DALLAS - Kansas Gov. Kathleen Sebelius has vetoed a bill that would have provided $63 million in state revenue bonds for infrastructure work at a proposed intermodal freight hub near Gardner in Johnson County.

Sebelius vetoed HB 2412 on Friday.

The bill would have established the Kansas Intermodal Transportation Revolving Fund. The fund would serve as the financing mechanism allowing state and local governments to make the road and utility improvements necessary to accommodate a $716 million, 1,000-acre transportation hub to be built near Gardner, a suburb west of Kansas City, by Burlington Northern Santa Fe Railway and its contractor, the Allen Group.

Proceeds from the special state revenue bonds, which were to be issued by Kansas Development Finance Authority, would be loaned to the city and the county. The local governments would repay the loans with revenues from city development fees and a 10-year abatement from local sales and property taxes approved by the Gardner City Council in 2006.

The hub proposal called for the revolving fund to make an initial loan of $49 million to Gardner for road projects and utility work at and near the site.

The intermodal project would handle ocean-going cargo containers delivered by rail car from ports on the West Coast. Large cranes would move the containers onto trucks for distribution or they could be stored at several large planned warehouses within the hub.

The state Legislature is not currently meeting, but will return to Topeka on May 29 for a one-day wrap-up session. If lawmakers are unable to overturn the governor's veto, the measure cannot be considered again until the 2009 Legislature convenes in January.

The transportation hub bonds were part of a multi-faceted bill that also would have allowed the construction of two large coal-fired electrical generating plants in western Kansas that Sebelius had rejected twice.

The Legislature styled the bill as the Economic Stimulus Act of 2008, but Sebelius said lawmakers "recklessly chose to jeopardize important initiatives for businesses and communities across our state by combining them with energy legislation I have previously vetoed twice."

In her message, the governor said she did not disagree with the Gardner project but vetoed the bill because it contained two subjects, which the governor said violated Article 2, Section 16 of the state's constitution.

"Under my direction, various state agencies have been working over the past several months with local officials and legislators to promote the development of the proposed intermodal facility in Gardner," Sebelius said.

"I am disappointed legislative leaders chose to impede their hard work by inserting this funding mechanism only within this bill. I remain supportive of this project and encourage the county commissioners to continue discussion with local and state officials to ensure this project moves forward."

The governor had signaled her displeasure with the measure at a news conference in early May.

"The intermodal bonds can and probably should be backed by the Johnson County Commission," she said at the news conference. "That's a very unusual framework for the state to step in for what is a local project."

A spokesman for the railroad company said the freight hub is scheduled to open in 2010.


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