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By Rep. Tim Walz

Since November’s election, the residents of Minnesota’s 1st Congressional District have continued to demonstrate their interest in the DM&E Railroad expansion project. This kind of civic engagement is the cornerstone of our democracy, and I hope this level of involvement will continue well after this issue has been resolved.

During my campaign, I promised to make the Dakota, Minnesota & Eastern loan process more transparent and accessible to the public. I’ve since obtained a seat on the House Transportation and Infrastructure Committee and its Subcommittee on Railroads. These two bodies oversee the loan program, and they offer me the opportunity to open the doors of this process to the public. New developments are taking place every day, and I will do everything I can to share information with the people of my district as quickly and thoroughly as I can. I hope you will find the following details helpful.

The status of the loan

Today, DM&E's loan request is in the final stages of consideration. Late last night the Department of Transportation (DOT) issued their Record of Decision (ROD) which deals with the environmental aspect of the proposal. By issuing the ROD, the Department of Transportation started a clock ticking, which requires the Secretary of Transportation to make a final determination on the loan within 90 days. Before the Secretary makes her determination, an evaluation by the Department's Credit Council addressing DM&E's ability to pay back a federal loan must be conducted.

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The Credit Council is currently reviewing whether DM&E is an acceptable credit risk, since the loan would be backed by federal dollars if DM&E is unable to repay it. The Credit Council began its review several weeks ago, and the members are currently evaluating information both from the company and from outside experts. The Council may approve the loan if it determines that the company is financially healthy. Or it can issue a conditional approval, setting out criteria that DM&E must meet in order to qualify for the loan. On the other hand, if the Council deems DM&E a poor credit risk and denies the application, the loan can only go forward if the Secretary of Transportation personally overturns the finding — a move which would be all but unprecedented. We expect a Credit Council determination perhaps in mid-February.

The Credit Council is poised to make a decision about the use of your tax dollars, and they are carefully studying the opinions of DM&E and others. If you would like to add your voice to the debate, I encourage you to submit letters to the following members of the Credit Council:

  • Jeff Shane, under secretary of policy.
  • Tyler Duvall, assistant secretary for transportation policy.
  • Lindy Knapp, acting general counsel.
  • Phyllis Scheinberg, assistant secretary for budget and programs and chief financial officer.
  • Joe Boardman, administrator, Federal Railroad Administration.
  • J. Richard Capka, administrator, Federal Highway Administration.
  • Sean Connaughton, maritime administrator.

Letters for the members of the Credit Council can be submitted on my Web site, www.house.gov/walz www.house.gov/walz, or can be faxed to my Washington, D.C., office at (202) 225-3433. Additionally, letters for the Credit Council can be dropped off at my Rochester office (1134 Seventh St. N.W.,) no later than Monday. I will deliver letters from my constituents to the Department of Transportation on Tuesday.
The next step

If the Credit Council gives DM&E the go-ahead, the application would proceed to the Office of Management and Budget, which would set credit risk premiums and other conditions in order to approve the federal loan guarantee. After the OMB’s analysis is finished, the FRA will make a final determination either to approve or reject the loan. Transportation Secretary Mary Peters must make a decision on the loan’s final approval before the 90-day clock runs out.

Other information

In addition to reviewing the mitigation agreements, financial information and environmental impact statements associated with this project, I have been consulting frequently with House Transportation Committee Chairman James Oberstar, who is also from Minnesota. We are working together to ensure that DOT administrators have all the relevant information they need as well as a sense of the opinions of 1st District voters. Finally, we are also working to ensure that, if the loan is approved, an appropriate and comprehensive mitigation plan is in place so that all communities along the line are safe.

Tim Walz, D-Mankato, represents Minnesota’s 1st Congressional District in the U.S. House.

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