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South Dakota Senator fights for DM&E loan program
Wednesday, February 15, 2006

By Edward Felker

The Post-Bulletin

WASHINGTON -- A key Senate backer of the Dakota, Minnesota & Eastern Railroad on Tuesday dismissed President Bush's bid to kill the loan program that will finance the railroad's expansion through Rochester.

Bush has proposed eliminating the Railroad Rehabilitation and Improvement Financing program in his 2007 budget. It is the second year the administration has sought to end the program and just months after agreeing to expand it from $3.5 billion to $35 billion.

The author of legislation authorizing the expansion, Sen. John Thune, a Republican from South Dakota, said through a spokesman Tuesday that the administration's plan was not likely to slow or stop the loan program.

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"The White House has opposed this program since it was first enacted," said Kyle Downey, Thune's spokesman. "The president's budget is simply a proposal, and Congress has the power of the purse. He's not worried about this impacting the program at all."

Thune was a lobbyist for the DM&E before winning his Senate seat in 2004 and proposed the program's expansion as part of the massive highways and transportation law passed by Congress last year.

The president's budget is currently before Congress and traditionally is altered in areas where Congress chooses through the annual budget and appropriations process. The 2007 fiscal year begins on Oct. 1.

The DM&E, a privately held railroad headquartered in Sioux Falls, S.D., has applied for a Railroad Rehabilitation and Improvement Financing loan to finance its $2.5 billion, 1,300-mile plan to extend lines into the coal-rich Powder River Basin in Wyoming and to upgrade tracks in Minnesota, Iowa and South Dakota.

Rochester and Mayo Clinic have unsuccessfully sought to block the DM&E from running coal trains through downtown Rochester. Final approval for the project from the federal Surface Transportation Board is expected soon, and once any additional environmental reviews are completed, the Federal Railroad Administration must approve or deny the loan within 90 days.

The budget does not mention the DM&E by name. The DM&E previously qualified for a Railroad Rehabilitation and Improvement Financing loan, in 2003, for a $233 million project covering the DM&E and its subsidiary, the Iowa, Chicago & Eastern. That project included a number of track upgrades, among them a section from Owatonna to Mason City, Iowa.

The Post-Bullletin is a daily newspaper published in Rochester, Minn., by Post-Bulletin Company, LLC, the publisher of Agri News.