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Bill would let coal seek tax incentives

Coal supporters took a first step Tuesday toward fixing what they see as a slight to Kentucky’s hard-hit coal sector.

The House Appropriations and Revenue Committee gave initial approval to a measure that would make the coal industry eligible to apply for some state economic incentives doled out to other businesses.

If the bill becomes law, coal mining or processing companies could seek approval for various tax incentives rewarding job creation and investment.

The proposal comes at a time when the Appalachian coalfields are mired in a downturn. Coal production has been the region’s economic backbone for generations, but thousands of good-paying mining jobs have been lost in the past couple of years.

The incentives are seen as a way to help enhance the coal industry’s competitiveness, supporters said.

“This is our attempt to try to give some advantage to get some of these jobs back and get people back to work,” said Democratic House Floor Leader Rocky Adkins, who is sponsoring the bill along with House Speaker Greg Stumbo and several other lawmakers, most of whom are from coal-producing regions.

The bill would expand the Kentucky Business Investment Program and Kentucky Enterprise Initiative Act to include coal mining and processing projects.

Coal- related projects have historically been excluded from those programs. Under the bill, coal projects would have to hire at least 10 employees and invest a minimum of $100,000 to be eligible, according to state economic development officials.

Coal-related companies would apply for the incentives from economic development officials like any other businesses, Adkins said.

“They have to qualify for it,” Adkins said. “They have to go through the process. And they’ve got to prove that this job or this facility would not be there without the incentives being in place to help make it happen.”

The measure won support from lawmakers representing non-coalproducing districts.

Rep. Mike Denham, DMaysville, noted that power plant and transportation jobs in his northern Kentucky area are linked to the coal industry.

“We need for coal to do well,” he said.

Adkins said he didn’t know for sure why the coal sector has been left out of those economic incentive programs.

“The only thing that I can figure is that the resource is already here,” he said. “We didn’t have to put an incentive in place to have coal moved into Kentucky. But I think we all understand the downturn in the coal economy in East Kentucky. If you live there, you see the impact.”

The coal sector’s struggles have become a hot political issue in Kentucky this year.

Lawmakers are considering other measures in the current session to try to help diversify and bolster the coalfield economies.

The downturn has come as Appalachian coal businesses have faced higher production costs and competition from other coal basins and natural gas.

Meanwhile, U.S. utilities increasingly have been switching from coal to natural gas to generate electricity.

Coal supporters also point to tougher regulations being enforced by the Obama administration as a main culprit for the industry’s slump.

The legislation is House Bill 474.

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