The Paducah Sun
The Paducah Sun
Paducah, Kentucky
Friday, March 22, 2002

USEC bill dies on uranium tax exemption
Portsmouth union opposition and northern Kentucky lawmakers caused Rep. Frank Rasche to kill the bill for now. Portsmouth union opposition and northern Kentucky lawmakers caused Rep. Frank Rasche to kill the bill for now.

By Bill Bartleman

FRANKFORT, Ky.--The bill to exempt enriched uranium produced at the Paducah Gaseous Diffusion Plant from the state sales tax appears to be dead for the session, apparently because of a battle between the plant operator, USEC Inc., and union workers at its Portsmouth, Ohio, facility.

"I'm not sure about everything that happened to kill the bill, but I just gave up on it," said Rep. Frank Rasche, D-Paducah, who sponsored the measure. "I just told the majority floor leader to go ahead and kill it. I didn't want to fight it anymore."

Majority Leader Greg Stumbo said the bill had some opposition from lawmakers who represent districts along the Ohio border near Portsmouth, but its decisive opposition came from the AFL-CIO.

"I don't understand what all of the issues are, but there was considerable opposition," Stumbo said. "We kept it alive in an effort to work them out, but the sponsor, Rep. Rasche, told me yesterday (Tuesday) to let it die."

The bill was sent to the House Appropriations and Revenue Committee and won't be reconsidered.

Rasche said he believed members of the Paper, Allied-Industrial Chemical & Energy Workers Union at the Portsmouth plant wanted the bill defeated so they could use it as a bargaining chip in its negotiation for severance packages for its laid-off members.

USEC has closed its enrichment plant in Portsmouth and announced in February that it was moving its final shipping operation from Portsmouth to Paducah, which would eliminate about 440 jobs.

Enriched uranium shipped from Portsmouth to USEC customers was exempt from the Ohio sales tax, and USEC asked for a similar exemption in Kentucky, which would save it and its customers about $6 million a year.

Rasche said the proposal will be raised again "next year when all the issues surrounding this are resolved."

USEC, however, isn't ready to give up. "We are aware of the action the House took, and at this point we are still exploring our options," USEC spokeswoman Elizabeth Stuckle said by phone from Bethesda, Md. She would not comment on the union opposition or discuss what "options" were being considered. She said it didn't involve reversing the decision to move the shipping operation to Paducah.

Sen. Bob Leeper, R-Paducah, said he might try to revive the issue in the Senate but wasn't ready to make a firm commitment. He said he'd talk with Rasche and others to determine whether an effort should be made to add the exemption to another bill or wait until next year.

The shipping operation is expected to be moved by this summer, after alterations are completed at the Paducah plant. It will create 35 to 50 jobs.