The Paducah Sun
The Paducah Sun
Paducah, Kentucky
Tuesday, April 16, 2002

USEC tax exempted as part of airport bill
Lawmakers from the Paducah area worked out the compromise, as they believed earlier opposition had dwindled.

By Bill Bartleman bbartleman@paducahsun.com--270.575.8650

FRANKFORT, Ky.--USEC Inc. will get the tax break it was seeking after it moves a final shipping operation from Portsmouth, Ohio, to Paducah.

The exemption of uranium enriched at the Paducah Gaseous Diffusion Plant from the state's 6 percent sales tax appeared to be dead in this session of the General Assembly. It was revived Monday as an amendment to a bill that includes exempting private airports of more than 1,000 acres from local zoning laws and provisions to pay for the removal of petroleum storage tanks.

"This was the only bill we found that we could attach the tax exemption to," said Rep. Charles Geveden, D-Wickliffe, who along with other Paducah-area lawmakers worked out the 11th-hour compromise.

The exemption will save USEC and its customers about $6 million a year. The shipping operation will be moved by early this summer.

McCracken Judge-Executive Danny Orazine said that failure to pass the bill would have had a negative effect on Paducah when USEC makes decisions next year on where to build a new enrichment plant.

"This sends a very positive message to USEC of the support they have not only in Paducah, but at the state level," said Orazine. "When the decision was made to close the Portsmouth plant and move all the operations to Paducah, we wanted to make this USEC's home and be as friendly as we could. When it appeared the bill wouldn't pass, all the people in the community worked as hard as they could to get it back on track. My only regret is that it didn't pass earlier in the session."

The passage also was welcome news for USEC. "We appreciate the support we have received from the Paducah area officials, community leaders, the chamber of commerce and legislators," spokeswoman Elizabeth Stuckle said from USEC headquarters in Bethesda, Md.

The proposed tax exemption had drawn opposition from two fronts:

Northeastern Kentucky lawmakers who represent districts across the Ohio River from Portsmouth blocked its passage because some of their constituents might lose their jobs.

After those objections were removed, members of the Paper, Allied-Industrial Chemical & Energy Workers Union 5-550, which represents workers at the Paducah plant, opposed passage without assurances that there would not be future layoffs.

Lawmakers backed off passing the earlier version of the bill to give USEC and the union time to reach a compromise on employment and other issues. When no agreement was reached, Geveden and Sen. Bob Leeper, R-Paducah, said the decision was made to renew their efforts to pass the measure.

"We always work to satisfy both sides when there is a disagreement on an issue, and we weren't able to do it in this case," said Geveden. "When we first introduced this bill, we thought it would sail through without opposition, but that wasn't the case. In the end, we just needed to pass the bill because it was the right thing to do."

Leeper said he attempted to work out a compromise that would ensure a minimum level of employment at the Paducah plant. When those efforts failed, he said he agreed with Geveden and Rep. Frank Rasche, D-Paducah, to find another way to pass the measure.

Leeper said he didn't talk with union members directly Monday but was told that the strong opposition that prevented the earlier passage had dwindled. "We had always planned to pass something to exempt the tax," he said.