Railroad project hits snag with bill

Railroad project hits snag with bill by Jaimi Reimer The governor may soon have a say in the issue of eminent domain under a bill passed Feb. 26.

The Senate passed, 28-6, HB 1106. The bill would repeal tax credits to railroads, revise the formula for assigning assessed railroad valuation to counties, and revise the right of eminent domain for railroads.

If passed into law, the bill would require a railroad to get permission from the governor or the Transportation Commission before exercising the right of eminent domain to obtain property.

The bill would also repeal tax credits given to railroads for replacement or repair of rail line.

Under the bill, the formula used to assess railroad value to counties would be changed to 33 and one-third percent of tonnage hauled through the county and 66 and two-thirds percent of track miles through the county.

The current formula is 75 percent tonnage and 25 percent mileage. 1106 was originally drafted as a bill to repeal railroad tax credits. A similar bill was amended in the House Taxation Committee to mirror HB 1106.

The bills, which would give total power over eminent domain to the governor, would effectively kill the Dakota, Minnesota and Eastern Railroad�s $1.4 billion proposed expansion to haul coal from Wyoming�s Powder River Basin, according to railroad representatives. DM&E President Kevin Schieffer told the Senate State Affairs Committee that the bill essentially gives the governor control of the entire railroad project.

�The real issue is the uncertainty of eminent domain,� he said. �This amendment was designed to kill this project.�

Schieffer said that by giving the governor control over eminent domain, the bill was casting doubt on the project. The bill would also require railroads developing projects to have enough financial backing to complete the project once it is started.

Gov. Bill Janklow said he was concerned that the project would be started, the DM&E would run out of funds and South Dakota would be left without a railroad.

Janklow went on record early on in the project�s development as being a proponent of the railroad expansion. He said since then that personal doubts have surfaced, and he now wants to be sure the best interests of South Dakota are served with the project.

Statements that he is out to kill the DM&E are exaggerated since he is the one responsible for the railroad being in the state in the first place, Janklow said.

He was responsible for continuing tax credits for the railroads when rail lines in South Dakota were abandoned in 1979. He also secured $20 million for an upgrade of the DM&E line from Wolsey to Pierre.

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