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State rail board will let line operators collect revenue from industrial leases

PIERRE -- Railroads that lease state-owned tracks in South Dakota will be allowed to collect and keep revenue from industrial sidings along the lines under a new policy.

The state Railroad Board unanimously approved the change Wednesday as part of revisions to its leasing guidelines.

Before the vote, board member Dan Baker of Rapid City asked for the revenue impact on the state Department of Transportation. The agency oversees state-owned railroad properties.

Currently, the revenue from siding leases goes to DOT’s railroad administrative fund.

Bruce Lindholm said he didn’t know the answer to Baker’s question. Lindholm is the administrator for the state railroad program.

“I don’t have a dollar figure for you,” Lindholm said.

He guessed the amount would be less than $10,000 annually and maybe half that much.

“We don’t have very many of them -- very few,” Lindholm said.

DOT also isn’t placing restrictions on the siding leases that operators on state-owned lines will be allowed to write.

“We don’t have any,” Lindholm said.

He explained the philosophy is to give flexibility to operators to do “what makes sense” depending on the situation.

Jack Parliament, a former board member who is general manager for the Sioux Falls-based D and I Railroad, said he likes the changes.

“To me, it does sound like a much fairer system,” Parliament told the board.

DOT remains in control of utility crossing agreements under the revised guidelines.

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