NewPage's Luke, Maryland, paper mill gets support from Allegany County Commission, which sends letters asking state legislators to kill bills that would phase out Luke mill's eligibility for renewable energy credits for black liquor, starting in 2018

CUMBERLAND, Maryland , February 27, 2014 () – Allegany County commissioners Thursday decided to send letters to legislators backing the return of more highway user revenues to local governments and asked legislators to kill a bill that might harm the Luke paper mill.

Highway user revenues, which formed the backbone of road repair and expansion projects in many counties and municipalities have been declining for several years. House Bill 1067 would begin to increase the local share of those revenues again. Commissioners signed a letter to Del. Norman Conway, the chairman of the House Appropriations Committee, which is considering the bill.

"This legislation seeks to increase the portion of the motor fuel tax revenue distributed ... across the state as a vital source of revenue for local governments," the letter states. "As first-term commissioners, we can attest ... to the hardship of the loss of $4.2 million in highway user revenue," the letter continued.

The bill would incrementally increase the funding back to 20 percent of total revenue over three years beginning in fiscal year 2016.

In 2009, Allegany County received just over $4 million in highway user funds from various state revenues for use on county roads and bridges. For fiscal 2013, that number was down to a little more than $400,000, county officials said. The Maryland Association of Counties is also backing increases in highway user funds for counties.

Commissioner Bill Valentine said he recently testified at the General Assembly on a Senate version of the bill, Senate Bill 664, and believed some senators until recently didn't understand the difficulties the loss of the funds had created for local governments. The funds have been diverted by the state for other purposes, including mass transit in urban areas.

Allegany County Chamber of Commerce leaders also sent letters in support of the highway revenue bill this week.

Bills that could affect the Luke mill drew another commission letter to legislative leaders.

"We will support our mill," said Commission President Mike McKay. Commissioners asked legislators to kill Senate and House bills that would cost the mill a significant source of revenue created by credits for renewable energy production. Commissioners wrote that "the Luke mill provides good-paying jobs to 825 employees. In addition, the Luke mill indirectly employs thousands of other individuals who provide the necessary raw materials and support services for the papermaking process."

The letters were addressed to Sen. Thomas Middleton, the chairman of the Senate Finance Committee and Del. Dereck Davis, chairman of the House Economic Matters committee.

The House and Senate bills would phase out credits important to the mill. Some environmental groups say the credits are not an environmentally sound policy.

The bill changes a list of renewable energy sources and phases out the Luke paper plant's eligibility for renewable energy credits. The energy credits can be traded and sold. The price of the credits is determined by the market. The credits of most importance would be phased out in 2018 under the bills. The credits are offered for so-called "black liquor," a byproduct of the paper-making process that can be burned for energy.

The decisions were taken at the regular commission business meeting Thursday.

Matthew Bieniek can be contacted at mbieniek@times-news.com.

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