When Marion County Commissioner Dan Holub attended a legislative luncheon Thursday at Manhattan, he had a good idea of what he would hear from legislators who serve Riley County regarding the TransCanada Keystone Pipeline exemption.
He assumed he would hear the same “canned” responses he had heard before — and he was right.
Holub was invited by Riley County officials to talk about the exemption and the impact it has on Marion County.
Property tax exemptions are a concern for Riley County officials, who gave strong advice to state legislative members in attendance at the meeting.
“We have to send a strong message that exemptions have to stop,” Riley County Counselor Clancy Holeman said.
Earlier in the meeting, Holub told the officials and legislators that even though the pipeline project did not go through Riley County, the county needed to be aware of the issues plaguing six other Kansas counties because it could happen to Riley County just as easily as Marion County.
He said he was invited by Riley County officials to “enlighten Riley County,” which was the point of his presentation.
Holub reviewed key points including the upcoming review by the state board of tax appeals of the oil company’s application for a 10-year property tax exemption.
One point of contention is whether the oil company meets the criteria required for the exemption by making the product accessible to Kansas oil refineries.
Holub continued that TransCanada spokesman Jim Prescott had said no Kansas refineries were identified on construction maps as points of access. No oil would be delivered to Kansas refineries because it’s a slurry, which Kansas refineries are not equipped to refine. A pipeline already exists for Kansas refineries to Oklahoma.
“I did put the rider on the bill to make it available to Kansas refineries,” Tom Hawk, representative of District 67, said. “I didn’t know we had to get it back from Cushing. We wanted to keep refineries going.”
“We were told by the Lieutenant Governor (Troy Findley) to not make Rep. (Carl) Holmes (of Liberal) mad,” Holub said.
“I was on the utilities committee at that time, Hawk said. “Rep. Holmes has a lot of respect. He’s the most knowledgeable on the committee. If he said it was OK, then it was.”
“We have to respect the people who brought this to the floor,” Rep. Sharon Schwartz of District 106 said.
“Legislators have claimed if the state didn’t give the oil company an exemption, the pipeline would go around Kansas,” Holub said. “Rep. Holmes said it would go around Kansas by way of Missouri. Sen. Jean Schodorf (of District 4) said the pipeline would go through Colorado. No one has been able to produce a map that shows this.
“TransCanada did not demand Kansas give them the exemption. Kansas is the only state giving an exemption.”
“We had the feeling that Kansas would get by-passed,” Hawk said. “If we didn’t have the pipeline, we wouldn’t get any revenue in 10 years.”
“Everyone believed the company,” Schwartz said.
“My vote was in favor of this because of the promises made,” Rep. Sydney Carlin of District 66 said.
“It’s a warning shot. Legislature does do things that leave counties and cities in a lurch,” Sen. Roger Reitz, District 22, said.
Exemptions to natural gas companies also were added to House Bill 2901.
“If another pipeline comes through, we’ll lose additional revenue,” Holub said.
“State exemptions can cause local taxes to increase,” Riley County Treasurer Eileen King said.
Holeman requested legislators initiate a comprehensive review to make sure no more exemptions occur.