ENERGY TAX TO HIT USERS OF COAL, NOT PRODUCERS

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, April 2, 1993                   TAG: 9304020216
SECTION: BUSINESS                    PAGE: A-9   EDITION: METRO 
SOURCE: GREG EDWARDS STAFF WRITER
DATELINE:                                 LENGTH: Medium
ENERGY TAX TO HIT USERS OF COAL, NOT PRODUCERS
Rep. Rick Boucher said Thursday he has succeeded in convincing the Clinton administration to impose its proposed energy tax on the users of coal rather than on coal companies.
President Clinton, as part of his deficit-reduction package, has proposed a tax on the British-thermal-unit content of fuels.
"I was highly concerned that the original proposal to impose the Btu tax on coal companies directly would add to administrative expense and further burden coal operators with paperwork," said Boucher, a Democrat from Abingdon.
However, Joseph Vipperman, president of Roanoke's Appalachian Power Co., said he's worried about the impact of the tax itself, rather than the administrative expense. The administrative cost "will be a small number compared to the energy tax," he added.
"Electric utilities are in a better position to administer the tax provisions and to file the reporting forms," Boucher said.
Vipperman, responding to Boucher's comments, said he has not looked at the administrative cost, but "we as a company and an industry have concerns about the ultimate impact of the energy tax. . . . That's where the concern should be."
In addition to electric utilities, Vipperman said, large manufacturers in such industries as steel, aluminum and chemicals are very concerned about the energy tax because they are competing in world markets against foreign companies that do not have such a tax. Anything that adds to their cost will hurt them competitively, he said.
The United Mine Workers last month supported the energy tax proposal as "fair and reasonable," but the American Farm Bureau Federation claimed it will cost farmers an estimated $1 billion a year.
The Farm Bureau said the tax will raise production costs, cut farm prices and make U.S. farmers less competitive in world markets.
Dean Kleckner, Farm Bureau president, said the tax would raise the price of gasoline 7.5 cents a gallon and add 8.3 cents to the cost of a gallon of diesel fuel. That would cost a dairy farmer with 50 cows $170 and add almost $2,500 to the expense of large tomato farm, the organization said.
Staff writer George Kegley contributed to this story.

by Bhavesh Jinadra by CNB