Archive for Wednesday, January 30, 2002

Rulings beneficial to energy companies

January 30, 2002

Topeka Two fairly dry and technical decisions by the Kansas Supreme Court may get a bit more attention than usual because of the state's budget crisis and the collapse of Enron.

In a tax appeal case, the court decided that two energy companies will get the mother of all tax refunds $26 million.

Regard-ing the tax appeal of Panhandle Eastern Pipeline Co., the court ruled that Panhandle and National Helium Corp. were a unitary business entitled to file combined tax returns for 1981 through 1984, which also entitled them to the $26 million tax refund.

The Kansas Department of Revenue had denied the companies' request to file combined returns because it required that one company must own more than half the stock of another company for the two to be considered a unitary business.

The Board of Tax Appeals disagreed, and the department appealed to the state Supreme Court. The court ruled that the department's requirement had no basis in Kansas law, which recognizes that both direct and indirect ownership or control can be the basis for considering two corporations a unitary business.

Panhandle, one of the larger gas pipeline companies, owns 50 percent of the shares of National Helium, which it formed to extract helium from gas coming into Liberal. The court concluded there was enough evidence the two companies were interrelated to support the decision allowing the tax refund.

Other recent cases decided by the Kansas Supreme Court include:

A decision limiting local government's eminent domain power. In National Compressed Steel Corp. vs. The Unified Government of Wyandotte County/Kansas City, Kan., the court ruled that Wyandotte County could not enter land it was considering to acquire by condemnation to conduct extensive underground environmental testing before starting condemnation proceedings.

A decision that it is no defense to a murder charge that medical treatment contributed to the death. In State vs. Kirby, the court affirmed Leonard B. Kirby Jr.'s Wyandotte County conviction of unintentional second-degree murder in the beating death of Karen Couts. Kirby argued that the beating he inflicted on the victim wasn't the cause of death because she would not have died if University of Kansas Medical Center doctors had discovered her injured spleen before it ruptured. The court said that when a person inflicts a wound calculated to endanger or destroy the victim's life, medical treatment that contributes to the victim's death doesn't relieve the person who inflicted the original injury from responsibility. Medical treatment is only a defense to murder when it is the sole cause of the victim's death, the court said.

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