The Paducah Sun
The Paducah Sun
Paducah, Kentucky
Wednesday, March 06, 2002

House committee revives USEC's tax exemption

By Bill Bartleman bbartleman@paducahsun.com--270.575.8650

A bill to exempt the state sales tax on enriched uranium produced at the Paducah Gaseous Diffusion Plant was brought back to life Tuesday and now appears ready for action on the House floor.

"I think there will be some opposition from northern Kentucky legislators, but I believe it is now going to pass," said Rep. Frank Rasche, D-Paducah.

USEC Inc., which operates the Paducah plant, asked for the exemption because of its plan to move the final shipping operation from its closed plant at Portsmouth, Ohio, to Paducah. Moving the shipping will save the company about $40 million a year. Exempting the sales tax will save USEC and its customers as much as $6 million a year.

USEC announced about three weeks ago it would move the shipping to the Paducah plant, adding as many as 50 jobs.

Rasche and Rep. Charles Geveden, D-Wickliffe, resurrected the bill from the House Appropriations and Revenue Committee, where it was sent last week after being removed from the agenda of bills scheduled for consideration by the full House. It was met with opposition from lawmakers who represent counties close to Portsmouth who complained moving the shipping operations would cost their constituents jobs.

Usually, reassigning a bill to Appropriations and Revenue this late in the session means it is dead. Geveden and Rasche said they were able to convince members of the committee to reconsider the measure. It was sent to the House floor by a 20-4 vote during a special meeting late Tuesday.

USEC official Charles Martin told committee members that if the exemption isn't approved, the company would change its method of shipping to transfer ownership out of state, rather than the traditional practice of customer picking up the material at the plant.

Geveden and Rasche also argued that it is an economic development issue because it will make USEC more competitive with foreign competitors that also sell the processed uranium that is used in nuclear fuel.