State Senate backs tax breaks for Idaho uranium plant

The Senate on Monday passed a pair of big tax breaks meant to help lure a proposed new $2 billion uranium enrichment complex to a site near the Idaho National Laboratory outside Idaho Falls.

Lawmakers voted 27 to 7 to extend a sales tax exemption for production equipment that handles nuclear fuel. They also voted 23 to 11 to cap property tax valuations at the plant to $400 million if Areva Inc. invests at least $1 billion in the next seven years. Together, the tax breaks could save the French company tens of millions annually.

Proponents _ particularly those from eastern Idaho _ have argued the state needs such incentives to land the plant, which would produce uranium fuel for a new generation of commercial nuclear reactors. Without breaks, Areva has said it could opt to build instead in Washington state, Ohio, Texas or New Mexico.

"Other states are offering huge economic incentives to win this company," said Sen. Brent Hill, R-Rexburg. "This is an important bill for Idaho."

The Areva plant is like money lying on the ground, and all Idaho has to do to get its share is bend over and pick it up, said Sen. Jeff Siddoway, R-Terreton.

The measures previously cleared the House and now go to Gov. C.L. "Butch" Otter.

Also on Monday, lawmakers began efforts to unwind a 2005 break meant to keep Albertson's Inc. in Idaho. The grocery chain was sold the next year to Supervalu, based in Eden Prairie, Minn.

With 104 existing U.S. nuclear reactors, the Nuclear Regulatory Commission received applications for seven new reactors in 2007 and expects dozens more in coming years. Meanwhile, uranium fuel shipments from Russia are due to be cut roughly in half by 2013 and a 56-year-old enrichment plant in Paducah, Ky., currently the only one in the U.S., is due to be closed.

Companies like Areva, along with Bethesda, Md.-based USEC Inc. and Europe's Urenco Ltd., are rushing to get a share of the action. USEC is building a new plant in Ohio and Urenco is doing the same in New Mexico.

At hearings in Idaho earlier this month, Areva environmental chief Robert Poyser told lawmakers he'll make a site recommendation to his company's board of directors in Paris by the end of March. Whatever state gets it, the company has promised thousands of construction jobs and 250 regular workers who will earn an average of up to $70,000 annually once the facility begins operations by 2014.

Sen. David Langhorst, D-Boise, and other opponents said the bills were tantamount to "giving away the farm." Some asked about the chance that uranium waste could remain at the site for three decades.

A few Republicans also opposed the tax cap as poor policy, saying $400 million was an arbitrary figure with unproven effect. Sen. Joe Stegner, R-Lewiston, said companies now doing business in the state would likely make similar demands.

For instance, he noted, Micron Technology Inc., the state's largest employer, three years ago had its property valuation near Boise capped at $800 million but could ask for a lower figure.

"How in the world will we look them in the eye and say 'No?' " Stegner said. "I would love to have this company come to Idaho, but how far are we going to reach to attract these companies? It's not like we're a depressed state. We're one of the fastest growing states in the country."

Another foe, Sen. Brad Little, R-Emmett, said tax concessions don't guarantee anything. Even with the incentives, Areva could build the plant elsewhere and leave Idaho with a legacy of failed incentives as happened with Albertson's, Little said.