By JOE BIESK
Associated Press Writer

FRANKFORT, Ky. (AP) - Lawmakers have agreed to take part in a special legislative session in mid-August to consider a package of incentives aimed at luring a $3 billion coal gasification plant to Kentucky.

Peabody Energy is looking at locations for the plant in Indiana, Illinois and Kentucky.

"If the legislature creates incentives to encourage development of alternative fuels during the special session, we are prepared to recommend that our equity group focus our project review exclusively in Kentucky," said Peabody Energy executive Rick Bowen.

Bowen was among a group of Peabody executives from St. Louis who met with Gov. Ernie Fletcher and legislative leaders in downtown Louisville on Wednesday.

Fletcher called the meeting with Peabody "very productive."

The governor said Peabody executives promised to recommend to their investors that they look exclusively at Kentucky if lawmakers approve tax breaks worth some $300 million.

Peabody is considering building the plant near one of its existing mines that has large coal reserves. Feasibility studies are under way to determine the preferred location.

Fletcher had wanted lawmakers to return to the Capitol next Monday for a special legislative session to approve the incentive package and other matters.

House Speaker Jody Richards and Senate President David Williams said legislative leaders have agreed come to Frankfort on Monday only to adjourn. The lawmakers will then ask Fletcher to issue another call for a special legislative session, possibly as early as Aug. 13, to deal exclusively with the Peabody incentives.

"I'm sure we can get something done if we lay politics aside," Fletcher said.

Fletcher originally asked the legislature to deal with a variety of other issues, including a measure that could prohibit public universities from providing health insurance benefits to domestic partners and a proposal authorizing $427.6 million in construction projects.

Richards, D-Bowling Green, said he and other members of his caucus did not want to deal with the other issues and would ask the governor to limit the August special session to only the incentives package.

"We think this is the emergency issue," Richards said.

Some House lawmakers have accused Fletcher, who is seeking re-election this fall, of using the other issues to help spur his campaign.

Williams said Fletcher had "expressed strong support" for the other issues, but that the two chambers were unlikely to agree.

Fletcher did not give a definitive answer when asked whether he'd be willing to reduce the session's agenda.

"I told them that they need to tell me which parts of these things are political and that I would certainly take that into consideration," Fletcher said. "Right now, they have the opportunity to come back and pass just the energy bill if that's what they want to do and leave the rest of them alone."

(Copyright 2007 by The Associated Press. All Rights Reserved.)