Tax Waivers For Pipeline To Cost Local Governments

SALINA, Kan. (AP) — Leaders from six Kansas counties want a chance to challenge the state's contention that the Canadian owner of a crude oil pipeline is eligible for millions of dollars in tax credits.

The Kansas portion of the pipeline will run through Washington, Clay, Dickinson, Marion, Butler and Cowley counties on its way from Steele City, Neb., to Cushing, Okla. The entire pipeline will carry crude oil from Canadian tar sands to Pakota, Ill., Cushing and the Gulf of Mexico.

The Kansas Department of Commerce has already signed a contract with Canadian energy company TransCanada granting $55.49 million in tax credits for the pipeline, which will be paid in 10 installments over 14 years, said Joe Monaco, a spokesman for the Commerce Department.

There has not been a ruling on whether the pipeline will also be exempt from property taxes.

At a meeting in Abilene last Wednesday, officials from five of the six Kansas counties involved raised questions about whether the pipeline qualifies for any tax exemptions.

According to the law creating the exemptions, Kansas refineries would have to have access to any pipeline that is seeking tax exemptions. Kansas refineries will not have any access connections to the TransCanada pipeline, said Jim Prescott, company spokesman, but will have to use their existing connections at Cushing, Okla., to access that oil.