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DENVER—A Republican plan to ratchet back Colorado’s unpopular late fees for vehicle tags moved ahead a step Tuesday. But the cut faces long odds because of the state’s budget crunch.

The Republican-controlled House gave preliminary approval to lowering late fees back to $10, down from a maximum of $100. The bill would also allow county clerks to waive late fees.

State analysts say the bill would save late drivers about $25 million a year. The state is currently using that money on roads and transit projects. For that reason, the late fee repeal faces an uphill battle in the Democrat-controlled Senate.

The House must vote on the measure one more time before it goes to the Senate.

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