmakers on a budget conference committee reversed course Saturday from a decision made a day earlier not to carry over a state tax break on vehicle purchases.

The septic tank legislation has generated contentious debate, largely from lawmakers in rural areas on Maryland's Eastern Shore who say an expensive burden is being put on their constituents.

State analysts estimate there are roughly 50,000 septic tanks that would be subject to the regulations. It costs around $12,000 to upgrade an existing system to be compliant.

Supporters, however, say the state's Bay Restoration Fund has enough money to pay for upgrades in systems that fail. But people who build new homes within 1,000 feet of tidal waterways would have a lower priority for state help.

"We will never clean up the bay if we have to keep playing catch-up, trying to clean up existing pollution while we allow new pollution to keep adding to the problem," said Sen. Mike Lenett, D-Montgomery, who sponsored the Senate bill.

The House of Delegates approved the Senate bill without amendments, sending the measure to Gov. Martin O'Malley, who intends to sign the legislation.

The measure would not affect people who live outside the state's Critical Area -- land within 1,000 feet of tidal waterways.

Anne Arundel, Queen Anne's, and Worcester counties already require homeowners to install septic systems with the nitrogen-removing technology when they build a new home in the Critical Area.

Meanwhile, the joint House and Senate conference committee on a budget reconciliation bill needed to balance the state's finances shifted gears into reverse on the new vehicle tax break -- a break dear to Maryland's senior U.S. Sen. Barbara Mikulski who battled for it in Washington.

The panel was faced with several decisions relating to tax breaks after the federal economic recovery act triggered provisions in Maryland tax law. The state automatically "decouples" for one tax year from any federal tax law change that is estimated to alter state revenues by more than $5 million.

To carry over the state tax break on new vehicles would have cost the state $10 million, and the committee decided against it, because they had hoped to reach a $100 million budget cushion to prepare for potential declines in revenue estimates due to the recession. By "recoupling" with the vehicle tax credit, the estimated fund balance dropped from $106 million to $96 million.

The break will save a taxpayer about $96 in state tax on a $20,000 vehicle purchase. The savings is about $350 for the federal break.

The House and Senate have yet to take final action on the two conference committees' work on the budget bill and the companion budget reconciliation measure. Final approval must be made by midnight Monday, when the General Assembly is scheduled to adjourn.