The 2-1 decision by a panel of the 4th U.S. Circuit Court of Appeals affirms the same court's 2005 ruling striking down the law. The Supreme Court had ordered the appeals court to take another look at Virginia's statute after the ruling on the federal ban.

The appeals court cited a key difference between the federal and state bans on the procedure that abortion opponents call "partial-birth abortion." The federal law protects doctors who set out to perform a legal abortion that by accident becomes the banned procedure. The Virginia statute provides no such protection.

The state has two weeks to ask the full federal appeals court to review the ruling, or 90 days to appeal to the Supreme Court. The attorney general's office "is reviewing all possible courses of action," spokesman J. Tucker Martin said.

The state law is unconstitutional "because it imposes an undue burden on a woman's right to obtain an abortion," Judge M. Blane Michael wrote in the majority opinion, joined by Judge Diana Gribbon-Motz.

Judith Leekin agreed to forfeit the subsidy money as she pleaded guilty to federal fraud charges Tuesday. She did not make any admissions in a separate abuse case in Florida.

She is accused of beating and starving the children in her Florida home. They moved to that state in 1998.

The 63-year-old Leekin also admitted she sent officials a phony report card documenting a child's progress.  She could face up to eight years in prison on the federal mail and wire fraud charges.

The court, in a 7-2 decision, upheld a law aimed at cracking down on the flourishing online exchange of illicit images of children.

Joan Bertin, executive director of the National Coalition Against Censorship, said Justice Antonin Scalia's narrow reading of the law in his majority opinion should result in "considerably less damage than it might otherwise have done." But Bertin said aggressive prosecutors still could try to punish people for innocent activity and put them "through a terrible ordeal."

The ruling upheld part of a 2003 law that also prohibits possession of child pornography. It replaced an earlier law the court had struck down as unconstitutional.

The new law sets a five-year mandatory prison term for promoting, or pandering, child pornography. It does not require that someone actually possesses child pornography.

Opponents have said the law could apply to movies like "Traffic" or "Titanic" that depict adolescent sex or the marketing of other material that may not be pornography.

Scalia, in his opinion for the court, said the law takes a reasonable approach to the issue by applying it to situations where the purveyor of the material believes or wants a listener to believe that he has actual child pornography.

First Amendment protections do not apply to "offers to provide or requests to obtain child pornography," Scalia said.

Likewise, he said, the law does not cover "the sorts of sex scenes found in R-rated movies."

Justice David Souter, joined by Justice Ruth Bader Ginsburg, dissented. Souter said promotion of images that are not real children engaging in pornography still could be the basis for prosecution under the law. Possession of those images, on the other hand, may not be prosecuted, he said.

"I believe that maintaining the First Amendment protection of expression we have previously held to cover fake child pornography requires a limit to the law's criminalization of pandering proposals," Souter said.

Scalia said the law would not apply to a situation in which both sender and recipient were talking about virtual images, not real pictures.

Jay Sekulow, a conservative public interest lawyer who filed a brief on behalf of members of Congress in favor of the law, said the decision reflects the importance of trying to cut down on child pornography on the Internet.

"The court understood, perhaps for the first time, how difficult and troubling the proliferation of online pornography is," said Sekulow, of the American Center for Law and Justice.

Authorities say 40-year-old Michael Arthur Howell (HOW'-el) of Indian Trail is charged with first-degree murder in the death of 44-year-old Sallie Rohrbach (RAW'-bak). Howell's initial court appearance will be held Monday afternoon in Superior Court in Charlotte.

Charlotte-Mecklenburg police continue to look for Rohrbach's body.

Ronhrbach is a Department of Insurance investigator who traveled to Charlotte early last week to audit Howell's Dilworth Insurance Agency. When family and co-workers didn't hear from her by Friday, they called police.

Authorities say Rohrbach's slaying was connected to her duties as an auditor, and that evidence was found in both her car and Howell's vehicle.

Aziz, 72, is the former deputy prime minister and one of Saddam Hussein's best-known lieutenants. He walked into the court Tuesday using a cane.

The other defendants include Saddam's cousin Ali Hassan al-Majid, known as Chemical Ali. He already was sentenced to death in another case.

They are facing charges stemming from the 1992 executions of 42 merchants accused by Saddam's government of profiteering when the country was under strict U.N. sanctions. They face the death penalty if convicted.

In a 7-2 ruling in a case from Kentucky, the justices permitted states to exempt interest on their own bonds from taxation while taxing residents for interest on bonds issued by other states.

In the $2.5 trillion municipal bond market, 42 states exempt some or all interest on their bonds from income taxes, while taxing interest on bonds from other states.

The states have said that throwing out the system of exemptions that began 90 years ago would have a devastating impact on state finances.

Industry groups warned of possible turmoil in the municipal bond market if the existing setup were dismantled.

In the majority opinion, Justice David Souter said that the state tax exemptions go back to 1919 and have not hindered commerce among the states.

In dissent, Justice Samuel Alito said the majority decision "invites other protectionist laws."

Souter responded that that the dissent "rightly praises the virtues of the free market." But Souter said that overturning the tax exemptions now would upset the market in bonds based on the experience of nearly a century.