S. HRG. 111–380 

FIELD HEARINGS FOR FISCAL YEAR 

2010 

HEARINGS 

BEFORE THE

COMMITTEE ON THE BUDGET 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

May 28, 2009 (9am)—HOW INFRASTRUCTURE INVESTMENTS CAM 

BOLSTER NORTH DAKOTA’S ENERGY AND AGRICULTURE ECONOMIES: THE U.S. 85 CORRIDOR 

May 28, 2009 (1pm)—HOW INFRASTRUCTURE INVESTMENTS CAM 

BOLSTER NORTH DAKOTA’S ENERGY AND AGRICULTURE ECONOMIES: THE U.S. 85 CORRIDOR 

July 2, 2009—FIELD HEARING TO CONSIDER HOW INFRASTRUCTURE 

INVESTMENTS CAN FOSTER ECONOMIC DEVELOPMENT AND THE 

AGRICULTURE ECONOMY: US 52 

November 12, 2009—FIELD HEARING ON INFRASTRUCTURE 

INVESTMENT: CREATING JOBS AND FUELING ECONOMIC GROWTH 

November 13, 2009—FIELD HEARING ON COMMUNITY ECONOMIC 

DEVELOPMENT 

( 

Printed for the use of the Committee on the Budget 

FIELD HEARINGS FOR FISCAL YEAR 2010 

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50–924pdf 2009

S. HRG. 111–380 

FIELD HEARINGS FOR FISCAL YEAR 

2010 

HEARINGS 

BEFORE THE

COMMITTEE ON THE BUDGET 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

May 28, 2009 (9am)—HOW INFRASTRUCTURE INVESTMENTS CAM 

BOLSTER NORTH DAKOTA’S ENERGY AND AGRICULTURE ECONOMIES: THE U.S. 85 CORRIDOR 

May 28, 2009 (1pm)—HOW INFRASTRUCTURE INVESTMENTS CAM 

BOLSTER NORTH DAKOTA’S ENERGY AND AGRICULTURE ECONOMIES: THE U.S. 85 CORRIDOR 

July 2, 2009—FIELD HEARING TO CONSIDER HOW INFRASTRUCTURE 

INVESTMENTS CAN FOSTER ECONOMIC DEVELOPMENT AND THE 

AGRICULTURE ECONOMY: US 52 

November 12, 2009—FIELD HEARING ON INFRASTRUCTURE 

INVESTMENT: CREATING JOBS AND FUELING ECONOMIC GROWTH 

November 13, 2009—FIELD HEARING ON COMMUNITY ECONOMIC 

DEVELOPMENT 

( 

Printed for the use of the Committee on the Budget 

COMMITTEE ON THE BUDGET 

KENT CONRAD, NORTH DAKOTA, Chairman 

PATTY MURRAY, WASHINGTON 

RON WYDEN, OREGON 

RUSSELL D. FEINGOLD, WISCONSIN 

ROBERT C. BYRD, WEST VIRGINIA 

BILL NELSON, FLORIDA 

DEBBIE STABENOW, MICHIGAN 

ROBERT MENENDEZ, NEW JERSEY 

BENJAMIN L. CARDIN, MARYLAND 

BERNARD SANDERS, VERMONT 

SHELDON WHITEHOUSE, RHODE ISLAND 

MARK WARNER, VIRGINIA 

JEFF MERKLEY, OREGON 

JUDD GREGG, NEW HAMPSHIRE 

CHARLES E. GRASSLEY, IOWA 

WAYNE ALLARD, COLORADO 

MICHAEL ENZI, WYOMING 

JEFF SESSIONS, ALABAMA 

JIM BUNNING, KENTUCKY 

MIKE CRAPO, IDAHO 

JOHN ENSIGN, NEVEDA 

JOHN CORNYN, TEXAS 

LINDSEY O. GRAHAM, SOUTH CAROLINA 

MARY ANN NAYLOR, Majority Staff Director 

CHERYL JANAS REIDY, Minority Staff Director 

(II) 

iii 

C O N T E N T S 

HEARINGS 

Page 

May 28, 2009 (9am)—How Infrastructure Investments Can Bolster North 

Dakota’s Energy and Agriculture Economies: The U.S. 85 Corridor ............... 1 

May 28, 2009 (1pam)—How Infrastructure Investments Can Bolster North 

Dakota’s Energy and Agriculture Economies: The U.S. 85 Corridor ............... 49 

July 2, 2009—Field Hearing to Consider How Infrastructure Investments 

Can Foster Economic Development and the Agriculture Economy: US 52 ..... 97 

November 12, 2009—Field Hearing on Infrastructure Investment: Creating 

Jobs and Fueling Economic Growth ................................................................... 147 

November 13, 2009—Field Hearing on Community Economic Development ..... 189 

STATEMENTS BY COMMITTEE MEMBERS 

Senator Conrad.................................................................................... 1, 49, 97, 147, 189 

WITNESSES 

Gaylon Baker, Executive Director, Stark Development Corporation .................. 74, 77 

Dr. Brad Bekkedahl, Williston City Commissioner............................................... 18, 21 

Beth Berge, Chief Operating Officer, Griggs-Steele Empowerment 

Zone ................................................................................................................... 207, 210

Dr. Jerry Bergman, Director of the Williston Research Extension Center........................................................................................................................... 38, 40 

Hon. Dennis W. Johnson, Mayor, City of Dickinson, North Dakota.................... 63, 66 

Mark Johnsrud, Power Fuels President................................................................. 33, 37 

Hon. E. Ward Koeser, Williston Mayor.................................................................. 15, 17 

Ellen Linderman, District VI Director, North Dakota’s Farmers 

Union ................................................................................................................. 138, 141 

Becky J. Meidinger, Development Specialist, Cooperstown-Griggs County Economic Development Corporation ..................................................................... 198, 203 

Keith Monson, President, M-Power, LLC .......................................................... 217, 220 

Patrick Nygaard, City Council President, City of Jamestown ......................... 123, 125 

Allen Orwick, Mayor of Michigan, North Dakota.............................................. 170, 174 

Connie Ova, CEO, Jamestown/Stutsman Development Corporation............... 128, 134 

Dean Rummel, President, TMI ............................................................................... 83, 85 

Brent Sanford, Watford City Council President.................................................... 30, 32 

Chuck Steffan, COO, Missouri Basin Well Service............................................... 79, 81 

David Tressler, Vice President of Manufacturing/Special Projects, Dakota 

Growers Pasta................................................................................................... 134, 136 

Benjamin Vig, Representative for the Twenty Third District, North Dakota 

House of Representatives................................................................................. 176, 180 

Francis Ziegler, Director of the North Dakota’s Department of Transportation ............................................................................ 4, 8, 52, 57, 103, 109, 156, 162 

(1) 

HOW INFRASTRUCTURE INVESTMENTS CAN 

BOLSTER NORTH DAKOTA’S ENERGY AND 

AGRICULTURE ECONOMIES: THE U.S. 85 

CORRIDOR 

THURSDAY, MAY 28, 2009 

U.S. SENATE, 

COMMITTEE ON THE BUDGET

Williston, ND 

The Committee met, pursuant to notice, at 9:04 a.m. in the 

Williston Community Library, 1302 Davidson Dr., Williston, ND 

58801. 

Hon. Kent Conrad, Chairman of the Committee, presiding. 

Present: Senator Conrad 

[presiding]. 

OPENING STATEMENT OF SENATOR CONRAD 

The CHAIRMAN. The hearing will come to order. I want to welcome everyone to this hearing of the Senate Budget Committee. 

This is an official hearing of the committee, so we will be operating 

under the rules of the U.S. Senate and an official record of this 

hearing will be kept. 

I especially want to welcome our outstanding witnesses here 

today. They include Williston Mayor Ward Koeser; Williston City 

Commissioner, Dr. Brad Bekkedahl; the Director of North Dakota’s 

Department of Transportation, Francis Ziegler; Watford City Council President, Brent Sanford; Power Fuels President, Mark 

Johnsrud; and the Director of the Williston Research Extension 

Center, Dr. Jerry Bergman. 

We will have two panels today. I’ll ask each of the witnesses to 

make a statement. I’d ask them to hold it to approximately 5 minutes. Full statements will be made part of the official record. That 

will leave us some time for questions to each of the panels. 

And this is especially important because what we are trying to 

do is build a case for improvements that I think we all know need 

to be made to Highway 85 as we prepare for the next transportation bill that will go through the Congress either later this year 

or sometime next year. 

This hearing will focus on how infrastructure investments in 

Highway 85 can foster the energy, agriculture, and manufacturing 

economies in this part of the State. We need to ensure that Highway 85 has the capacity to handle the increased economic activity 

in this region. 

The energy development in this part of the State, particularly 

with the oil boom in the Bakken formation, is crucial to North Dakota’s economy. And, I might add, the importance of this corridor 

2 

goes well beyond our own borders. This region is now of significant 

national importance and needs to be seen in that way. 

Our State is already one of the leading energy producers in the 

Nation and the expansion of energy production in this region will 

play an increasingly important role in the national effort to reduce 

our dependence on foreign energy. Highway 85 represents a critical 

lifeline for this energy development. 

This map shows why Highway 85 is so important to the energy 

production in our State. We have major gas plants and oil fields 

scattered up and down this road. You can see there the green line 

is Highway 85 and we have depicted on this map—at least those 

of you in the first rows will be able to see it—the oil fields, the gas 

fields that are close-by this highway. 

Specifically, 400,000 barrels of oil a day are produced in the corridor region and a large percentage of that—of that is hauled over 

Highway 85 to tank farms for transport via pipeline. The highway 

connects six major east-west highway systems that service these 

energy developments. And the highway serves as a major route for 

the transport of oil rigs, pipe, steel, and supplies. 

We also have significant and growing manufacturing and agricultural businesses in this area that similarly rely on Highway 85 to 

transport their products. Unfortunately, as we all know, Highway 

85 was never designed to handle the increasing number of heavy 

trucks and oversized loads currently traveling on it. The highway 

simply must be repaired to foster continued growth in these industries, to ensure a safe travel route, and to better serve the communities in the area. 

Let me say that a key reason that I’m holding this hearing today 

is because last fall I traveled on Highway 85 and, I’ll tell you, it 

made quite an impression on me. It’s very clear that the condition 

of that road has to be addressed; that there are safety issues and 

safety concerns that have to be attended to; and that there is simply a volume of traffic that has to be addressed as well. Highway 

85 was never designed for this level of development. I think all of 

us who have traveled on that road know that those statements are 

true. 

Improvements to Highway 85 will also pay dividends for agriculture in the region. It will enhance the transportation of crops 

and livestock. It will help increase export opportunities with enhanced access to Canada, and it will help further diversify western 

North Dakota agriculture with the ability to attract more valueadded agriculture businesses to the region. The manufacturing 

businesses in the region will also benefit from improvements to 

Highway 85. 

The North Dakota Department of Transportation’s ongoing study 

of the corridor will form the basis for determining the necessary investments that must be made. Let me emphasize that. There is a 

process that is set up in the State of North Dakota, under the direction of Mr. Ziegler, who is the head of our Department of Transportation, to prioritize needs in the State and to determine what 

kind of upgrades are necessary. We are not prejudging that process 

here today. 

I got called yesterday by a former State legislator who is very 

concerned that we are holding a hearing focusing on Highway 85 

3 

when there are so many roads in the State that have been adversely affected by flooding. And we told him that you have to keep 

in mind what we’re talking about with Highway 85 is future transportation program funding. The moneys that are used to address 

the damage to roads from flooding are FEMA public assistance 

funds. That is an entirely different pot of money. And, in fact, earlier this week I was in Lisbon and La Moure working on that separate pot of money, the FEMA disaster assistance funds that flow 

as a result of the Presidential declaration that deal with the flooded roads that have been dramatically impacted all across the State 

of North Dakota. But what we’re focusing on here today is a separate pot of money, the money that will flow to the State as a result 

of the transportation legislation that will be considered by Congress either later this year or next. I think it’s very important that 

we make that distinction. 

I intend to continue to work at the Federal level to bring resources to address the needs here in North Dakota, both the needs 

in those areas that have been affected by flooding and the opportunities that exist for improving transportation so we improve the 

economic opportunity for a region like this one. 

Highway 85, as I indicated earlier, is a key lifeline, not just for 

this community, but, really, for the national effort to reduce our dependence on foreign energy. 

North Dakota benefited greatly from the last highway bill, which 

was completed in 2005. As a negotiator of that bill, I worked to 

make sure that North Dakota received significant funding increases for our highways and transit needs. Specifically, I worked 

to secure one and a half billion dollars for North Dakota, a 31 percent increase over the previous bill. Annually, that averages over 

$230 million a year for highways, with additional funding provided 

for transit systems. 

We did very well in comparison to other States. We received two 

dollars for every dollar in gas tax money we send Washington. That 

put us in the top four States in the entire United States in terms 

of our return on our tax dollar sent to Washington. 

I also worked to have Highway 85 designated as a high-priority 

corridor. The designation means Highway 85 is eligible for special 

corridor funding from the Federal Highway Administration to help 

expand the area into an even greater trade corridor. 

Here are some of the priorities that I intend to work on as we 

begin consideration of the next transportation bill. The next bill, I 

believe, must identify sufficient funding so that infrastructure investments are secure and robust over the length and term of that 

legislation. States and communities must be able to rely on this 

source of funds. 

Next, any new transportation bill must maintain recognition that 

rural transportation needs are absolutely vital to the Nation. After 

all, most of the energy production for this country, most of the agriculture production is in rural areas. 

And, finally, I will fight very hard to secure funding for longterm investments for our nationally important corridors like Highway 85. I am particularly interested in hearing from our witnesses 

on the immediate investments that are needed in Highway 85 and 

what future investments are needed to support the energy, agriVerDate Aug 31 2005 12:16 May 25, 2010 Jkt 000000 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 C:\DOCS\50924.TXT SBUD1 PsN: TISH
4 

culture, and manufacturing enterprises so important in this part of 

the State. 

I am also interested in learning whether any of the $170 million 

in Federal stimulus funds provided to the State for roads have 

reached this corridor or are planned for this corridor. 

And with that, we will turn to our witnesses that are here today. 

Again, I want to thank them for their attendance and their participation. 

We have with us today, as I indicated, Williston Mayor Ward 

Koeser; Williston City Commissioner, Dr. Brad Bekkedahl; and the 

Director of North Dakota’s Department of Transportation, Francis 

Ziegler. 

Francis, I’d like to start with you, if we could. It is very important that at this hearing we make the case on the needs for this 

highway corridor. There is no one better to do that than our Director of Transportation in the State of North Dakota who enjoys a 

reputation as someone who makes these decisions based on a process that prioritizes the transportation needs of the State of North 

Dakota. 

Let me just say that while most of the funding for roads and 

bridges comes from the Federal Government, we look to the State 

Department of Transportation to set the priorities. In other States, 

they do it differently. They have a political process. We have not 

done that in this State. We try to follow in priority order the needs 

that are determined by the State Department of Transportation. 

And let me just indicate that we have a high degree of confidence 

in the State Department of Transportation to make these judgments in a professional and objective way. We work closely with 

Governor Hoeven. I note that his Chief of Staff is here, Lance 

Gaebe. We appreciate very much his participation. I think that 

sends a signal that the Governor takes us seriously. 

Senator Dorgan and Congressman Pomeroy, who were with me 

yesterday, said that they wanted to make certain that the record 

from this hearing is made available to them and that they will do 

everything they can to support the conclusions that we reach as a 

basis—as—as a result of this hearing. 

Again, Mr. Ziegler, thank you very much for your being here and 

I think based on my previous dealings in the previous transportation bills, the credibility that the North Dakota Department of 

Transportation has, not only here, but around the country, serves 

us very well. 

Thank you, and please proceed. 

STATEMENT OF FRANCIS ZIEGLER, P.E., DIRECTOR, NORTH 

DAKOTA DEPARTMENT OF TRANSPORTATION, BISMARCK, 

NORTH DAKOTA 

Mr. ZIEGLER. Thank you, Senator. I certainly appreciate the opportunity to be here before your budget committee. 

I’d like to address the following three items: Federal transportation legislative issues, Senator, that you had already talked 

about, how critical that is for the future; how infrastructure investments can bolster North Dakota’s economy; and the US 85 corridor. 

Federal investment in North Dakota’s highways is in the national interest and it is imperative that the reauthorization of the 

5 

Federal highway program continue to serve the needs of rural 

States, allowing us to continue to meet the demands being placed 

on our highway network, including US 85. 

This year, I know we have some legislators in the audience here, 

but we had an unprecedented sum of nonmatching general Federal 

fund dollars that came from our legislative body to help with the 

program. 

The CHAIRMAN. Let me just ask you to stop for a minute, 

Francis. Obviously, we’re having some problems with that microphone. Why don’t we do this? Why don’t we, Tracee—we’ll give you 

this microphone. OK. 

Mr. ZIEGLER. Testing. OK. 

Earlier this month, the legislative body passed a $1.35 billion 

budget and that was—it’s a highlight of what the department had 

received this year. Of that, about $750 million was Federal aid, and 

so we certainly appreciate that. But the infrastructure certainly 

needed it for the immediate assistance to cities, counties, and townships, and to the State DOT to help with our infrastructure. So 

that’s what we’re all about. 

Senator I did provide you with a full document. In the interest 

of brevity this morning, I will just highlight a few of the items. 

The Department of Transportation is very, very concerned about 

the highway account of the highway trust fund approaching a zero 

balance this summer. It will be highly disruptive to States if 

FHWA begins to delay payment of State claims to reimburse costs. 

As a zero balance gets closer, States will begin to curtail bid openings and work to avoid the risk of not having funds to pay for that 

work. If the program is disrupted, we certainly are going to be in 

trouble. We hope that Congress can address that and we appreciate 

anything that you could do to help with that. 

The other thing is that a multi-year highway and surface transportation authorization bill is also needed. The bill would recognize 

the benefit the entire Nation receives from a strong Federal investment in surface transportation. And it’s important under this legislation that rural States be able to get their fair share. We do have 

a large population base, a lot of highway—excuse me, a lot of highways, a large infrastructure base with few people to pay for it, and 

so it gets—the Federal aid is very important to us. 

Federal-aid highways in our state, not just those in highway— 

not just those on the national highway system, No. 1, serve as a 

bridge for truck and personal traffic between other States, enable 

Ag exports and serve the nation’s ethanol production and energy 

extraction industries, which are located largely in rural areas. 

They’re a lifeline for remotely located and economically challenged 

citizens. They enable people and businesses to traverse the vast 

tracts of sparsely populated land, and they provide access to scenic 

wonders, and enable and enhance investments to address safety on 

these rural roads, such as Highway 85. 

Highway transportation between our country’s major metropolitan areas is simply not possible without excellent roads that bridge 

these vast distances. FHWA data on tonnage origins and destinations shows that just over 59 percent of the truck traffic using 

North Dakota’s highways does not either originate or terminate 

within the State. So we’re a bridge State. 

6 

A significant portion of the economy in our State is based on Ag, 

energy production, and natural resource extraction. In fact, the 

Governor’s economic package has identified Ag and energy and advanced manufacturing, technology-based businesses, and tourism 

as growth industries, for which we need a good infrastructure. 

Ag is one sector of the economy where the United States has consistently run an international trade surplus. 

North Dakota is a major contributor of energy production in the 

nation. Our State is currently fifth in oil production and contains 

a large amount of coal reserves. Good roads throughout the State 

are paramount to the Nation becoming energy independent. 

Over the last three decades, tens of thousands of rural rail 

branch lines have been abandoned. The reduced reach of the rail 

network means that many areas, particularly rural areas, must 

rely more heavily on trucks. With this increased truck traffic in 

North Dakota and much of the upper Midwest, we are challenged 

with our ability to continue to move the products. The challenge is 

compounded by the necessity to impose spring load restrictions. 

Like congestion, load restrictions slow down commerce and add 

greatly to the cost of doing business. 

We have a chart over there, Senator. I know it’s pretty hard to 

read, but you can see the red lines on chart one, and that shows 

the number of roads that we have load restrictions on in the spring 

of the year. So for a 3-month period of time in North Dakota, the 

commerce that can move on those roads is very limited because of 

the fact that we are limited to—because of the load restrictions. 

Rural States like North Dakota face a number of serious obstacles in preserving and improving the Federal-aid highway system 

within their borders. We are rural, geographically large, have low 

population densities and extensive highway networks. 

Our road network has few people to support it. The per capita 

contribution to the highway account of the highway trust fund contributed—or attributed to North Dakota is $161 that North Dakotans put in, compared to the average of $109 per person nationally. 

These factors make it challenging for rural States to provide and 

maintain and preserve a modern system. I’ll just give you an example. In our system, our orange plow trucks to remove snow and to 

seal the cracks that they have to seal costs $9,200 per year per 

mile. It takes about 2,000 cars a year just to maintain the snowplow operations and those maintenance operations in and around 

the State. So a Federal investment is certainly an important element. 

As it relates specifically to the Highway 85 corridor, transportation provides a vital link to our State’s economic growth and is 

critical to almost all freight movements: Connecting manufacturers 

to retailers; farms to markets; shippers to pipelines, railroads, airports, and seaports. For this reason, the State has proceeded with 

a number of improvements on the TRE roadway or corridor that 

are part of the Statewide Transportation Improvement Program. 

On chart two, you can see it. It’s in your testimony, Senator. It’s 

probably pretty hard to see that on chart two. But all the way from 

the border of South Dakota up to Highway 2, the department has, 

in the last decade, done quite a bit of work on this facility and is 

intending to do considerably more. The green portion from the top 

7 

down on that chart shows the most recent efforts that are going to 

be made on some safety initiatives that we have going. 

We are also currently working on the—we have cosponsored a 

corridor study, as you already indicated, with the Teddy Roosevelt 

Expressway Coalition. And that’s to study the whole 197 miles of 

the TRE. The overall objective is to find out what is necessary, and 

it’s done in three phases: To identify current to projected needs; to 

develop primary corridor improvement alternatives; and to refine 

preferred alternatives and prepare the required environmental documents. 

While we’re doing that, we are, in concert, doing these safety efforts and making these safety efforts to make sure that the corridor 

is safe while we look to the future as to what it’s going to be looking like down the road. 

Some of the main topics that have been brought up at some of 

the meetings and some of the hearings are everybody’s interested 

in making improvements. Everyone is interested in safety. And so 

widening shoulders, lowering hills, adding turning lanes are all 

very important on this corridor. 

There are concerns about changes to 85 that could result in communities being bypassed. People fear that. So as we develop corridors, we have to recognize that, and our engineers will be looking 

at that as a concern that’s been expressed. Residents living along 

the road have concern about losing land to the right-of-way, and so 

on. So those are just some of the things we’re—we have been hearing. 

Phase one of the study is scheduled to be completed on May 

2010. And as each phase is completed, we’ll determine what to do 

with the next phase. 

Senator I know you’ve always worked with us and we really appreciate the working relationship we have as we work to prioritize 

our projects, and we certainly hope to work with you again on this 

project to prioritize it and, as you said earlier, to put it in our list 

of high priorities that we have in our State. And as you can see 

from the red on chart one, there are a lot of priorities. 

In conclusion, Senator, we consider it essential that Congress, 

through the reauthorization process, recognize that significantly increased Federal investment in highways and surface transportation 

in rural States is, and will remain, important to the national interest. The citizens and businesses of our nation’s more populated 

areas, not just residents of rural America, benefit from a good 

transportation network in and across rural States like North Dakota. With such legislation, we will be better equipped to address 

our statewide needs, which includes the US 85 corridor. 

Senator that concludes my testimony and I’ll certainly be willing 

to answer any questions that you might have. 

[The prepared statement of Mr. Ziegler follows:] 

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The CHAIRMAN. Thank you. Is this working? 

Voice. Like it was before. 

The CHAIRMAN. Well, perhaps you can hear me even if it’s not 

working perfectly. Francis, I think what we’ll do is proceed with 

the rest of the panel. Then we’ll come back to you. I do want to 

try to determine as best we can if there are matrix that apply to 

Highway 85 that tell us what kind of increases we’re facing in 

terms of traffic through the corridor from what we have experienced in previous years. And that will be important to us in making the case. 

Before I come back to you on questions, I’d like to next go to 

Mayor Koeser and thank him for being here and ask you to proceed. It looks like we have got all kinds of microphone issues here. 

STATEMENT OF HON. E. WARD KOESER, MAYOR, CITY OF 

WILLISTON, NORTH DAKOTA 

Mr. KOESER. Thank you. 

The CHAIRMAN. Welcome. Good to have you here. Thanks for the 

leadership you’ve provided on this issue over many years. I’d note 


50924.048
15 

that, Mayor, you and Brad and others were just in Washington 

talking to us about the future of this region and the priorities that 

you’ve put on transportation needs. 

Mr. KOESER. Thank you. 

Good morning. My name is Ward Koeser and I have served for 

15 years as the President of the Board of City Commissioners for 

Williston. That would be commonly what we call mayor. 

Thank you, Senator Conrad, for coming to our city to hold this 

hearing so that you and the budget committee can better understand the issues relevant to our community. 

Although we’re trying hard to diversify our economy, agriculture 

and oil remain as the main pillars holding up our economic base. 

Agriculture has played a key role ever since the settlers moved 

here more than a hundred years ago, while oil has been a part of 

our lives since oil was first discovered near Tioga in the early 

1950’s. The vast majority of our citizens in northwest North Dakota 

have ties to at least one of these two industries, with over 20 percent of Williston workers being employed in the oil field. 

The city of Williston has worked hard to provide the infrastructure needed for these and other industries to thrive. Improvements 

have been made to our water system, schools, airport, streets, and 

roads. We recognize that for our city to grow and prosper, adequate 

infrastructure must be in place and well-maintained. 

As we look to the years ahead and evaluate what needs to be 

done to position our community for a bright and prosperous future, 

we recognize that improving the connections of our city to the rest 

of North Dakota and the world needs to be a high priority. This 

is why we wholeheartedly support the development of the US Highway 85 corridor. 

Communities with strong agriculture and oil industries require a 

tremendous amount of transportation for the products produced. 

Thousands of truckloads of farm products, such as durum, wheat, 

peas, lentils, corn, potatoes, and sugar beets, need to find their way 

from the field to the elevator or processing plant. The farm trucks 

hauling these commodities need good, solid roads capable of handling heavy loads. 

The oil industry requires even more truck hauling. Pickups, 

trucks, and semis fill our roads as drilling, service, and production 

oil companies haul heavy equipment, water, diesel fuel, and crude 

oil from Williston to well site and well site to pipeline-loading facilities. Convoys of large and heavy trucks move oil rigs and travel 

to wells for production stimulation and other service jobs. Moving 

convoys of trucks on two-lane roads create safety issues, as travelers become impatient to pass slow-moving vehicles and risk their 

own safety, as well as those they meet on the road. A four-lane corridor in the heavily traveled areas would be of great benefit. 

Infrastructure improvements in the US Highway 85 corridor will 

help our oil and Ag industries grow to meet an increasing world demand. Our region has the potential to feed and fuel America. As 

the corridor improves, so will the speed and safety with which our 

products move to market. The Highway 85 corridor travels through 

the breadbasket of America and the energy beltway of the United 

States. 

16 

It’s common to see pickups and trucks with Texas, Oklahoma, 

and Colorado license plates in our community, and it’s common for 

our oil field workers to travel south to other oil production regions 

of the country. A good road system for these workers to travel on 

saves time and money and provides for a safe arrival. 

The Bakken oil formation has the potential for us to meet a 

greater portion of America’s demand for energy, but it will require 

an investment in infrastructure. As the benefits will be nationwide, 

it’s fitting that the Federal Government should be involved in the 

funding of these improvements. An improved Highway 85 corridor 

will be good for Williston and especially good for America. 

Thank you again, Senator Conrad, for coming to Williston to 

hear from those most impacted by the oil and Ag industries. 

[The prepared statement of Mr. Koeser follows:] 

17 


50924.042
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The CHAIRMAN. Thank you, and thanks for your testimony and 

thanks for the effort that you’ve made over the years. 

Is that working? You know, sometimes the technology just 

doesn’t want to cooperate. 

Again, thank you, Mayor. 

Next, we have Dr. Brad Bekkedahl. Brad has been deeply involved in this effort for as long as I can remember and always is 

helpful on the insights he provides on the need for transportation 

improvements in the region. 

Brad, please proceed with your testimony. 

STATEMENT OF BRAD BEKKEDAHL, D.D.S, CITY 

COMMISSIONER, CITY OF WILLISTON, NORTH DAKOTA 

Dr. BEKKEDAHL. Thank you, Senator Conrad. Good morning to 

you and your staff. 

One point I would make is that we need to invest in our infrastructure of microphones in the library, I think. So we would—we 

will correct that for your next hearing, sir. Thank you. 

My name is Brad Bekkedahl. I am currently the Finance Commissioner for the city of Williston. I want to thank you for bringing 

this Senate Budget Committee Field Hearing to Williston and allowing me the opportunity to present testimony on the importance 

of infrastructure investments for the US 85 corridor. It is a crucial 

link in producing and moving the commodities produced in our agriculture and energy economy here in North Dakota. I hope my testimony of a success story for infrastructure investment will be an 

asset to the other testimony provided here today. 

My background for this presentation is my involvement in economic development issues for western North Dakota. In my role as 

an elected official, I have worked cooperatively with other local, 

State, and Federal officials and agencies to promote the development and diversification of our economies. In my research to perform these duties in 1996, I discovered the importance of infrastructure, particularly four-lane highway systems, to moving goods 

and services safely and efficiently from points of production, to 

manufacturing and adding value, and, finally, to distribution to 

destinations and final markets. 

In 1997, I was elected president of the Communities for a Modern Highway 2, a North Dakota communities group seeking to complete a four-lane corridor on US Highway 2 that was planned to go 

from Grand Forks in eastern North Dakota to Williston in western 

North Dakota, but had only been completed from Grand Forks to 

Minot. Working as an advocacy group to promote infrastructure deVerDate Aug 31 2005 12:16 May 25, 2010 Jkt 000000 PO 00000 Frm 00024 Fmt 6633 Sfmt 6601 C:\DOCS\50924.TXT SBUD1 PsN: TISH

50924.043
19 

velopment, we were able to get the last 100 miles of this four-lane 

corridor completed in 2008. It was the successful coordination of 

planning and commitment at the state and Federal elected and 

agency levels that saw this completion in less than 7 years. 

At the time, no one could have predicted what would happen to 

the economy of North Dakota, particularly northwest North Dakota, but a crystal ball could not have even put the infrastructure 

in place at a better time. The development of legume crops on our 

summer-fallow ground has substantially increased our agricultural 

production capability, and investments by private capital have reacted with facilities to add value to these crops in our local communities. This increase in production has also increased our need for 

fuel, futilizer—fertilizer, and equipment. Highway 2 has been the 

corridor for much of that transit of goods in and out of our area, 

and its presence as a completed corridor has been a stimulus for 

our economy. 

We have also seen the largest expansion of our oil and gas industry east, west, and south of Williston due to the Bakken formation 

development. Again, Highway 2 has been a corridor that has facilitated the safe and efficient development of that resource play without risking the lives of local citizens that also use the highway system for their transportation needs. 

The relevance of where we stand today with the development of 

the Highway 85 corridor reminds me of where we were in 1996, 

partnering with you, Senator Dorgan, and Congressman Pomeroy 

as well at that time, and I see great potential for another success 

story for infrastructure investment in North Dakota. 

As a board member of the Theodore Roosevelt Expressway Association formed to promote infrastructure development on US Highway 85, I have been acutely aware of both corridors and their potential. In comparing the corridors, the one area of difference is the 

history of traffic we have that shows the already significant growth 

of industrial and commercial traffic on High—on the Highway 85 

corridor. According to data provided by the North Dakota Department of Transportation, we have seen an increase in truck average 

daily traffic, ADT, from a testing location 5.1 miles north of 

Belfield of approximately 100 percent from the period of time from 

2004 to 2008, a 4-year doubling of traffic and trucks. It is apparent 

from the data that exists that this corridor is already seeing 

growth higher than the rest of North Dakota, which indicates our 

traffic numbers on the corridor are also being raised by the transport of goods and services south and north of our corridor area. 

The development of our partner corridors, the Ports-to-Plains 

Corridor and the Heartland Expressway, are now impacting the 

Highway 85 system in North Dakota, which raises the significance 

of the infrastructure investment to a level of national importance. 

We see increasing movement of our agriculture commodities 

north and south of our corridor, as well as the majority of our 

equipment and production transportation related to oil and gas development at a time when we need to increase our domestic production capability to reduce our foreign oil dependency. 

Production of food and energy are critical to the strength and 

independence of our country, and this entire corridor is an infrastructure investment that makes sense to further promote that 

20 

goal. Our partnership of three federally designated high-priority 

corridors with nine States involved have significant national credibility at this time. Our nine States currently produce 14 percent of 

the total U.S. gross production—gross domestic production. 

We embrace seven of the top ten States for installed and potential wind energy, with currently producing 45 percent of the total 

U.S. wind production, and we transport 22 percent, or almost $45 

billion, of United States agricultural goods, and contain 25 percent 

of the U.S. current ethanol refining capacity. 

This is a corridor properly positioned for infrastructure investment to buildupon the success already occurring. Since 2004, North 

Dakota has led the Nation in percentage growth of exports and 

Highway 85 is an important corridor to that statistic. And as the 

statistics show, it is already a corridor with connections to transportation of a national significance. 

Senator Conrad, I appreciate the opportunity to be here today 

and thank you and your staff for your interest and involvement in 

such an important issue as infrastructure investment for the future 

of not only our State, but our corridor and our nation. Thank you, 

sir. 

[The prepared statement of Dr. Bekkedahl follows:] 

21 


50924.045
22 

The CHAIRMAN. Thank you. OK. Is that working? 

The Audience. Yes. 

The CHAIRMAN. I’m not quite sure what the trick is with this, but 

it’s working for the moment. Let’s get right to it. 

Maybe I can start with you, Brad, and go right down the line on 

the witnesses on this panel. What are your views of the condition 

of Highway 85 currently? How would you describe the condition of 

Highway 85? 

Dr. BEKKEDAHL. I think, Senator, as you said in your opening 

statement, it’s obvious that the road was never designed for the 

traffic level or the loads that are being placed on the surface at this 

time. We have significant rutting, and hydroplaning is becoming an 

issue in wet or rainy weather events. We have a significant number 

of people from this area and from Dickinson as well that just don’t 

travel the road anymore because of the safety concerns. 

I think the mayor pointed out that the traffic that we see, particularly with the oil industry, it’s a little slower moving because 

of the loads and the sizes that they take, but it also tends to run 

in convoys. And what happens is people become very impatient. 


50924.046
23 

They don’t want to sit behind a convoy for 30 miles when they 

could be going 65 miles an hour and they’re doing 45. And they 

tend to take risks because of that. 

As a personal note, about 3 weeks ago I was going to Bismarck 

for the weekend for National Guard duty, and I was traveling the 

road. And I was coming up a hill and on the other side of the hill, 

when I reached the peak of this small hill obstruction, there was 

a convoy of oil trucks coming toward me in their lane and three 

cars coming directly at me in the passing lane, which forced me 

into the shoulder and part of the ditch to actually let them pass 

at that time. And I’m sure that has happened to many people. 

So those instances have impacted the safety of the citizens using 

that road. So I would say that you’re correct, the base is in bad 

condition at this time, needs significant overhaul. 

I know that the DOT has worked with us in identifying those 

concerns and reacting to them as best they can. In fact, I can’t believe they reacted as well as they have with the funding and the 

issues that they have for planning on this road. So I commend 

them for that. But I think in the long-term pattern, we need to do 

much more. 

The CHAIRMAN. Mayor, what would be your assessment of the 

condition of Highway 85? 

Mr. KOESER. It would be similar to Dr. Bekkedahl’s. I’m not an 

engineer, so I don’t necessarily understand the basis and, you 

know, that part of the road structure, but I just know that people 

have a lot of concerns when they travel that road. 

I was speaking to someone not too long ago who actually was 

working in Watford City at the time and he was saying how you 

really have to plan extra time. Now, there’s nothing wrong with 

that, but when people don’t always plan extra time, then they take 

chances. So the safety issue, I think, is probably the biggest concern that I would have on the road, whether that be the—you 

know, the grooving and the hydroplaning or whether it would just 

simply be the fact that traffic in many times is moving in convoys, 

as has been stated already. People take chances. 

And when you mix the oil and agriculture together, it creates 

some challenges. So I just—I recognize that the road, when the 

road was initially built, I don’t think anyone understood what agriculture would involve, the size of the equipment that’s used as it 

is now, and, obviously, when the road was built initially, they 

didn’t understand that there was going to be an oil industry developed in there. So what’s happened over the years is these two industries have developed and they’ve both put great demands on 

roads. You know, you can have some industries that don’t impact 

roads too much, but those certainly do. 

The CHAIRMAN. All right. 

Francis, how would you describe the condition of 85? 

Mr. ZIEGLER. Well, certainly, the Department of Transportation 

has recognized that it needs work. There’s no doubt. And that’s 

why we have chart two up there to indicate that we’re looking at 

doing some safety work, providing some passing lanes and some 

turning lanes and those types of things. 

We have those types of issues statewide and, as my testimony indicated, not only the load restrictions, but we have load issues and 

24 

can I—we do have—you asked about the matrix earlier. I do have 

a map with me today that talks about, yes, in some areas, certainly, the traffic has gone up. From Bowman north to the I–94, 

it’s actually gone down considerably. And we can provide that information to you, Senator. 

But there are some other States—other parts of the State, I 

should say, that—I’ll give you an example. North of Jamestown, we 

have those same situations, and so the department is looking at 

the funding that it has available and is prioritizing all that we 

have to do in this State to keep the system going. 

It’s a daunting challenge some days when you—this past spring, 

we had an unbelievable amount of damage to our roadway system, 

and we attribute it to the fact we started out with a wet fall and 

a long winter, which got very cold, and so we had some freeze-thaw 

issues, and then this spring, we had a wet spring. And so the loads 

that were out there, and on Highway 85, the same type of thing, 

those heavy loads really did a tremendous amount of damage to the 

roads. So we’re struggling right now. 

The stimulus money couldn’t have come at a better time. Our 

legislative body, along with Governor Hoeven’s initiative to put 

$140 million into the system, couldn’t have come at a better time. 

So we are equipped to date to help ourselves, but for the long run, 

we’re going to need a good, strong Federal aid program. 

The CHAIRMAN. Well, thank you, and we have always worked in 

strong partnership on a plan that is responsive to North Dakota’s 

needs and I know we’ll do that again, Francis. 

Let me ask you this: Has the State received stimulus funding for roads, I think somewhere in the range of $170 million? 

Mr. ZIEGLER. [Nods]. 

The CHAIRMAN. Is some of that being deployed to this part of the 

State? Can you give us some sense of whether any of that stimulus 

money is coming into this corridor? 

Mr. ZIEGLER. Senator, I believe it is. We have some we did some 

microsurfacing last year and we’re going to be doing some of the 

same type of work where Brad Bekkedahl indicated there’s some 

rutting. So, yes, it is. We’re going to be looking at doing some of 

that immediate repair so that—you know, we don’t want cars 

hydroplaning on our roads, and that’s concerning, and that’s caused 

by heavy loads, though. Certainly going to put that money to use. 

And, in fact, Senator, we have about 50 percent of our stimulus 

money already obligated and ready to go. Sixty-eight million dollars 

will be done this year and then the remainder up to the 170 million 

will be done in 2010. 

The CHAIRMAN. Can I just say this? That in my driving on that 

road last fall, the rutting was very apparent. I mean, and I must 

say, there were places there that I was very concerned about. We 

were driving in a van. 

And the other thing I really noticed is people taking risks. And 

I think it’s born of impatience when they’re dealing with these convoys and you’ve got a—you know, truck after truck after truck and, 

you know, there are places where it’s hill, truck, curve. I remember 

that’s how my grandfather used to describe driving through Wisconsin: Hill, truck, curve, (expletive deleted). And so I think we 

know we have got issues. 

25 

Francis, can you tell us and, look, we understand fully the extraordinary challenges that you confront because the cost, especially last year, of all of your inputs skyrocketed. When oil goes to 

$140 a barrel, asphalt skyrockets. Steel skyrockets. All of your diesel, all of your input costs jump dramatically; correct? And that’s 

what you were faced with last year. 

Mr. ZIEGLER. That’s correct, Senator. The asphalt prices were in 

the neighborhood of three to four hundred dollars a ton. After the 

as—the oil barrel price went up, it was at 800 to 900 dollar a ton. 

So it about doubled. 

The CHAIRMAN. Yeah, so this is the reality of what we’re having 

to confront. 

Do you have any estimates at this point of what kind of money 

would be necessary to address the concerns that we have all identified in the Highway 85 corridor? 

Mr. ZIEGLER. At this time, I don’t have an exact number for you, 

Senator. We are—and that’s one of the reasons we’re doing the 

study, so that we know what the future holds and then what kind 

of repairs are needed. And that would be in addition to what you 

see on this—on chart two. 

But we certainly can get a better handle on those numbers and 

get those to you. 

The CHAIRMAN. OK. That would be hugely helpful because we’re 

facing another crisis with our highway program, as you identified. 

We have, for this year alone, a five to seven billion dollar shortfall 

in the trust fund. We estimate the shortfall for next year to be in 

the nine to ten billion dollar range. There is going to have to be 

a source of funding to fill in that shortfall or States will be compelled to cut back; isn’t that correct? 

Mr. ZIEGLER. That’s correct. 

The CHAIRMAN. So we have to fill in that shortfall. In the budget 

that I presented to my colleagues that’s now passed the Congress, 

we filled in that shortfall. We called for the committees of jurisdiction to come up with the money so that that shortfall would be 

met. And we called for it in both this year and next. And the committees of jurisdiction, especially the Finance Committee on which 

I also sit, are not very eager to take on that challenge, come up 

with that amount of money in this short a period of time, with all 

the other demands, but I think there’s a general recognition it’s got 

to be done. 

And this is important in terms of the functioning of our economy 

as well because it makes no sense to, on the one hand, provide a 

stimulus funding to provide more jobs and jobs that will be in this 

country, as well as improve the efficiency of our economy by addressing some of these transportation needs, and then have the 

states have to cut back because the trust fund is running a deficit. 

That doesn’t make any sense to you, does it, Francis? 

Mr. ZIEGLER. I certainly agree with you. 

The CHAIRMAN. So that’s something that we have to try to address. 

One other question I’d ask. If—Brad, if you—you’ve been involved in this for so many years. You did really tremendous work 

on Highway 2. What is—in your mind’s eye, what do you think the 

26 

future needs to be for this 85 corridor? What are the kinds of upgrades that you think are going to be necessary? 

Dr. BEKKEDAHL. Well, I think, Senator, the immediate upgrades 

would involve the safety considerations we have already brought to 

the DOT’s attention and they’re addressing at this time, which are 

turning capacities at major junctions; you mentioned the six major 

east-west highways that intersect this corridor, and those need to 

be addressed, and they’re—I’m told they’re using safety dollars for 

that at this time. 

The other would be to identify the safety issues in terms of obstructions, hills, curves, as you mentioned as well, and that 

would—in my mind, would involve passing lane capacity, at least 

to a route around those traffic areas and obstruction areas. 

I could see the traffic building, because it’s becoming a corridor 

of national significance, north and south to the level of where 

someday a possible divided highway scenario could be in place as 

well. We see a divided corridor highway system south of us. Of the 

2,300 miles already in this corridor, which are existing highway 

systems—this is not a new system—approximately 1,400 miles of 

that is already a four-lane or a divided highway system. So we are 

part of that. 

And as I see that traffic growing south of us and north of us and 

passing or traversing through us, I think that could be an eventuality. So my issues would be safety, obstruction removals, rebuilding the base of the system to handle the loads, and possibly even 

acquiring right-of-way properties for possible expansion to a fourlane or divided system as the traffic and the need dictates. 

That would be where I’d go, sir. 

The CHAIRMAN. Mayor, what would be your observation? What’s 

your vision for the future of 85? 

Mr. KOESER. I’ve always felt that, as mayor, one of my jobs is 

to look to the future. I need to spend as much time as I can saying, 

‘‘What’s going to happen 5 years and 10 years down the road?’’ And 

as I look at the region and, you know, if we take the agriculture 

and oil, if you look at agriculture, we have a very bright future. 

This is one part of the country that actually has water available 

for irrigation. So I see the Ag industry developing exponentially 

where you will find several times the amount of products being produced as they are to—as there are today. Whether that takes 5 

years or 10 years or 20 years, I don’t know that. 

When I look at the oil industry, we recognize that this Highway 

85 corridor sits right at the heart of the Bakken formation and we 

already recognize that there’s, you know, four to five billion barrels 

of oil in that area, and maybe more than that. And although we’re 

very supportive of the green initiatives and trying to find other 

ways to provide for the energy needs, that’s going to take some 

time. It doesn’t happen overnight. And even as it does happen, I 

think there will be a great demand and there will be a demand for 

oil energy that would exceed what we could produce in America. 

So I see that only growing. And what—it’s hard to predict. Even 

those in the industry are hesitant to say what’s going to happen. 

But when you combine the two, you know, as we commented earlier, it’s one thing if you have a strong Ag industry and you have 

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27 

ers and whatever moving down the road. And it’s another thing 

when you have an oil industry. But when you put those two together, I really see, in my mind, a need for a four-lane road system. 

That may start by having areas where you have four-lane segments. I’ve been on roads in Alaska where they do that, which allows—when there’s a convoy, it allows people to get past them for 

several miles and it goes back to the two-lane. Maybe it would be 

phased in that way. 

But I see a very bright future for this region. It’s kind of the last 

frontier of America and has tremendous potential. When you look 

at the water resources that we have here in the Missouri River and 

when you look at the oil resources we have, those are two commodities that the demand is not going to decrease for. 

The CHAIRMAN. Thank you very much. Let me—Francis, if I 

could ask you on a technical basis because you’re our technical expert here, and this is something I very much want to get in the 

hearing record, from a technical standpoint, when this road was 

constructed and when improvements have been made previously in 

years past, I assume that this was built to a certain standard, certain engineering standard. When that was done, when this road 

was designed, when it was originally built, I assume that the 

standard that applied then did not contemplate what has developed. I mean nobody could have foreseen the development of the 

Bakken formation. Nobody could have foreseen what’s happened 

with farm equipment, bigger, heavier. So help us understand so 

that when we talk to the technical people at the committees of jurisdiction, whom you know well—I’m thinking about the EPW committee now—help us with the language of how we would explain 

the standards that this road was built to and what would be required now. If we didn’t have a road there, we had the current demands, what kind of a standard would be required? 

Mr. ZIEGLER. First of all, Senator, when we design a project or 

any road, let’s say we start from zero, like we did on Highway 2 

with those added lanes, that is a design life of 20 years. And so 

what we do is we look at the anticipated traffic, both vehicular and 

truck traffic, and we I’m not going to get into a lot of details, but 

we use ESALs, and that’s equivalent single-axle loading, that is 

going to be on that road. And so you can only project what you 

know. We can only design for what we know. 

So when you look out 20 years, you have to be very visionary to 

try to figure out what’s out there and what’s going to happen. So 

as that system was built, it was built on the basis that we could 

incrementally add more pavement to build structural stability to it. 

And, as you can tell, we have had to do that. We have gone back 

in and added structural stability to it. 

There comes a point in time where you have to go back and just 

redo it because the asphalt pavements that are out there have deteriorated to the point, due to loading and weather factors, to 

where you can’t do it anymore. You go back and remill and start 

over. 

So the second part of your question, how would we look at it 

today, we would use the same parameters. We look out 20 years, 

project what the truck traffic is going to be, what the—all traffic 

is going to be, and then go back and deal with that same criteria 

28 

as we look ahead to the visions of what’s going to happen. We 

would have to incorporate those heavier loads that are there today. 

And we’re finding that—— 

The CHAIRMAN. Is it fair to say—if I can interrupt, is it fair to 

say that nobody could have anticipated the energy and agriculture 

development that is—that has occurred in this corridor when that 

highway was originally designed and constructed? 

Mr. ZIEGLER. There was no way of noting—knowing that. It used 

to be, for those who are from the Ag world, we drove around with 

small single-axle trucks, and now you don’t find very many farmers 

that don’t have at least a tandem axle, and most of them have 

semis, to move their goods and services. So that’s a big change for 

the Department of Transportation to take care of that kind of loading. 

The CHAIRMAN. You know, I’ve been driving on this road for 40 

years, and I tell you, the changes, I think they’re the most dramatic of any place that I drive in North Dakota. You know, the energy development alone has just transformed the traffic pattern on 

on parts of 85. You referenced Bowman to 94, that the traffic has 

actually been reduced there, as I heard you say it. But north of 94, 

do your traffic counts show a significant increase in traffic by 

trucks? 

Mr. ZIEGLER. Senator, there are increases in segments. There are 

actually decreases in some of the segments. I have the information 

in front of me. 85 south of Watford City, that did have a decrease. 

But, in general, there has been an increase in traffic. It is in that 

neighborhood of a thousand to 2,000 vehicles a day. 

The CHAIRMAN. A thousand to 2,000 a day. 

And what percentage of that is truck traffic? Do you have that? 

Mr. ZIEGLER. Yes, I do. It’s approximately 20 to 30 percent. 

The CHAIRMAN. Truck traffic? 

Mr. ZIEGLER. That’s correct. 

The CHAIRMAN. And, Brad, when you gave the numbers of, on a 

segment, a hundred percent increase in truck traffic, what segment 

did that involve? 

Dr. BEKKEDAHL. Senator, it was a—there was a marker placed 

about 5.1 miles north of Belfield, so I’m assuming it would be a 

traffic count that would be going north and south at that point. 

The CHAIRMAN. At Belfield? 

Dr. BEKKEDAHL. Just north of Belfield. So it would be whatever 

traffic was going out of Belfield north and coming to it south. 

The CHAIRMAN. As I heard you say it, this is a 2004–to–2008 

comparison? 

Dr. BEKKEDAHL. That’s correct. 

The CHAIRMAN. OK. All right. Anything that any of these panelists would want to add to their testimony at this point before we 

go to the second panel? 

Mr. ZIEGLER. I would, Senator. 

The CHAIRMAN. Please proceed, Francis. 

Mr. ZIEGLER. Thank you. 

I would simply add, Senator, that whatever we do in transportation, we certainly ask that you and your committee work hard on 

the new highway bill. We would like the opportunity to work with 

you on that. Our State is very dependent on its Federal aid for its 

29 

transportation system and we look to a bright future here in North 

Dakota. Our visions are very bright. A lot of good things happening 

in our State, and, certainly, pulling together with the Federal Government and the State Government, we can build an infrastructure 

system that will serve our citizens. 

The CHAIRMAN. Francis, maybe you could just tell us for the 

record, what percentage of your funding is from Federal sources? 

Mr. ZIEGLER. We are at 55 percent. 

The CHAIRMAN. Fifty-five percent Federal. 

And as we go into this next transportation bill, I think it’s critically important that we, as we have done in the past, work together on a strategy and plan on how to maximize those Federal 

resources. You know, we are a very large State. We’re a relatively 

low population State, but we’re a State that is critically important 

to the economic future of the country because we have the greatest 

combined energy resources. If you look at all of the elements to reducing our dependence on foreign energy, our oil, our gas, our coal, 

our wind energy potential, our various fuel replacement potentials 

that we have in this State for biofuels, North Dakota really is an 

energy hub for the rest of America. And the 85 corridor is central 

to that energy hub. 

So there is a clear Federal responsibility here and, obviously, we 

have partnerships with the State and the local units of government. It requires all of us pulling together to get a result. And we’ll 

need to be talking. 

Director Ziegler, I think very quickly, will be wanting to be talking to the Governor and Senator Dorgan and Congressman Pomeroy, as well, as we fashion our strategy for going forward with the 

highway bill. It is now very clear because of the shortfalls in the 

trust fund that these decisions are going to come sooner rather 

than later and so we need to be prepared. 

We always look forward to working with you. 

Mr. ZIEGLER. Thank you. 

The CHAIRMAN. Thank you, all. 

Mayor Koeser, delighted to have you here. 

Brad, thanks, as always, for the commitment that you’ve made 

to improvements in our transportation sector. 

Next, we’ll go to our second panel, Watford City Council President, Brent Sanford; Power Fuels President, Mark Johnsrud; and 

the Director of the Williston Research Extension Center, Dr. Jerry 

Bergman. I’d call you to the witness table and thank this group of 

witnesses as well. 

As they’re coming to the table, I’d just like to, for a moment, describe the witnesses that are part of this panel. Mr. Sanford is the 

president of the Watford City Council. Mr. Sanford is also a thirdgeneration owner of S & S Motors, which is one of the oldest continuous businesses in Watford City. 

Mark Johnsrud is the president of Power Fuels, which is an oil 

field transportation company. 

And Mr. Jerry Bergman, Dr. Bergman, is the director of the 

North Dakota State University-Williston Research Extension Center and superintendent of the MSU Eastern Agricultural Research 

Center at Sidney, Montana. We’ll forgive him for that. 

30 

You know, I was with Senator Tester and I told him last week, 

I said, ‘‘If you’ve got a Montana driver’s license, in North Dakota, 

you’re guilty.’’ OK. That’s a joke. Don’t be writing me letters about 

how I’m picking on Montana. I was picking on Senator Tester. 

Jerry coordinates the research activities of the two stations that 

serve seven million crop acres. 

So what we wanted to do with this panel is to get kind of a diverse view. We have heard from elected officials and we have heard 

from our Director of Transportation. Now we wanted to hear from 

some of our private sector partners and those who have an involvement in the other major categories of economic activity on the corridor, and that’s why this panel was selected. 

Brent, why don’t we start with you. Again, the President of the 

Watford City Council. Welcome and good to have you here. 

STATEMENT OF BRENT SANFORD, PRESIDENT, WATFORD CITY 

COUNCIL, WATFORD CITY, NORTH DAKOTA 

Mr. SANFORD. Thank you, Senator Conrad. I appreciate the opportunity to speak on behalf of the people of our region regarding 

the importance of Highway 85 to our communities. 

My name is Brent Sanford. I’m on the panel today representing 

Watford City and McKenzie County as a local business owner and 

as the city council president. I was born and raised in Watford 

City, the county seat of McKenzie County, which is directly south 

of Williston, along Highway 85. I graduated from the University of 

North Dakota, lived and worked as a CPA in Fargo, North Dakota; 

Phoenix, Arizona; and Denver, Colorado. 

In 2004, my wife and I decided to move home and become thirdgeneration owners of S & S Motors, a 60-year-old automobile dealership. My grandfather started the business in Watford City in 

1946 when he returned home from serving in the Navy during 

World War II. He owned the business for 28 years. Then my father 

owned the business for 30 years. The faces and franchises have 

changed over the years, but one thing has stayed the same. Our 

main customers are dryland farmers, ranchers, oil field service 

companies, utility companies, and their employees. 

Another thing has stayed the same: Highway 85 is the only way 

the people of Watford City receive their goods and services. With 

no rail and no major airport, every kernel of wheat and every calf 

are hauled out by truck. Every egg and strawberry, every nut, bolt, 

and two-by-four are hauled into Watford City by truck. If you drove 

to this meeting along Highway 85 today, it probably wouldn’t surprise you to know that our local grocery stores have extreme 

produce losses compared to their competitors along interstate highways. 

But people from McKenzie County don’t dwell on this. We make 

do with what we have. We’re a hardy people. We’re independent 

people. Our grandparents crossed the Missouri River and hauled 

their children over the bluffs and prairies to homestead where 

there were no roads and railroads. We’re used to solving problems 

and challenges for ourselves. But with oil and clean water supply 

tightening worldwide, other people may be interested in what we 

have here in McKenzie County, and we’re seeing that interest right 

now. 

31 

We can grow food in McKenzie County without irrigation and we 

have some of the best oil reserves in the U.S. So our narrow, 

bumpy, potholed, rutted Highway 85 has become the concern of 

others from outside of our county. 

In western North Dakota we share the same concerns with the 

rest of the Highway 85 corridor from West Texas through New 

Mexico, Oklahoma, Kansas, Nebraska, Colorado, South Dakota, 

Wyoming, and Montana. These ten States make up the energy and 

agricultural production center of our nation. We share common 

characteristics in the sizes of our towns, the types of people living 

in our communities, the ways we make our living, and the types 

of goods we produce. We also share a common bond in that we are 

somewhat the forgotten region in regard to interstate transportation. You can go 300 miles east or west to reach a north-southrunning interstate highway system in many parts of this Highway 

85 corridor. This commonality has resulted in the alliance of three 

highway associations: The Theodore Roosevelt Expressway, the 

Heartland of North Dakota and South Dakota; the Heartland Expressway of Nebraska; and the Ports-to-Plains Alliance of Texas to 

Colorado. We are hoping our combined voice and unified vision will 

help bring attention to the challenges we face conducting our lives 

and our business along our existing highways. We also hope our 

combined voice and vision can bring light to the importance of the 

Ag and energy corridor and help convince Congress that development of our own Ag production and our own energy production is 

of vital national importance. 

As a sidenote, I was an active observer of the Highway 85 problems on my last career stop before returning home to North Dakota. The last position I held before returning home was as the 

chief financial officer for Transwest Trucks in Commerce City, Colorado. My office overlooked the busy divided four lanes of Highway 

85 as it entered the Denver metro area from the northeast. People’s 

lives are affected every day by the bottleneck of traffic fighting 

through the middle of Denver as Highway 85 converges with I–25. 

The normal course of commerce in the entire west central region 

of the United States from Salt Lake City to Kansas City is hampered and disrupted by the lack of a seamless north-south route 

through eastern Colorado, away from I–25. While living and working in Colorado, the importance of moving Highway 85 to the east 

of Denver became very apparent to me. 

The people here today from the North Dakota DOT, the Portsto-Plains Alliance, and the Theodore Roosevelt Expressway have a 

storehouse full of information and statistics on what type of traffic 

is currently moving up and down our disjointed north-south roads 

on the Highway 85 corridor. Although the existing levels of traffic 

warrant discussion and consideration for infrastructure improvements, when planning the next highway bill and transportation 

bill, I would urge you to have the vision of what could be moving 

over improved north-south routes on our highway system. I would 

urge you to hold the vision of wind turbines and drilling rigs being 

safely transported down four-lane highways rather than limping 

down potholed two-lane highways with no shoulders. I would urge 

you to hold the vision of thriving communities that appear along 

the interstate systems adjacent to Highway—I–25 in northern ColVerDate Aug 31 2005 12:16 May 25, 2010 Jkt 000000 PO 00000 Frm 00037 Fmt 6633 Sfmt 6601 C:\DOCS\50924.TXT SBUD1 PsN: TISH
32 

orado, like Windsor, Fort Collins, Loveland, Longmont, and Westminster, as opposed to the dying communities along Highway 85 

only 10 to 20 miles away running parallel to I–25 in northern Colorado and eastern Wyoming. 

I’d urge you to envision a vibrant Highway 85 Ag and energy corridor up and down the center of our country as visionary leaders 

did when developing the east-west routes of the Federal rail system 

and the Federal interstate highway systems. We need the support 

of Congress in this endeavor. This is larger than individual States 

and individual counties. We’re asking for visionary leadership from 

you, Senator Conrad. 

Thank you for your time and consideration of this issue. This 

concludes my testimony. 

[The prepared statement of Mr. Sanford follows:] 


50924.038
33 

The CHAIRMAN. Thank you very much, Brent, for really excellent 

testimony. I appreciate it very much, and I think we’re establishing 

a record here that will help us persuade our colleagues and others 

who will participate in the decisionmaking that we have got to address certain high-priority areas in the country. This really is an 

interest that goes beyond the interest of a region, a state. These 

really have become national issues, especially with the development of the Bakken formation and the further development of 

American agriculture turning a way that is far more reliant on 

heavy machinery than it was when this highway system was originally designed. 

With that, we’ll go to Mark Johnsrud, the president of Power 

Fuels, which is an oil field transportation company. Welcome to 

you, sir, and please proceed. 

STATEMENT OF MARK JOHNSRUD, PRESIDENT, POWER 

FUELS, WATFORD CITY, NORTH DAKOTA 

Mr. JOHNSRUD. Good morning, and thank you for inviting me to 

testify at this hearing this morning. My name is Mark Johnsrud 

and I am the president and owner of Power Fuels and Landtech 

Enterprises, which are companies that provide fluid handling 

transportation and services to oil companies in the Williston Basin. 

We currently employ roughly 30 people in western North Dakota 

and eastern Montana. And in the last years, our business has 

grown from roughly 60 employees to our current base of roughly 

300 today. Our growth has been fueled by the expansion of the 

Bakken formation, which was started in Richland County several 

years ago and has moved into western North Dakota. 

The US Highway 85 corridor is a very important initiative to 

serve the growing energy industry. Highway 85 is the primary artery that provides essential access to the inflow and outflow of 

products to support the oil and gas industry. This includes a broad 

range of products, including drilling rigs, well casing, drilling 

fluids, frac sand, pipeline components, and the movement of crude 

oil. 

From the energy industry’s perspective, we see the benefits of the 

US 85 corridor in the following categories: The long-term planning 

and growth for our State, the safety aspect, and a tax base that is 

extremely important for North Dakota. 

2008 was a monumental year for the North Dakota petroleum industry. In April of last year, the U.S. Geological Survey released 


50924.039
34 

a report that estimates the Bakken formation to have between 

three to four and a half billion barrels of undiscovered, technically 

recoverable oil. This is a 25-fold increase from the amount of oil 

that can be recovered compared to the agency’s 1995 report of 151 

million barrels of oil. 

In 2008, North Dakota produced more oil than they have since 

the State established the measure to report. The State reported 

production of over 62 million barrels, which is up 39 percent, compared to 45 million barrels extracted the year earlier. The 2008 

shatters the previous record, which was set in two thousand—or, 

excuse me, in 1984, at which time we produced 52 million barrels. 

The CHAIRMAN. Mark, can I stop you right there because—— 

Mr. JOHNSRUD. Yes. 

The CHAIRMAN [continuing]. I want to rivet the point in your testimony right here that you’re making. You’ve just testified that the 

oil production in North Dakota went up almost 40 percent in 1 

year, and I think this is a statistic that would be especially powerful with those that we need to convince. We all know that we are 

importing almost 60 percent of the oil that we use in this country. 

There is a strong consensus, in fact, rarely do I see a stronger consensus in Washington than exists on this issue, that it’s absolutely 

in America’s interest to reduce our dependence on foreign energy. 

That’s what we’re doing right here in this region, increasing oil 

production 40 percent. I don’t think there’s another part of the 

country that has had that kind of increase year over year. 

And if that kind of increase is going to be supported, you’ve got 

to have the infrastructure to move the product. 

Mr. JOHNSRUD. That’s correct. 

The CHAIRMAN. And so I want to make certain that this part of 

the testimony is clear and that we direct some of our colleagues’ 

attention to this specific point and some of their staff members as 

well. 

Thank you. 

Mr. JOHNSRUD. The next thing I’d like to address is the safety 

issue. Safety and safety training has become a primary focus of the 

energy industry. We currently participate in three safety-related 

data bases that our customers use to evaluate us. And the first 

thing they look at is our historical safety rating; No. 2 is they 

evaluate our training programs; No. 3 is they evaluate our written 

manuals to see what kind of a safety program we’re developing. 

They come up with a total score. 

The larger companies today are using this scoring mechanism for 

vendor selection, and that’s why we have to be very cautious as to 

where we’re sending our employees, what we’re asking them to do, 

and the conditions they’re working in. 

The increase in traffic on Highway 85, especially truck traffic, 

and the fact the highway is a two-lane road increases the potential 

for more accidents. In addition, the combination of agricultural 

traffic, trucks, combines, and tractors, tourism traffic, and oil field 

traffic using a busy two-lane highway is a recipe for disaster. 

The Highway 85 corridor has become a critical component of the 

movement of oil to existing pipeline systems. Almost 59 percent of 

the state’s increase in oil production was from Mountrail County 

last year. A significant amount of that was trucked from Mountrail 

35 

County to pipeline stations in Richey, Montana, and Fryburg, 

North Dakota. Trucks hauling oil will continue to be a major part 

of the movement of oil from the wells to the pipeline locations. 

The CHAIRMAN. Can I stop you again because, again, you’ve provided testimony here that is very, very important for my 

colleagueto hear and their staffs to understand. 

This oil, much of it is not being moved initially by pipeline. I find 

my colleagues have, in their mind’s eye, this notion that the oil all 

moves by pipeline. In the first instance, gathering lines that then 

go to major pipelines. But that isn’t the way it works, is it? 

Mr. JOHNSRUD. No. 

The CHAIRMAN. What really is happening is this oil is produced 

and then it is trucked to lines; isn’t that—— 

Mr. JOHNSRUD. That is correct. And part of it is is that over time 

we’ll see more gathering lines that are put together. But because 

of how rapid this expansion has been and especially the other factor that most people don’t realize is that when the oil boom was 

here several years ago, it took three to 4 months to drill a well. 

Now they’re drilling a well in 30 days or less. 

The CHAIRMAN. You know, I’ve found my colleagues—I just had 

a discussion the last week we were in session before coming home 

for this work period, and I was really kind of surprised how surprised they were. One of my colleagues said to me, ‘‘Well, Kent, 

don’t you have’’—in getting ready for this hearing, we were talking 

about it. And he said to me, ‘‘Well, don’t you have’’—‘‘Aren’t those 

existing oil fields out there?’’ I said, ‘‘Yes, they are.’’ He said, ‘‘Well, 

why don’t you have existing gathering lines?’’ I said, ‘‘Well, because 

we have got new wells that are being drilled that don’t have gathering lines extend to them, and we have also got issues of pipeline 

capacity.’’ 

So you’ve got a lot of oil that is being trucked here, and being 

trucked for a considerable distance. How far would it be to the stations, the Fryburg station and the other one that you referenced? 

Mr. JOHNSRUD. From Mountrail County, we’re somewhere between 120 and 170 miles. 

The CHAIRMAN. So this is really not what they think is happening; OK? 

Mr. JOHNSRUD. Correct. 

The CHAIRMAN. This is not in their head that this oil is being 

trucked those distances. 

Mr. JOHNSRUD. Mm-hmm. 

The CHAIRMAN. So this is also a very important point that I want 

to make certain is highlighted in the testimony. 

Mr. JOHNSRUD. And, you know, the I–85 corridor both going 

south from Watford City and then also going north to the Alexander leg for the Enbridge pipeline are extremely busy. 

The CHAIRMAN. Would you know how heavy these trucks are 

once loaded? 

Mr. JOHNSRUD. Yes. Most trucks today, because they’re trying to 

maximize volume, weigh 105,000 pounds. 

The CHAIRMAN. One hundred five thousand pounds, so that’s 

over 50 tons? 

Mr. JOHNSRUD. That is correct. 

The CHAIRMAN. OK. 

36 

Mr. JOHNSRUD. And—— 

The CHAIRMAN. I’m sorry to interrupt you, but I want to—— 

Mr. JOHNSRUD. No, not at all. And this is—— 

The CHAIRMAN [continuing]. I want to make certain that this— 

that people pay attention to this part of the testimony because it 

makes the case why you’ve got to deal with this differently than 

I think a lot of people are thinking about. 

Mr. JOHNSRUD. Well, I’m sure when this road was built, an 

80,000-pound truck was, you know, a tractor-trailer or something 

of that configuration, but 80,000 pounds was all that was contemplated at that time. 

The CHAIRMAN. All right. 

Mr. JOHNSRUD. I guess the next part I’d like to mention is our 

State infrastructure needs to continue to be a priority item for the 

Federal Government, for all that we have talked about. If North 

Dakota wants to continue to grow its energy business, we need to 

move this project to the top of the list. The oil and gas production 

taxes for 2008 was nearly $400 million, up from $68 million in 

2003. 

As a North Dakota resident, I’m pleased to see our State have 

an economic surplus in our budget. As we look at the challenging 

economy today and other States with deficit problems, we need to 

invest in projects like the US 85 corridor to keep the energy industry investing in North Dakota energy production. 

Thank you. 

[The prepared statement of Mark Johnsrud follows:] 

37 


50924.040
38 

The CHAIRMAN. Thank you. That’s very, very useful testimony. I 

think it will help us a lot. 

Jerry, do you want to proceed? Thank you so much for being 

here. We appreciate it very much. Jerry Bergman. 

STATEMENT OF JERRY BERGMAN, Ph.D., DIRECTOR, 

WILLISTON RESEARCH EXTENSION CENTER, WILLISTON, 

NORTH DAKOTA 

Dr. BERGMAN. Thank you, Senator Conrad. 

The Mon-Dak region of eastern Montana and western North Dakota has a three-million-acre land base. A dramatic growth in MonDak agriculture production has resulted from the reduction of fallow acres due to conservation tillage systems and crop diversification. And as a result, we have two million additional crop acres 

since 1990. 

The Mon-Dak region is the No. 1 producing area in the United 

States in durum, wheat, peas, and lentils for both export and domestic markets. The Mon-Dak region is the last irrigation frontier 

in the United States and has the potential to develop up to one milVerDate Aug 31 2005 12:16 May 25, 2010 Jkt 000000 PO 00000 Frm 00044 Fmt 6633 Sfmt 6601 C:\DOCS\50924.TXT SBUD1 PsN: TISH

50924.041
39 

lion new acres of irrigated agriculture to support expanded production and area processing of high-value and value-added crops, both 

for food and energy and industrial uses. 

The CHAIRMAN. Let me interrupt you, too, because this is another key point. This whole hearing is about energy and agriculture 

and manufacturing, how they impact this corridor. You just used 

a statistic here that I want to make certain gets paid attention to. 

Two million acres, crop acres, increase since 1990? 

Dr. BERGMAN. Correct. 

The CHAIRMAN. OK. That is massive. And that involves the Montana and the North Dakota side? 

Dr. BERGMAN. Yes, and about 1.5 million of that’s on the North 

Dakota side. 

The CHAIRMAN. Great. Well, that’s a powerful point. 

Dr. BERGMAN. Yes. 

The CHAIRMAN. Please go ahead. 

Dr. BERGMAN. New large-scale agricultural processing industries 

are needed in the Mon-Dak region to support irrigation and economic development and job creation through growth in both 

dryland and irrigated agriculture. Investment in a four-lane divided US Highway 85 will be a key factor in attracting agricultural 

processing industries into our region and to allow us to fully capitalize and develop our water and land resources. 

The potential of the Mon-Dak region to develop our resources 

will be greatly enhanced with the completion of the US 85 corridor 

for safe, efficient transportation of our agricultural crops, livestock, 

and renewable energy products. 

And I thank you again for allowing me to testify in support of 

the US 85 corridor project. 

[The prepared statement of Dr. Bergman follows:] 

40 

The CHAIRMAN. Thank you very much. This has been a very 

helpful panel. I appreciate it. I’d like to ask you a few questions, 

if I could, to further flesh out the record. 

Maybe, Mark, I can start with you and ask you how have conditions on US 85 been impacting the oil industry and its development? What would you say if one of my colleagues here—a group 

of my colleagues were here and, say, they ask you the question that 

they asked me, ‘‘What’s the condition of this road? How has it impacted oil field development and the movement of oil in this corridor?’’ 

Mr. JOHNSRUD. I guess I believe that, to this point, I would not 

say that it has necessarily hampered the development, but, as you 

look forward, it’s going to start to hamper problems, such as if you 

have more accidents, if you have more issues. Some of the companies that we work for are extremely sensitive with regards to safety and one problem takes just a significant amount of time. One 

accident can create a small company like ours just heartache that 

will last forever. 


50924.044
41 

So, you know, how—it’s really hard to define how you’d say how 

does it impact you, but it does, without any question. 

As I look at the next 3 months, at every safety meeting, I tell 

our drivers, ‘‘This is the most dangerous time of the year because 

you’re having people up here on’’—‘‘that are tourists, are looking, 

and when there’s a buffalo or something else, they will just stop 

or pull over to the side of the road.’’ And that just creates more 

problems. 

And, you know, if there’s an accident, it’s an unfortunate event 

for everybody involved. 

The CHAIRMAN. You know, you make a very good point. 

And this corridor—I think that’s another point we need to make 

for our colleagues’ understanding. Not only is this critical for energy and agriculture, not only for our State and region, but the 

country, this is also a major tourist destination in North Dakota. 

Mr. JOHNSRUD. Yes. 

The CHAIRMAN. Medora is—may be the leading tourist attraction 

in our State and it’s right in the center of this region. So that adds 

a complicating factor. 

Brent, maybe you could help us. What would you say in terms 

of if I had colleagues here and they’re saying, ‘‘Why should we be 

concerned about this Highway 85 corridor?’’ What would you say to 

them? 

Mr. SANFORD. I guess I’ll continue beating the drum on the Ag 

and the oil infrastructure that’s necessary to continue developing 

those industries. It’s fathomable to believe we can continue at current levels of production, which the two gentlemen on the panel 

have showed us an increase exponentially with what we have with 

basic safety improvements. 

But to have a vision for what it could be, I think takes the next 

step. To envision where we could go to facilitate a hundred percent 

growth again in oil production. The reserves, apparently, are there. 

The technology is here. The people that know how to get it out is 

here. The bottleneck is the transportation. 

And the same goes with agriculture as well. The know-how is 

here. The land is here. The bottleneck is transportation. 

That hasn’t even touched on other opportunities that we in 

McKenzie County—Gene Veeder is here today. We have looked at 

economic development projects of all different types in McKenzie 

County. We really can’t support light manufacturing in McKenzie 

County when we have no rail, no major airport, no port. The only 

way that goods are getting in and out is by Highway 85. We have 

given up on that. We can do tourism, we can do oil, we can do Ag. 

But there’s no reason to say we couldn’t do light manufacturing up 

here if there were a four-lane highway. 

The vision of what could be is—that’s what I’m saying, it’s going 

to take visionary leadership. It’s exponential compared to what it 

is now. 

The CHAIRMAN. All right. Jerry, I’d like to go back to you. What 

specific benefits do you see accruing to this area’s agricultural 

economy with improvements along the corridor? You’ve already 

made the case, which I think is a very, very important one, two 

million additional crop acres in this Mon-Dak region, a million and 

a half of those in North Dakota alone, because of the change in 

42 

planting patterns and the change of agricultural economics. What 

do you see as the role of Highway 85 in the future development as 

a result of those increased crop acres? 

Dr. BERGMAN. Well, one of the first questions when we visit with 

food processing companies is, ‘‘Do you have a four-lane divided 

highway?’’ And that is a very—— 

The CHAIRMAN. And why is that important to them? 

Dr. BERGMAN. To move their finished products, both to export 

markets and to the east. Two-thirds of the population of the U.S. 

is east of the Mississippi and we actually have a great freight advantage to move product there compared to the West Coast. And 

to do that, we need good four-lane divided highways. 

The CHAIRMAN. OK. 

Any other points any member of this panel would want to make 

for the record? 

Mr. JOHNSRUD. I have one. 

The CHAIRMAN. Yeah. 

Mr. JOHNSRUD. I guess—— 

The CHAIRMAN. Go ahead. 

Mr. JOHNSRUD. One more thing, I guess, I’d like to just comment 

on. We have talked about what’s happened in the last year, a hundred percent increase in the traffic on Highway 85. Currently, 

there’s 36 rigs drilling in the State and we’re anticipating somewhere in the neighborhood of another, you know, 10 to 15 that will 

start drilling after load limits come off. So if we kind of interpolate 

that we’re going to end up with 50 rigs drilling an average of this 

year, most of these rigs today are going to drill ten wells. That’s 

adding an additional 500 wells. 

In the last couple years, we have seen a tremendous increase in 

the frac’ing and the stimulation of these wells as far as the amount 

of recoverable oil. And so as you take a look at, you know, this year 

and next year and 2 years, we can see that we’re going to create 

a real problem just getting oil out of this area. But the additional 

stress that we’re going to put on the highways is going to be monumental because while we see a 60 percent increase over the last 

year, we won’t see that kind of increase again, but we’re going to 

see—on a pure barrels produced per year, we’re going to see the 

same kind of increase or more versus what we have in the past. 

The CHAIRMAN. Well, that’s a very powerful point. All right. I’m 

going to thank this panel. 

And we have just got a few minutes remaining here. I want to— 

if there’s somebody in the audience that would like to make a brief 

statement on this issue, we’d be happy to entertain it at this point. 

Again, I want to recognize that the Governor’s Chief of Staff is 

here. I had a chance to speak directly to the Governor yesterday 

about this hearing and thanked him for having his Director of 

Transportation here and also sending his Chief of Staff. We appreciate that very much. 

If there’s anybody that would want to make a statement for the 

hearing record, we’d certainly be willing to recognize them. 

Yes, sir. If you’d identify yourself for the record and tell us what 

you do. 

43 

STATEMENT OF DWIGHT VANNATTA, NORTHEAST MONTANA 

LAND AND MINERAL OWNERS ASSOCIATION, BAINVILLE, 

MONTANA 

Mr. VANNATTA. Excuse me. First of all, I am guilty. I’m from 

Montana. And I thought I should lend a perspective here. 

The CHAIRMAN. If you would—— 

Mr. VANNATTA. First of all, I’m Dwight Vannatta from Bainville, 

Montana, which is just across the line. 

The CHAIRMAN. Could you help us with the spelling for the 

record? 

Mr. VANNATTA. Dwight, D-w-i-g-h-t, Vannatta, V-a-n-n- a-t-t-a. 

The CHAIRMAN. OK. 

Mr. VANNATTA. And I’m with the Northeast Montana Land and 

Mineral Owners Association, excuse me, which lends to the oil production. I’m also with the Montana Farm Bureau. That has to do 

with the Ag end of it. 

The CHAIRMAN. OK. 

Mr. VANNATTA. There’s some statistics I think that would lend 

greatly to your efforts here because I also am retired from the railroad and I was in train service for 40 years. So I have knowledge 

about the amounts of grain, oil, fertilizer, and other products that 

have been distributed or hauled from this area. I worked out of 

Havre, Montana; from there to as far east as St. Paul, Minnesota, 

and as far west as Spokane, Washington. 

In those 40 years, there have been hundreds of miles of railroad 

that have been abandoned. And as a typical example, because I 

know personally of it, I saw the stats on it—in fact, at a Federal 

Railroad Administration hearing—where when the—what we call 

the north branch from Bainville, Montana, to Opheim, Montana, 

was abandoned or allowed to abandon, except for the bottom 50 

miles, in 1978, we hauled an average of 20,000 tons of grain per 

week off of that branch. That is a smaller production than you have 

over here where you get a little more rain. 

The—when—— 

The CHAIRMAN. And all that I assume the point is that’s moved 

to the roads now. 

Mr. VANNATTA. Exactly. Twenty thousand tons of grain represents in excess of 600 18-wheelers, typical grain-hauling vehicles. 

So when you talk about the rutted roads, when you take that many 

vehicles of that size and put them on the roads, you’re going to 

have ruts. 

Also—— 

The CHAIRMAN. What is the—do you know—by off chance, do you 

know what the grain truck—typical grain truck would weigh? 

Mr. VANNATTA. Very close to what Mark said an oil rig—or an 

oil crude-hauling truck would. 

The CHAIRMAN. Yeah, he was talking 50 tons for—— 

Mr. VANNATTA. Yeah. And, of course, when you’re coming from 

the grain bin off of the farm 50 to a hundred miles to a grain terminal, a rail terminal, and you don’t have the means to calibrate 

and weigh and everything, they’re probably in excess of 160,000, 

you know. I would—that’s the reality. I’m not trying to be derogatory or anything. It’s just a reality. 

The CHAIRMAN. Francis, you keep your ears shut now. 

44 

Mr. VANNATTA. But like it was alluded to earlier about the only 

access in and out of Watford City was rail or highway. And that’s 

very true because that rail line in there has been abandoned for 

some years now. And so all that production has been put on the 

road as well. None of these things were anticipated or could have 

been anticipated when the engineers that designed these highways 

did so. 

The CHAIRMAN. Can I just say this to you, Dwight? You may be 

from Montana, but you’re a darn good witness. 

Mr. VANNATTA. Well, OK. The Montana side of this is going to 

be interesting because I also belong to the Mon-Dak Energy Alliance that we have been working on to complete an energy complex. 

And because of that, it—there’s going to be some more significant 

impact on our roads. And, also, because of that, there are going to 

be increased productions of agriculture, like Dr. Bergman alluded 

to earlier about the significant increase already. 

The Fort Peck Tribes on the Fort Peck Indian Reservation, the 

council told me that they have between 250,000 to 500,000 acres 

available for production in oilseed and/or corn and other grains 

that they intend to implement because it’s just been—— 

The CHAIRMAN. Are those acres that are not being produced on 

now? 

Mr. VANNATTA. Right. They have not been produced. They’re just 

grazing and so forth. 

The CHAIRMAN. Grazing. 

Mr. VANNATTA. Yes. 

The CHAIRMAN. And they’re intending to turn that over to production? 

Mr. VANNATTA. Exactly. 

The CHAIRMAN. So that would be very significant additional 

that’s big. 

Mr. VANNATTA. Yeah. 

And like Dr. Bergman also alluded to, the irrigation potential, 

because they also have significant water rights, they could just put 

vivid irrigation—— 

The CHAIRMAN. Yeah. 

Mr. VANNATTA [continuing]. And irrigate and increase their production over a normal dryland production system. OK? 

The CHAIRMAN. All right. 

Mr. VANNATTA. Now, that portion of the corridor that goes to 

Culbertson and then into Canada, that will be impacted significantly by this increased production and by other entities, such as 

the CRP programs that will be coming out and not being allowed 

back in because they’re a different—— 

The CHAIRMAN. Ah—very, very good point. This is a point that’s 

not yet been made at this hearing and I want to make sure this 

gets on the record. Thank you for saying it, Dwight. 

We know that because of the changing economics, land that has 

been in CRP has not been productive, at least not productive for 

crops that go to market, that a significant chunk of that land is 

going to come out of CRP and go back into production, meaning 

there will be even more demand on these road systems. 

Mr. VANNATTA. And, also, like Jerry also alluded to is the various 

different crop varieties and species to be implemented into their 

45 

crop rotation systems in order to offset the need for expensive fertilizer by implementing the legumes will make a significant impact, 

too, because there you have another source of another product that 

has to go in a different direction and a different way than when 

it is normally, you know, to Yakima or the West Coast or—— 

The CHAIRMAN. Yeah. 

Mr. VANNATTA [continuing]. To Chicago or otherwheres. It’s going 

to go all over. And so that, too, will increase the—— 

The CHAIRMAN. Yeah. 

Mr. VANNATTA [continuing]. Impact on the roads. 

The CHAIRMAN. Yeah. You’re exactly right. All right. Thank you, 

Dwight—— 

Mr. VANNATTA. Thank you. 

The CHAIRMAN [continuing]. Anyone else that would like to add 

a perspective to the record here before we close out? Jerry? Absolutely. 

Dr. BERGMAN. I have one more. 

The CHAIRMAN. Yes, sir. Maybe, Brent, you can pass him that 

mike. 

Dr. BERGMAN. A fuel for thought, not food. We have the potential 

on our CRP acres to convert a portion of that to biomass for energy 

once that technology is available. And when that’s harvested, it can 

be dead-ripe and it would have no influence on habitat. So you 

could take a third of your acres of CRP for biomass for energy without infecting the habitat that’s crucial to many of the people in our 

country. 

The CHAIRMAN. Well, thank you for that. Let me just say that 

we’ve just had hearings in Washington on this question of biofuels, 

and they tell me, I was just with the Secretary of Energy, that he 

believes they’re very close to a breakthrough on biofuels that is also 

going to change the economics of that opportunity. So we have got 

a lot of food for thought here about likely changes that are going 

to have a big impact. 

Dwight, I’m so glad you mentioned the railroad situation because, you know, you think about those volumes that used to move 

on the rails that have now been pushed over onto these road networks. That’s a big deal. 

Any other—yes, sir. 

STATEMENT OF MILT HANSON, PRESIDENT, NORTH DAKOTA 

BED & BREAKFAST ASSOCIATION, ARNEGARD, NORTH DAKOTA 

Mr. HANSON. My name is Milt Hanson. I’m the owner of Old 

School Bed & Breakfast down in Arnegard and also the president 

of the North Dakota Bed & Breakfast Association. 

The CHAIRMAN. Welcome. 

Mr. HANSON. One thing that has been mentioned very slightly is 

tourism. Tourism is North Dakota’s No. 2 industry. This part of the 

State is prime for tourism. Our Sara Otte Coleman, Director of 

North Dakota Tourism, is very active in increasing that. And what 

I see from my guests is they’re competing with Mark’s trucks. You 

know, they’re out looking at the buffalo. They’re out looking at the 

antelope and all of a sudden there’s a hundred thousand-pound 

semi roaring up behind them, you know, by no fault of the semi 

46 

driver. He’s doing his job. But that tourist, he’s come to see our 

country, see our beautiful country, see the Theodore Roosevelt 

Park. 

And hopefully with our State tourism’s efforts, that the volume 

of traffic—you know, these guys up here are—you know, they talk 

about the weight limits on the traffic. Tourism depends on volume. 

You know, we talk about maybe a thousand vehicles a day. If—during the summertime, it’s probably much greater than that going by 

my facility down in Arnegard. So to—an increase in the condition 

of Highway 85 directly benefits that segment of North Dakota’s 

economy, which is, again, our No. 2 industry in the State. 

The CHAIRMAN. Very good point, and I’m glad you—very good 

point. I’m glad you made it. 

We’re about at the end of our time here because I’ve got to go 

down to Dickinson for meetings there and we’re going to have a 

similar hearing down there because we want to make sure we 

make the case in that community as well, in that region. 

So any we’ll have one more that we can take. Yes, sir. 

STATEMENT OF ALLEN DOMAGALA, HULSING & ASSOCIATES, 

DICKINSON, NORTH DAKOTA 

Mr. DOMAGALA. Allen Domagala. One—— 

The CHAIRMAN. Could you just spell your name for our 

transcriptionist, so we get it correct on the record? 

Mr. DOMAGALA. D-o-m-a-g-a-l-a. I’m with the architectural office 

Hulsing & Associates. 

One thing that all of this brings up is the Williston area is busy 

in construction processes, but you go to the eastern part of the 

State and everything is slowing down. We haven’t experienced that, 

so our truck traffic continues trying to bring construction materials. We have got the other problem that without the increased capability of our highway system, we can’t get trucks here. ‘‘I go on 

four lanes.’’ 

So with that, a delivery comes to Bismarck. Then it shuttles off 

into a smaller truck. That might get to Minot and shuttles off to 

a smaller truck. Now with the four-lane there, it’s making a little 

bit of a change. 

But we have had a recent project over the last year that the delivery was transferred four different times to get to a truck capable 

of getting to Williston. 

The CHAIRMAN. Wow. 

Mr. DOMAGALA. We’re in a construction boom and this is creating 

a problem that’s always been there. If we can find a way to alleviate that problem, we’ll continue on with our boom and bring the 

businesses back into town to be able to support them. 

The CHAIRMAN. Well, that must add a—a very, very good—very 

interesting point. I’ve not heard that before from anyone. That 

must add a lot of cost when you’ve got to make all these shifts. 

Mr. DOMAGALA. Absolutely. 

The CHAIRMAN. All right. Thank you very much—very much for 

that. 

Let me just indicate we have run out of time. We thank everyone 

for participating, all of our witnesses. I especially want to thank 

this panel, Brent, Mark, Jerry. I appreciate very much your particiVerDate Aug 31 2005 12:16 May 25, 2010 Jkt 000000 PO 00000 Frm 00052 Fmt 6633 Sfmt 6601 C:\DOCS\50924.TXT SBUD1 PsN: TISH
47 

pation. It was terrific. You did really an outstanding job that I 

think is going to be very helpful to us. 

To others who provided testimony here in the audience, thank 

you as well. It was, all of it, excellent comments. I just am very, 

very pleased with this hearing. I don’t think it could have gone any 

better. 

So thank you very much, and we have got to keep working on 

this together. Thank you, all. 

The meeting will stand adjourned. 

[Whereupon, at 10:48 a.m., the hearing was adjourned.] 

(49) 

HOW INFRASTRUCTURE INVESTMENTS CAN 

BOLSTER NORTH DAKOTA’S ENERGY AND 

AGRICULTURE ECONOMIES: THE U.S. 85 

CORRIDOR 

THURSDAY, MAY 28, 2009 

U.S. SENATE, COMMITTEE ON THE BUDGET

Dickinson, N.D. 

The Committee met, pursuant to notice, at 1:02 p.m. in the Student Center Ballroom, Dickinson State University, 900 Campus 

Drive, Dickinson, ND, 58601. 

Hon. Kent Conrad, Chairman of the Committee, presiding. 

Present: Senator Conrad [presiding]. 

OPENING STATEMENT OF SENATOR CONRAD 

The Chairman. Welcome, everyone, to this hearing of the Senate 

Budget Committee. This is an official hearing of the committee, so 

we will be operating under the rules of the U.S. Senate, and an official record of this hearing is being kept. 

I especially want to thank our distinguished witnesses today. 

They include Dickinson Mayor Dennis Johnson and our Director of 

North Dakota’s Department of Transportation, Francis Ziegler. 

They will be on our first panel, followed by a panel that will include the Executive Director of the Stark Development Corporation, Gaylon Baker; the Missouri Basin Well Service COO Chuck 

Steffan; and TMI President Dean Rummel. I look forward very 

much to hearing from this distinguished group of witnesses and 

taking their concerns and ideas back to Washington to share with 

my colleagues. 

This hearing will focus on how infrastructure investment in 

Highway 85 can foster the energy, agricultural, and manufacturing 

economies in this part of the State. We need to ensure that Highway 85 has the capacity to handle the increased activity in this region. 

The energy development in this part of the State, particularly 

with the oil boom associated with the development of the Bakken 

Formation, is crucial not only to our economy, but is important to 

the national effort to reduce our dependence on foreign energy. 

Our State is already one of the leading energy producers in the 

nation, and the expansion of energy production in this region will 

play an increasingly important role in the national effort to become 

less dependent on foreign sources. Highway 85 represents a critical 

lifeline for this energy development, and in that context, it is not 

just a regional issue or a State issue; it becomes a national concern. 

50 

This map shows why Highway 85 is so important to the energy 

production in our State. We have major gas plants and oilfields 

scattered up and down this road. Specifically, 400,000 barrels of oil 

a day are now produced in the corridor, and a large percentage of 

it is hauled over Highway 85 to tank farms for transport via pipeline. 

The highway connects six major east-west highway systems that 

service these energy developments, and the highway serves as a 

major route for the transport of oil, pipe, steel, and other supplies. 

We also have significant and growing manufacturing and agricultural businesses in this area that rely on Highway 85 to transport 

their products. 

Unfortunately, Highway 85 was not designed to handle the increasing number of trucks and oversized loads currently traveling 

on it. The highway needs repairs to foster continued growth in 

these industries, to ensure a safe travel route, and to better serve 

the communities in the area. 

Let me just say—and I’m intimately familiar with this because 

one of the key reasons I’m holding this hearing is because I was 

on Highway 85 last fall, and it was not a happy experience. And 

I think anybody who’s traveled that road knows what I’m talking 

about. I’m talking about the wash-boarding, talking about the extremely heavy truck traffic, talking about the delays in movement 

in some parts of that roadway, talking about safety concerns that 

are raised. 

We certainly heard this at the hearing in Williston this morning, 

in what was really an outstanding hearing, I thought. Director Ziegler was there, and we had excellent witnesses there, and I think 

we are going to hear much the same in Dickinson. 

Improvements to Highway 85 will also pay dividends for agriculture in the region. It will enhance the transportation of crops 

and livestock. It will increase export opportunities with enhanced 

access to Canada and will help further diversify western North Dakota agriculture with the ability to attract more value-added agriculture to the region. 

The manufacturing businesses in the region will also benefit 

from improvements to Highway 85. Let me indicate that the North 

Dakota Department of Transportation’s ongoing study of the corridor will form the basis for determining the necessary investments 

that must be made. We are not prejudging this process. In fact, we 

are relying on the North Dakota Department of Transportation’s 

analysis to determine what direction should be taken for the future. That’s the only—as I see it, the only reliable, objective way 

to determine what needs to be done for the future. 

North Dakota has benefited greatly from the last highway bill, 

which was completed in 2005. As Chairman of the Budget Committee and as a senior member of the Finance Committee, I was 

included in the final group that negotiated the differences between 

the House and the Senate on that transportation bill, and I worked 

hard in that conference committee to make certain that North Dakota received significant funding for our highways and transit systems. 

Specifically, I worked to secure $1.5 billion for North Dakota, a 

31 percent increase over the previous bill. Annually, that averages 

51 

out to over $230 million a year for our highways and bridges, with 

additional funding provided for transit programs across the State, 

as well. 

We did very well overall by securing two dollars for every dollar 

in gas tax money collected in our State, ranking us among the top 

four States in the Nation for return on our tax dollars. And I’m 

proud of that, and I don’t think we have anything to apologize for. 

We have a very large State, relatively sparsely populated. 

We are critical to the national infrastructure because of our agricultural production, our energy production, and tourism, all of 

those components. North Dakota has got to receive more than we 

send in if we’re going to maintain a national network of roads. 

I also worked to have Highway 85 designated as a high-priority 

corridor. That makes us eligible for special corridor funding from 

the Federal Highway Administration to help expand the area into 

an even greater trade corridor. 

Here are some of the priorities I will focus on as we begin consideration of the next highway bill. The new legislation must identify 

sufficient funding. This is something that Director Ziegler, our distinguished administrator of the Transportation Department in 

North Dakota, has brought to our attention repeatedly. There has 

got to be a reliable source of funding for highway and bridge work 

all across the country. 

The current trust fund is insufficient. In fact, we know we’re 

going to run out of money this year. We’re going to have to have 

an injection of $5 to $7 billion this year to prevent withholding 

from States of the ability to go forward with contracts that have 

already been entered into. States and communities must be able to 

rely on their Federal partners. 

Next, any new highway bill must maintain recognition that rural 

transportation needs are vital to the nation. And finally, I will fight 

to secure funding for long-term investments for our nationally important corridors, like Highway 85. 

I am particularly interested in hearing from our witnesses today 

on the immediate investments that are needed for Highway 85 and 

what future investments should be. Agriculture, manufacturing, 

energy, all of them will benefit by wise investments in our infrastructure. I’m also interested in learning whether any of the $170 

million in Federal stimulus funds provided to the State for roads 

have reached the corridor or if they will. 

I want to again just indicate that I have enjoyed the working relationship we’ve had with the State. Mr. Ziegler, in my judgment, 

has been an absolute professional. He enjoys credibility, not only 

here in the State, but he certainly does with the congressional delegation. And I am happy to report with the people that we are trying to persuade in Washington of the special needs that attach to 

a State like ours, the special needs that surround Highway 85. 

With that, I want to turn to Mr. Ziegler for his testimony, and 

then we’ll go to Mayor Johnson. I again just want to thank Mr. Ziegler for his leadership and for his partnership as we’ve worked to 

provide the kind of important funding that’s necessary to move the 

economy forward. 

52 

STATEMENT OF MR. FRANCIS G. ZIEGLER, P.E., DIRECTOR, 

NORTH DAKOTA DEPARTMENT OF TRANSPORTATION, BISMARCK, NORTH 

DAKOTA Mr. Ziegler. Thank you, Senator. I’m Francis Ziegler, 

Director of the North Dakota Department of Transportation, and I 

want to thank you for the opportunity to appear before the Budget 

Committee today. Today, I’d like to address the following: Federal 

transportation legislative issues; how infrastructure investments 

can bolster North Dakota’s economy, especially along U.S. Highway 

85 corridor. 

The Federal investment in North Dakota’s highways is in the national interest, and it’s imperative that the reauthorization of the 

Federal Highway Program continue to serve the needs of the rural 

States, allowing us to continue to meet the demands being placed 

on our highway network, including Highway 85. 

That said, this year, for the first time ever, the State of North 

Dakota was able to commit an unprecedented sum of non-matching 

State general fund dollars to help build North Dakota’s transportation infrastructure. This year, we passed a $1.35 billion landmark transportation funding in North Dakota, which included 

about $750 million of Federal aid. 

This money will be used to fund maintenance and enhancements 

of the State’s infrastructure, as well as grants for immediate assistance to cities, counties, and townships, in working to address 

weather- and flood-related damage to their roads. 

The highway account, Senator, as you indicated, of the Highway 

Trust Fund is projected to have a zero balance this summer. It will 

be highly disruptive to States if FHWA begins to delay payment to 

the State claims as we ask for reimbursement of costs. As a zero 

balance gets closer, States will begin to curtail bid openings and 

work to avoid the risk of not having funds to pay for the work. 

Furthermore, North Dakota already has contracts in place for 

which the Federal Highway Administration may not be able to provide this reimbursement of funds. The public may not be able to 

provide—the public at large, the jobs and transportation benefits of 

the program, would be denied, or at least delayed, if the program 

is disrupted. We hope that Congress can pass appropriate legislation soon so the trust fund will have those resources, as you indicated, Senator. 

A multiyear highway and surface transportation authorization 

bill is also needed. This bill would recognize the benefits the entire 

nation receives from strong Federal investment in surface transportation. Under this legislation, it’s important for rural States like 

ours to receive at least its current overall share formula in other 

funds. Certainly, that result would be in the national interest. 

In support of the result, we’d like to emphasize a few reasons 

why investment in transportation infrastructure in rural States 

such as ours serve important national trends. First, North Dakota 

serves as a bridge for truck and personal traffic between other 

States. We need to enable agricultural exports and serve the nation’s ethanol production and energy extraction industries, which 

are located largely in rural States. 

They’re a lifeline for remotely located and economically challenged citizens; enable people in businesses to traverse the vast 

53 

tracts of sparsely populated land that are major characteristics of 

the western United States; to provide access to scenic wonders, and 

to facilitate tourism. Also, to enable to enhanced investment to address safety needs in rural routes. 

Highway transportation between our country’s major metropolitan areas is simply not possible without excellent roads that bridge 

those vast distances. The FHWA data on tonnage origins and destinations shows that just over 59 percent of the truck traffic using 

North Dakota’s highways does not either originate or have a destination in North Dakota. A significant portion of the economy in 

our State is based upon agricultural and energy production, and 

that— 

THE CHAIRMAN. Francis, could I stop you on that point? Excuse 

me for interrupting, but you just made a point that I think we 

should highlight. What is the percentage of traffic going through 

here that does not originate in North Dakota? 

MR. ZIEGLER. Fifty-nine percent. 

THE CHAIRMAN. So almost 60 percent of the traffic here does not 

originate here. So when we’re talking about a national transportation bill, if we’re going to have a national system, we’ve got to 

have national support. And, you know, I get hit with this all the 

time, that North Dakota is getting a bigger share of the Federal 

Treasury than our population justifies, and we plead guilty to that. 

We get $1.80 back for every dollar we send Washington. I’m talking 

overall. On highways, we get two dollars back for every dollar we 

send. But there’s a reason for that. 

If we’re going to have a national system, we’ve got to have national support. And given our population density, and given the 

size of our State, if we don’t get a disproportionate benefit with respect to roads and bridges, we would have a very bad system. Isn’t 

that the case, Francis? 

MR. ZIEGLER. That is correct, Senator. 

THE CHAIRMAN. In your judgment, is the current formula sufficient? We know that there will be people coming after the formula, 

and they won’t be looking to give us more. They’ll be looking to 

take money that has traditionally come here. And in your judgment, is the current formula, is it critically important to maintain 

that? 

MR. ZIEGLER. Senator, in my judgment, it’s very critical that 

North Dakota maintain the current formula. 

THE CHAIRMAN. Well, one of the things we’re going to have to do 

soon after this hearing concludes is get together and work on our 

strategy for this next transportation bill, because we face, as I indicated at the outset, a shortfall of $5 to $7 billion this year. That’s 

going to have to be addressed. 

In the budget that I just wrote and my colleagues passed, we 

provided for that funding, and we provided for funding for the next 

transportation bill that is significantly in excess of what the trust 

fund will provide, because the hard reality is, the trust fund, if we 

just rely on the revenues of the current trust fund, we will not be 

able to come anywhere near matching the need that exists. Is not 

that the case, Director Ziegler? 

MR. ZIEGLER. Senator Conrad, that is very much the case. In 

fact, our National Association has told us that the trust fund curVerDate Aug 31 2005 12:16 May 25, 2010 Jkt 000000 PO 00000 Frm 00059 Fmt 6601 Sfmt 6601 C:\DOCS\50924.TXT SBUD1 PsN: TISH
54 

rently brings in approximately $32 billion, and the spend is approximately $40 to $41.5 billion, so there’s a significant shortfall 

there. 

THE CHAIRMAN. Well, let me just say that the budget that I 

wrote that my colleagues have agreed to is designed to meet that 

need at that higher level, understanding that that gap is going to 

have to be filled, and it requires the committees of jurisdiction to 

come up with the money to make up the difference so we’re not just 

adding to the deficit. 

And I took a significant amount of heat for that insistence, but 

I think with our current financial situation as it is, we’ve got to insist that the next highway bill be paid for, and there is that gap. 

So the trust fund revenues are not going to be adequate. 

MR. ZIEGLER. OK. I’ll continue. A significant portion of the economy in our State is based on agricultural, energy production, and 

natural resource extraction. In fact, the government’s economic 

strategy plan has identified Ag, energy, advanced manufacturing, 

technology-based businesses, and tourism as growth industries, because North Dakota holds a competitive advantage in those areas. 

These have been the focus of much of North Dakota’s investments in economic development. Ag is one sector of the economy 

where the United States has consistently run an international 

trade surplus, not a deficit. Over the past two decades, roughly 30 

percent of all U.S. Ag crops were exported. North Dakota is a major 

contributor of energy production in the nation. Our State is currently fifth in the Nation in all oil production and contains a large 

amount of coal reserves. 

Good roads throughout the State are paramount to the Nation 

becoming energy independent and providing Ag products to feed a 

hungry world. It’s also worth noting that over the past three decades, tens of thousands of miles of rural branch lines have been 

abandoned nationwide. The reduced reach of the rail network 

means that in many areas, particularly rural areas, must rely more 

heavily on trucks to move goods. 

With increased truck traffic in North Dakota, much of the upper 

Midwest, we’re challenged with our ability to continue the products. This challenge is really compounded by the necessity to pose 

spring load restrictions. Like congestion, load restrictions slow 

down commerce and add greatly to the cost of doing business. 

We moved the chart this afternoon to your left, Senator, so you 

can read it a little bit better, but if you will look at those lines on 

that chart, one, you’ll see where we have load restrictions in our 

State, and it’s pretty significant— 

THE CHAIRMAN. Director Ziegler, I noticed immediately upon entering the room how you cleverly moved the charts to this side. I 

told them, we’ve got to get these charts blown up, because when 

they’re over on that side, I couldn’t read them, but here, I can see 

them clearly. 

MR. ZIEGLER. Well, we want you to see them. 

THE CHAIRMAN. You know I like charts. 

MR. ZIEGLER. We’ve heard that. OK. Rural States like North Dakota face a number of serious obstacles in preserving and improving the Federal-aid highway system within our borders. We’re very 

55 

rural, geographically large, have low population densities, and have 

extensive highway networks. 

Our large road network has few people to support it. The percapita contribution to the highway account of the Highway Trust 

Fund attributed to North Dakota is $161, compared to the national 

average of $109 per person. These factors make it very challenging 

for rural States to provide, maintain, and preserve a modern transportation system that connects the rest of the nation. 

Our budget to maintain—just to maintain, plow snow, seal 

cracks, and do some pothole patching, takes the transportation system about $9,200 per year per mile. It takes about 2,000 vehicles 

a mile per day to generate that amount of revenue from the current 

motor fuel taxes. In fact, very few of our roads actually hit the 

2,000 per day. In summary, our ability to address highway needs 

throughout the State depends in part on the resolution of some 

broader transportation legislative initiatives. We set forth today 

some of the many reasons why it’s in the national interest for the 

Federal Government to continue to make substantial investments 

in transportation in a State like ours. A continued strong Federal 

funding role is appropriate. 

More specifically, on the Highway U.S. 85 corridor, transportation provides a vital link to our State’s economic growth and is 

critical to almost all freight movements, connecting manufacturing 

to retailers, farms to markets, shippers to pipelines, railroads, airports, and seaports. For this reason, the State has proceeded with 

a number of improvements on the Teddy Roosevelt Expressway, 

U.S. 85 Highway corridor, that are part of the Statewide Transportation Improvement Program, or STIP, and that’s on Chart 2. It 

shows all the improvements that we’re looking to make on it. 

The Teddy Roosevelt Expressway is vital to serving the needs of 

western North Dakota and beyond our borders. The State of North 

Dakota and the Teddy Roosevelt Expressway Coalition are sponsoring a corridor study on 197 miles of the TRE located in North 

Dakota. The overall general objective is to prepare the TRE corridor master plan. It’s scheduled to be conducted in three phases. 

The first phase is to identify the current and projected needs 

within the border or within the corridor. Phase two is to develop 

primarily corridor improvement alternatives to get ready to see 

what we need to do on it. And then third, to refine preferred alternatives and prepare required environmental documents. 

Kadrmas, Lee, Jackson, and Ulteig engineers have been selected 

to conduct the study, and phase one is underway. We’ve had some 

public hearings in Bowman, Belfield, Watford City, and in 

Williston, and some of the main topics that have been brought up 

at the meetings, there’s an interest in making improvements, definitely, and safety is a big factor, that everybody talks about widening shoulders, lowering hills, addressing turning lanes, and so 

on. 

Concern about to changes to U.S. 85, though, that there’s some 

concern about that it could result in communities being bypassed. 

Residents living along the roadway are concerned about losing land 

to the right-of-way. So on and on, but we’re getting good input on 

those public hearings in addressing the corridor needs. 

56 

Phase one of the study is scheduled to be completed in May of 

2010. Senator, I know you’ve always worked with us, with the Department of Transportation, with our State, and with our Governor 

to develop a list of priorities as the Department of Transportation 

sees the needs, and we hope that you would do that again on this 

corridor and work with us to develop the priorities as they come 

out of the study. 

In conclusion, Senator, we consider it essential that Congress, 

through the reauthorization process, recognize that significantly increased Federal investment in highways and surface transportation 

in rural States is and will remain important to the national interest. The citizens and businesses of our nation’s more populated 

areas, not just residents of rural America, benefit from a good 

transportation network in and across rural states like North Dakota. 

With such legislation, we’ll be better equipped to address our 

statewide needs, which includes the U.S. 85 corridor. This concludes my testimony. I’m certainly willing to answer any questions 

that you might have. 

[The prepared statement of Mr. Ziegler follows:] 

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50924.032
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50924.033
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50924.036 50924.037
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50924.047
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The CHAIRMAN. Thank you, Director Ziegler. I want to take just 

a moment and recognize Lance Gabe, the Governor’s Deputy Chief 

of Staff who is with us. We appreciate Lance very much for being 

here. In Williston, I introduced him as the Governor’s Chief of 

Staff. On my trip down here from Williston, I was contacted by the 

Governor’s Chief of Staff, who asked me if I knew something that 

he did not. He wanted to know if he’d lost his job and Lance was 

taking over, and I assured him that, as far as I knew, he was secure at his job, but I was happy to promote Lance, at least for the 

morning. Thank you very much, Lance, for being here. 

Next, we’ll turn to Mayor Johnson, Dennis Johnson, our good 

mayor. We very much appreciate the leadership he provides in this 

community. Mayor Johnson, why don’t you proceed? 

STATEMENT OF HON. DENNIS W. JOHNSON, MAYOR, CITY OF 

DICKINSON, NORTH DAKOTA 

MR. JOHNSON. My name is Dennis Johnson. I presently serve as 

President of the Dickinson City Commission. This is my ninth year 

in that capacity. I am a western North Dakota native and have 


50924.048
64 

lived in Dickinson the past 35 years. On behalf of the citizens of 

Dickinson and southwest North Dakota, it is my honor to extend 

to Senator Conrad a warm welcome to our community. We are 

pleased that you are here to hold this hearing regarding the U.S. 

85 corridor. 

Dickinson is home to about 18,000 people. It is the largest city 

in the southwest quadrant of North Dakota. Dickinson, of the larger North Dakota cities has the most diversified economy and may 

be the most entrepreneurial city in North Dakota. Dickinson’s economy is not overly dependent upon one economic sector. It participates in multiple economic sectors. There is a solid agricultural 

economy in southwest North Dakota consisting of both production 

agricultural and ranching. There is a robust energy economy in 

western North Dakota. Western North Dakota has oil, natural gas, 

lignite coal, and ethanol production. Currently, the Bakken Formation is one of the largest oil plays in the lower 48 States. The formation covers portion of western North Dakota, eastern Montana, 

and southern Saskatchewan. 

While much of our commerce historically travels east and west, 

the oil industry in western North Dakota travels predominately 

north and south, connecting the cities of Houston, Denver, Gillette, 

Dickinson, Sydney, and Williston. In addition to the oil and coal industry, this region also has electrical generation capacity that includes coal and natural gas-fired plants and wind generation. 

Dickinson has a growing manufacturing economy. There are in 

excess of 1,300 manufacturing jobs in our community. This is a 

high concentration, considering the size of our city. The manufacturing companies are a diverse group producing institutional furniture, food products, gravel handling equipment, electric thermal 

storage heaters, oil storage tanks, aircraft, electrical harnesses and 

circuit boards, and solar-powered water mixing equipment. 

A very large majority of their manufactured products are marketed outside of North Dakota. Dickinson has a vibrant service 

economy. It serves a regional area that extends into Montana and 

South Dakota, providing education, retail, financial, medical, recreation, and other professional services. 

Dickinson State University’s 2,800 students come from a large 

geographical area. The tourism economy is a significant contributor 

to the area’s economy. Dickinson is the gateway community to the 

Theodore Roosevelt National Park and the historic town of Medora. 

Both are located within the scenic North Dakota Badlands, about 

30 miles west of Dickinson. About 500,000 people annually travel 

to the national park to enjoy sightseeing, camping, hiking, biking, 

and horseback riding in the Badlands. About 100,000 people during 

the summer attend the Medora musical in its outdoor amphitheater. 

People visit Medora and the Badlands because of its historical 

connection with Theodore Roosevelt. This area also attracts those 

who hunt and fish. Western North Dakota is well-known for its 

world-class pheasant, water fowl, and mule deer hunting. Lake 

Sacagawea, located north of Dickinson, has excellent walleye fishing, boating, and other water recreation. 

Dickinson has a solid construction economy that services the 

local building needs of the region. Last year, the city issued 285 

65 

building permits totally just over $45 million in value. Housing values continue to rise within the city. While the Dickinson area economy consists of many diverse segments, an important common need 

for each segment is truck transportation. We are fortunate to be 

serviced by the Burlington Northern Santa Fe Railroad for inbound 

and outbound transportation for major commodities. However, most 

of the area’s inbound and outbound transportation needs are met 

by trucks. 

A sparsely populated rural area such as western North Dakota 

is highly dependent upon the trucking industry. We are fortunate 

to be located on Interstate 94. I–94 provides area businesses with 

a safe and efficient outbound east-west corridor to markets. The I– 

94 corridor also provides Dickinson with quality inbound transportation service for goods and materials consumed by area businesses 

and citizens. 

It would be a great economic boost to this area if we had a highway similar to I–94 that would provide equally safe and efficient 

transportation in a north-south direction. In my opinion, it would 

make markets north and south of us more accessible. It would also 

be easier for our area to import goods from the north-south direction into our area. I also believe it would be safer for motorists 

moving in a north-south direction. 

I would encourage developing U.S. Highway 85 into either a 

super two or four-lane format. That concludes my testimony. 

[The prepared statement of Mr. Johnson follows:] 

66 


50924.064
67 

The CHAIRMAN. Thank you very much, Mayor Johnson. I hope 

you’ll let me call you Mayor. I know that you’re really the President of the City Council, but let me ask you—turn to you first and 

ask you, how would you describe the condition of Highway 85? And 

remember, if you will, that we’re trying to persuade people 1,500 

miles away in Washington, colleagues, staffers, that there is a need 

for greater Federal funding for this corridor, as well as the highway needs of the entire State. 

I mean, if we’re trying to describe so that a staff person on the 

EPW Committee in Washington can kind of get a sense of what 

we’re dealing with if you drive up and down 85, how would you describe it? 

MR. JOHNSON. Well, I’d be most familiar with the section from 

Belfield, North Dakota to Williston, North Dakota. I would describe 

it as being busy, with lots of truck traffic. You’ll see a lot of trucks 

relates to the energy industry, of course, but it’s not just industry. 


50924.065 50924.066
68 

You’ll see a lot of dry vans that are moving up and down that highway. 

I would describe it very similar to the way you described it from 

your trip last fall. It’s rough and the shoulders are narrow. If 

you’re traveling—and we travel at speeds of—right at 65 miles an 

hour— 

THE CHAIRMAN. Right at 65? 

MR. JOHNSON. Yeah, not above it. When I’m sitting next to the 

DOT Director, I’m right at 65. But at those speeds, with a two-lane 

highway with lots of truck traffic, the director noted that there’s 

hills and curves, and so you’d have visibility issues. There are real 

safety issues there, and so I’d be very concerned about the safety 

aspect of it. And it’s—when you’re out traveling on the highway in 

a sedan and you have that much truck traffic there, it’s I think a 

dangerous condition. 

THE CHAIRMAN. You know, I described my grandfather going 

through the State of Wisconsin when I was a kid, and he’d call it 

a hill truck curve, and I added expletive deleted. And that was sort 

of my experience last fall on 85, hill truck curve—I won’t say the 

expletive deleted. But, you know, it was very clear to me that we’ve 

got serious work that’s got to be done there. 

MR. JOHNSON. Let me add one thing, too. People who aren’t familiar with North Dakota, most of what they’ve perhaps seen in 

the media about us is they viewed eastern North Dakota, which is 

very flat, has tremendously rich farmland. But out here in western 

North Dakota, we have buttes and hills, and we don’t have that 

same flatness. And so there is a real safety element here in the 

west. 

THE CHAIRMAN. Yeah, I’ll tell you, it’s one of the things that I 

experienced, that people get behind trucks. And we were in the situation where there were trucks going maybe 40, 45 miles an hour, 

and people get impatient. And then you’ve got a hill, you’ve got a 

curve, and people take—they get impatient and they start to do 

risky things. And we certainly saw that last fall. 

MR. JOHNSON. Well, and living in the Northern Great Plains, we 

do experience winter from time to time. 

THE CHAIRMAN. We’ve been denying that, Dennis. 

MR. JOHNSON. But when you’re on a two-lane highway and you 

meet an oncoming truck and there is some snow on the highway 

or snow on the shoulder, you get a tremendous amount of snow fog 

also, which is a very dangerous condition. 

THE CHAIRMAN. Let me ask you this. When you described, Dennis, a super two—those are the words I heard you use, as options 

and alternatives for the future, a super two or a four-lane, what 

do you mean by that? What comes to your mind’s eye when you describe a super two? 

MR. JOHNSON. Well, when I think of a super two highway, I 

would perhaps think of one where there’s say some controlled access to the highway. I would think of a two-lane highway that has 

wider shoulders. I would—there would be areas where there would 

be passing lanes, some of those hills or curves that we’ve talked 

about. But something that is certainly a noticeable step up from an 

ordinary two-lane highway. 

69 

THE CHAIRMAN. OK. Director Ziegler, what terminology do you 

apply? Obviously, that’s a two-lane road now. How do you term it 

within the department in describing that road facility now? Do you 

just call it a two-lane? Is it a certain type of two-lane? Do you have 

this super two terminology that the mayor is using, or how would 

you describe the options? 

MR. ZIEGLER. Senator, currently, Highway 85 is a two-lane facility. It has some control access in the newer areas where—what we 

consider control access on a corridor like this or a roadway like this 

is that we have no more than five approaches per mile. That’s the 

control we’ve used. We’ve actually bought that when we buy rightof-way. 

As it relates to a super two concept, the mayor described it very 

well. Fundamentally, it’s a wider segment of roadway. It provides 

passing, it provides climbing lanes where necessary, and it addresses those safety needs that we need to address on this corridor. I’ve 

personally— 

THE CHAIRMAN. Is there any rule of thumb to how much cost 

that adds to go to that kind of improved road? 

MR. ZIEGLER. Senator, to go to a super two on this corridor—I’d 

have to do some mathematic. We’ll have our engineers do some 

mathematical efforts. But typically, we would need to add some 

shoulders, six, eight, ten-feet wide shoulders, and then an additional lane in the middle where necessary. It doesn’t have to be a 

third lane or a passing lane continuously. You provide that at intervals. 

I have had the opportunity to drive on what is called a super two 

in Nevada between Laughlin and Vegas, and it’s a very comfortable 

feeling, and what it allows is when cars get bunched up or trucks 

get bunched up, you can do passing at regular intervals. So that’s 

the super two concept that the Mayor talked about. 

THE CHAIRMAN.Could you provide for the committee kind of a 

rule of thumb—I’m not asking for it here, but could you give us 

some idea what cost that would add? 

MR. ZIEGLER.To add to the shoulders and an additional lane, 

passing lane, at intervals, would in all likelihood be in the neighborhood of a million dollars for every mile that you would do that 

on. 

THE CHAIRMAN. And so as a percentage, would we be talking 

about 120 percent of a typical two-lane, or can you give us some 

rough rule of thumb? 

MR. ZIEGLER.If a typical two-lane is 24 feet plus 6-foot shoulders, 

which would bring that to a 36-foot roadway, this one would have 

to be at least 50-plus feet, and so you could just proportion of those 

costs. A typical two-lane—and the most current we have is the 

highway two-four laning. That cost us over a million dollars a mile, 

and we had owned the right-of-way. 

And so if you took a million dollars a mile for a typical roadway 

if we started all over from scratch on this, I’m going to estimate 

that it would be $1.5 to $1.75 million dollars per mile. 

THE CHAIRMAN. OK. That’s very helpful. Let me ask you this. I 

asked you this question in Williston—I get asked, not infrequently, 

stimulus, we had $170 million of stimulus funds for highways in 

North Dakota that were allocated by Congress earlier this year. 

70 

What’s been the disposition of those funds? Are any of those funds 

flowing to this corridor, or will they? What can you tell us about 

that? 

MR. ZIEGLER.Senator, first of all, we appreciate the stimulus 

funding. It came at a perfect time, when we had a tough winter, 

we have had a tough spring, a very wet spring, and our roadways 

have certainly shown a loot of damage. And it was good that our 

legislative body was able to help us out with that. 

But the stimulus money that we’ve put into place statewide has 

been to address a lot of the load-carrying capacity issues that 

would relate to that map with all the red roads. So we’re doing 

overlays to help us with the spring activities, to keep that flowing. 

We believe that—Grant is going to be checking this afternoon 

with staff—that we have a micro-surfacing job coming onto this 

corridor to help with the redding and some of the loading issues. 

THE CHAIRMAN.Let me just indicate that I was called yesterday 

actually by a former state legislator, and he was concerned that I 

was holding these hearings, putting a focus on Highway 85, when 

there are so many other road issues around the State, especially 

as a result of the extraordinary flooding we’ve experienced. 

And my staff shared with them that it’s important to understand 

that those roads that have been affected by flooding are covered by 

FEMA funding under public assistance. So that’s a separate pot of 

money. What we’re talking about here in this hearing is a future 

transportation bill and the need to address key corridors as well as 

the road and bridge network across the State of North Dakota. 

But we need to put a focus on all of the priorities of this State, 

and very frankly, Highway 85 is a key priority, not only for this 

State, but for the country, because of the energy and agricultural 

production that moves on this highway. And as a gentleman said 

this morning in Williston, you’ve got to remember that a lot of this 

traffic that used to move on the rails is no longer moving on rails 

because many of these rail lines have been abandoned that has 

pushed a substantial additional load onto the road networks. 

So we’ve got kind of a triple whammy going on here with 85. 

We’ve got, No. 1, the dramatically increased energy traffic that is 

on this road, and these are 50-ton trucks. Then we’ve got the agricultural loads. We had testimony this morning that since 1990, a 

million and a half acres have been added to the crop base just in 

the North Dakota part of this region. A million and a half crop 

acres added. All of that production is being put on this road network. 

And then, No. 3, because of the removal of certain rail assets, an 

additional burden has been put on this road network. So you put 

that all together, it is like a triple whammy, and we’ve got to respond to it. 

And Director Ziegler, who I have high regard for, I think we have 

to put ourselves in his shoes as well. He faced dramatic increases 

in all the input costs to road and bridge construction in this State 

last year. You think of what happened when oil went to $145 a barrel. What happened to asphalt costs? What happened to all of the 

other inputs? What happened to diesel costs? What happened to 

the cost of steel? 

71 

In fact, I’d ask you, Director Ziegler, for the record, maybe you 

could just give us some examples of the kind of input cost increases 

that you were faced with last year. 

MR. ZIEGLER. Senator, they were significant. Asphalt prices were in the neighborhood of $300 to $400 per ton just before 2005. From 

2005 to 2008 and now again in 2009, we’re seeing $700 to $900 a 

ton, but in that average of $800 a ton. So that— 

THE CHAIRMAN. So more than a doubling just there. 

MR. ZIEGLER. It’s more than doubling just in that commodity. 

The steel prices have leveled off. We’re currently building a bridge 

at Drayton, North Dakota, and we’ve got some good steel prices on 

that project, and so we’re happy about that. 

Cement prices have leveled off, and actually dropped some. But 

it’s the asphalt commodity that we use so much on these types of 

roads that has really driven up our costs. 

THE CHAIRMAN.And, actually, last year, before this leveling off in 

cement and a leveling off in steel, you faced big run-ups in those 

input costs, as well, did you not? 

MR. ZIEGLER.Yes, we did. Cement had gone well over $100 a ton 

when it had been about $80, and steel prices had gone up at least 

25 to 30 percent, but they’ve leveled off and actually come down. 

THE CHAIRMAN. So we’ve got to understand if we’re going to 

maintain the same road network and improve upon it, and the 

input cost for every mile go up dramatically, we’ve got to put more 

resources into the system if we’re going to do just the same job that 

we’ve been doing. And if we want to make improvements and enhancements, the money’s going to have to come from somewhere. 

I would just say to you, it’s very clear that the revenue base of 

the trust fund is not going to be adequate to meet the needs. Isn’t 

that the case, Director Ziegler? 

MR. ZIEGLER. That is correct, Senator. In our National Association discussion, we’re really concerned about that very point, is the 

fact that the 18-cent gas tax or 18.4-cent gas tax is only generating 

$32 billion, and we’re spending at more than that, and we need 

more than that, Senator. 

THE CHAIRMAN. Do you have any assessment from your National 

Association of what kind of expenditure will be required in the next 

transportation bill? Would you expect somewhere in the range of 

$42 billion to be required to meet the needs nationally? 

Mr. ZIEGLER. Senator, our association has done a neat study, and 

we’re looking at in the neighborhood of $450 billion for a 6-year 

program. 

THE CHAIRMAN. For a 6-year program? 

MR. ZIEGLER. That’s correct. 

THE CHAIRMAN. Well, Director Ziegler, you’ve just given me a 

very sobering number. 

MR. ZIEGLER. Those are the needs as our States see them. 

They’re significant. Senator, as you recognize the fact that when 

the stimulus was addressed, the fact that infrastructure was valued in this country, and that’s how we get people to jobs. That’s 

how we get jobs for people. 

And so the infrastructure—like I always say, the infrastructure 

is the engine that drives the economy. And a good economy cannot 

be sustained without a good transportation system. 

72 

THE CHAIRMAN. No, and that’s absolutely true. And it’s, No. 1, 

building these roads and bridges and maintaining them creates 

jobs, and they’re jobs right here in America. No. 2, it also has the 

added benefit of proving the economic efficiency of America up 

against the competition we face internationally. 

So I argued in the stimulus package for far more for infrastruc- ture. I argued for $200 billion of the package to be for infrastructure, because to me, it makes the most sense. You really get a big 

bang for the buck, not only in jobs, but in increased economic efficiency. 

Let me go back over these numbers, if I could. I heard you say 

for a 6-year bill, your National Association has now calculated that 

we would require somewhere in the range of $470 billion? 

MR. ZIEGLER. Senator, $450 billion. 

THE CHAIRMAN. Four fifty. So that would be $75 billion a year 

on average. Seventy-five billion a year, and the trust fund is throwing off on about $32 billion a year, if I’m right. 

MR. ZIEGLER. So that is a gap of $43 billion a year. Now, is your 

National Association—honestly, this is the first time I’ve heard 

these numbers, and honestly, it almost takes my breath away, I 

have to tell you honestly. So we’re talking about a $43 billion gap. 

Has your National Association come up with options on how to 

close that gap? 

MR. ZIEGLER. We have. In fact, our association did testify to the 

Policy Commission and the Infrastructure Funding Commission. In 

fact, there have been two of those types of commissions. Of course, 

one of the things that is almost taboo is to keep talking about gas 

tax, so there’s public-private partnerships that are being talked 

about. There’s bond banks that are being talked about. VMT is 

being talked about, as well as— 

THE CHAIRMAN. What is that? 

MR. ZIEGLER. It’s basically a user fee, vehicle miles traveled user 

fee. And that is to say— 

THE CHAIRMAN. What do you call that? 

MR. ZIEGLER. Vehicle miles traveled user fee, a VMT fee. 

THE CHAIRMAN. V—I see, it’s V for Victor, VMT. 

MR. ZIEGLER. VMT. 

THE CHAIRMAN. Oy, oy, oy. This is worse than I thought. OK. 

Now I’m sorry I held this hearing. Well, I personally don’t believe 

that gas tax is going to do it. I don’t see the support for increasing 

the gas tax, with gas prices where they are and with gas prices 

where they’ve been, to the level that would close that gap, and so 

I think we’re going to have to be thinking very, very seriously 

about other options. 

Do you have any good news that you could give me? Forty-three billion, 6 years. That’s a $258 billion hole that we’ve got to fill. Two 

hundred and fifty—that’s real money, even in Washington. And 

what is—can you help us understand, that amount of money is to 

achieve what result? 

MR. ZIEGLER. Senator, that amount of money is to achieve the result to take care of the needs that the States are seeing in the infrastructure condition of today. There are thousands of bridges out 

there that are structurally deficient. I’m talking about the entire 

country now. 

73 

THE CHAIRMAN. Yeah, yeah. 

MR. ZIEGLER. Thousands of bridges that are deficient, roads that 

are in bad shape, and there’s an infrastructure that has tremendous needs. And as you travel around the country—which I don’t 

do all that much of, but had an opportunity last week to be in 

Pennsylvania for one of our spring meetings with our association, 

there’s a lot of work that needs to be done. 

You know, our interstate system is just over 50 years old, and 

it was designed for 20 to 30 years. And so it’s right there. It needs 

to be basically reconstructed. And obviously, the capacities have to 

be increased. The pavement thicknesses have to be increased because of the heavier loads that we carry today. I hated to ruin your 

day here, but I guess that’s really—those are some of the realities. 

THE CHAIRMAN. You know, honestly, this is the first that I’ve 

heard these numbers. I’ve been working on a gap, but it was a gap 

much smaller than this one. Let me ask you this. Do you believe 

that in any way, these numbers are gilding a lily or gold plating? 

Do you believe that there are savings we could achieve out of that 

amount and still have a responsible program? 

MR. ZIEGLER. Senator, in every study and every needs and wants 

assessment, one has to take a look at the priorities and have to go 

back and reprioritize what it takes to really keep this economic engine going. And certainly, as an association, they’ve looked at that. 

But I couldn’t say today what kind of a cutback we could make in 

order to still meet the needs and wants of some of the States that 

have put those dollars together. 

THE CHAIRMAN. Well, let me just say this to you. And, again, I’m 

coming at this cold, because this is the first I’ve heard these numbers. But I’ve got to tell you, it is going to be extraordinarily difficult to meet those numbers. And I think we’re going to have to 

look at cutting back. We’re clearly going to have to look for additional revenue sources. But, honestly, we’re going to have to cut, 

because I don’t think there’s an appetite for filling that big a hole, 

not with the economy in the situation that it’s in. 

MR. ZIEGLER. We certainly recognize that as an association and 

are working toward providing options how these things could be 

funded. 

THE CHAIRMAN. OK. Mayor Johnson, any last thoughts or observations on what you’ve heard here today or anything that you’d 

want to make certain is included in the record? 

MR. JOHNSON. No, sir. 

THE CHAIRMAN. All right. Thank you. I want to thank you both 

for, again, excellent testimony. I’ve certainly heard some things 

here that are new to me, but important for me to know. 

MR. ZIEGLER. If I could, Senator, make some closing comments. 

THE CHAIRMAN. Yes. 

MR. ZIEGLER. Highway 85 corridor is very important to us, as 

you can see from the chart. We are moving forward with quite a 

number of projects in the next few years, and so most of those are 

safety-type projects to make sure that we have a safe corridor. And 

I look forward to working with you and your staff to work together 

to help create the basis for the next highway bill. I know that 

you’ve worked very closely with us and the Governor’s office, and 

we certainly appreciate that and thank you for it. 

74 

THE CHAIRMAN. Well, I have appreciated very much our working 

relationship, and I think very soon after these hearings have concluded, we need to get together and put together our strategy for 

this next transportation bill, because, especially after what I’ve 

heard here today, we’ve got—I knew we faced tough challenges, but 

I must say, after hearing your testimony and what the National 

Association has determined as what the needs are, we’ve got a 

much bigger problem than I had previously heard in testimony. All 

right. Thank you. Thank you so much, Mayor Johnson. Thank you, 

Director Ziegler. We appreciate it. 

Our next panel is made up of Gaylon Baker. Mr. Baker is the 

Executive Director for the Stark Development Corporation. He also 

serves on the Board of Directors for the Theodore Roosevelt Expressway. Chuck Steffan of Belfield, North Dakota. Mr. Steffan is 

the COO of Missouri Basin Well Service, which is a trucking operation for oil and gas field services. And Dean Rummel of Dickinson, 

North Dakota. Mr. Rummel is the President of TMI in Dickinson, 

which is a leading manufacturer of laminate casework products for 

schools, laboratories, and healthcare facilities. 

Welcome. It’s good to have you here. I appreciate very much your 

participation in this hearing. Please know that your entire statements will be made part of the official record of this hearing, and 

we’d ask you to proceed and give us your thoughts on the opportunities that exist in the Highway 85 corridor. Gaylon, welcome. 

STATEMENT OF GAYLON BAKER, EXECUTIVE DIRECTOR, 

STARK DEVELOPMENT CORPORATION, DICKINSON, NORTH 

DAKOTA 

MR. BAKER. Thank you, Senator Conrad. My name is Gaylon 

Baker. I am Executive Vice President of Stark Development Corporation, the economic development office serving Stark County 

and its surrounding market area. 

I’ve been in this position for 14 years, having prior experience 

and training in metro area redevelopment, marketing, land use 

planning, business planning, housing rehabilitation, and regional 

planning. I’m a member of the Theodore Roosevelt Expressway Association Board of Directors. The Theodore Roosevelt Expressway 

Association is a part of the Ports-to-Plains Alliance. The goal of a 

safer, more efficient corridor highway that spans our nation from 

north to south is shared by all of the alliance. 

Such a corridor highway will improve the future of North Dakota 

and its neighbors on several fronts. Our association could cite an 

impressive list of statistics that support the economic impact of 

north-south trade. 

North Dakota alone trades over $2 billion domestically with the 

other eight States in the Ports-to-Plains Alliance. Our State also 

realized $1.8 billion in exports by truck to Canada and $15 million 

in exports by truck to Mexico in 2008. Both of these export numbers are up over 200 percent since 2004. North Dakota’s leading 

manufactured export is machinery, followed by transportation 

equipment, processed foods, and chemical products. 

North Dakota’s exports of goods has risen sharply in recent years 

as more and more companies are finding markets across our counVerDate Aug 31 2005 12:16 May 25, 2010 Jkt 000000 PO 00000 Frm 00080 Fmt 6601 Sfmt 6601 C:\DOCS\50924.TXT SBUD1 PsN: TISH
75 

try’s borders, and as they have more grown more sophisticated in 

their marketing. 

Many of our local companies rely on U.S. Highway 85 for moving 

the equipment and goods that tie us to the large markets in the 

southwestern United States, in addition to Canada and Mexico. 

However, this movement is currently hampered by the condition 

and design of this critical roadway. Pavement conditions, lack of 

lane separations in critical locations, access points, lack of turning 

lanes, pathways through residential and commercial areas, and 

other concerns effectively restrict the potential of this roadway to 

meet the growing demand we are seeing. 

Western North Dakota is fortunate to be home to a number of 

businesses with the capability to sell extensively into out-of-state 

markets. As a State located in the middle of the continent, our 

strength as an essential manufacturing and distribution point increases when we are connected to our free market partners to the 

north and south. 

Our area businesses, including agricultural, energy, and manufacturing, are leaders in research and development of methods and 

processes that add value and bring new money into North Dakota. 

They have studied potential markets thoroughly and subsequently 

focused on the specific segments to achieve success, in spite of what 

most of the country regards as a remote location. 

Adding value in specialization, I believe, are the future of American manufacturing, but we will see mass volume, repetitive production often go overseas. In mass volume production, other transportation methods are more efficient. Conversely, in specialized 

manufacturing done in smaller quantities, trucks are the most appropriate transportation choice. U.S. Highway 85 is a major trucking corridor for us. 

Several years ago, in 2001, Dickinson was chosen to host a population symposium, largely because at that time, we were recognized 

as an epicenter of out-migration, particularly among our young people. Key experts were hosted in an academic assessment of this 

problem, and many potential solutions were put forth. 

For local leaders, this was an opportunity to take stock of their 

situations in their communities. Fortunately, they did not just listen and walk away. They asked themselves, what can we do to become the place people want to live? The answer is multifaceted and 

includes recognition of cultural diversity, community recreation improvements, development of new housing, adding shopping opportunities, good-paying jobs, and improving our connections to the 

world around us. 

The diagram that you can’t see below illustrates some of the 

many investments communities have connected to the U.S. Highway 85 corridor that they have made in themselves to become more 

attractive. Allow me to verbalize what’s in the diagram, and my 

apologies for not having charts. The diagram illustrates the relative layout of Watford City, Belfield, Bowman, Dickinson, Richardson, Medora, and flags those many improvements that these communities have invested in for themselves. It’s things like the Rough 

Rider Motel, the amphitheater, and the golf course out in Medora; 

the visitor center and the main street project in Watford City; the 

pavilion, the fire station, the veterans memorial, and the recreation 

76 

area in Belfield; the library, the Dakota Winds Arena, and the Four 

Seasons Pavilion in Bowman; the West River Community Center, 

the Theodore Roosevelt Presidential Library, the downtown library 

remodel, and the Badlands Activity Center in Dickinson; the retro 

energy project, the highway incubator that’s being planned, and the 

Cenex expansion, and the healthcare facility—thank you, by the 

way—in Richardson. 

And those are just some of the top-of-the-mind things that came 

to me as I wrote this. These investments have produced results. 

The net out-migration has either slowed or reversed for a number 

of communities. Today, Dickinson’s population is climbing, not because the town has become a retirement haven, but because young 

families are choosing to stay or relocate here. 

The birth rates at St. Joseph’s Hospital and at other hospitals in 

our area have been on the rise. Students are finding Dickinson 

State University and its proud host city to be attractive. Dickinson 

State University brings young people to the area for a period of 

their life, and they are staying because they like the upbeat tone 

and the social and cultural offerings. 

In turn, the economic development momentum of our area businesses has provided them with opportunity to visualize a prosperous future here. I have a couple more charts on paper, one of 

Dickinson State University fall enrollment, which has grown from 

around 1,800 in 1998 to 2,730 in 2008. Dickinson area total employment has climbed from about 9,700 in 1998 to 12,200 in 2007, 

the last number I have available. That’s about 2,500 in about 9 

years. 

So while our baby rate has improved, challenges do remain. 

Young families need to be confident that they themselves and the 

businesses they work for are connected to urban centers and markets. Any sense of remoteness and isolation on either of those 

fronts is frightening to them. Good connections, which are what we 

see as the future of U.S. Highway 85, are critical to sustaining our 

youthful population. That concludes my testimony. 

[The prepared statement of Mr. Baker follows:] 

77 


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50924.056
79 

The CHAIRMAN. Thank you very much, Gaylon. Next, we’ll hear 

from Chuck Steffan, the COO of Missouri Basin Well Service. Welcome. Good to have you here. 

MR. STEFFAN. Thank you. 

THE CHAIRMAN. Please proceed. 

STATEMENT OF CHUCK STEFFAN, COO, MISSOURI BASIN 

WELL SERVICE 

MR. STEFFAN. Good afternoon. My name is Chuck Steffan. I’m actually the Chief Operating Officer for Missouri Basin Well Service, 

but I accept your generous promotion, Senator, at least for the 

afternoon. 

THE CHAIRMAN. I’m not sure pay will follow, but— 

MR. STEFFAN. We have locations at Belfield, North Dakota and 

also Ross, North Dakota. We’re primarily a transporter of producVerDate Aug 31 2005 12:16 May 25, 2010 Jkt 000000 PO 00000 Frm 00085 Fmt 6601 Sfmt 6601 C:\DOCS\50924.TXT SBUD1 PsN: TISH

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tion water, crude oil, and drilling mud in western North Dakota. 

We’ve been in existence since 1979. We have over 300 employees, 

of which 270 of those are full-time drivers. We operate 175 tractortrailers, which consist of double bottoms, bobtails, A trains, fifth 

wheels on the water side, and mostly tractor tank and pup trailers 

hauling oil. 

Our trucks will run 68 to 95 feet in length and could potentially 

haul payloads of 40 to 50 tons. The proposed Theodore Roosevelt 

Expressway is the primary corridor for our day-to-day business, as 

it is for most of the oil production in North Dakota. 

Most recently, the Bakken oil discovery is conservatively estimated at 3.65 billion barrels of oil and could be the largest oil deposit found in the U.S. next to the Alaskan oilfields. The T.R. Expressway lies in the heart of what the U.S. Geological Survey calls 

the largest continuous oil accumulation it has ever assessed. 

Most recently, the Sanish/Three Forks Formation, which lies directly under the Bakken, could potentially add additional barrels 

of production in the shadow of the T.R.Expressway. With time and 

technology, more of the estimated 167 billion barrels of Bakken oil 

in place could be recovered. 

THE CHAIRMAN. Is that 167, that just in North Dakota? 21MR. STEFFAN. I believe it is. 

THE CHAIRMAN. Because we’ve got—I have a much bigger number in my head for the entire Bakken, but that includes Montana 

and Canada. 

MR. STEFFAN. Exactly. Best estimates given normal rates of exploration say this play will be in place for several decades, and production curves will obviously continue beyond exploration. We are 

currently hauling oil and production fluids from wells that have 

been in place since the 1950’s. Given the lack of pipeline infrastructure and the infeasibility of pipelining all the products of oil production to their final destination, trucking fluids will continue to 

be an ongoing use for Highway 85. 

Our primary concern for Highway 85 is safety. Given the nature 

of the current oil exploration industry, and specifically, the 

Bakken, including the normal traffic generated by production, 

Highway 85 is the host to rigs bringing heavy equipment, drilling 

units, oilfield pipe, tankage, frac tanks, and fracing equipment to 

oil well sites throughout the Williston basin. 

Unlike North Dakota geological discoveries of the past, fracing 

has been used extensively to improve the recovery of oil and gas 

in the Bakken. It’s typical to have 26 to 46 frac tanks in transit 

to each frac job. In order to fill one of those tanks, it usually takes 

two loads of a truck to fill those frac tanks, so there’s a lot of activities going on when you have a fracing going on. 

In addition, fracing crews create their own convoy in transit to 

frac jobs, adding to existing traffic generated by the North Dakota 

oil industry. This traffic, added to the normal tourism traffic, Ag 

traffic, and other commerce, presents a safety concern that could 

be reduced by an expanded highway. 

Our second reason for support of the expansion of Highway 85 

is the efficiencies it would create in traffic flow, many of which 

were talked about earlier today, including turnout lanes and passing lanes that would be beneficial to all who travel this corridor. 

81 

Finally, oil and gas revenues provide significant support to the 

current and rare budget surplus in the State of North Dakota. It 

seems logical that the State would consider it a sound investment 

to provide a thoroughfare to enhance future revenue production 

from the oil industry and to better holster commerce that would 

continue to support the State’s budget. 

Just to give you an idea, since 2007, our company has grown 250 

percent in terms of our fleet and 400 percent in terms of the number of drivers that we employ. We project that if the current oil 

prices would happen to increase, we would see a continued growth 

in both our fleet and the number of drivers that we have. 

[The prepared statement of Mr. Steffan follows:] 


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The CHAIRMAN. Chuck, could I ask you—I sat up in Williston and 

I was talking to a colleague before coming out, and I was talking 

about this hearing and what’s happening in the oil play out here. 

He was kind of intrigued about the Bakken, and he’d seen some 

of the news reports about it. 

And what really surprised him—and it was interesting, his reaction—was that this oil is trucked so far, because in his head, you’ve 

got existing oilfields, so that would mean to him you’d have existing gathering systems going to existing pipelines. 

How would you explain it to somebody who thinks that’s what’s 

out here, that you have existing production, existing gathering 

lines going to existing pipelines? How long would your average run 

be with one of your trucks to haul oil? 

MR. STEFFAN. Our average run would probably be about 70 

miles, but we do have one run where we were actually taking oil 

out of the Monmouth area up to Alexander, which about a 170-mile 

haul. What’s happening in some cases is that we’re mixing oil of 

lower quality with oil of higher quality, creating a blend thats 

worth more money, so the economics are driving that situation. 

THE CHAIRMAN. And how would you explain to people like my 

colleague, who was very surprised by this notion that we don’t have 

existing gathering lines and pipelines to move this oil? How would 

you explain it to— 

MR. STEFFAN. Well, we have a play that’s really in an area that’s 

different than what we’ve previously had before, when you talk 

about what’s going on in the Kildeer area and heading north. We 

have, of course, in Montreal County, a very—one of the discovery 

fields in North Dakota, but some of that infrastructure has also 

seen the value of its time and it’s had its usefulness. 

But a lot of that production is coming out of a new area, and it 

has to be pipelined or trucked to facilities actually that were just 


50924.060
83 

created. And the other thing is we’ve had enhancements in technology, so some of the existing infrastructure is not as efficient and 

productive as it once was. 

THE CHAIRMAN. And what percentage of the oil, in your estimation, would be being trucked, versus moved through gathering 

lines and existing pipelines? 

MR. STEFFAN. You know, off the top of my head, I would say 

about 50 percent of it’s being trucked. 

THE CHAIRMAN. So a very large percentage of the oil that needs 

to be moved is not moving through pipelines and gathering lines, 

it’s moving on the road network? 

MR. STEFFAN. Basically, what we’re doing is taking it from the 

source of origination to a lack unit or a unit that’s going to pump 

it out of State or to another destination. So you will never have a 

pipeline system from every well to a lack unit because of the cost 

of it. It’s just more efficiently handled through trucks. 

THE CHAIRMAN. Through trucks. OK. Very good. Thank you very 

much. Next we’ll hear from Dean Rummel, the President of TMI 

in Dickinson. Dean, I hope you really are the President. I mean, 

I’ve been getting these—I’ve been inflating people’s positions all 

day here. 

MR. RUMMEL. You could certainly name me the CEO, if you’d 

like, Senator Conrad. 

THE CHAIRMAN. That may come with certain resistance from 

other circles here. 

MR. RUMMEL. Exactly. 

THE CHAIRMAN. I don’t want to get crosswise with the mayor. 

STATEMENT OF DEAN RUMMEL, PRESIDENT, TMI, DICKINSON, 

NORTH DAKOTA 

MR. RUMMEL. Thank you, Mr. Chairman. Good afternoon. My 

name is Dean Rummel, President of TMI Systems Design Corporation and TMI Transport Corporation. TMI is the nation’s largest 

manufacturer of institutional-grade laminated cabinets, 

countertops, and architectural woodwork, with consolidated sales 

exceeding $52 million in 2008. We’ve been providing products for 

education, healthcare, laboratory, and other commercial projects 

throughout North America for over 40 years. 

In addition to schools, hospitals, and laboratory projects across 

the United States, TMI’s products are being utilized on projects, including the J. Paul Getty Museum in Los Angeles, the Bank One 

Ballpark in Phoenix, the Denver International Airport, the Cleveland Browns Stadium, and the Georgia Dome. 

TMI products are produced in modern state-of-the-art factories 

on our campus right here in Dickinson, consisting of over 150,000 

square feet of manufacturing space. TMI Transport is a companyowned trucking company with 25 semi tractors and 44, 53-foot 

trailers that deliver our products to each project site, and we haul 

other products back into this region for a number of different customers. We currently employ 360 full-time, year-round employees 

and 45 seasonal college interns. 

TMI would strongly support, and we believe the area would benefit greatly, from the investment in the U.S. 85 corridor. As a manufacturer, we need to move our products to the various markets in 

84 

the U.S. and western Canada. On the average, TMI Transport travels 1,300 miles to our first delivery in each truck. Our growth and 

success is dependent on roads, such as Interstate 94 that has provided easy access to the markets in the east and southeast United 

States. 

The U.S. 85 corridor would benefit the movement of product to 

Texas, Arizona, California, Colorado, New Mexico, Nevada, Oklahoma, and Wyoming. In 2008, TMI averaged about 1,000 outbound 

loads, and nearly a third of our deliveries were to those eight 

States. There is no comparable infrastructure like Interstate 94 

going north and south, and that can be, at times, a detriment to 

our success. 

Just last week, TMI Transport had a major accident en route to 

a delivery to two school projects in the state of Wyoming. Our driver took North Dakota Highway 22 South to Highway 79, and we 

rolled the truck—he rolled the truck while navigating a curve in 

the road just south of Reeder, North Dakota, just ten miles into the 

State of South Dakota. 

The road is narrow and it’s unforgiving, and the driver wandered 

too close to the edge of the road. The conditions were good. The 

road was dry. It was during daylight hours. But the shoulder was 

soft and the damage to the truck, the trailer, and the cargo was 

extensive. We’re thankful that our driver had but minor injuries 

and was released from the hospital the same day. If the U.S. 85 

corridor were to become a reality, we probably could avoid an accident like that, because our trucks would utilize a more truckfriendly route. 

TMI has to rely on truck deliveries because it’s not feasible to deliver to school and hospital job sites utilizing other modes of transportation, like rail. Institutional building contractors and construction managers operate under very compacted time schedules and 

they require deliveries on specific phases of the projects, along with 

special deliveries for breakages and shortages. 

Rail does work well for transportation of TMI’s major raw materials, primarily particle board and plywood panels. That material 

is high-volume, heavy in weight, and is produced, of course, in forested areas of the country. We receive five to six carloads per week, 

and the freight costs are slightly less than by truck. Rail would not 

work for our outbound deliveries. 

On behalf of TMI, I would like to encourage the Senate Budget 

Committee to support this investment in the U.S. 85 corridor. That 

concludes my testimony, Mr.Chairman. 

[The prepared statement of Mr. Rummel follows:] 

85 


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86 

The CHAIRMAN. Thank you very much, Dean. Dean, do you believe TMI would be even more successful if you were the CEO? You 

don’t have to answer that. In fact, it’s probably better if you don’t 

answer that. 

MR. RUMMEL. Thank you. 

THE CHAIRMAN. Well, we’ve got to have a little laugh along the 

way. Let me ask you this. Dennis, would you like to come back to 

the witness table? 

MR. JOHNSON.—I was just commenting on what I might do— 

Dean was the CEO. 

THE CHAIRMAN. Oh, I get it. I get it. Let me ask you this. If you 

were to describe to my colleagues and their staffs the condition of 

Highway 85 now, how would you describe it, Dean? If we’re just in 

conversation with them, as I am with my colleagues, trying to perVerDate Aug 31 2005 12:16 May 25, 2010 Jkt 000000 PO 00000 Frm 00092 Fmt 6601 Sfmt 6601 C:\DOCS\50924.TXT SBUD1 PsN: TISH

50924.062 50924.063
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suade them of something, what words would you use to describe 

Highway 85 and what’s happening there? 

MR. RUMMEL. Senator Conrad, I did talk to one of our drivers 

who drove a whole lot and kind of asked him that question because 

I kind of anticipated that you’d be asking me some tough things 

that I couldn’t answer, because I don’t drive U.S. 85 as much as, 

of course, they would. 

Usually, they actually try to avoid it. That’s why our truck was 

going south on Highway 22. And it’s just because of the amount of 

traffic that is on it. They choose to try and avoid that road. It is 

no better than all the other two-lane roads, and actually, they can 

cutoff 15 miles getting to I–90 by going straight south on 22 and 

cutting across on 79. And so for 15 miles, they say it really does 

not make any difference. They would prefer, of course, to have a 

four-lane U.S. Highway 85, because they would definitely use it. 

But they actually try and avoid it right now. 

THE CHAIRMAN. OK. Chuck, how would you describe it? If you 

were visiting with my colleagues in Washington, trying to help 

them understand what conditions are like there, how would you try 

to describe it? 

MR. STEFFAN. I believe there’s segments of the highway that are 

definitely in need of improvement. We’ve got heavy loads going up 

and down that road. We’ve got many loads that are wider than normal. Even if you take a look at what’s happened in agriculture, the 

economies of scale, we’ve got bigger equipment all the time. So one 

of the primary concerns we deal with is traveling down that road 

with heavy roads and working with the existing traffic that’s out 

there, be it big Ag equipment or even big oilfield equipment and 

the visibility issues that are there. 

And we understand too that we create some traffic hazards ourself from the standpoint of the size of our rigs and the number of 

rigs going down the road. And actually, a wider road with turnout 

lanes would be beneficial from the standpoint that we know that 

if we travel slower, we actually create efficiencies from fuel economy. And so turnout lanes and passing lanes would be beneficial 

for everyone on that highway. 

The Chairman. You know, this isn’t particularly relevant to this 

hearing, but I’d just be interested, what is the optimum speed from 

a fuel usage perspective? Do you do studies on that kind of thing? 

MR. STEFFAN. For most of our trucks, it’s about 60 miles an hour. 

THE CHAIRMAN. Sixty miles an hour. Gaylon, how would you describe it? If you were trying to persuade one of my colleagues that 

Highway 85 needs more investment and specifically here, we’re 

talking about Federal investment, how would you describe it? 

MR. BAKER. Well, in a word, I would describe it as unsafe, and 

that is because of the—not just because of Chuck’s trucks or Dean’s 

trucks, it’s unsafe because of the visibility problems, the length of 

view you have on curves, that sort of thing, the rutting of the roadway, the narrow shoulders, where—and part of—we’re fortunate to 

have part of Highway 85 go through some pretty scenic areas. The 

problem is that people pull off and want to look, and you can come 

upon something like that pretty suddenly. Sadly, there have been 

some tragic accidents on Highway 85 in recent years. We don’t like 

losing especially our young people that way, and that has hapVerDate Aug 31 2005 12:16 May 25, 2010 Jkt 000000 PO 00000 Frm 00093 Fmt 6601 Sfmt 6601 C:\DOCS\50924.TXT SBUD1 PsN: TISH
88 

pened, and we—the safety of that roadway I think is our primary 

concern. Certainly for tourism-type traffic, they too choose to avoid 

it because of the amount of traffic and especially heavy trucks. 

THE CHAIRMAN. You know, I’ve got to tell you, after—I drove on 

it quite a bit last fall, and it made a very strong impression on me. 

I thought it was the worst road in the State, and I mean from 

every standpoint. The amount of traffic, I find really striking. 

When I was on it, the volume of trucks—and I don’t know if that 

was just the couple of days I was on it were unusual, but it was 

really striking, the truck traffic, and the very heavy truck traffic, 

both energy and agriculture. 

The other thing that struck me is the rutting. I mean, there were 

places where you were in like grooves in the road, it was so worn 

down. And that is not safe. The other issue is the hills and the 

curves, because you—I remember very well going around a curve 

and running into one of these—I don’t know if it was a convoy, but 

it was a series of trucks moving closely together, and they were 

moving at quite a slow speed, for whatever reason. You know, it 

was just an unsafe situation. 

Absent going to a four-lane, which I think has to be an option 

on the table here, especially if we’re looking down the road to the 

additional development in the Bakken Formation, it seems to me 

four-laning, at least in parts of it, have to be on the table for consideration. 

Mayor Johnson talked about what he termed a super two. Well, 

I can see where that would be tremendously helpful in places in 

that road too. Passing lanes, wider turnoffs, broader shoulders, all 

of those things would certainly help. I think passing lanes would 

be enormously helpful and beneficial. 

I remember going up one of the hills as we were going up to 

Williston on 85 and again getting caught behind a whole series of 

trucks. You couldn’t get past them. And there was just—there were 

too many blind spots. You couldn’t get past them. And they were 

going I’d say 45 miles an hour. At least it seemed like 45 to me. 

Actually, we wound up getting late to our next appointment because we spent so much time—and we had, we thought, plenty of 

time—on 85. But people that were in our group all wound up being 

late because of the conditions on 85. 

Anything else this panel—anything else you’d want to say for the 

record? 

MR. BAKER. Senator, as far as you were asking how do you fund 

something like this, and how do you refund the Highway Trust 

Fund, certainly, our transportation methods are moving somewhat 

away from pure gasoline and, of course, diesel fuel, which generates all the taxes. And, of course, the efficiencies in automobiles 

has helped us a lot in that way. 

There are other things that vehicles consume on a regular 

basis—tires or something like that—that a person could, I suppose, 

tack a small tax on. Certainly, it sounds to me like the solution will 

have to be multifaceted more so than just the reliance on a single 

source. 

THE CHAIRMAN. I believe that, Gaylon, and I’ll tell you, the numbers that our Director delivered today that the National Association sees as the need for the next highway bill if it’s a 6-year bill, 

89 

I mean, that’s a really striking number. And if we have a gap anywhere close to that, we’re going to have to think outside the box 

on where the money is going to come from. 

And there’s no question in my mind the trust fund revenue is 

grossly inefficient to meeting the need that’s out there. I have no 

doubt about that. So we’ve got a lot of work to do. 

I thank the three of you very much. I want to open it up now 

to those who are in the audience, if there’s anybody here that 

would like to make a statement for the record. If you’d give your 

name and spell it so our transcriptionist is able to capture that for 

the record, and you tell us who you’re representing, if you’re representing an interest or an organization, and if not, just say that 

you’re here as an interested, concerned citizen. Yes, sir? 

MR. BRACKEL. Lynn Brackel, Bowman County Commissioner. 

One thing to consider on this corridor, we have received wind propeller—wind generators—the propellers coming down—85, the way 

I understand it, they cannot drive on an interstate system like 25 

or 29. They have to get off on these side roads. 

Please consider trying to pass one of these trucks with this propeller out the back. We need to have something on this Highway 

85, because we’re seeing a lot of propellers coming through here, 

because they’re manufactured in North Dakota. 

THE CHAIRMAN. Yeah. Well, that’s a very good point. 

MR. BRACKEL. One thing to consider is the way the—in to corridor 85. 

THE CHAIRMAN. Yeah. No, that’s a very good point. Yes, sir. 

Other—yeah? 

MR. ROLFSTAD. Senator, thank you for coming here to Williston. 

We appreciate it. Tom Rolfstad, Economic Development Director, 

Williston. Just a couple— 

THE CHAIRMAN. Well, we’re in Dickinson now though, Tom. 

MR. ROLFSTAD. I know, but it’s—town. But just a couple of things 

that I wanted to talk about. And he is the CEO. But a couple of 

things I wanted to mention was—one is as you look at the new 

highway bill, and I think particularly in these kind of tough 

times—and I’m sure you’ve seen some shocking numbers and a lot 

of—but it’s not just DoT, and we appreciate your diligence on that. 

I think a lot of our folks are pretty excited about having you there 

on the Budget Committee and kind of adding the balance. So I applaud you for that. 

THE CHAIRMAN. Not all of my colleagues have that view of me. 

MR. ROLFSTAD. And that’s why we appreciate it. You give it some 

balance. 

THE CHAIRMAN. Well, thank you. 

MR. ROLFSTAD. You give up—a lot of—you know, Will Rogers 

said the problem with common sense is that it’s not so common. 

And we think you have common sense. 

THE CHAIRMAN. Thank you for that. 

MR. ROLFSTAD. But I did want to mention, as we look at the new 

highway bill, particularly in this environment, we’ve got to look at 

job creation. That is part of the highway package. But I guess I 

was actually surprised when the whole stimulus came out maybe 

how little of it was really infrastructure-related. And there’s other 

things, too. There’s need for transportation lines and pipelines and 

90 

various things if you look at our future, but so I think that’s something we need to think about in terms of this highway bill. It certainly could be a way of helping to get the economy back on track. 

And as we restructure the country, our highway system and our 

railroads and our transportation runs east west and part of it is 

to make these more solid connections. And I guess I was quite intrigued when I heard Bill Dickinson speak at Senator Dorgan’s energy conference last year. But it makes a lot of sense, and I don’t 

know if it’s getting traction in Washington or not, but I do see a 

lot of wind development in North Dakota, and as you look at the 

maps, this corridor is a wind corridor all the way to Texas, and 

we’re all kind of oil and gas country, so natural gas for the off cycle 

kind of a solution. 

But we need to also have those transmission lines, just like we’re 

not getting oil out of here by pipelines. That’s probably our handicap with developing this kind of thing. But it might be better to 

put some of those wind towers through the middle section of the 

country than trying to go outside of Martha’s Vineyard, put it out 

there where people don’t want to look at them. 

But so anyway, I just feel like this is kind of an energy corridor, 

and we could be a big part—you know in terms of solving U.S. energy economies, but also start to diversify into greener ones. 

THE CHAIRMAN. Well, thank you for those observations. I think 

many of us have this view that we can be an energy hub for the 

country, that we really have got it all. We’ve got the oil and gas. 

We’ve got the coal resource, we’ve got the wind energy potential, 

got the biofuels, all of it here. So North Dakota really is going to 

play I think an increasingly important role in this country’s energy 

future. 

With that said, you reference in the stimulus package somewhat 

disappointed that there wasn’t more for infrastructure. Let me just 

say, as somebody who argued for dramatically more infrastructure 

expenditure within the amount of the stimulus package—I argued 

strenuously for $200 billion of infrastructure, and the argument 

that was used against us was the delay, that it takes longer to do 

infrastructure projects and to get the money moving in the economy. 

My answer was, wait a minute. When they built the Pentagon, 

they built it in 9 months. And the answer that came back, well, 

you’ve got all these rules and regulations now that prevent you 

from moving as quickly. I said, ‘‘Waive them.’’ That’s exactly what 

was done when we dealt with the flooding in Grand Forks, North 

Dakota. The one reason James Lee Witt is a hero in northeastern 

North Dakota is because he came in and he waived the things that 

prevented us from moving quickly, just waived them. 

They now say we didn’t have the authority to do it. Well, too 

late. It’s done. And I urge the administration and I urge my colleagues, put somebody in charge who has the ability to override 

rules and regulations that, yes, in normal circumstances, make perfect sense, but when you’re in an emergency, just don’t make any 

sense. 

Well, that wasn’t very well-received, but that was my own view, 

is we would have been better off putting more money into infrastructure—roads, bridges, highway, rail, airports, movement of 

91 

goods on our rivers, and even through our ports—that all of that 

creates jobs right here at home, and in addition to that, improves 

our economic efficiency as a nation. 

You know, when you start racking up the cost to our country of 

all the delays because you’ve got these truck fleets, you’ve got 

Dennis’s truck sitting out on the beltway in Washington, DC, you 

go out there during rush hour, everything is stopped dead. You 

know? There is an economic cost to that. It reduces our efficiency 

as a nation. It reduces our competitiveness as a country. So those 

are considerations as well. 

Any other comments? Yes, ma’am? 

MS. THIEL. I’m Terri Thiel. I’m the Director of the Convention 

and Visitors Bureau here in Dickinson, and I want to address 

two— 

THE CHAIRMAN. Terri, could you just spell your last name for the 

record? 

MS. THIEL. T-H-I-E-L. 

THE CHAIRMAN. All right. Thank you. 

MS. THIEL. And I want to address the economic impact that 

you’re going to have, but also some of the safety issues. The economic impact is that we have two national parks within this corridor system, and the park that is directly to the west of us is actually 100 miles between that north and south unit. Looking at the 

people that are traveling up and down this whole corridor, up and 

down, the majority of our visitors are from out of State, and that’s 

how our State markets, is to bring these people from out of State. 

Well, we have in-State visitors as well. 

The amount of money that brings in is astronomical, and just reviewing that national park, is over 500,000 visitors a year. So that 

corridor also feeds all of these smaller communities. When you’re 

starting up in Williston, Fort Buford, going down through 

Arnegard, down to Watford City, and down to Bowman or to Fort 

Hills[ph] and to the park and on, that all brings in those dollars. 

And when you’re talking tourism, you’re not talking just people 

who go see these attractions. You’re also talking about people that 

are traveling for the visitor industry and the support systems that 

travel. Those are the trucks that are going to support that tourism 

industry, the ones that are going to the hotels or to these places 

that feed on them just for that industry alone. 

So it’s a whole web of different things that go into tourism. This 

is why I often say we should really refer more to it as our industry. 

The tourism division markets heavily out of State and they also 

market internationally. We have people coming in from Norway, 

Germany, all of those on our road systems, where they’re accustomed to—typically when you’re taking vacations a much safer, 

more prudent system for visiting. 

So all that comes into that part of it, leading us, and then we’re 

also looking at that safety factor. Part of the safety factor that has 

become very important is with the motor coach industry. You 

know, a few years ago, about 4 years ago, we had the Family Motor 

Coach Association come in to Minot for their State convention. During that time, we had these other clubs that are associated with 

that going into pockets of our State. 

92 

These motor coaches are large, very large, and they’re typically 

at an age that’s probably a little bit more advanced, and they’re a 

lot of times having also— 

THE CHAIRMAN. What age would that be, that more advanced— 

MS. THIEL. —at a very wise age, but at a— 

THE CHAIRMAN. Is this— 

MS. THIEL. Larger— 

THE CHAIRMAN. Is this a shot at Director Ziegler? 

[Laughter.] Ms. Thiel. But at the same time, we’ve also got vehicles behind them. So if you’re looking at these things going down 

the road—and some of it’s like a motor coach, a vehicle, and a boat. 

They’re long. Now here comes the oil industry. They’ve got their 

large vehicles going, and that really does become a concern with 

that. And I know we’ve talked about safety with that. 

THE CHAIRMAN. Yeah. No, I’ll tell you, it is a point that bears repeating, because it really—it does matter. You know, we had testimony this morning up in Williston, a gentleman that runs transportation for the oil sector, and he said—he went through the safety rating system that companies who are their customers apply to 

them, and it was a very stringent comparison that they apply to 

their potential suppliers, those who provide services to them, on 

what their safety record is, what their training is for safety, and 

what the steps they’ve taken to make improvements. And they 

make a decision on who they’re going to hire based in part on their 

safety record. 

And he was very clear. He said, ‘‘Look, this is very important to 

our competitive position and our continuing success as a company.’’ 

Thank you. Yes, ma’am? 

MS. STEINER. Vicki Steiner. I’m Executive Director for the North 

Dakota Association of Oil and Gas Producing Counties, and our 

counties support this project. On a personal note, I took a trip at 

the end of April, and I’d like to underscore the comments about unsafe. I know that my vehicle hydroplaned a few times, and I 

watched an oil tanker truck ahead of me. The water was coming 

down the ruts because of the hills, and it was pooling at the bottom. And when he was ahead of me, when he hit that water, the 

water shot up both sides, higher than his vehicle, and hit two oncoming vehicles, passenger cars, and for a split second, they 

couldn’t see, and I was behind them. At that point, I thought—I 

was about—I thought, ‘‘Maybe I should just go back.’’ Then I 

thought, ‘‘But, no, where do I turn around in this heavy rain? 

Maybe I should just go slower.’’ So I took—put one wheel on the 

shoulder, one on the high part of the road, and I tried to take that 

as best I could, but when you would hit those pools, then you would 

find your vehicle kind of skidding. 

So it’s definitely unsafe, and I think the path—a super two would 

be great, and in some places, I think a four-lane would be great. 

THE CHAIRMAN. Yeah. I’ll tell you, I had some of that same experience, hydroplaning. One of the days that we were on 85, it was 

raining heavily, and I also experienced this—I don’t know what 

you’d describe it as, the water coming off those trucks, blinding 

cars coming the other way. I found that the most kind of concerning. OK. Yes, sir? 

93 

MR. KLEWIN. Senator Conrad, we do appreciate your interest in 

this project, and we’ve been out to your office in Washington, DC 

a couple of different times. I just wanted to explain— 

THE CHAIRMAN. If you’ll give your name for the record? 

MR. KLEWIN. Excuse me. It’s Cal Klewin, K-L-E-W-I-N, Executive Director of Theodore Roosevelt Expressway. We’ve been in 

your office several different times talking about our project, and 

one of the things that I think, and you’re aware of, is we have a 

partnership, a nine-state partnership, and now including possibly 

two Canadian provinces. 

And one of the things that we’ve noticed all the way through the 

corridor in the center of the United States is we have energy in 

common, renewable fuels in common, and also agriculture. And we 

kind of are growing ourselves on those particular assets that they 

have going through the corridor of our country. 

And I think it’s proven very positive that we have some 

strengths, and I think it’s going to drive particularly real development in those strengths. And that’s what our corridor partnership 

is about, and we do appreciate your interest. 

THE CHAIRMAN. You bet. Thank you so much. Yes, ma’am? 

MS. KOUBA. I’m Marlene Kouba, from Regent. Farmer. 

THE CHAIRMAN. Could you spell your name, too? 

MS. KOUBA. K-O-U-B-A. 

THE CHAIRMAN. Thank you. 

MS. KOUBA. I represent North Dakota Women Involved in Farm 

Economics. 

THE CHAIRMAN. Oh, very good. 

MS. KOUBA. And I’m wondering about the eminent domain and 

the easements involved in expanding this road. I know it’s a bad 

road. I’ve been on it the last couple of years. And I’m also wondering if this could be another corridor between Mexico and Canada to make us another North American Union. 

THE CHAIRMAN. Well, I don’t think we’re talking about any North 

American Union here. That’s not really what we’re talking about 

here. We’re talking about specifically the needs on this road. And 

I tell you, the public input we’ve received is just overwhelming on 

the need to address the concerns on 85, and from really every element of the North Dakota community. 

I’ve heard it from the business community. We had testimony 

both here and in Williston. From the agriculture community, strong 

testimony on that in Williston. I’ve heard it from governmental officials up and down Highway 85. With the questions of eminent domain, those are really questions we should direct to Director Ziegler in the scoping process and the development of their plans, because they are best positioned to answer those questions. And I’m 

sure those are part of your considerations, are they not, Director? 

MR. ZIEGLER. Yes, they are. 

THE CHAIRMAN. Yes, we had—yes, this woman, and then the 

gentleman—first of all, I want to thank you for your patience, sir. 

MR. KOPPINGER. No problem. 

THE CHAIRMAN. OK. 

MS. JAMES. I’m Lyn James, and I’m the Mayor of Bowman— 

THE CHAIRMAN. Yes. Good to see you, again. 

94 

MS. JAMES.—here in the southwestern corner. Thank you. Good 

to see you. And I wanted to just piggyback onto Terri Thiel’s testimony regarding tourism. Not only do we see North Dakota tourism, 

but being in the southwestern corner, we also see that there are 

a lot of tourists from Canada, as well as eastern Montana and 

North Dakota. We’re kind of the funnel that takes people to the 

Black Hills. And there’s a great economic impact there, too, just 

with them stopping in the different communities. 

And so there’s not only North Dakotans using this road, but 

other people, and it’s very important that we see an improvement. 

So we appreciate your support. 

THE CHAIRMAN. You bet. Thank you very much. Yes, sir? Again, 

thanks for your patience. 

MR. KOPPINGER. My name’s Mike Koppinger. I’m here on behalf 

of SolarBee and SolarBee Transportation. We, as a training company, we know that probably the most dangerous aspect of our job 

is our travel. We spend about 60,000 miles a year traveling. And 

as the manager of transport, where we kind of MapQuest everything out and find what the best route to go for the highway. 

The Colorado market is probably our biggest market, along with 

Texas, Arizona, Nevada, California. So I would say 75 percent of 

the time, when we leave Dickinson, we turn south at Belfield, and 

we head up 85. So on behalf of Solarbee, I just want to say that 

we totally support this corridor to that market area for so long. 

THE CHAIRMAN. OK. Thank you very much. Anyone else, final 

words? Brock? 

MR. LANDBLOOM. Brock Landbloom, Director of Roosevelt Custer 

Regional Council. I think we should also note that when we developed this country, railroads went east and west. There was no connection to carry goods north and south. And the other thing is that 

it’s only a partial interstate system on the front range by interstate 

25, that goes from north to south. I think those are two items that 

I probably should throw out there are well. 

The Chairman. That’s a very good point, very good point. We had 

a gentleman that came that was in the audience in Williston that 

stood up, and he’d been on the railroad for 40 years, and he described how abandonment of certain rail lines had moved a staggering amount of traffic onto the road networks. And so we’ve had 

really good contributions, not only from our formal witnesses, but 

people in our audience, as well, and we certainly appreciate that 

very much. Tom? 

MR. ROLFSTAD. Yes. Senator, just one more comment, that—but 

I think, as you—negotiate with urban states, and how we justify 

expenses in the rural areas, I kind of read back at all as my state 

commissioner, and I substituted for time to time, and I just happened to be at one of the meetings that this corridor had in Colorado. And it was early on in my learning of this thing, but talk 

about that I–25 corridor in Denver, that’s—really, initially, that’s 

where we want to run this through. 

Colorado kind of went through a paradigm shift when they recently expanded the I–25 highway from four lanes to six lanes, 

$100 million a mile to build that stretch. And their philosophy is 

now, ‘‘We don’t want traffic through I–25. We want it around the 

city.’’ And Colorado looked at this alignment about the time I got 

95 

involved in looking at eastern, central, and I–25 corridors. And 

they said, ‘‘We’re going to go 60 miles east of Denver alignment, 

and that’s going to be our alignment heading up to Scott’s Bluff, 

Nebraska. 

And similar to the area up here, we can build four-lane highways for $2 million a mile to go to Denver just to expand for $100 million 

a mile. And I think somewhere I’ve heard about our counterparts 

have to get thinking about how do they get—and that’s just the 

traffic congestion, but there’s a lot of other—every Federal agency 

had more complicated budgets when you congest the situation. 

THE CHAIRMAN. It is a very good point, and I’m glad you made 

it, because, you know, I hear a lot, ‘‘Well, North Dakota, North Dakota, North Dakota. You guys are getting a disproportionate share 

of Federal money for your population.’’ And I hear it a lot. 

You know, the reality is there are reasons for it. We’re going to 

be part of a national system. We’ve got a lot of territory to cover 

here with a relatively sparse population. So the Federal Government is going to have to have a disproportionate share. And that 

extends to many other parts of life here. 

And, you know, they’ve got to also look on the other side of the 

ledger. What are they getting from this State? Vast agricultural 

production, critically important energy production, oil, natural gas, 

coal, and, increasingly, renewable types of energy. 

So this country, we’re the fifth largest oil producer in the United 

States. Most people don’t think of North Dakota that way. Most 

people don’t think of North Dakota as a State that produces electricity for nine States, but we do. Most people dont think of North 

Dakota as the place that’s got the greatest wind energy potential 

of any State in the nation, but we do, and I think, as we go forward, it’s going to be increasingly apparent that North Dakota has 

an awful lot of the things that America needs, and to get it, and 

to get it efficiently, is going to require some additional investment. 

And I don’t think we can shrink from that. I think we have to be 

very direct about it, and we have to make the case, and that’s what 

this hearing is about. 

And I especially want to thank the witnesses here today, the formal witnesses and those in the audience who stood up to provide 

their observations as well. With that, we’ll declare the hearing adjourned, and thank you very much. The hearing is adjourned. 

[Whereupon, at 2:54 p.m., the hearing was adjourned.] 

(97) 

FIELD HEARING TO CONSIDER HOW INFRASTRUCTURE INVESTMENTS CAN FOSTER 

ECONOMIC DEVELOPMENT AND THE AGRICULTURE ECONOMY: US 52 

THURSDAY, JULY 2, 2009 

U.S. SENATE, 

COMMITTEE ON THE BUDGET

Jamestown, N.D. 

The Committee met, pursuant to notice, at 3 p.m. in the Jamestown College Furness Multipurpose Room, Reiland Fine Arts Center, 6000 College Lane, Jamestown, North Dakota 

Hon. Kent Conrad, Chairman of the Committee, presiding. 

Present: Senator Conrad 

[presiding]. 

OPENING STATEMENT OF SENATOR CONRAD 

The CHAIRMAN. Thanks everybody for being here. I apologize for 

being late. It’s all that construction out on the highway. We were 

earlier today going from Grand Forks to Fargo and I’m delighted 

to see those Federal and State dollars at work on the Eastern Corridor, and we had healthcare forums in Grand Forks and Fargo. So 

again I apologize for being late but I’m delighted to be here because 

I think this is an important hearing. 

This is an official hearing of the Senate Budget Committee, so 

we’ll be operating under the Rules of the U.S. Senate and an official record of this hearing is being kept. 

I especially want to welcome our very distinguished witnesses 

today. They include the Director of North Dakota’s Department of 

Transportation, Francis Ziegler, who we very much admire for his 

professionalism. 

The Jamestown City Council President Pat Nygaard. Thank you, 

Pat, so much for being here. 

Jamestown/Stutsman Development Corporation CEO Connie 

Ova, who will be on the second panel, as well as Dakota Growers 

Pasta Vice President of Manufacturing David Tressler who will 

also be on the second panel, and the Farmers Union District Director, District VI, Ellen Linderman. 

Thank you all for your willingness to participate and testify. 

There is a discussion right now in Washington on how to proceed 

with respect to the reauthorization of surface transportation programs. As Francis knows very well, the Trust Fund is running out 

of money, will run out of money, we estimate, in August. We need 

about an $8 billion infusion to make it through the rest of the year. 

98 

Next year, we think we’re about $10 billion short in the Trust 

Fund of meeting the requirements from the previous transportation 

bill. 

So it is critically important that we gather information and evidence to present to our colleagues because I suspect what is going 

to happen is a short-term reauthorization. 

It looks to me, Francis, like perhaps an 18-month extension, and 

in all likelihood a straight extension of the last transportation bill 

but nonetheless with room for special projects in States that can 

demonstrate a need that is supported by evidence. That’s why this 

hearing is important today. 

I earlier did a hearing on Highway 85 out in Western North Dakota. Francis was good enough to participate in that. 

What we’re attempting to do here is to make a record, an official 

record for presentation to the staff and members of the relevant 

committees, because they’ve made clear to us the only things that 

have any chance of being included, and I want to emphasize this, 

the only things that have any chance of being included are things 

that have a hearing record and things for which there is a demonstrated need. That’s why this hearing is important here today. 

We believe that Highway 52 is a critical artery in the State of 

North Dakota. You all know—if we could go to that, Tim—Highway 

52 goes from the Canadian border and comes down, connecting in 

Jamestown to 94 and then is jointly signed with 94 going east. It 

is a key artery in North Dakota. 

Let’s go to that next slide, if we could. Highway 52, in particular, 

has seen a large spike in truck traffic. Just 20 miles to the north 

here, Highway 52 near Carrington, truck traffic has increased 47 


50924.152
99 

percent from 2002 to 2008, and in the next 10 years commercial 

trucking in North Dakota is expected to increase by 42 percent. 

This is all part of the record to demonstrate the need for additional investment of Federal and State in Highway 52. 

The agriculture industry is reliant on the State’s road network 

to move products and services. I think we all know that. Significant 

in growing agricultural businesses in this region rely heavily on 

Highway 52 to receive raw goods and transport their finished products to market. However, the continued growth of these valueVerDate Aug 31 2005 12:16 May 25, 2010 Jkt 000000 PO 00000 Frm 00105 Fmt 6601 Sfmt 6601 C:\DOCS\50924.TXT SBUD1 PsN: TISH

50924.153
100 

added businesses is dependent on a transportation system that is 

both efficient and reliable. 

Similarly, our ability to track new companies and businesses to 

this region will depend on a quality transportation system. Unfortunately, Highway 52, like many of our nation’s highways, is deteriorating. Heavy truckloads associated with our agriculture and 

manufacturing businesses have put added strain on this crucial 

roadway. The highway needs repairs to foster continued growth in 

these industries, to ensure a safe travel route, and to better serve 

the communities along its route. 

Let’s go to the next slide, if we can, Tim. Improvements to Highway 52 will pay dividends for agriculture in the region. It will enhance the transportation of crops and livestock. It will increase export opportunities with enhanced access to Canada, and it will help 

further diversify North Dakota’s agriculture and manufacturing 

economy by attracting more value-added agricultural businesses to 

the region. 

The North Dakota Department of Transportation is responsible 

for determining the priorities for road investments across the 

State. We rely on their prioritization process and have—that has 

high credibility with us. 

I want to emphasize I’m going to continue to work at the Federal 

level to bring additional resources to address the needs here. The 

reauthorization of the transportation bill will be an important vehicle for those Federal resources. 

If we could go to the next slide, Tim? North Dakota benefited 

greatly from the last highway bill which was completed in 2005. As 

a conferee on that bill, I made certain that North Dakota received 

significant funding for our highways and transit systems. 


50924.154
101 

We do know that it pays to have seniority in Washington because 

the most senior members are in the room when the bill is finally 

drafted and I had the privilege and the honor of being in that position in the last transportation bill. 

There, I worked to secure a billion and a half dollars for North 

Dakota, a 31 percent increase over the previous legislation. Annually, that averages out to $234 million for highways with additional 

funding provided for transit programs. 

We did very well in a competitive basis with other States, getting 

$2 for every dollar we send to Washington. That ranked us in the 

top four States in terms of a return on our gas tax dollars. 

I also worked to direct investments to Highway 52, including the 

Jamestown Bypass, and other high-priority North Dakota projects 

in the previous highway legislation. 

Here are some of the priorities that I intend to focus on as we 

begin consideration of the next highway bill. The next legislation 

must identify sufficient funding so that our infrastructure investments are secure and robust for the longer term. States and communities must be able to rely on them. 


50924.122
102 

Next, any new highway bill must maintain recognition that rural 

transportation needs are absolutely vital to the entire country. We 

are a United States of America, not a divided states of America. It 

is critically important that these rural areas get the funding that 

they need. 

And I also want to fight to secure funding for the critical arteries 

in our State, like Highway 52, to ensure that we maintain a nationally connected system. 

I’m particularly interested in hearing from our witnesses on the 

immediate investments that are needed to Highway 52 and what 

future investments are needed to support economic development 

and the agricultural economy so important in this part of our 

State. 

I’m also interested in learning whether any of the 170 million in 

Federal stimulus funds provided to the State for roads have 

reached this highway. That’s important for the record, as well, because that’s part of what we’re asked by the committees of jurisdiction. 


50924.123
103 

Let me conclude as I began by saying what is critically important 

at this hearing is that we set a record to take to our colleagues and 

to take to the staffs of our colleagues on the committees of jurisdiction. They have made abundantly clear to me that as we move toward a short-term reauthorization to meet the shortfall in the 

Trust Funds, that the only additional investments will be in areas 

that have held hearings and have demonstrated specific needs. 

That’s the purpose of this hearing, and I’m delighted that we have 

outstanding witnesses to provide that evidence to the committees 

and their staffs in Washington. 

With that, I will turn first to our excellent Director of North Dakota’s Department of Transportation Francis Ziegler, somebody 

who we’ve worked closely with in the past and we have high confidence in Director Ziegler and his entire team. 

I want to emphasize he has a team and they are well regarded 

not only in North Dakota but I want to say well regarded nationally and as we set these hearings, I can tell you the staffs of the 

Transportation Committees, the relevant committees of jurisdiction, were especially interested in hearing your testimony, Francis, 

and I think that’s frankly a tribute to you. 

With that, if you’d go ahead and proceed with your testimony, 

and then we’ll go to Mr. Nygaard before the second panel. 

STATEMENT OF MR. FRANCIS ZIEGLER, P.E., DIRECTOR, 

NORTH DAKOTA DEPARTMENT OF TRANSPORTATION 

Mr. ZIEGLER. Thank you, Senator. Mr. Chairman, good afternoon. 

I’m Francis Ziegler, Director of the North Dakota Department of 

Transportation. 


50924.120
104 

Thank you for the opportunity to appear before you and your 

Budget Committee today. 

Senator our testimony is available and it’s a little bit lengthy, 

but I will paraphrase today in the interest of time. 

US 52 is an important highway for moving people and commodities in North Dakota and it’s part of the National Highway System. However, before discussing 52, I’d like to address some important broader transportation issues, those which you’ve already 

touched on. 

Number 1 is solvency of the Highway Account of the Highway 

Trust Fund and the continuity of the Highway Program in North 

Dakota and in the nation. 

Number 2, that rural states like North Dakota must participate 

at least proportionately in any future growth of the Federal Highway Transportation Program. 

Number 3, that additional issues with reauthorization legislation, and 4, the importance of the 52 corridor supporting North Dakota’s economy. 

I cannot stress enough that Federal investment in North Dakota 

highways is in the national interests. It’s imperative that legislation reauthorizing the Federal Highway Program continue to serve 

the needs of our rural states, as you have already said, Senator, 

allowing us to continue to meet the demands being placed on our 

highway network, including Highway 52. 

Here’s some background on what we’re going here in the State 

to improve transportation. This year, the State of North Dakota 

committed an unprecedented sum in non-matching State General 

Fund dollars to help strengthen North Dakota’s transportation infrastructure. 

Governor Hoeven recently signed into law a landmark $1.35 billion transportation funding bill. While the state is doing its share, 

Federal investment in transportation is critically important. 

Let me turn to some of the Federal issues that we’re concerned 

about. Again, as I mentioned, Senator, the Highway Account of the 

Highway Trust Fund is projected to reach a zero balance this coming summer, in August. It will be highly disruptive to states if the 

Federal Highway Administration begins to delay payment of state 

claims to reimburse us for the costs. 

Compounding North Dakota’s situation is that, like other states, 

we already have contracts in place for which the Federal Highway 

Administration may not be able to provide reimbursements. This 

would create a financial crisis for the North Dakota Department of 

Transportation. 

Therefore, we certainly hope that Congress will pass appropriate 

legislation in July so that the Trust Fund will have resources to 

pay the highway work this summer that’s under construction. 

Secretary of Transportation Ray LaHood recently proposed that 

solving the Highway Trust Fund shortfall be combined with the 

Highway Program extension of 18 months and an enactment of 

some reforms. We believe legislation to replenish the Highway 

Trust Fund and provide an extension to reinsure program continuity while Congress works on the long-term legislation should 

not be combined with reforms. We’re concerned it might delay it 

105 

and so we’re pretty—quite frankly, Senator, very nervous about the 

financing of the—— 

The CHAIRMAN. Can I stop you on that point and just to indicate 

we have expressed to the Secretary our concern about that, as well. 

We’ve urged the Secretary to consider a separation here. Do the 

extension on one track and the reforms that they propose on another track, so we don’t slow down the necessary 18-month reauthorization. 

I think it would be unfortunate, given all of the other legislative 

agenda, now a Supreme Court nominee, all of the legislation that’s 

moving, healthcare reform, energy legislation, and all the rest, to— 

I’m afraid add some of the reform provisions might unduly delay 

the legislation that’s absolutely imperative which really buttresses 

your point. 

Mr. ZIEGLER. Thank you. We appreciate that, appreciate hearing 

that. 

The next highway transportation authorization bill needs to at 

least provide proportionate funding for rural states like North Dakota. 

A multiyear highway transportation authorization bill is needed. 

There’s broad consensus that increased investment will serve the 

national interests. Many ideas have been advanced in recent years 

and Congress is now starting to shape that legislation. 

Currently, our department and others in rural states have clearly stated to Congress and various commissions that this next authorization must provide a rural state like North Dakota at least 

its current overall share of Federal formula and other funds. 

In addition to preserving our share of overall funding, I’d like to 

address some issues that concern us that are being proposed in the 

reauthorization process. 

Additional planning and reporting requirements and Federal 

oversight. The current Highway Transportation Program is very 

complex. We’d like to see processes streamlined so we can deliver 

projects more efficiently. 

Tying climate change to transportation legislation. Both the climate change legislation that passed the House of Representatives 

last week and the legislation reported by the House Highways and 

Transit Subcommittee last week would require all states to develop 

targets to reduce transportation-related greenhouse gases. 

States will be required to make efforts to increase transit ridership, walking and biking. While we in North Dakota have made 

great strides in this area, our state’s very rural and have some 

winter seasons to deal with here and there’s only so much we can 

do to promote biking and walking. 

The CHAIRMAN. First of all, Francis, don’t we deny that we have 

a severe winter? 

Mr. ZIEGLER. Sometimes it gets kind of cold, Senator. 

The CHAIRMAN. I call it seasonably cool. 

Mr. ZIEGLER. OK. I like that. We’d like to ensure that the administration of the statute does not force a state like ours to undertake 

unrealistic efforts to reduce greenhouse gas control. 

National performance standards and targets. Performance measures are important and the State of North Dakota uses them in our 

project selection process. We believe that national performance 

106 

standards should be general in nature and that each state should 

be allowed to establish its own specific performance measures with 

the broad general guidance from the Federal Government regulations. 

Let me now turn to reasons why the authorization legislation 

should continue to provide rural states, like ours, with at least 

their current share of the Highway and Surface Transportation 

Programs. 

First of all, we serve as a bridge state for truck and personal 

traffic. According to the most recent Federal Highway Administration data on 22 origins and destinations show that just over 59 percent of the truck traffic using North Dakota’s highways doesn’t 

originate here or it doesn’t have a destination here. 

We also need to enable ag products that serve the nation’s ethanol production and energy extraction industries which are located 

largely in rural states. A significant portion of the economy in our 

state is based on agricultural, energy production, and natural resource extraction. 

Ag is one sector of the economy where the United States has consistently run an international trade surplus, not a deficit. Over the 

last two decades, roughly 30 percent of all the U.S. ag crops were 

exported. 

Some other reasons are that the highways are a lifeline for remotely located and economically challenged citizens. It also enables 

people and business to traverse the vast tracts of land in sparsely 

populated areas and to provide access to scenic wonders and facilitate tourism. 

North Dakota is a major contributor of energy production in the 

nation. Our state is currently fifth in oil production and contains 

a large amount of coal reserves. Good roads throughout the state 

are paramount to the Nation becoming energy independent and 

providing ag products to feed a hungry world. 

Over the last three decades, over 1,500 miles of railroads have 

been abandoned and the reduced reach of the rail network means 

that many areas, particularly rural areas, must rely more heavily 

on trucks to move goods. With increased truck traffic in North Dakota and much of the Upper Midwest, we’re challenged with our 

ability to continue to move these products. That challenge is compounded by the necessity to impose load restrictions. 

Attachment 1, which, Senator, is over your left should, shows 

how many of the state’s roads were affected by load restrictions 

this spring. The US 52 did not have load restrictions and we’re 

happy to note that. We worked very hard to make sure that that 

piece of roadway which we know carries a lot of commerce did not 

have a load restriction on it. 

Our large road network has a few people to support it. In North 

Dakota, there are about 16 people per lane mile of Federal aid 

highway. The national average is about a 129 people per lane mile. 

Per capita contribution to the Highway Account of the Highway 

Trust Fund attributed to North Dakota is a $161 per person compared to the national average of a 109. 

Our budget to maintain, that is plow snow, seal cracks and do 

summer work, is approximately $9,200 per mile per year. It takes 

107 

about 2,000 vehicles per mile per day to generate that kind of revenue from state motor fuel taxes. 

In summary, our ability to address highway needs throughout 

the state depends in part on the resolution of some broader transportation legislative issues. Accordingly, we believe that’s why the 

national interest is for the Federal Government to continue to 

make substantial investments in the transportation of rural states 

like ours. 

Now I’d like to be very specific about the US 52 Corridor. Transportation provides a vital link to our state’s economic growth and 

is critical and crucial to many great movements, connecting manufacturers to retailers, farms to markets, shippers to railroads, airports to seaports. The transportation infrastructure plays a key 

role in supporting the growing needs of the business industry and 

traveling public. 

The US 52 Corridor is important in serving these needs in the 

Northwest and Central part of North Dakota. In addition, the corridor also plays an essential role in supporting international trade 

with Canadian provinces. These two provinces have the fastestgrowing economies in Canada. 

The DOT has recognized the importance of 52. From 1994 to 

2008, about a 143 million was invested in preserving this corridor. 

Major improvements include numerous projects in truck climbing 

and turning lanes from Minot north to the Canadian border. 

In the late ’90’s, there were major improvements in the segment 

from Fessenden to Carrington to improve the load-carrying capacity. In the late ’90’s, four miles of four-laning was completing 

southeast of Minot and major reconstruction to the county line 

from there. 

In 2002, as you indicated, Senator, a truck bypass around Jamestown was constructed to improve the traffic flow, safety, and alleviate truck traffic through the city of Jamestown. 

In 2009, there are three projects scheduled along the corridor 

costing about 4.1 million. In addition, there are about eight million 

worth of projects scheduled for the years 2010 through ’12, and 

those are shown on Attachment 2 which is that second chart, Mr. 

Chairman, shows in color coding in green some of the major 

projects that we’re going to be undertaking. 

Based on distress scores, rutting, and ride data, the information 

that we collect on all our systems, the corridor is in relatively good 

shape with the exception of two locations, Burlington to Minot and 

Fessenden south, and those need work and there’s no doubt about 

it and that’s why we selected those projects to go to work on. 

Traffic volume in the corridor ranges from just over 1,200 vehicles a day near the Canadian border to just over 3,000 vehicles 

near Velva. Most of the corridor carries about 500 trucks per day. 

The largest truck volumes, up to 700 vehicles per day, are in the 

segment between Jamestown and Carrington. 

Attachment 3, that’s pretty hard to read for you, Senator, that’s 

the third chart, shows the total traffic in truck volumes along the 

52 corridor and that’s in our written document. 

Attachment 4 provides a graphic comparison of the total traffic 

on the major corridors in the state and that’s the fourth chart up 

there. 

108 

Truckers proceeding south on US 52 bypass around Jamestown 

must travel on I–94 which has an 80,000 pound load limit subject 

to certain exceptions. To enhance the movement of commodities, 

state legislation was passed allowing truckers to purchase a single 

trip or annual permits to carry loads up to a 105,500 pounds on 

I–94. This state legislation is within the exception allowed by Federal law. 

We feel that Federal funding for substantial expansion on US 52 

Corridor needs to be an enhanced appropriation. We’re concerned 

about the earmarks and we want to make sure that we, like in the 

past, are allowed to work with and pull that all together for the 

new bill. We appreciate that opportunity. 

We continue to monitor the traffic, roadway conditions, and safety concerns along US 52 to ensure the safe movement of people and 

commodities. 

Mr. Chairman, in conclusion, we consider it essential that the 

Congress, through the reauthorization process, recognize that significantly increased investment in highways and surface transportation in rural states is and will remain important to the national 

interests. 

The citizens and the businesses of our nation?s more populated 

areas, not just residents of rural America, benefit from good transportation network in and across the rural states, like North Dakota. 

With such legislation, preserving program share for states like 

North Dakota, we will be better equipped to address our statewide 

needs, which include the needs of US 52. 

Mr. Chairman, that concludes my testimony, and I’d certainly be 

happy to answer any questions that you might have. 

One more thing, Senator. I know that you did a lot of work and 

we appreciate your efforts. There are projects that are now going 

into the Devils Lake Area that we’ll be working on much quicker 

now that that little roadblock has been taken out of the picture. 

[The prepared statement of Mr. Ziegler follows:] 

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The CHAIRMAN. Yes, we were able to break that logjam and I 

think it’s going to be very meaningful up there and very important 

and we appreciate your good work and your help as we had to persuade the department that we had to have a little different policy 

approach in order to make this work and we appreciate our colleagues for supporting what needs to be done there. 

Let me ask you, if I can, Francis, before we go to Pat. Would you 

support a straight extension, an 18-month extension of the current 

transportation bill? 

Mr. ZIEGLER. Mr. Chairman, I would. 

The CHAIRMAN. Number 2, would you support a continuation of 

the ability to have earmarks as part of that extension? 

As you know, there’s discussion now on precluding any earmarks. 

Would you support a continuation of earmarks in that 18-month 

extension? 

Mr. ZIEGLER. Mr. Chairman, as in the past, we have worked very 

closely with you and your staff and certainly with that close cooperation, we would support that. 


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The CHAIRMAN. That’s very important and it’s one of the key reasons we gotta hold these hearings. We gotta be able to demonstrate 

within the state that the Department of Transportation believes 

that that is the appropriate approach to delay some of the or at 

least put on a separate track the other reform provisions proposed 

by the Administration. 

So I should ask for the record, would you support dual-tracking 

the reform provisions and the straight extension of the current 

transportation legislation? 

Mr. ZIEGLER. Mr. Chairman, the North Dakota DOT, along with 

our associations, would be very pleased to work with the dualtracking program to get the program extended and at the same 

time be working on any reforms that may be necessary. 

The CHAIRMAN. Yeah. I appreciate that very much. I think it’s 

critically important. Time is short. 

As I indicated before, our projections are the Trust Fund is going 

to go cash negative in August and we need an $8 billion infusion. 

We need by our estimates about a $10 billion infusion for next 

year. 

So I want to ask you that, as well. Working through your association, do you have estimates of the shortfall? Are the estimates 

that I’ve given roughly in the range of what your understanding is? 

Mr. ZIEGLER. Mr. Chairman, our association has reported $5–8 

billion shortfall and that’s what you had said earlier, and then for 

next year, we had heard the same number, $10 billion shortfall, for 

the 2010 Fiscal Year. 

The CHAIRMAN. I think those are roughly right. I mean, I think, 

you know, the estimates of the Budget Committee were six to 

eight. We’re looking at the shortfall—excuse me. 

We’re looking at the shortfall being at the high end with what’s 

happened with miles being down, revenue being down, costs still 

being—still staying up even though oil prices have come down substantially. 

As we look across the cost side of the equation, because we had 

that bottle-wave effect of a big run-up in energy prices last year, 

we’re still stuck with high input costs. 

Is that your experience here? If you could tell us something for 

the record with respect to what you’re experiencing in terms of the 

underlying costs? 

Mr. ZIEGLER. Mr. Chairman, we recently did a look at our inflation factors and from 2001 to 2007, our inflation was in excess of 

50 percent. The numbers are in round numbers to over 10 percent 

a year as far as the inflation factors. 

Even though asphalt prices did come down somewhat, BaconDavis wages went up, fuel for the trucks that we so much depend 

on for road construction is up, and so it’s just a touch over 10 percent for inflation for each one of those years. 

The CHAIRMAN. Yeah. Can you tell us in terms of the last year, 

again for the record, what is your cost experience? Even though oil 

prices have dropped down substantially, you still see increased 

costs flowing through the system? 

Mr. ZIEGLER. Mr. Chairman, yes, we do. We’re in excess of 10 

percent for this past year, also. 

The CHAIRMAN. For this year, as well? 

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Mr. ZIEGLER. That’s correct. 

The CHAIRMAN. I think that’s important to get on the record and 

I thank you for that. 

Anything that you’d want to add? 

Mr. ZIEGLER. No, Mr. Chairman. Just appreciate the opportunity 

to be here today and to work with you on the new transportation 

bill and certainly hope that the extension can be granted soon. 

Thank you. 

The CHAIRMAN. This is going to be race and it’s critically important. I hope my colleagues across the country are doing—taking advantage of this break to do what I’m doing, to hold these hearings, 

to get on the record precisely what you have provided here. It’s as 

clear as it can be the need to have an extension, to have it soon, 

to fill in the hole in the Trust Fund, and to do that, while preserving the ability of individual members to have earmarks based 

on their state priorities. 

Next, we’ll turn to Pat Nygaard, the Jamestown City Council 

President. 

Welcome. You might want to separate those two a little bit to 

prevent feedback. 

Welcome, Pat. Thank you. 

STATEMENT OF MR. PATRICK NYGAARD, CITY COUNCIL 

PRESIDENT, CITY OF JAMESTOWN 

Mr. NYGAARD. Thank you, Chairman. My name is Pat Nygaard, 

and I’m the City Council President for the city of Jamestown. My 

testimony is also available in the back of the room, and I’ll speak 

today as to how vitally important US Highway 52 is to the city of 

Jamestown and really our surrounding trade area. 

Thank you, Senator Conrad, for holding this hearing today and 

for initiating discussion on the importance of US Highway 52. As 

you’re aware, US Highway 52 is a major highway that stretches 

over 2,000 miles and passes through 11 states. 

From its point along the U.S.-Canadian border at Portal, North 

Dakota, to the Charleston Harbor in Charleston, South Carolina, 

this major highway is vitally important and nowhere is it more important than here in Jamestown, North Dakota. 

US Highway 52 is one of two major highways that intersect 

Jamestown and Stutsman County. It serves as a critical roadway 

through our trade area. A significant amount of truck traffic occurs 

on this roadway. In fact, so much—so many semi-trucks utilize this 

highway that the State of North Dakota constructed a bypass 

around the city of Jamestown in 2002, as Mr. Ziegler alluded to 

earlier. 

The importance of this highway is evident when you examine the 

effects it has on the various segments of our local and regional 

economy. This roadway serves the needs of our major industries, 

including agriculture, tourism, and manufacturing. 

As a major farm-to-market transportation route, US Highway 52 

is utilized by thousands of farmers throughout the area. During the 

spring of the year, you’ll see many semi-trucks hauling grain from 

storage bins on the farm to our area elevators. 

Additionally, you will see air seeders, many manufactured just 

35 miles to the east at Valley City, making their way up and down 

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this highway. Throughout the summer and fall, you’ll see everything from spraying and tillage equipment, combines, tractors and 

semis moving back and forth along this highway. 

During critical times of the year, US Highway 52 becomes even 

more important as weight limit restrictions prevent farmers from 

hauling grain on the county roadways. US Highway 52 makes a 

great deal of this possible for our area farmers so that they may 

contribute—may continue to contribute to the agriculture industry, 

a vitally important sector of our local economy and, of course, the 

largest sector of our state’s economy. 

While not to the level of Medora and the badlands of Western 

North Dakota, tourism does hold an important role in our local 

economy. Every year thousands of tourists visit the Frontier Village and National Buffalo Museum, home to the world’s largest 

buffalo and two rare albino buffalo. 

Additionally, Jamestown lays claim to being home to perhaps the 

greatest Western novelist of all time Louis L’Amour and this alone 

brings additional tourism opportunities to our area. Also being the 

rural state that we are, many people visit our region each year to 

fish our area lakes and take advantage of our excellent hunting opportunities. 

Whatever their reason to visit Jamestown and our surrounding 

area, many of these individuals arrive here by way of US Highway 

52. 

While the manufacturing sector has been hard hit in many areas 

of our country over the last decade, Jamestown manufacturers continue to succeed and collectively they employ a significant number 

of people in Jamestown and the surrounding area. 

Goodrich, a cargo system manufacturer, employs over 500 people. 

Cavendish, a potato processing plant, employs approximately 250 

people. Duratech Industries, an ag equipment manufacturer, employs over a hundred people. Agri-Cover, a manufacturer of tonneau covers for pick-up and grain trucks, employs over a hundred 

people. And Newman Signs, the manufacturer of those highway 

billboards you saw on your way into Jamestown, employs over a 

hundred people. I don’t know if you flew or drove today, but no 

doubt you’re very familiar. 

All these companies receive their raw materials and ship their 

finished products via our major roadways, including US Highway 

52. In the case of Agri-Cover, they’re a small town success story. 

This company started in the little town of Courtenay, located in 

Northeast Stutsman County, but the company founders realized 

that to ensure long-term success, they needed to relocate their company closer to a major transportation route. 

Their choice was to relocate the company just north of Jamestown along US Highway 52. In my opinion, this is clear and convincing evidence of the important role this highway plays in our 

local economy. Two expansions and 100+ employees later, AgriCover is a thriving company and wonderful employer. 

So whether it is agriculture, tourism, or manufacturing, you can 

see that this highway is critical to each. Given the important role 

this highway plays in each of these sectors, our Federal lawmakers 

should continue to place a high priority on US Highway 52 and 

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make the infrastructure investments necessary to keep this a viable and structurally sound roadway. 

That would conclude my testimony, and if I can answer any 

questions. 

[The prepared statement of Mr. Nygaard follows:] 


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The CHAIRMAN. Thank you very much for that excellent testimony, and, Pat, let me ask you one of the questions and this is 

going to sound a little strange but these are questions I get. 

Do you know of any local opposition to improvements on Highway 52? 

Mr. NYGAARD. No, I wouldn’t imagine there would be much. You 

know, generally, there—obviously the budget and the deficits we’re 

facing are hugely important, but I think most people tend to come 

to agreement when it comes to infrastructure projects and how necessary they are. 

The CHAIRMAN. Well, I thank you for that. The reason I ask is, 

you know, around the country, especially in the more urban parts 

of the country, there are now some people who are in opposition to 

any major highway improvements. I’ve not found that anywhere 

near in North Dakota, but the fact is that we do see that in other 

parts of the country. 

Francis, I’m sure you hear that from your colleagues, and so I 

think it’s important for the record. You are a local leader here. You 

know the sentiment in the community. 


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Could you give us some sense of support for improvements on 

Highway 52 in the community as distinct from those who might be 

in opposition? You’re indicating you know of no opposition. 

In terms of support, what would you say the level of public support is for improvements to 52? 

Mr. NYGAARD. Well, I would say the level of support would be 

very high, just given the points I touched on in my testimony, 

given the different areas that it impacts, and then given the reallife examples of a manufacturer moving to be closer to that specific 

roadway to haul their finished products in and out of. So I think 

there’s a case in point example right there. 

The CHAIRMAN. And we’ve seen testimony from the Department 

of Transportation with respect to the increase in traffic, traffic 

count numbers. 

Can you testify as to your own experience as a leader in the area 

for increased traffic and usage of Highway 52? 

Mr. NYGAARD. Well, obviously the bypass is a statement right 

there as to the truck traffic. Obviously, you know, from the city’s 

perspective, we are trying to get trucks to—get traffic to avoid the 

city, but as Mr. Ziegler pointed out, the greatest number of truck 

traffic was between Jamestown and Carrington and to just allow 

that traffic to go around the city was moved better and allow the 

trucks themselves to not be slowed down by the stop and go traffic 

of downtown Jamestown is certainly evident. 

The CHAIRMAN. I was able to get funding, the Federal share of 

that funding in the last transportation bill for the bypass. 

Can you tell us how the bypass is functioning? 

Mr. NYGAARD. I think it’s functioning very well. I mean, I know 

as a long-time Jamestown resident from growing up, it wasn’t uncommon at all to see, you know, many semi-trucks throughout the 

day coming down Main Street which naturally isn’t what you want, 

given somebody hauling hazardous material or anything like that. 

But it certainly has taken a lot of the wear and tear off of our 

local streets. 

The CHAIRMAN. Good. Director Ziegler, could you answer that 

same question in terms of how you assess the success of the bypass? 

Mr. ZIEGLER. Mr. Chairman, the bypass has been very successful 

and the fact is that we were approached—excuse me. We were approached after the bypass was opened with the segment of 94 being 

a problem, as I indicated in my testimony, where it could only haul 

80,000 pounds and we were approached by a lot of truckers and so 

it gives you an indicator that they wanted to use the bypass. It was 

working well but for that short piece and so legislatively, we were 

able to fix that issue and now the truckers can move with a 

125,000 pound load. 

The CHAIRMAN. Good. Excellent. Anything that either one of you 

would like to add? 

Mr. NYGAARD. No, sir. 

The CHAIRMAN. All right. I appreciate very much your testimony, 

and thank you. 

I’ll call the second panel to the witness stand. Jamestown/ 

Stutsman Development Corporation CEO Connie Ova, Dakota 

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Growers Pasta Vice President of Manufacturing David Tressler, 

and Farmers Union District VI Director Ellen Linderman. 

As they’re coming to the witness table, I want to thank Jamestown College for allowing us to have this hearing here. I want to 

say I have a special soft part in my heart for Jamestown College 

because my wife, when she came to North Dakota, the first place 

she came was Jamestown College. 

She was one of those people who was in the United States Navy 

and the only other woman in her Air Squadron was from Jamestown, North Dakota, and after their service in the Navy, they went 

back to New York, it was the midst of the garbage strike, and her 

friend from Jamestown said, ‘They don’t even pick up the garbage 

here? I’m going back to North Dakota,′′ and several weeks later, my 

wife waited to get on a subway train and to go to her work. She 

was going 2 hours each way each day, and she decided she wasn’t 

getting on the train. 

She went to another part of the station and bought a ticket for 

North Dakota and never even went back to her apartment. She just 

came here, hooked up with her friend from Jamestown and enrolled in Jamestown College. So I will be forever grateful to Jamestown College. 

With that, we want to turn to our second panel. Delighted that 

you’re here. Again, I want to make clear that the purpose here is 

to establish a record of the need for improvements to Highway 52 

and that those improvements be funded to the extent possible in 

any extension of the transportation bill considered by Congress this 

year. 

With that, we’ll go to Connie Ova, again the Stutsman—Jamestown/Stutsman Development Corporation CEO. 

Welcome. Please proceed. 

STATEMENT OF MS. CONNIE OVA, CEO, JAMESTOWN/ 

STUTSMAN DEVELOPMENT CORPORATION 

Ms. OVA. Thank you. It’s nice to be here. As a side note, if I could 

express our thanks to you and to your staff for helping with FEMA 

to—for—to be able to encourage them to assist the county with the 

roads, with providing extra assistance for the grades. So very much 

appreciate it. 

The CHAIRMAN. Glad to do it. 

Ms. OVA. With that, I’ll start my testimony. I also have my testimony available at the back if anybody’s interested in it. 

I’m Connie Ova. I’m CEO of Jamestown/Stutsman Development 

Corporation. 

Thank you very much for the opportunity to appear before the 

Budget Committee today. 

Today, I would like to address the following. I’ll give you a brief 

overview of Jamestown/Stutsman Development Corporation, JSDC, 

how good road infrastructure will assist existing business and also 

foster new economic development in a region. 

JSDC was organized to develop employment, to improve business 

conditions, and to advance the interests of the city of Jamestown 

and Stutsman County by implementing and sustaining an organized effort to attract new businesses and industries, support existing businesses and industries and encourage new business starts. 

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The JSDC has an economic development program available to assist with expanding or relocating business. JSDC’s mission is in 

concert with the city of Jamestown and Stutsman County and utilizing their supply of funding. JSDC is dedicated to area economic 

development, growth and diversification with specific focus on increasing and/or preserving primary sector jobs, business and industrial development, creating, fostering and maintaining business 

and trade activities, encouraging and providing incentives for business entrepreneurs to locate or relocate to our community. 

The Jamestown/Stutsman Development Corporation owns an ag 

process industrial park with 55 acres of land available for sale or 

lease directly adjacent to Cavendish Farms potato processing plant. 

In addition to that, JSDC owns the I–94 Business Park which 

has 30 acres available for manufacturing, warehouse distribution, 

or national services. The I–94 Business Park is home to Stutsman 

Harley-Davidson, to Infinity Building Services, and this fall will be 

the new home to Ag Country Farm Credit Services. 

In addition, JSDC recently purchased property east of Jamestown in Spiritwood Township. There, JSDC owns 100 acres of 

prime industrial property in the Spiritwood Energy Industrial 

Park, co-located with Cargill Malt and Great River Energy. 

I’ve included information in my handouts directly related to 

those sites and to opportunities available in this community and 

those sites, as all of our businesses, are reliant on good infrastructure. 

The JSDC’s Strategic Plan was reviewed and updated most recently in January of this year by the JSDC Board of Directors. The 

plan for 2009 through 2013 includes seven strategies we are setting 

our sights on and what Strategy Number 1 is is transportation and 

distribution. 

To achieve that strategy, we are advocating that Jamestown geographic location is ideal to focus on the transportation and distribution of products and services with access to air, ground, and rail, 

and Highway 52 is a vital link in that whole system for highways. 

Our approach will be to gather or has been to gather data details, communicate with companies within the industry, establish 

criteria, and develop a business plan. 

We know that an efficient transportation system is essential for 

the future economic health of this region and state. Improvements 

to our public roadway system lower costs for producers and consumers and make North Dakota more attractive in a highly competitive market, highly competitive market for jobs and industry. 

Failure to maintain our public roadway system will result in lost 

jobs and opportunities for economic development to neighboring 

states. Jamestown is diligently marketing the advantage of its central location at the crossroads of major highways and railroads to 

attract new and retain existing businesses. 

North Dakota must have access to safe transportation services in 

all areas of the state to ensure personal mobility for work, pleasure 

and needed services. Maintaining a safe and trouble-free transportation system is critical for all to experience the quality of life we 

have come to expect in North Dakota. 

Without a good roadway system, people could not get to work, 

there would be no access to healthcare, education, and recreation. 

130 

Farmers would not be able to get their goods to market, and manufacturers would be unable to ship their products or receive supplies. In short, the economy would shut down. 

But just having a public roadway system is not enough. The system must be well maintained, efficient, reliable, and accessible. 

Manufacturers rely more and more on just- in-time delivery which 

means much of the inventory they previously kept in their warehouses is now on trucks on the public roadway system for delivery 

to the plants at the time the manufacturer needs the supplies. 

It is critical to the economy that the roadway system supports 

consistent and reliable transportation so that this just-in-time delivery is successful. This requires a road system that is in good condition, has adequate capacity, is well maintained, even in inclement weather. 

Investments in the public roadway system support the economy 

through (1) direct job creation through construction activities, (2) 

indirect and induced job support, and (3) productivity gains. 

In addition to job creation and support, productivity gains are realized by investments that reduce travel times, make travel times 

more consistent, reduce crashes and reduce vehicle operating costs. 

Companies across the region, such as those that were talked 

about and represented here today, attest to the importance of the 

roadway system in terms of location, capacity, and condition to 

their ability to succeed in today’s economy. 

Many areas of the state are seeking public roadway improvements that they believe are critical to support existing and share 

future economic development. Transportation costs are major costs 

of doing business which means a high-quality public roadway system is necessary to attract new businesses and support the growth 

of existing development. 

Agriculture is the Number 1 industry in this community and 

North Dakota. Good transportation is vitally important to those 

farmers needing to move commodities to markets, to transport 

equipment from farm to farm and field to field, and to receive 

goods and services, to provide food and fiber to the world. 

One of North Dakota’s greatest resources is the quality of life 

that exists within its borders. Transportation services support 

North Dakotans with many quality of life benefits. North Dakotans 

value the ability to move and travel with ease. Our public roadway 

system provides the primary means to access recreation, education, 

healthcare and services. 

Increasingly, these quality of life issues are also critical to local 

economic development. Companies want good roads not only for 

business purposes but to attract and support a stable work force. 

High levels of accessibility and mobility are key to experiencing the 

quality of life Jamestown/Stutsman County has to offer. 

Most economic development professionals recognize the distinction between growth and development. As a result, our work involves much more than attracting the next big employer or simply 

increasing the number of jobs in the community. Our concern is 

also with increasing the quality of jobs available in the community. 

Doing so requires working to improve the operating environment in 

which businesses function. That operating environment includes 

and depends on transportation infrastructure. 

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In conclusion, we consider it imperative that Congress recognize 

that significantly increased Federal investment in highways and 

surface transportation in rural states, such as North Dakota, is vitally important to economic development and to the continued 

growth of this state and nation. 

It is also critical to ensure the growth and delivery of safe and 

healthy North Dakota-grown food and fiber to the world. 

This concludes my testimony. 

[The prepared statement of Ms. Ova follows:] 


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The CHAIRMAN. Thank you very much. 

Ms. OVA. You’re welcome. 

The CHAIRMAN. Important testimony and I’m glad to have it on 

the record. 

As we do these hearings, we like to get the testimony of the local 

economic development leaders because, in our view, this legislation 

does have the double effect. Yes, it creates jobs and yes, it increases productivity. It enhances the competitive position of these 

communities and you’ve testified to that, and I thank you for it. 

Ms. OVA. You’re welcome. 

The CHAIRMAN. Next, we have David Tressler who is the Dakota 

Growers Pasta Vice President of Manufacturing. 

Welcome, David. Please proceed. 

STATEMENT OF MR. DAVID TRESSLER, VICE PRESIDENT OF 

MANUFACTURING/SPECIAL PROJECTS, DAKOTA GROWERS 

PASTA 

Mr. TRESSLER. Thank you, Mr. Chairman. 

Thank you for inviting the Dakota Growers to be a part of this 

U.S. Senate Committee hearing. 

Dakota Growers Pasta Company was established in 1993 as a cooperative to add value to each bushel of wheat delivered by the 

growers by adding profit to each share owned. 

The capacity in 1993 was 120 million pounds per year. Today, 

Dakota Growers is a C corporation with approximately $300 million in sales with a total company capacity of 500 million pounds 

per year of dry pasta products. 270 million pounds are produced at 

the Carrington, North Dakota, location, and 230 million pounds in 

our New Hope, Minnesota, location. 


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The current expansion will increase the capacity in Carrington to 

330 million pounds per year beginning in 2010. Dakota Growers 

Pasta is the third largest manufacturer in the U.S. The Carrington, 

North Dakota, manufacturing plant employs 270 full-time workers. 

Dakota Growers Pasta is the only pasta manufacturer with an 

identity-preserved capabilities, providing field- to-plate traceability. 

Carrington, North Dakota, is the headquarters of the company. 

Markets for our products include all 50 states and some foreign 

countries. The products that originate in Carrington, North Dakota, must travel over Highway 52 to its final destination. The 

service provided by Highway 52 is critical in continuing the success 

of this company. 

The use of Highway 52 by trucks and other services to Dakota 

Growers has grown. It is a vital link in the delivery of items all 

necessary in making pasta. Incoming traffic includes wheat, fuels, 

packaging, maintenance materials, operating supplies, support 

services, and labor to the plant. Outgoing traffic includes feed products and pasta. Total traffic now is over 1,200 trucks per month 

with an expected increase to 1,500 trucks by the start of 2010 when 

the current expansion is completed. 

Trucks access Highway 52 from Minot to Jamestown for Dakota 

Growers. The majority of these trucks will return east on Highway 

52. Twenty percent of the wheat is delivered by truck each year. 

Truck access provides a competitive edge by being economical 

transportation for our neighboring farmers. 

Retail shortage during the recent history left many pasta manufacturers without wheat for processing. The ability to access local 

wheat supply and trucks all year kept the Carrington plant in operation during this time and in business. 

Reliable truck delivery of wheat via Highway 52 is a vital link 

to take advantage of locally grown wheat necessary for maintaining 

the identity-preserved program that is key to Dakota Growers’ success. 

In addition, numerous services and support people will be traveling the highway to the Carrington manufacturing plant. 

Dakota Growers Pasta’s success is directly dependent on the 

maintenance of Highway 52 as a no-load-restricted road. Safety is 

a concern as the Highway 52 continues to—use of Highway 52 continues to increase. It services many diverse users, from slow-moving oversized farm equipment being transported from field to field, 

grain trucks from field to market, families going shopping and 

services in local towns, tourists enjoying the area, oversized loads 

transporting large parts to a windmill development in the heart of 

the state, to a single/double/triple trailer over-the-road semi-services, Dakota Growers is dependent upon many originating in the 

U.S. and Canada. 

All users are competing with nature and the environment for the 

use of the land that makes up this highway. Dakota Growers Company encourages the development of Highway 52 to encourage 

trucks to stay on primary roads with minimal stops or restrictions 

to promote safety. 

Improved durability to handle the increased numbers of large 

weight trucks, maintain high-profile Highway 52 as a primary 

snow route to be maintained during the winter months, promoting 

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logical step to encourage continuation of the four-lane road into 

Carrington. This will provide safe transportation environment for 

many diverse uses of the highway. 

Dakota Growers has gained confidence in its customers to be a 

viable competitor in pasta manufacturing industry. This is best illustrated by the capacity expansion now in progress. Improvements 

in Highway 52 will be a key infrastructure investment that will 

continue to foster economic growth in the agriculture economy and 

continued success of Dakota Growers Pasta Company. 

Thank you for this opportunity. 

[The prepared statement of Mr. Tressler follows:] 


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The CHAIRMAN. Thank you, David. If I could just do a followup 

question with you. 

As a business leader, do you believe that in the taxpayers’ interests, additional investments in Highway 52 are justified, looking at 

this from the taxpayers’ perspective? 

Mr. TRESSLER. Mr. Chairman, I think from the taxpayers’ perspective, it is in their best interests because it will help to foster 


50924.089 50924.090
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Dakota Growers and the economy that is strengthened by that 

area, and I believe that they will get a return on that tax dollar. 

The CHAIRMAN. I believe that, as well. I think the record is very 

clear that these transportation investments not only create jobs, 

foster economic development, but also improve the competitive position of our country. 

We now not only compete domestically, we compete internationally, and if we’re going to be competitive, we’ve got to have the 

most efficient infrastructure of any company—any country in the 

world, and these investments in transportation are critically important to our continuing competitive position, and I think it’s very 

useful to have somebody of your business background indicate that 

you believe these investments pay dividends, as well. 

Ellen Linderman, welcome. Good to have you here. District VI 

Director of the North Dakota Farmers Union. 

Why don’t you share your perspective on the need for additional 

investments in Highway 52? 

STATEMENT OF MS. ELLEN LINDERMAN, DISTRICT VI 

DIRECTOR, ND FARMERS UNION 

Ms. LINDERMAN. Thank you, Senator. 

My name is Ellen Linderman, and I am a farmer and a District 

Director for North Dakota Farmers Union. 

I have farmed with my husband Charles and our family in the 

Carrington area for the past 33 years. It doesn’t seem possible but 

it is. I have—over the years, we have witnessed many changes in 

agriculture but one thing has remained constant, the need for a 

good transportation system in our area so that agriculture can 

grow and thrive. 

This in turn enhances the economic viability of our rural community. An integral part of the transportation system in our area is 

Highway 52 as it runs diagonally across the state from north of 

Minot down to Jamestown where it connects up with Interstate 94. 

It runs through what I consider the agricultural heartland of North 

Dakota. 

While we used to grow just a few crops, such as wheat or barley, 

at our farm, this is no longer true for us or our neighbors. We have 

expanded our crop diversity to include such things as corn, soybeans, sunflower, and other specialty crops. 

This was done for economic reasons as well as the increased 

availability of other crops that can now be grown in our region 

thanks to research and development. 

I have attached a list of the crops that can be grown in North 

Dakota, and I might add that there is ongoing research to hopefully 

expand this list to create even more economic opportunities for the 

farmers in our area. We have become very good at producing a 

wide variety of crops. 

Along with these new crops have come some new challenges for 

our infrastructure system. For example, when we harvest corn, 

there is a lot more volume per acre than with wheat or other traditional crops. This means that there is more trucking from the field 

to the farm to the local elevator. As a result, most farmers have 

switched from using—switched to using semi-trucks for grain 

transport. 

139 

Also, as elevators have become larger and fewer, we often have 

to haul grain a greater distance to access these elevators. 

With a wider variety of commodities on the farm, more trips either to the local elevator or often to a processor at considerable distance are required. With these newer crops, such as corn, there is 

also an increased need for inputs. While the inputs may be shipped 

via rail to certain points across the state, from there they are usually shipped by truck to local facilities and to the farms. 

I might also add that the machinery which has to be moved on 

roads from field to field has become larger and takes up more of 

the roads than it used to. Have you ever tried to pass a combine 

or a large tractor and farm implement lately? 

Actually, my husband, when he was coming in from the farm 

yesterday, when he came up against Highway 52, he had to sit 

there and wait for a long line of vehicles that was being slowed 

down because they were following a tractor with a baler behind it. 

Roads have to be built wide enough to accommodate this machinery. Even the local elevators that have access to railroads end up 

shipping part of their inventory by truck. Bulk commodities, such 

as wheat and corn, can be shipped on large unit trains, but other 

commodities are not grown in a large enough quantity or they need 

to be segregated and can’t make use of unit trains. They have to 

be shipped via our road system. 

In some cases the end user of the commodity wants to know 

where it originated. This requires the use of trucks to take the 

commodity from the farm storage to the processor or the cleaning 

plant for bagging and further shipment. 

We grow food grade soybeans on our farm. We contract them 

with SB&B Foods at Castleton which is near Fargo. We have to 

store them on our farm until SB&B wants them. We were so 

thankful this spring for Highway 52/281 because there were only 

normal load restrictions in place so that we could move the beans 

when we needed to. 

We need to be a reliable supplier, as does SB&B, if we want to 

keep our customers happy. SB&B cleans, bags, and tags the soybeans and puts them in containers which go to the West Coast 

where they are then shipped to Japan for processing. 

This winter, we were among a group of soybean growers that 

traveled to Japan to visit with the processors. We learned from 

them how important food safety is to the consumer in Japan. They 

want to know where the soybeans come from and they want to 

know how they were grown. We saw bags of soybeans from our 

farms with the attached labels that indicated their origin. 

I believe this is the future of agriculture in the global economy. 

Highway 52, if it is in good year-round condition, allows us to be 

part of the global economy in a way that we may not have been— 

that we may not have considered when we began farming 33 years 

ago. 

SB&B is also considering contracting some identity- preserved 

wheat for shipment abroad. This again requires segregation so that 

the producer and the consumer are connected. 

Those who grow potatoes in our area also know the importance 

of Highway 52. Again, they truck potatoes to Cavendish Farms, a 

processing plant near Jamestown, on an as-needed basis. This is 

140 

also true of barley producers in our area who contract with the 

malting plant at Spiritwood. 

We also grow confection sunflowers which are sold in all those 

little bags you find at convenience stores across the country for 

human consumption. We haul seeds to the elevator but the elevator 

hauls them to Grandin for processing. 

There is a canola crushing plant near Velva, North Dakota. Some 

farmers in our area grow canola for shipment to that plant but 

more often it is grown to the north and west of that plant, again 

using Highway 52. 

While we are adept at producing a wide variety of crops, we have 

only begun to develop processing facilities which would further enhance rural economic development. In Carrington, we are fortunate 

to have Dakota Growers Pasta Company that has provided jobs for 

the community but it has also provided a market for our durum 

wheat. 

Although some durum is grown in our area, most of it is trucked 

via Highway 52 from the northwest area of the state. Again, the 

durum is stored on the farm at harvest and then hauled in later. 

There are all kinds of economic opportunities opening up in agriculture with the development of biofuels, identity-preserved crops, 

organic crops, and even new types of feedstocks for livestock which 

would enhance livestock development in the state. 

However, if we do not have a reliable transportation system, all 

of the research and development in the world will not help us. We 

have to be able to ship our commodities on demand. If we are to 

develop processing plants locally, we need dependable roads. If anything, I expect to see an increase in the amount of agricultural 

goods shipped on our roads. 

I consider Highway 52 to be literally a life line to connect us to 

the global economy. Without it, our present progress may well 

wither and die as we will be left in isolation from the global markets. 

With a well-built modern Highway 52, we will be able to maintain our connection to processors and world markets and then continue to build on what we have already accomplished. 

Thank you for allowing me to give my testimony. 

[The prepared statement of Ms. Linderman follows:] 

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The CHAIRMAN. Thank you for that excellent testimony. 

I want to thank this panel. You’ve provided important input to 

the committee and to the Congress and we appreciate it very much. 

I want to just—we’re about at the end of our time, I know that, 

but I want to—I noticed the mayors here. Mayor Liechty, if you’d 

want to say something for the record, I’d invite you to come to the 

microphone. 

If you’d just identify yourself for the record? Certainly we all 

know you, Mayor Liechty. 

Ms. LIECHTY. Mayor Clarice Liechty, Mayor of the city of Jamestown, and I was in Norway visiting on a North Dakotans to Norway trip, so I did not have time to prepare anything, testimony 

here. 

But personally thinking, as a farmer and one who has a collection point for Red River commodities for sunflowers, it’s Highway 

52 is very important for farmers. It’s important for moving product 

across the state. It’s important for the city of Jamestown, also, because our agriculture community is very top in providing economic 


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development for our community, and it’s a life blood for our community. 

Thank you very much for coming to Jamestown and holding this 

hearing. 

The CHAIRMAN. Thank you very much for your testimony. I think 

it’s important that the mayor of this community is sending a very 

clear signal of the importance of this vital roadway. 

I also want to recognize Lance Gabe who’s here, the Deputy 

Chief of Staff of our Governor. I think that sends a signal how important the Governor of the state views Highway 52 and its development. Thank you, Lance, for being here, as well. 

Anyone else who would like to make a statement for the record? 

We’ve just got a few minutes remaining here, but if there’s somebody here that would want to be heard publicly, I want to give 

them that opportunity. 

If you’d just identify yourself for the record and indicate what 

you do, your interest in Highway 52? 

Ms. HAGER. 

Sure. Mary Hager, Wells County Commissioner and lifelong resident of Harvey, North Dakota, and I just wanted to touch base on 

how important Highway 52 is going through Wells County. 

We have Pheasant Co-op which has expanded over the years and 

their big push is probably their bean plant which people from all 

over North Dakota come and, of course, Highway 52 is very valuable. 

And again, in Harvey, the Prairie Towers, which is Harvey Elevator, they have expanded, and we have numerous farmers coming 

on Highway 52. So it’s very vital to our county, along with a new 

organic flour mill and they have contracts over in Korea and it’s 

very vital for Highway 52 for people to bring in their organic products. So Highway 52 is vital to us now. 

The CHAIRMAN. If I could ask you just for the record, I’ve asked 

others this, do you know of any opposition in your local area or in 

the county to improvements to Highway 52? 

Ms. HAGER. There has been no opposition. Actually, I visited 

with various community members throughout the county that we 

were going to be attending this and their big thing was—and I 

mentioned it to Mr. Ziegler—when are we going to four lane from 

Minot to Jamestown? They feel it’s very vital because of the heavy 

truck traffic. 

The CHAIRMAN. And let me just go the next step. Would you 

say—well, how would you characterize support for additional investments in Highway 52? How would you characterize the level of 

support in your community, in your county? 

Ms. HAGER. High, very high. 

The CHAIRMAN. Very high. 

Ms. HAGER. Very positive. 

The CHAIRMAN. Yeah. All right. Well, I think we’ve established 

a record that’s very clear here today. 

I want to thank all the witnesses, everyone who’s attended. I 

deeply appreciate it. 

You know, these are decisions that are going to be made in the 

coming weeks. It is very important that we fill the hole in these 

146 

next weeks because the Trust Fund runs out of money, our estimates are, in August. 

Director Ziegler, I think, has a similar estimate of when that 

might occur. 

So this is a timely hearing and I’m very pleased that we’ve been 

able to do it, and I very much appreciate all of the witnesses here 

today. 

Thank you, and the hearing stands in adjournment. 

[Whereupon, at 4:11 p.m., the hearing was adjourned.] 

(147) 

FIELD HEARING ON INFRASTRUCTURE INVESTMENT: CREATING JOBS AND FUELING 

ECONOMIC GROWTH 

THURSDAY, NOVEMBER 12, 2009 

U.S. SENATE, 

COMMITTEE ON THE BUDGET

Michigan, North Dakota 

The Committee met, pursuant to notice, at 2:15 p.m. in Michigan, North Dakota 

Hon. Kent Conrad, Chairman of the Committee, presiding. 

Present: Senator Conrad. 

[presiding]. 

OPENING STATEMENT OF SENATOR CONRAD 

The CHAIRMAN. Why don’t we begin? The Committee will come 

to order. I want to welcome everyone to this hearing of the Senate 

Budget Committee. This is an official hearing of the Committee. So, 

we will be operating under the rules of the U.S. Senate, and an official record of this hearing is being kept. 

This hearing and others like it that I’ve been holding is especially important as we consider a new transportation bill for the 

country. As you know, we are operating on short-term extensions 

of the previous highway legislation, transportation legislation. And 

many of us believe we now need a longer term extension of that 

program to provide stability and assurance of funding to the states. 

We also believe it’s critically important for our economy because almost no part of Federal spending does a better job of creating jobs 

and does a better job of improving the competitive position of our 

country. 

One of the things we know is transportation is absolutely essential to the competitive position of the United States. And so, I especially want to welcome our distinguish witnesses here today. They 

include the Director of North Dakota’s Department of Transportation, Francis Ziegler; Michigan Mayor Allen Orwick; and District 

23 State Assembly Representative Ben Vig, who also served on my 

staff for a time in Washington. It’s good to see you again, Ben. 

Let me just indicate that the committees of jurisdiction have 

said, as we consider new highway legislation, unless there have 

been hearings with respect to specific products—projects, that 

funding that goes outside the formula, that is, moneys that move 

outside the formula, that go to so-called demonstration projects, 

will not be approved unless there have hearings about those 

projects. That’s why we’ve done a series of projects around the 

148 

state with respect to a number of the high-priority transportation 

corridors in the state. 

I wanted to come to this part of the state because, obviously, we 

have issues here as well. I think we’ll hear that from our local representatives, and I expect to hear that from the head of our North 

Dakota Department of Transportation as well. 

This hearing will focus on how infrastructure investments, and 

particularly investments in critical highway projects, can foster economic development and help to produce jobs in our state. 

Let me go through a number of slides to make points that I think 

are critically important to have on the record. 

North Dakota, we all know, has fared better than the rest of the 

country during this recession. When the current recession began in 

December of 2007, the unemployment rate in North Dakota was 3.1 

percent compared to a national rate of 4.1 percent. Since that time, 

unemployment in North Dakota has risen, although modestly, to 

4.2 percent; the national level of unemployment has risen to 10.2 

percent. 

Even more alarming, nationally, is the statistic that when you 

combine unemployment with underemployment, the rate rises from 

10.2 percent to 7.5 percent—17.5 percent: 17.5 percent of the people in our country either don’t have work or don’t have sufficient 

work, don’t have the amount of work they’d like to have. That is 

a serious matter. That means one in every six of our fellow citizens 

does not have the work they would like to have. 

149 

Although North Dakota has not been hit as hard as the rest of 

the country, we cannot consider ourselves an island. We’re not exempt from layoffs. We’ve seen that in major industries in North 

Dakota. We have seen Melroe—Bobcat, for example, have significant layoffs because of the international market. So, we’re no 

longer an island unto ourselves, and we’ve got to pay close attention to what’s happening elsewhere. 

Let’s go to the second one, if we can, Matt. 


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The stimulus that was passed in February has played an important role in increasing economic output. Economists have estimated 

that stimulus contributed significantly to economic growth in 2009. 

Stimulus funds are expected to continue to aid gross domestic product growth into next year as additional funds flow into the economy. Here, you can see, these are the estimates from the economists of the difference that the stimulus package has made. 

I’d be the first to say the stimulus package was imperfect, but 

I also believe it was absolutely essential to prevent a collapse. Last 

year, I believe, our country and the rest of the industrialized world 

was on the brink of a financial collapse. I will never forget being 

called to an emergency meeting in the Leader’s office with 15 of the 

leaders of Congress, Republicans and Democrats, the Chairman of 

the Federal Reserve, and the Secretary of the Treasury. At that 

meeting, they told us they intended to take over AIG the next 

morning, and they were not there to ask our consent; they were 

there to tell us they were doing it, and they told us the reason they 

were doing it is, if it was not done, that they believed there would 

be a global financial collapse. That’s about as stark as it can be 


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made. And they went through in some detail their reasoning as to 

why there would be extraordinarily serious repercussions if AIG 

was allowed to go under. 

With that, there followed months then of negotiation on an overall rescue package, and I was involved in those negotiations. I—one 

of the negotiations went all weekend. We went all one Saturday 

night after going for days before that, and during those deliberations we were told that if we did not reach agreement by 5 or 6 

o’clock on Sunday night, that the Asian markets would open and 

they would collapse, and that would then be followed by our markets opening on Monday and we could expect them to collapse. 

You know, when you are told these things by the Secretary of the 

Treasury of the United States, I take them seriously. I don’t think 

the previous Secretary of the Treasury, whether I particularly 

agreed with him on other policy matters or not—that’s not the 

issue. He and I had very significant disagreements on fiscal policy, 

but when he looks me in the eye and looks other leaders of the 

Congress in the eye and says, we face a global financial collapse 

unless we act, I’m not going to take the risk of his being wrong 

about that prediction. 

So, we did take action, and I think we did avert a collapse that 

would have been not just in this country but around the rest of the 

world as well. 

Let’s go to that third slide, if we can, Matt. 

152 

North Dakota has been awarded $700 million in stimulus funds 

thus far. These dollars will be used to fund high-priority needs 

across the state. About half of the stimulus funds going to North 

Dakota will put people to work rebuilding our state’s infrastructure. Transportation projects will receive $188 million, including 

170 million to build and improve our highways and bridges. The 

state will also receive $168 million for other critical infrastructure 

needs, including several important rural water projects. Stimulus 

funds will also go to keep our teachers in the classroom, make our 

homes and businesses more energy efficient, put cops on the street, 

and fund many other high-priority needs. 

Let’s go to the fourth slide, if we could, Matt. 


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The North Dakota Department of Transportation has awarded 

about half of its $170 million in highway stimulus funds to some 

94 projects across the state. And I’m sure Mr. Ziegler will update 

us on this in his testimony. Of the 83 million that has been awarded, 57 million in projects are complete, and about $26 million, as 

I understand it, are in progress. 

I hope my numbers agree with yours, Francis. 

The state Department of Transportation is in the process of identifying projects and awarding contracts for the remaining $87 million in highway stimulus funding. I will be very interested to hear 

Mr. Ziegler’s testimony with respect to that effort. And let me say 

how much I respect the professionalism of the Department of 

Transportation under Mr. Ziegler. We can be very proud of the way 

North Dakota functions. We do not have the kind of political interference, the kind of corruption that we see in other places. The Department of Transportation, in my experience is first rate, and Mr. 

Ziegler is a dedicated professional. 

Nelson County will receive stimulus funding for two highway 

projects. This past summer, a stretch of County Road 1, just north 


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of here, was resurfaced using stimulus funding. Next summer, as 

I understand it, Francis, Highway 2, just outside of Michigan, east 

to the county line, will be resurfaced using stimulus funds. 

Matt, let’s go to the sixth chart, if we can. 

North Dakota benefited significantly from the last highway bill, 

which was completed in 2005. As a conferee on that bill—a ‘‘conferee’’ is just a fancy name for somebody that’s designated to work 

out the differences between legislation coming out of the House of 

Representatives and the U.S. Senate. Both of the chambers pass 

separate bills. Then you have to work out the differences. The people who are given the responsibility for working out the differences 

are called the ‘‘conferees.’’ As Chairman of the Budget Committee, 

I now have the responsibility and, in many ways, the opportunity 

to serve on many conference committees to work out differences between legislation from the Senate and the House. So, as a conferee 

on that bill, I was able to make sure that North Dakota received 

significant funding for our highways and transit. 

And, I might say, we function differently than people—representatives in other parts of the country. We try to adhere to the priorities set out by our own Department of Transportation. So, we don’t 

do what some of our colleagues do in other parts of the country. 

They tell people: You name the road after me, we’ll build the road. 

We don’t do that in North Dakota. The Department of Transportation has a process by which they determine what the priorities 

are. And in my experience, it’s been a pretty objective process, and 

we follow that process in any funding we are able to get over and 

above the formula funding. So, we go to Mr. Ziegler and his colleagues, and we say, what are your priorities? We’re not in the 

business of second-guessing them. 

In the last highway bill, I worked to secure one and a half billion 

dollars for North Dakota, a 31 percent increase over the previous 

bill. Annually, that averages out to $234 million a year for highways, bridges, and the rest, with additional funding for transit programs. We did very well overall by securing $2 for every dollar in 


50924.121 50924.122
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gas tax money collected in the state, ranking us among the top four 

states in the Nation in return for gas tax dollars raised. 

But let me indicate, we thought it was a great triumph when 

that bill was passed. Subsequently, we’ve faced hyperinflation in 

the most important cost elements to building highways and 

bridges. Concrete, steel, asphalt—all of these increased dramatically in cost, reducing what we thought we were buying, reducing 

the amount of highway miles, reducing the number of bridges that 

we could replace. And so, it is critically important now that we 

have new transportation legislation that deals with the current realities. 

Here are some of the priorities I will focus on as we begin consideration of the next highway bill: First of all, the next transportation bill must identify sufficient funding so that the infrastructure investments are secure and robust over the long term and so 

they are paid for. We simply cannot add more to the debt. The debt 

has already doubled over the previous 8 years. It is scheduled to 

double again, rising to more than 100 percent of the gross domestic 

product of the United States. 

That is an unsustainable course. And it is critically important 

that we, as a nation, face up to this, and this is something we can 

do. We’ve done it before. In the nineties, we not only balanced the 

budget; we stopped the raid on the Social Security Trust Fund. We 

can do this, and it’s critically important that we do it again. States 

and communities must be able to rely on the funds that are promised to them. 

Next, any new highway bill must maintain recognition that rural 

transportation needs are vital to the nation. 

And, finally, I will fight to secure funding for the critical highway 

arteries in our state to ensure that we maintain a nationally connected system. Ever since President Eisenhower advanced the 

interstate highway system, there has been a recognition that these 

systems tie the Nation together and that these systems are critically important not only for the economic health of American but 

for our national security. And we have to again remind ourselves 

and remind our colleagues that those are the essential reasons for 

a national program. 

I am particularly interested in hearing from our witnesses today 

on the importance of highway investments in this region and its effect on economic growth. I’m also interested in hearing about what 

future investments are needed to support economic development 

and the agriculture and energy economy so important in this part 

of the state. And, normally, I would have just talked about agriculture, but I can’t anymore because we now have very important 

energy installations. Earlier today, I was at the wind farm near 


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Langdon, and we know we are now contributing to this nation’s energy needs in this part of the state as well. 

With that, we’ll turn to our witnesses. I’m delighted to have 

them here. I’m going to turn first to Mr. Ziegler, our very well regarded head of the North Dakota Department of Transportation. 

Francis, I’m delighted that you’re here, and please proceed with 

your testimony. Again, you understand the importance of these 

hearings because we’ve got to lay the case before the next transportation bill is written. It is going to have to be done in the early part 

of next year. And so these hearings are especially important to lay 

the record and especially the record for rural states like ours. 

Thank you for being here. 

STATEMENT OF FRANCIS ZIEGLER, DIRECTOR, NORTH 

DAKOTA DEPARTMENT OF TRANSPORTATION 

Mr. ZIEGLER. Thank you. Thank you, Mr. Chairman. My name 

is Francis Ziegler. I’m the director for the North Dakota Department of Transportation. And, Senator, I want to thank you for the 

opportunity to appear before your committee today. 

The title of today’s hearing is ‘‘Infrastructure Investment: Creating Jobs and Fueling Economic Growth.’’ Let me say at the outset that we believe that transportation infrastructure investment 

creates jobs and strengthens the economy and provides additional 

benefits. Transportation—we say this often at the Department of 

Transportation: Transportation is the engine that drives the economy. 

The State of North Dakota has increased its financial commitment to transportation infrastructure. Earlier this year, Governor 

John Hoeven signed a bill into law that was a landmark bill that 

provided $1.35 billion in transportation funding. This includes a 

significant amount to rebuild roads; help cities, counties, and townships recover from the winter activities and the spring flooding. 

The DOT is also working on emergency relief projects, for many 

projects that are just about 40–50 miles west of here at Devils 

Lake. The majority of our ER work, our emergency relief work, is 

in the Devils Lake area. 

Senator I probably should have noted that while we have testimony—it’s written testimony I will paraphrasing in the interests of 

time. 

The CHAIRMAN. I appreciate that, and your full statement will be 

made a part of the record. 

Mr. ZIEGLER. OK. Thank you. 

While the State of North Dakota is doing more than ever, Federal investment in transportation is critically important. Federal 

aid accounts for 52 percent of the current biennium, and that’s 

without the American Recovery and Reinvestment Act. 

In the balance of my testimony, I’ll discuss job creation and other 

benefits from transportation infrastructure investment, and the 

Federal surface transportation legislation. 

Under job creation and benefits, the transportation infrastructure investments create jobs in several ways. First, there are jobs 

on the site—workers operating heavy equipment, truck drivers, 

plant operators, flagmen, and others. Next, there are jobs in supplier and support industries. These can include jobs in the aggreVerDate Aug 31 2005 12:16 May 25, 2010 Jkt 000000 PO 00000 Frm 00162 Fmt 6601 Sfmt 6601 C:\DOCS\50924.TXT SBUD1 PsN: TISH
157 

gates, asphalt plants and factories that make guardrails, signs, and 

other roadway infrastructure and hardware. In addition, when a 

contractor or supplier is involved in a project, its headquarters staff 

is strengthened, whether in job additions or in job retention. There 

is a general boost to the economy also from the onsite and supplier 

jobs in the local economy. Contractors and employees are at a local 

community. They spend their money at the local restaurants, gas 

stations and so on. 

The number of jobs that one project or group of projects creates 

can be hard to estimate, particularly when one goes beyond the 

project site jobs. Estimates developed in the last few years by the 

Federal Highway Administration are that for each $1 billion of 

Federal highway program dollars—and that’s not taking into account the non-Federal match—results in 27,800 jobs, both direct 

and indirect. About a third of the jobs—— 

The CHAIRMAN. Maybe I could stop you on that, and just have 

you repeat that because this is one of the points—probably the single most important point we’re going to need to make to our colleagues. And maybe you can just repeat that so we emphasize it 

in the record. 

Mr. ZIEGLER. The most recent study that was done by the Federal Highway Administration indicates that for every $1 billion of 

Federal highway program dollars—that doesn’t include any of the 

state’s match on those Federal aid dollars—results in 27,800 jobs, 

and that’s both direct and indirect. And the direct jobs are about 

a third of that total. So, it would be about 8,000 jobs directly and 

the rest would be the indirect jobs. 

The CHAIRMAN. Thank you. 

Mr. ZIEGLER. A very significant number. 

We are confident, however, in addition to job creation, positive 

economic activity follows from transportation infrastructure investment. As you can see from the map, and I will show—my map is 

a lot harder to read than yours, Senator. 

[Laughter.] 

Mr. ZIEGLER. But you can see that—these are the ARRA 

projects—American Recovery and Reinvestment Act projects, and 

they’re both 2009 and 2010. ER projects—as I said, they’re mostly 

in the Devils Lake area. And then STIP projects, which is the general process that you talked about. It’s our Statewide Transportation Improvement Program projects. We have them all over the 

state. And what we do, as you said Senator, we have a 

prioritization program that identifies the greatest need at the time, 

and that’s where we put our money. And you can see that the entire state benefits from the jobs and—from the roads, first of all, 

that we schedule, and then from the jobs that come from that. 

The CHAIRMAN. Can I ask you, just on that point, Francis’ I’m 

sorry to interrupt. What is the—can you help us understand how 

you do prioritization? How do you determine where these dollars 

go—state and Federal—in your prioritization process? 

Mr. ZIEGLER. What we do is we have eight districts. There are 

eight district engineers. One is here today—Wade Swenson from 

the Devils Lake District. 

The CHAIRMAN. Welcome, Wade. 

158 

Mr. ZIEGLER. And what they do is they look at each one of the 

roads, and they’re benefited by what we call as a ‘‘Pave-Tech Van’’ 

that goes out and actually takes pictures of each road, and it 

records the roughness and it records the distress, the number of 

cracks, the number of alligator break outs, that are on that road. 

So, we have that information on what’s called our pavement management system, and then we have the judgment calls that each 

district engineer makes. So, from that, we take the worst of the situations and we say, well, these need to be fixed. And so, we go 

down this prioritization list and create the project list. From there, 

we go public with that list. We go out to each one of the media outlets in those areas of the districts, and we say: Here’s our plan. Do 

you have any input? 

From there, we get the input from the public, and oftentimes 

from cities and county commissioners and so on. They will provide 

their input to us. And from there, we create what’s called a ‘‘STIP,’’ 

the Statewide Transportation Improvement Program. And that’s 

how the process works. 

The CHAIRMAN. OK. 

Mr. ZIEGLER. The other thing that I do want to say is the final 

product is improved as we go around and do these projects. Logically it also saved money locally. All the cities that have Federal 

aid highways going through those cities also benefit from the fact 

that they don’t have to tax their local citizens in order to get the 

roads done. I can speak of quite a few projects. We’ve done one 

major project in Devils Lake, and then we’ve also done major 

projects like in Bismarck with the ARRA funding, seventh and 

ninth pair. And we’ve gone throughout the whole state and made 

sure that we have accomplished our tasks around the state, rather 

than just funneling it into one area. 

Another benefit that I’d like to highlight is safety. I don’t give a 

talk without having safety as being the No. 1 goal of the Department of Transportation. After all, our mission is to safely move 

people and goods. And so, rural transportation fatalities have been 

a concern, and, Senator, we’re taking it very serious. Our state now 

has more fatalities than we’ve had since the early eighties. And the 

Department of Transportation has been working with our partners 

at the Highway Patrol to see what we can do in the area of fatalities. Both a smooth roadway system and a good transportation system is certainly going to help with the fatality issue and the safety 

issue. 

These investments are important to the economic competitiveness of the state. You know, one of the things that our ag sector 

has always helped the country provide a positive—you know, a 

very positive export margin. And so, as we send goods abroad, 

America benefits from it. And so, the transportation is necessary 

to help make that work. 

Better highways and the availability of public transit also help 

us in our daily lives, ensuring access to school, medical facilities, 

work, and others. Our planning process at the DOT—we work to 

direct funding to projects that are prioritized, as I explained earlier, to provide these types of benefits. 

I’d like to now move into the surface transportation issues of the 

new transportation bill. Clearly, our ability to continue to invest in 

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surface transportation infrastructure in North Dakota will depend 

in large part on surface transportation funding levels. AASHTO, 

our Association of State Highway and Transportation Officials, has 

recommended, for the 6-year period from 2010 to 2015, a $375 billion program for highways and bridges, and 93 billion for other programs, and most of that is transit. 

The CHAIRMAN. So, if we just do the math for our colleagues, 

$468 billion in a 6-year program? 

Mr. ZIEGLER. That’s correct, Senator. 

The CHAIRMAN. $468 billion. When you first shared these numbers with me, I almost fell off the chair, when we were over in 

Dickinson. You remember that. 

Mr. ZIEGLER. I remember. 

The CHAIRMAN. It’s a tremendous amount of money—$468 billion. But that is the professional recommendation of the highway 

and transportation officials around the country? 

Mr. ZIEGLER. That’s right. 

The CHAIRMAN. OK. 

Mr. ZIEGLER. Beyond the overall funding level, however, to 

achieve continued progress in North Dakota, it is essential that 

rural states like North Dakota participate at least proportionately 

in any growth of the Federal highway and transportation program, 

both as to formula and other funds. 

In the House authorizing committee, a proposal has been outlined. The outline apparently calls for an increase in Federal highway program authorizations of the highway trust fund of about 110 

billion over the next 6 years. That would be 337 billion compared 

to 227 that the past bill had. The outline suggests that at least 50 

billion of that 110 billion is reserved for a new program only for 

metropolitan areas and that another 25 billion is reserved for large 

nationally significant projects. We don’t believe North Dakota 

would get any of those, Senator. 

The outline also refers to an infrastructure bank. The bank’s 

funds may not be readily accessible to rural states like ours. 

So, we see a minimum of 75 billion of the 110 billion that North 

Dakota may not have access to. 

The CHAIRMAN. And this is from the House authorizing committee? 

Mr. ZIEGLER. That’s correct, Senator. 

The CHAIRMAN. Just so people who are listening know, we always have problems with the difference between the House and the 

Senate. The House is based on population, and of course the big 

population states dominate. California has over 40 members in the 

House of Representatives. North Dakota only has one. I’ve often 

said I’d rather have our one than all 40 out there in California, 

but, nonetheless, they get 40 votes, and that creates a real problem. Thank goodness, in the Senate, every state has two. And the 

way we’re able to get a good result is we have a much more favorable formula in the Senate than the House does, and then we go 

to conference committee, and we negotiate. So, I think it’s important to understand that this is coming from the House authorizing 

committee—frankly, completely expected that they would favor the 

more populous parts of the country. 

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Mr. ZIEGLER. Senator, this proposal would also provide an increased share of transportation investment in transit, and we certainly recognized that and use transit to a large extent here in 

North Dakota. We support instead, however, rather than the increase that they’ve talked about, a proportional growth in highway 

and transit programs. We’re concerned with the reduced share of 

the transportation bill’s programs compared to our current law. 

And certainly, Mr. Chairman, we appreciate your efforts to avoid 

any such result in the final legislation. 

I’d also like to address the impact of inflation on our transportation program. And, Senator, you already touched on it earlier. 

But in the past 8 years, the highway construction inflation in 

North Dakota has increased by 11 percent per year. And I have a 

chart here that shows how those percentages are increasing. We 

have the trend line, and then we have the overall index. And what 

used to cost $1 in 2001 costs $1.88 today. 

The nation benefits from Federal transportation investment in 

and across rural states. I like to say that rural states serve as a 

bridge for truck and personal traffic between other states; it enables ag exports, as I said earlier, to serve the nation’s ethanol production and energy extraction industries. It’s a lifeline for remotely 

located and economically challenged citizens. It enables people and 

businesses to traverse the vast tracts of sparsely populated land, 

and it provides access to tourism facilities, which is our secondlargest industry. 

Senator we have details on each of those points, those bullet 

points, but in the interest of time, I will move right on to funding 

and financing considerations in my testimony. 

The CHAIRMAN. And your full statement, as we’ve indicated, will 

be made part of the record and is very helpful to us. 

Mr. ZIEGLER. OK. Thank you. 

The CHAIRMAN. Thank you for that additional detail. 

Mr. ZIEGLER. Moving on to funding and financing considerations, 

rural states like North Dakota face a number of serious obstacles 

in preserving and improving the Federal aid highway system in our 

borders. We are very rural. We are geographically large, have low 

population densities and extensive highway networks. 

Our large road network has few people to support it. In North 

Dakota, there are about 16 people per lane mile of Federal aid 

highway; nationally, it’s 129. Our low population and traffic density 

also means that tolls are not an answer to funding transportation 

needs in rural areas. Our budget to maintain—that is, to plow 

snow, seal cracks, do pothole patching—costs about $9,200 per mile 

per year. It takes about 2,000 cars per mile per day to generate the 

amount of revenue from state motor fuel taxes, just to pay for the 

maintenance. Very few state highways in North Dakota average 

2,000 vehicles per mile per day. 

A couple other points I’d like to make is that the Department of 

Transportation has gone into a Pavement Preservation Program. 

Timely maintenance of the roadway surface improves ride quality 

and extends the life of the roadway, and it also helps with loadcarrying capacity. 

While the program has been very effective, thin lift overlays can 

cause a problem for the future. As we add more thin lift overlays, 

161 

what happens is the roadway gets narrower. And our concern with 

that is that we are getting feedback from the public that they don’t 

like to see the narrower roads, that they like to see more of a 

shoulder on the road. That adds costs to our process. 

I want to move into increases in regulatory requirements. It 

takes about three to 4 years to complete a project that requires a 

full environmental review in our state. We have done projects 

quicker. An example is Memorial Bridge. We had that environmental impact statement finished in 18 months and actually got an 

award for it. But, fundamentally, it takes quite a while in order to 

go through the processes. And we’d just ask that we don’t have 

more; we have—we know the process well. We just don’t want to 

get into more regulations. 

We have been working with our national association on performance standards and performance measures. We believe they are 

very important. The State of North Dakota uses performance measures on our own. We have our own report card on how we’re doing 

in our performance. What we would ask of a national bill is that, 

while we fully expect the performance measures to be developed 

and be part of a bill, we ask that they be general in nature and 

that each state be allowed to establish its own specific target for 

those performances. 

My second last point, Senator, is that we would ask that legislation ensuring continuity of the program is important. It’s important 

the funding in such legislation be at levels as high as fiscal year 

2009 levels. Without continuity and adequate funding, the highway 

construction industry loses confidence and possibly reduce employment or postpone equipment purchases. 

Senator in conclusion, we consider it essential that the Congress, 

through the reauthorization process, recognize that significantly increased Federal investment in highways and surface transportation 

in rural states is, and will remain, important to the national interest. Our entire nation benefits from a good transportation network 

in and across rural states like North Dakota. With such legislation 

preserving program share for states like North Dakota, we will be 

better equipped to generate jobs and economic growth in North Dakota as well as meet statewide transportation investment needs. 

Senator that concludes my testimony. I’d be happy to answer to 

any questions you may have. 

[The prepared statement of Mr. Ziegler follows:] 

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The CHAIRMAN. Thank you very much, Francis. It would be my 

intention we go to the other witnesses and then come back for 

questions, but I would want just before we do that, before we go 

to the Mayor—you indicated that currently Federal aid accounts for 

52 percent of the current biennial budget without covering the Recovery Act money. Do you have a calculation of what that percentage would be with the Recovery Act money included? 

Mr. ZIEGLER. Yes, I do, Senator. It’s 58 percent. 

The CHAIRMAN. Fifty-eight percent with the Recovery Act money? 

Mr. ZIEGLER. That’s correct. 

The CHAIRMAN. OK. Because I’m sure I will get that question 

from my colleagues. Thank you very much for that testimony. I appreciate it very much, and I appreciate your service to the state. 

Next, we will go to Mr. Allen Orwick, who is the Mayor here in 

Michigan. 

We are delighted to have you here, Mayor. I appreciate very 

much your willingness to testify so that we can make our case to 

our colleagues in Washington about the need for resources for the 

more rural parts of the country, and delighted that you’ve taken 

the time to be here to help us with that task. Please proceed. 

STATEMENT OF ALLEN ORWICK, MAYOR OF MICHIGAN, 

NORTH DAKOTA 

Mr. ORWICK. Thank you, Mr. Chairman. I’m Allen Orwick, Mayor 

of Michigan, North Dakota, a small community of 345 people located in northeastern North Dakota. Our city is honored to host a 

Senate Budget Committee hearing on Infrastructure Investment: 

Creating Jobs and Fueling Economic Growth, being held here 

today, November 12th, 2009. I hope that our city proves to be a 

gracious host while in attendance. I personally want to thank Senator Conrad for his invitation to testify before your committee. 

In 2008, Michigan, North Dakota, celebrated its 125th anniversary. This event commemorated the accomplishments of our community and the individuals who have called this special place 


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home. When our founding fathers first established Michigan City 

in 1883, they could not have imagined the world in which we live. 

However, their sense of adventure, optimism, and community spirit 

is still found here today. It is with this mind-set that we work on 

a daily basis to make our community a better place for all who live 

and work here. Just as these pioneers did more than a century ago, 

we face the challenge of developing and providing a strong economic community, transportation system, and public infrastructure 

for our residents. 

Michigan is fortunate to have access to a major highway and rail 

line. These are significant assets to our community. Both are very 

instrumental in keeping Michigan a vibrant community. We are located on the Burlington Northern Santa Fe Railroad line which includes a transcontinental primary line reaching from Seattle to 

Chicago. This rail line provides an excellent source of transportation for goods and products being shipped to and from our local 

communities. Amtrak, North Dakota’s only passenger rail service, 

operates the Empire Builder from Chicago to Seattle and maintains 

seven North Dakota stations, the two closest being Grand Forks, 

North Dakota, and Devils Lake, North Dakota. Hopefully, someday 

our country will invest in a ‘‘fast train’’ system that will provide a 

quick and affordable transportation alternative to automobile and 

airplane transportation. This would be an excellent way to save energy and relieve the stress on our current systems. 

Our location on U.S. Highway 2, a major four-lane highway, allows those who do not live in our city the opportunity to utilize our 

retail, manufacturing, and service industries. All these sectors rely 

heavily on a strong transportation system to survive. We have one 

of North Dakota’s largest John Deere implement dealers located 

here. The owner feels that without U.S. Highway 2, his business 

would have a reduction in annual sales in excess of one-third. 

As North Dakotans, we need to drive great distances for employment opportunities, medical services, retail shopping, personal and 

professional services, and entertainment. Our local educational system, the Dakota Prairie School District, includes a majority of Nelson County. The grade school is located in McVille, North Dakota, 

and the junior and senior high school is located in Petersburg, 

North Dakota. These communities are 28 miles apart and are considered central locations within the district. Almost every student 

is transported somewhere daily during the school year. 

Maintaining our highway system is crucial to our survival. We 

cannot afford to neglect the roads on which our children and residents travel, sometimes in extreme weather conditions. Currently, 

a section of Highway 2 between Michigan and Lakota is in desperate need of repair. Hopefully, this will be addressed shortly. 

Within the city of Michigan, we have spent approximately 

$80,000 to repair curbs, gutters, and streets over the past 18 

months. We were fortunate to receive approximately $11,000 of economic stimulus funding to help offset this expense. Even with that 

aid, we have depleted our street fund and are not sure how we are 

going to address upcoming repair needs. As we look to the future, 

the City does not see how it will be able to maintain our current 

street system without funding from Federal and state agencies. 

172 

Michigan is currently in the process of a sewer and lagoon repair 

project that we hope to have completed in 2010. The estimated cost 

of the project is $1.3 million. We have been notified that we will 

receive economic stimulus funding for about 50 percent of the 

project. This funding will be of a great benefit to our citizens, allowing the City to reduce the cost assessed to our citizens at a 

more affordable level. 

The biggest threat to Michigan’s infrastructure and community 

as a whole at this time is the continual rise of Lake Laretta. Our 

runoff water is drained to the lake, which is currently at historic 

levels. Should Lake Laretta continue to rise, the water will move 

back toward the city causing flooding, loss of property and city infrastructure including our sewer system. We are currently working 

with the Nelson County Water Resource District to provide for a 

long-term solution to this problem. 

As far as our local economy, we have seen both ups and downs 

over the past couple of years. Our economy is very dependent upon 

the agricultural sector, but as we diversify, the national economy 

becomes more important to our businesses. 

The agricultural economy has been very strong with good crops 

and high prices the past couple of years. However, with current 

commodity prices, it looks as though that may be changing. This 

strength has proved beneficial to businesses that provide services 

and products for agricultural production. Our local implement dealer reports that these good years have resulted in increased sales 

and growth, allowing him to expand his work force by four positions. 

In contrast, when our school closed several years ago we were 

successful in bringing a wiring harness manufacturing company 

into our vacated school building. The facility was readied for them 

with the help of Federal funding. At their peak, the Fargo Assembly Company was running two shifts and employing up to 100 fullor part-time individuals. With the recent downturn in the national 

economy and increased competition as a result of this downturn, 

they have had to reduce their work force to 25 employees that are 

being limited to 16 hours per week. 

A recent addition to our business community is Heritage Arts 

Gallery and Gifts. This cooperative of local artists is located on the 

frontage road off of U.S. Highway 2. They have seen a decline in 

business as the national economy has slowed. They market their 

products to tourists throughout North Dakota but find their location on U.S. Highway 2 is their lifeline. However, restrictions 

placed on signage along the highway create a real roadblock in 

marketing their retail store to those same tourists traveling that 

lifeline. The manager feels that the tourism industry needs the 

support of state and Federal funds to allow for the establishment 

of new businesses and growth of those currently in operation. Not 

only do these funds need to be made available, but the businesses 

need help in accessing and utilizing the programs established for 

these purposes. 

Our most recent success story was the re-opening of our grocery 

store. In May of 2008, for the first time in our history, Michigan 

was without a grocery store. The community took on this project 

with our local Job Development Authority and raised $89,110 loVerDate Aug 31 2005 12:16 May 25, 2010 Jkt 000000 PO 00000 Frm 00178 Fmt 6601 Sfmt 6601 C:\DOCS\50924.TXT SBUD1 PsN: TISH
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cally through public and private donations. In addition, we were 

successful in applying for and receiving a $70,000 USDA Rural 

Business Enterprise Grant. The Michigan JDA purchased the 

building and equipment from the previous owner, replaced and upgraded equipment, improved the facilities, including making the 

store handicapped accessible. The JDA now provides the store 

building and equipment rent free to our new grocer. From October 

of 2008 to October 31st, 2009, a regional grocer ran the store until 

a local owner could be found. That local owner took over on November 2nd, 2009, and is celebrating her grand opening on Saturday, 

November 14th, 2009. This would not have been possible without 

the financial help of Federal funds. 

In closing, I feel that it is important that we have—that we continue to invest in economic development and infrastructure, as they 

both improve the quality of life of our residents. The investment we 

make today will yield dividends now and well into the future. 

North Dakota is fortunate to have a strong economy in comparison 

to many parts of our country. Now is our chance to bring that to 

the next level so that our children and grandchildren will have an 

opportunity to also call North Dakota home. 

Thank you for your consideration and the opportunity to speak 

before you today. 

[The prepared statement of Mr. Orwick follows:] 

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The CHAIRMAN. Thank you, Mayor—really excellent testimony, 

really exactly the kind of thing that we need in the record and 

we’re looking for, and you’ve certainly provided to us. So, I’m very 

appreciative of the testimony you’ve provided for the Committee. 

Why don’t we go next to Ben Vig, and then we’ll go back to questions for the panel? 

Welcome, Ben. Good to see you. 

STATEMENT OF BENJAMIN VIG, REPRESENTATIVE FOR THE 

TWENTY THIRD DISTRICT, NORTH DAKOTA HOUSE OF 

REPRESENTATIAVES 

Mr. VIG. Thanks for coming here, Senator, and good to be here. 

I’m Ben Vig. I’m from Aneta, and I’m also State Representative 

for the 23rd Legislative District, which encompasses Nelson, 

Griggs, Steele, Eddy, Benson Counties, and Spirit Lake Nation. 

I think it’s great that you’re having these field hearings across 

North Dakota to see our transportation infrastructure first hand, 

and to see how some improvements are needed before the next congressional transportation bill is in the Senate or the House. I know 

you had similar hearings out west along the Highway 85 corridor. 

The last 10 days, farmers have been busy to wrap up harvest. 

In the Legislature, I serve on the Agriculture Committee where I 

am reminded that farming and ranching is our state’s No. 1 industry, with one out of four jobs being agriculture-related. We wouldn’t 


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have a strong industry if it wasn’t for the transportation infrastructure that we have. 

As I was hauling soybeans to Finley a couple days ago, I was sitting in the line at the elevator surrounded by semi trucks that had 

Finley and Hope and Sharon and Cooperstown, Town of Hatton, on 

the side of the trucks. We all haul grain to the Finely farmers’ elevator because it is designated a 110-car unit grain elevator by Burlington Northern and Santa Fe. There was a process some 10, 15 

years ago where BNSF wanted to concentrate toward larger grain 

elevators and send longer trains, primarily the 110 units, to these 

elevators, where in the past, BNSF would send a 54-car train to 

these elevators. In concentrating on our grain elevators, all the 

farmers connect on the rural state highways and drive to town, and 

these are the farm-to-market roads. As time goes on, we need to 

renew our investment in the farm-to-market roads across North 

Dakota. 

We in the state have over 7300 miles in state highways that our 

citizens rely on. As the farm trucks get longer, the farm machinery 

gets wider, and more construction occurs in our region for wind development, our farm-to-market roads need to be rebuilt, wide 

enough to handle our equipment today. 

As I was driving the grain truck home from Finley the other day, 

a combine went halfway down the road ditch to provide room to 

pass. In what other industry does a person traveling on our roads 

have to drive down the ditch to provide room for others? Frankly, 

I think our farm-to-market roads need more attention. I have seen 

other states have passing lanes on their highway or wider shoulders so there’s no hazard to anyone. If progress was made for efficiencies in the railroad industry hauling our agriculture commodities to market, the ball was dropped when it came to farm-to-market roads and their efficiencies. We need to rebuild the foundation 

in our farm-to-market roads for safety purposes and for convenience to travelers. I would tremendously like to see this a priority 

in the next transportation bill. 

And I would remiss if I didn’t mention our county and township 

roads. We have had high-volume crops in the past several years, 

such as more corn production and barley, which resulted in more 

truck traffic than normal. And with the oil pipeline coming through 

Nelson County here and wind farm construction, our county and 

township roads have been getting used a lot and, you know, that’s 

great too. 

Last spring, we received a large amount of flooding from the 

melting snow, and the gravel was washed off the roads. The foundation on our township and county roads was being exposed, rutted 

up, and are in desperate need of repair. FEMA did provide emergency funds to put gravel back on and replace some culverts, but 

with over 75,000 miles of county and township roads in North Dakota, I think this is another vital part of our infrastructure that 

needs more attention. 

There are still a great number of people living on the land, working on the family farms, and we need a transportation system that 

we can be proud of—safe and convenient. 

Last week, I attended a conference in Bismarck on economic security and stability, which concentrated on people living in poverty. 

178 

The presenters at the conference mentioned that transportation 

makes up one-sixth of a family’s budget—or an individual’s budget. 

Whether a person is commuting to work or going to a ball game 

or traveling to the doctor’s office, transportation is a huge part of 

the budget. In communities like Michigan and Aneta, people are 

commuting to work, to school, to the doctor’s office, to a hockey 

game—it seems like we’re on the road all the time, and it costs 

money. 

Another aspect of our transportation system—it needs to include 

public transportation. Across my legislative district, I see people, so 

many of my constituents, live on a fixed income. Driving is quite 

expensive at the $2.80 a gallon for gas. Our communities have established senior citizen buses over the last several decades—our 

senior citizen buses for people to make trips to Devils Lake, Grand 

Forks, and Fargo. I know my grandma, like so many senior citizens, boarded the Steele County bus to make trips to Fargo, and 

the public bus is a necessity for her to go to the mall or to the drug 

store or an eye clinic as she does not like the urban driving. Public 

busing is very important for the people in our communities. Ensuring we have funds available for buses, preferably fuel-efficient 

buses, funds for bus driving and operating budgets should be a 

huge priority in the next transportation bill. 

Portions of our country are working to develop high-speed rail to 

commute from city to city. As you know, we have Amtrak that travels through Michigan with depots in Grand Forks and Devils Lake. 

Developing a mass transit system that is efficient to operate for the 

public entities involved and is friendly to the family’s budget is always a tough act to balance, but when public transportation brings 

less stress on individuals for traveling through crowded city streets 

or driving long distances—my grandma mentioned, why didn’t she 

take the bus years beforehand? I think we need to start advertising 

the use of public transportation. With people working longer, working harder, and their income staying relatively stagnant, I think 

public transportation and mass transit is a way to save money 

while traveling. 

For putting people back to work in a national economic recession, 

I think rebuilding our infrastructure is a primary place to being. 

The American Recovery and Reinvestment Act was a great beginning, as it invested in our communities, not overseas; gave new 

projects to construction crews building the roads and waterways 

and many projects in our communities. And by rebuilding our 

farm-to-market roads so they can last another 50 years, we will 

have created jobs, put people back to work in our local communities, much like what Governor Guy did back in the 1960’s, when 

we built the state highway system in the day and the upgrades 

that took place across the state. 

With that, we need to rebuild the foundations of our county and 

township roads too. As I mentioned, farming and ranching is still 

our No. 1 industry in North Dakota, and we need the infrastructure to handle another 50 years or more of prosperity and people 

living on the land. We also need to look at building up public transportation, mass transit for North Dakota. Building the infrastructure so we can travel with ease to the doctor’s office, to school, or 

179 

a hockey game, we will have improved the quality of life, cut costs 

for the family budget. 

With all this, we often focus on putting people back to work or 

creating jobs in our community, but I asked some friends who are 

still in college and a couple of friends who are in the work force 

now about what it takes to live in North Dakota and what it takes 

to live in our communities, and they all said ‘‘Money.’’ We all need 

to have a salary that we can live on. After all, transportation is 

roughly one-sixth of a family’s budget. You know what health care 

costs on a family’s budget and what education costs are on a family’s budget. As expenses continue to rise and income remains stagnant, $10 an hour doesn’t pay many bills anymore. You probably 

have noticed as well the agriculture commodity prices have fallen 

dramatically too. Cutting expenses is always a priority in families’ 

budgets, and I think working toward efficiency in transportation is 

a good step in the right direction. 

I would like to thank you again for coming to Michigan. The 

Mayor is here. I know he works hard on keeping the Main Street 

in town full and people coming to town and a beautiful city. And 

Francis Ziegler—I thank him for the work at the DOT. I know 

we’ve put many projects across the state, some state funding and 

American Recovery and Reinvestment Act. So, thank you guys for 

the work here, and I thank everyone for turning out. 

[The prepared statement of Mr. Vig follows:] 

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The CHAIRMAN. Thank you, Representative Vig—excellent testimony as well. We appreciate it very much. 

Let’s turn to, quickly, some of the key issues that we’re going to 

face when we get back to Washington, because here’s the problem 

that we’ve got: Director of Transportation Ziegler has pointed out 

that the national association of transportation leaders have identified the need in this country over the next 6 years for transportation—highways, bridges, transit, and the rest—at $468 billion 

dollars. 

Mr. Ziegler, do you have available to you the amount of money 

that the trust fund, as currently constituted, could provide over 

that period of time? 

Mr. ZIEGLER. Senator, it’s my understanding that the trust fund 

currently brings in, in gas tax, about 32 billion per year. So, taking 

that times 6, would be $192 billion. 

The CHAIRMAN. And 192 billion subtracted from 468 is 276 billion, right? 

Mr. ZIEGLER. Right. 

The CHAIRMAN. So, we’ve got a $276 billion hole over the next 

6 years if we are going to meet the amount that the transportation 

leaders of the country in all of the states have determined is necessary to continue the program as it is, and expand it for the popuVerDate Aug 31 2005 12:16 May 25, 2010 Jkt 000000 PO 00000 Frm 00188 Fmt 6601 Sfmt 6601 C:\DOCS\50924.TXT SBUD1 PsN: TISH

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lation increases that we have had and that we will continue to 

have over that 6-year period. Isn’t that the basis of the forecast? 

Mr. ZIEGLER. That is correct. 

The CHAIRMAN. So, we got a big problem here. We’ve got a hole 

that is much bigger than the funding source—we’ve got a need 

much bigger than the funding source. In fact, the size of the hole 

is bigger than the funding source. 

Mr. ZIEGLER. Right. 

The CHAIRMAN. And what would happen, Mr. Ziegler, in your 

judgment, in the country and specifically in North Dakota, if we 

were not to have resources of the amount recommended by the 

transportation professionals around the country? 

Mr. ZIEGLER. Senator, given the 32 billion that the trust fund 

brings in now, if that was the extent of the funding, it would cut 

our Federal aid approximately in half. 

The CHAIRMAN. It would cut our Federal aid approximately in 

half? And what would that mean—what would that mean to the 

road and bridge network across the state of North Dakota? 

Mr. ZIEGLER. Currently, the Department of Transportation does 

approximately 200 projects per year, and that’s for both roads and 

bridges, and that includes the county roads under the Federal aid 

system. If you cut that in half, I think everybody recognizes the 

fact that we’re only going to be able to do half as much. And it’s 

going to provide—it’s going to create an infrastructure that’s going 

to have bridges that may have to close; it’s going to have roads that 

are going to be rougher and they’re not going to meet the standards 

of today. But the fact is that the entire transportation system will 

deteriorate. 

The CHAIRMAN. Mr. Ziegler, I have developed great respect for 

your professionalism over the time we’ve worked together. You are 

a straight shooter. If you were to tell the people of North Dakota, 

on a scale of 1 to 10, the seriousness with which you view cutting 

the number of projects that you could do in half, what that would 

mean to the road and bridge system in North Dakota—10 being extremely serious, 1 being not so bad. Where would you put it if— 

on a scale of 1 to 10, 10 being extremely serious, 1 being not so 

bad? Where would you put it if we had to cut the funding and the 

program essentially in half? 

Mr. ZIEGLER. Senator, it would be a sliding scale. I would start 

out by saying, initially we would be in that 6 to 7, as a rating, but 

it doesn’t take very long—two, 3 years down the road, and we’re 

looking at a 10, because what happens is, as time goes on, the infrastructure deteriorates. And so, maybe we can live for a year or 

two with less funding, but that transportation system keeps deteriorating, it will deteriorate to the point where it becomes a very 

serious issue, which brings it to that 10. 

The CHAIRMAN. And so, help us understand the way the current 

trust fund works, the funding mechanism that’s available. How is 

the trust fund currently funded? 

Mr. ZIEGLER. The trust fund is currently funded with the gas tax 

of 18.4 cents per gallon on the Federal side, and then within the 

state, we have a 23 cents per gallon that’s added onto that. 

The CHAIRMAN. OK. So, the Federal share is funded by 18.4 

cents a gallon. 

184 

Mr. ZIEGLER. That is correct. 

The CHAIRMAN. The state share is 23 cents a gallon. Is that correct? 

Mr. ZIEGLER. That is correct. That is correct. 

The CHAIRMAN. So—and the reality is that funding level doesn’t 

come anywhere close to meeting the projected need? 

Mr. ZIEGLER. That is correct. 

The CHAIRMAN. And so, either we are going to have to cut dramatically or we’re going to have to find some other funding source 

or, for example, increase the gas tax substantially. Would that be 

a fair conclusion? 

Mr. ZIEGLER. That’s—it’s a fair statement to say that a revenue 

source will have to be found. 

The CHAIRMAN. A revenue source will have to be found. Either 

increasing gas tax or some other source of revenue? 

Mr. ZIEGLER. Yes. 

The CHAIRMAN. You know, it strikes me, as we study this issue, 

that the world is changing, and changing rapidly, with respect to 

funding a transportation system solely with gas tax. And I say that 

because you look at what’s happening to technology. We’ve got the 

Chevy Volt coming along—they’re not going to use gasoline. They’re 

going to use electricity. We have other cars that are being developed that are also going to use other sources. So, there is not going 

to be any gas tax revenue from those vehicles. We have vehicles 

that do exist getting much better mileage. I see almost every night 

on television one manufacturer after another talking about the fact 

that their cars get more mileage than their competition and far 

better mileage than they have in the past. That means reduced 

revenue for the highway system. 

Mr. ZIEGLER. That’s right. 

The CHAIRMAN. So, you know, if we kind of think ahead here, if 

we’re going to have a lot of cars that run on electricity, not running 

gasoline, and we’re basing all of the funding on a gas tax, does it 

strike you, Mr. Ziegler, that we’d probably better think about alternatives to a system that is solely financed by gas tax? 

Mr. ZIEGLER. Yes, it does, Senator. 

The CHAIRMAN. And the professional organization that includes 

the transportation leaders across the country—you and I were visiting before we began, and I—as I understood it, you were explaining that they have come up with a number of options for additional 

and different sources of funding. Is that the case? 

Mr. ZIEGLER. Senator, that is correct. The Commission on Transportation Policy and Funding that was created—I believe it was a 

bipartisan commission that did about 2 years of study. They went 

around nationally and sought input from leaders in transportation. 

They built a lot of the scenarios to what’s going to happen in the 

future. 

Your point about the Chevy Volt is well made, and understand 

there are new cars coming into the market that will be in that 60- 

mile-per-gallon range—a significant decrease in utilization of gasoline and energy. While, as a country, that is very positive, we can 

be energy self-sufficient from a transportation perspective, it puts 

us in a quandary. 

185 

And, therefore, this commission, as they were talking about the 

issues, went through and created a whole menu of options of what 

those revenues could be. And I don’t have those uppermost in my 

mind, but some of them are PPPs—public-private partnerships. 

While North Dakota hasn’t used public-private partnerships, which 

often relate to tolling because you sell the infrastructure and then 

you have—those investors toll it so that they can get their investment back out of it, tolling in North Dakota wouldn’t work because 

we don’t have enough cars to make tolling pay for itself. 

North Dakota has used public-public partnerships I’ll share with 

you. We’ve gone into major cities—Fargo, Minot, Grand Forks— 

where the local governmental agencies will say, OK, you need some 

help on this? Interstate will help you. In fact, Fargo next year is 

going to be helping us pay for one lane of I–94 between 45th and 

29. So, they’re stepping up to the plate. But not every community 

can do that. So if—— 

The CHAIRMAN. Michigan—let’s ask the mayor. Could you do 

that? 

Mr. ORWICK. We can’t fix our potholes anymore. 

The CHAIRMAN. Yes. 

Mr. ORWICK. And we’re talking—— 

The CHAIRMAN. I mean, you can’t take care of your local situation. 

Mr. ORWICK. That’s right. That’s correct, Senator. 

The CHAIRMAN. Well, other ideas that they came up with? 

Mr. ZIEGLER. Senator, like I said, I can’t remember all, but the 

public-private partnerships, tolling, was one. VMT—— 

The CHAIRMAN. And tolling—let’s just be very clear. We need it 

on the record here. In a state like ours, tolling is not going to work, 

is it? 

Mr. ZIEGLER. It’s not going to work. 

The CHAIRMAN. And it can’t possibly work because we don’t have 

the amount of traffic to have the tolls finance the infrastructure investment. 

Mr. ZIEGLER. That’s correct. They had several other ideas, but 

the one that comes to mind is the VMT, which is vehicle miles 

traveled, and what that means is that for every—it becomes more 

of a user fee, rather than a gallon charge or tax. It becomes a user 

fee. If you put X number of miles onto your vehicle at so many 

cents per mile, that would be the charge that you’d have. 

The CHAIRMAN. And, you know, we’re going to have—it seems to 

me we’re going to have to have that as a component or we’re going 

to have to have some other source dedicated to transportation, or 

we’re going to see a dramatic deterioration in the quality of our 

transportation system in a state like North Dakota. 

Mr. ZIEGLER. That is correct. 

The CHAIRMAN. Is that a fair conclusion? 

Mr. ZIEGLER. It’s a fair conclusion. 

The CHAIRMAN. And when we look at this vehicle miles traveled—for example, if somebody buys a Chevy Volt, they would have 

some kind of gauge or some kind of meter that would say how 

many miles they’ve traveled, and then they would get billed for 

that because otherwise they’re not going to contribute at all to the 

transportation network that they rely on, and that’s not fair. It’s 

186 

not fair to have just those who are on gas-powered vehicles, dieselpowered vehicles paying to provide a network for those of us who 

might be driving different kinds of vehicles. I mean, I must say I’m 

kind of intrigued with getting a Chevy Volt when that comes out, 

but, you know, they’ve got to be able to contribute, too, to the road 

network that they’re using. 

Mayor, they’ve alerted me we’re coming to the end because we’ve 

got to go on to New Rockford for an event there this evening. Anything that you would want to add to this discussion? You’ve said 

very clearly it’s not going to work for you to have public-public 

partnerships. You have a hard time meeting the needs that you 

have locally now. And do I—can I conclude from your remarks on 

the importance of transportation here that you are open to some 

additional source of revenue to support the transportation system 

in this state and around the country? 

Mr. ORWICK. Senator, I think it’s important, especially in a rural 

state like North Dakota, that we have a transportation system. 

Without it, we couldn’t live here. Physically, we couldn’t live here. 

It has to be some sort of a mechanism put in place to make the 

process of bringing that revenue into the Treasury a fair method, 

because those of us who choose or who are able to live here have 

to drive 60 miles, 120 miles round trip to work, some people. Compare that to somebody living in New York City who doesn’t. So—— 

The CHAIRMAN. My daughter lives in New York, doesn’t even 

have a car. 

Mr. ORWICK. Yes. And so, she’s not helping at all either, is she? 

The CHAIRMAN. No. I will remind her of that. 

[Laughter.] 

Mr. ORWICK. Tell her the mayor—— 

The CHAIRMAN. I don’t think she’ll take it well. 

Mr. ORWICK. Tell her it was the mayor of Michigan, not—— 

The CHAIRMAN. OK. That helps. 

Mr. ORWICK. So, I think that that’s one of our concerns, is that 

it’s expensive enough to live here now—— 

The CHAIRMAN. Yes. 

Mr. ORWICK [continuing]. And so that we—if it gets to be too 

cost-prohibitive, we won’t be able to maintain—to live here and utilize the roads that are out here. 

The CHAIRMAN. Yes. Ben, anything that you would want to add? 

Mr. VIG. Well, thank you, Senator. You’ve covered—you guys 

have covered quite a bit here with, you know, the whole system is 

funded right on gas tax, and so we need to look at diversifying 

some of the funding sources. And I’d reiterate a little bit, we need 

to work toward efficiencies in transportation so we can cut down 

on some of the family budgets, because it’s expensive to travel to 

Forks or Devils Lake and round trip some days. Yes. The efficiencies are a priority. 

The CHAIRMAN. Yes, it’s very clear that public transportation is 

going to have an increasingly important role. 

Mr. VIG. Yes. 

The CHAIRMAN. You know, we all love our cars, you know? I’m 

as guilty of it as anybody. I’ve got a big, old Buick Park Avenue— 

a 1999 Buick Park Avenue. And I’ve put almost as much money in 

it in the last 3 weeks as the car is worth. 

187 

[Laughter.] 

The CHAIRMAN. I’m thinking, well, wait a minute, what’s happening here? 

Let me—we’ve just got a few minutes left, but I want to make 

sure that if there’s anybody in the audience that would want to 

comment for the record on transportation, that they have that opportunity to do so. There’s a microphone right here. If you’d just 

go to the microphone, identify yourself for the record so that we 

capture that in the official record? 

Odell, any statement you’d want to make. 

Mr. FLAAGAN. Yes, Senator. I’m Commissioner Flaagan from Nelson County here, and—— 

The CHAIRMAN. Odell Flaagan, for the record. 

Mr. FLAAGAN. Yes. And the reaching we do in the counties is 

very important for the Federal highway bill, because without that, 

for every county in the state, it would be losing a lot of money, because we can’t afford it when we go to Bismarck to reach secondary 

roads and we get a new Federal highway report, and they say, 

well, you’re going to be short 100,000 this year, it’s not helping us 

out in Nelson County at all. So, I think you’ve got to work very 

well in Washington because that’s got to be improved somehow. 

And I think maybe on funding you might have to go to registration 

on vehicles and maybe raise the gas tax to get other options, because we need the highway bill. It’s very important. And not a 

cheaper one—— 

The CHAIRMAN. Yes. 

Mr. Flaagan—to look forward to, Senator. 

The CHAIRMAN. You know—— 

Mr. FLAAGAN. Thank you. 

The CHAIRMAN. I appreciate that, and you can see these options—none of them are very attractive, you know? Honestly—raising the gas tax with the price of gasoline going up as much as it 

has. Of course, it’s back down now some from what it was. But, 

still—I mean, if we look back historically, these prices are high; 

they’re low compared to what people in other countries pay. You 

know, in Europe they’re paying 4, 5, 6 bucks a gallon. Of course, 

they have different measurements in those countries. But if you do 

an equivalent—do you know what the equivalent would be, 

Francis? What they’re paying in Europe for our gallon? 

Mr. ZIEGLER. Senator, I’ve heard that it is 5–6 dollars a gallon—— 

The CHAIRMAN. Yes, I think so. 

Mr. ZIEGLER. And that is the equivalent. They’re typically in liters—— 

The CHAIRMAN. Oh, yes, they’re in liters. Right. 

Mr. ZIEGLER. But that is—that’s already been converted. 

The CHAIRMAN. Yes. So, we’d be talking dramatically more that 

they’re paying. And, of course, as a result, as Ben says, they’ve chosen to go into more systems. 

Anybody else from the audience that would want come to the 

microphone, be identified for the record, and give us your input for 

the Committee’s deliberations on this next transportation bill? 

188 

I don’t want to close anybody off. I know I’m getting the high 

sign that we’ve got to be on the road to get to New Rockford in 

time. 

Let me just close then by thanking especially the witnesses. I’m 

delighted, Mayor, that you were here. Ben, thank you for your contribution. Francis, as always, I have appreciated so much your 

input at the hearings we’ve held around the state. We’re going to 

need to continue to do these because the committees of jurisdiction 

have again made clear to us that unless we have had hearings with 

respect to any add-on projects, they’re just not going to get considered. 

So, anything that you want to bring to our attention, we should 

make sure we have a hearing on so that we’re covered under that 

rubric. I think we’ve done some good work around the state out 

there on 85 and 52, but if there are others that you want to make 

sure are eligible for any add-ons above formula funding, we should 

make sure we do hearings on them. So, I’d welcome your input on 

that. 

We also need to think, I think—I think we need to expand our 

analysis of what options might be best for us, that we are pushing 

for in the funding fight that’s to come. 

And thank you all, to people from Michigan and the Michigan 

area who have come to this hearing. We very much appreciate that, 

appreciate the hospitality of the community of Michigan in holding 

this Senate Budget Committee hearing on a topic that’s critically 

important to our region, our state, and to the country itself. 

With that, the Committee will stand in adjournment. 

[Whereupon, at 3:39 p.m., the hearing was adjourned.] 

(189) 

FIELD HEARING ON COMMUNITY ECONOMIC 

DEVELOPMENT 

FRIDAY, NOVEMBER 13, 2009 

U.S. SENATE, COMMITTEE ON THE BUDGET

Cooperstown, North Dakota 

The Committee met, pursuant to notice, at 10 a.m. in Cooperstown, North Dakota 

Hon. Kent Conrad, Chairman of the Committee, presiding. 

Present: Senator Conrad. 

[presiding]. 

OPENING STATEMENT OF SENATOR CONRAD 

The CHAIRMAN. I now call to order this hearing of the Budget 

Committee. This is an official hearing of the Committee. So we will 

be operating under the rules of the U.S. Senate, and an official 

record of this hearing is being kept. 

I especially want to welcome our distinguished witnesses today. 

They include Becky Meidinger, the Development Specialist at the 

Cooperstown-Griggs County Economic Development Corporation; 

Beth Berge, the Chief Operating Officer of the Griggs-Steele Empowerment Zone; and Keith Monson, the President of M-Power. 

This hearing will focus on how we can encourage economic development in Griggs County and the surrounding region. We’ll have 

a particular focus on the impact of energy investments. 

I want to acknowledge the mayor, who is here. We’re delighted 

to see you, Mayor. If you’d like to say a few words, we would certainly welcome that. 

The Mayor. Well, just a brief comment. I want to welcome to everyone here to the Senate Budget hearing, and they include the 

rain in Cooperstown. And I look forward to the information that 

we’re going to receive. 

The CHAIRMAN. Well, I thank you for that. I thank you for the 

welcome to Cooperstown. And I want to say the importance of this 

hearing is that we establish in the record the reasons and rationale 

for the continued support—Federal support—for the empowerment 

zone. As you know, these matters have to be periodically reviewed 

by the Congress of the United States. And it is important that we 

establish in the record the reason and rationale for it, what it has 

accomplished, and what it seeks to do for the future. 

I would like to first note that North Dakota has fared better than 

the rest of the country during this recession. Nationally, the unemployment rate has climbed from 4.9 percent in December of 2007 

to 10.2 percent in October of this year. By comparison, in North 

190 

Dakota the unemployment rate has risen from 3.1 percent to 4.2 

percent over that same period. It is important that we continue to 

make investments in the critical infrastructure, including highways, to enable North Dakota’s economy to continue to grow and 

diversify. 

Historically, North Dakota has faced different issues with respect 

to unemployment. The problem of out-migration has been a distinguishing feature for our state. We need to ensure there are good 


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jobs to keep our workers, particularly our young people, who represent the future of our state, here in North Dakota. 

Let’s go to the second slide, if we can. This is John Fuher, by the 

way. John is my agriculture staffer in Washington. He’s from 

Edgeley, North Dakota, and, I might say, did an outstanding job 

on the Farm Bill. 

The CHAIRMAN. The stimulus package passed earlier this year 

certainly was not perfect, but it’s clearly having a positive impact 

on economic growth. Economists have now estimated that stimulus 

contributed significantly to economic growth in 2009. This chart 

shows what the economists are suggesting was the impact on economic growth of the stimulus package by quarter. Stimulus funds 

are expected to continue to aid economic growth into next year as 

additional funds flow into the economy. 

192 

North Dakota has been awarded so far about $700 million. This 

funding is going to highways, infrastructure and water projects, 

education, energy projects, law enforcement, veterans, and housing 

in our state. 


50924.118
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Let’s go to that fourth slide, John, if we can. 

Over $60 million of stimulus funding will be directed toward a 

variety of energy projects statewide; $25 million is set aside for the 

North Dakota State Energy Program. The goal of that program is 

to improve energy efficiency, reduce demand for electricity across 

the state, and help families reduce their energy bills. Another $25 

million will go toward home weatherization. This will help families 

insulate their homes and take other steps to ensure that they are 

not faced with even higher home heating bills during the winter. 

And $11 million will go to energy efficiency and conservation block 


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grants which are used to retrofit government buildings to save taxpayer money. 

Fifth—let’s go to that next one, if we can—we call this ‘‘capturing 

the wind.’’ Importantly, North Dakota is at the cutting edge of the 

drive to develop alternative sources of energy. Of particular importance to this part of the state is the fact that we are rapidly becoming a leader in wind energy. Yesterday, I had a chance to visit the 

wind energy farm close to Langdon, North Dakota. Later today, I 

will be visiting the wind energy farm, the Ashtabula installation 

near Finley. And this is making a significant contribution to our 

economy in this part of the state. 


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We know that North Dakota has the greatest on-land wind energy potential of any state in the nation, and we are often called 

‘‘the Saudi Arabia of wind.’’ Selling wind power and other kinds of 

energy to Chicago and the other big markets will be a tremendous 

engine for economic growth in this part of the state. Companies 

across North Dakota, including in and around Griggs County, are 

investing in wind power. Investment in wind energy is projected to 

grow to over 2600 megawatts by 2012. 

You know, you think about where we started. That kind of investment in North Dakota is dramatic. Florida Power and Light 

told me yesterday they have already invested a billion dollars in 

wind energy in our state. We were trying to think when I had met 

with the board of directors of Florida Power and Light in Florida. 

I think it was eight or 10 years ago. I was asked to come and meet 

with their board of directors in Florida because they were interested in beginning to make wind energy investments in North Dakota. 

At that meeting, they told me that they were prepared to invest 

$1.3 billion in North Dakota if two things happened: if we extended 

the wind energy credit and, No. 2, if we could get the grid opened 

up so that they could deliver power from North Dakota down into 

the Chicago market. We got the wind energy credit extended. I authored that legislation, and my colleagues adopted it. We have had 

less luck opening up the grid. As you know, one of our big challenges is getting through Minnesota and through Wisconsin down 

into the Chicago market. Now, we’ve had some ability to move 

power out of the state, but not as much as we need to fully develop 

the potential of wind energy. 


50924.156
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I have introduced legislation, along with other colleagues, that 

would provide the ability to open up those corridors so that we 

could deliver wind energy from where it can be produced to where 

it is needed. 

Griggs and Steele Counties are uniquely positioned in terms of 

economic development, because one of only ten USDA Rural Development Empowerment Zones in the entire country is located here. 

Since receiving this designation in 1999, now 10 years ago, the 

Griggs-Steele Empowerment Zone has received $17.7 million in 

Federal money. The empowerment zone is driven by four key principles in encouraging opportunities for rural economic growth: One, 

economic opportunity is the No. 1 priority for the Griggs-Steele 

Empowerment Zone. The goal is to create jobs. Second, sustainable 

community development recognizes that successful economic development can only work when it is part of a coordinated and comprehensive development strategy to ensure a stable and high quality of life for residents. Third, community-based partnerships are 

needed to ensure that economic development efforts involve local 

individuals. And, fourth, a strategic vision for change ensures that 

a community shares a common view for revitalization. 

Let’s go to that seventh slide. This is the last one. 


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The Griggs-Steele Empowerment Zone has been involved in several recent projects for the area, including DataCom International. 

DataCom has located a division of their company here in Cooperstown. The Griggs County Museum—the empowerment zone helped 

fund projects at the museum. And the Cooperstown Community Activity Wellness Center—the empowerment zone provided grant 

funding for the wellness center to purchase new equipment. 

I look forward to hearing from our witnesses today about 

otherareas where the empowerment zone is assisting with economic 

development in the region, and I’m particularly interested in hearing what future energy investments are needed to support economic development. 

With that, we will turn to our witnesses today. And I’m delighted 

to have such a distinguished group of witnesses: Becky Meidinger, 

the Development Specialist at Cooperstown-Griggs Economic Development Corporation, will be speaking on the role of the economic 

development corporation in spurring economic and industrial 

growth in Cooperstown and the surrounding area. Beth Berge, the 

Chief Operating Officer of the Griggs-Steele Empowerment Zone, 

will speak to the role of the empowerment zone in the revitalization of Griggs and Steele Counties. And Keith Monson, the President of M-Power—M-Power is a locally owned wind power developer located in Finley. Its Luverne Wind Farm generates approximately 150 megawatts of wind and is sited on privately owned 

farmland. One hundred and fifty megawatts of wind energy—I 

hope I’ve got those numbers right, Keith, but you’ll correct me if 

I’m wrong. 

Welcome, witnesses. Let me just say that, under the rules of the 

Senate, witnesses are to be permitted to make their full and comVerDate Aug 31 2005 12:16 May 25, 2010 Jkt 000000 PO 00000 Frm 00203 Fmt 6601 Sfmt 6601 C:\DOCS\50924.TXT SBUD1 PsN: TISH

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plete statements without being interrupted for people either agreeing or disagreeing with their testimony. And we’ll observe that rule 

here. And when the witnesses are complete, we’ll have a time for 

questioning, and then we’ll also open it up to people who are here 

in the audience, if they would like to add to the hearing record. 

Again, I want to emphasize the importance of this to continue 

support for these efforts. It is critically important that we lay on 

the hearing record what has been accomplished and what the view 

is to what can be done in the future. 

With that, Becky, why don’t you proceed? 

STATEMENT OF BECKY J. MEIDINGER, DEVELOPMENT SPECIALIST, COOPERSTOWN-GRIGGS COUNTY ECONOMIC DEVELOPMENT CORPORATION 

Ms. MEIDINGER. Thank you, Senator Conrad, and thank you for 

the opportunity to present this information today, and welcome to 

the guests here. 

I am the Development Specialist for Cooperstown-Griggs County 

Economic Development Corporation, serving the community of 

Cooperstown and businesses within Griggs County. I’m also a 

member of the executive board for the South Central Dakota Regional Council, which serves a nine-county region whose focus is 

community economic development. And I am also a member of the 

board of the Economic Development Association of North Dakota, 

whose focus is to educate and connect developers throughout the 

state, addressing community economic development issues and programs. Through my board affiliations and my position for Griggs 

County, I have a good understanding of the community economic 

development issues and projects that our local community, our region, and the state are addressing. 

My focus today will be to bring awareness to the local community 

economic development projects and touch on some regional issues. 

The top industry in North Dakota is agriculture, followed closely 

by tourism. Our region is a prime location for agriculture, and our 

tax base for Cooperstown and Griggs County depends on our farmers and the agricultural businesses located here. We are also fortunate to be a key location for several manufacturing companies, both 

large and small, which enables our economy to be somewhat diverse. Additionally, we are beginning to capitalize on tourism opportunities for our county and region, particularly with the newest 

state historic site, the Oscar 0 Minuteman Missile facility. Cooperstown is also the location for the Cooperstown Medical Center, 

which is one of the largest employers within the county and a 

strong community asset. 

In order to understand what is happening with regard to jobs 

and the economy in our local communities, we need to understand 

that many of our economic successes or failures depend on the 

leaders and entrepreneurs within our community, and how willing 

they are to take the risks necessary to be proactive rather than reactive. Economic development in rural communities cannot take 

place unless community development is happening at the same 

time. Without the support of the community leaders, businesses 

will not grow and succeed. 

199 

Fortunately, we have the leadership in place that supports successful businesses and expansions from the existing businesses, 

which has in turn spawned other business ventures and opportunities. While the rest of the country has been struggling, as Senator 

Conrad mentioned, with the high unemployment rates, plant closures, and a major downturn, North Dakota has been able to show 

a considerable budget surplus and has the lowest unemployment 

rate in the nation. However, in the rural communities and in Cooperstown, we are beginning to see the impact of that economic downturn. 

I recently spoke to two of our larger manufacturing companies, 

and they’ve had some negative impacts, which have included a few 

layoffs and others being cut back by their jobs by 50 percent. Fortunately, they are beginning to see an increase in sales, but one of 

the companies stated that if they didn’t have their international 

sales, they would have had to close up shop. The differences in the 

euro and dollar have impacted their sales considerably. 

Due to the weather constraints, the farmers in the area have also 

struggled to get their crops off the fields, and that in turn has affected numerous local ag businesses and retail businesses. 

Fortunately, the Cooperstown Medical Center has been successful in hiring two new doctors and another nurse practitioner, which 

brings their total up to five for their providers. Through outstanding fiscal management and being able to develop a hospital 

district for the county, they were able to positively impact their 

bottom line and raise some of the wages as a result. 

Some of the issues that we deal with in rural communities, especially in rural North Dakota, are our aging population and out-migration of our younger adults. Our state has one of the eldest populations in the Nation per capita, but a low unemployment rate. 

Many of our elderly are continuing to work well past retirement 

age, if there is such a thing, many times because there are no other 

workers to do the jobs, and this is especially true in the farming 

community. Many of the larger farmers need to hire help to work 

their fields and find it very difficult to hire qualified people who 

want to work, so they continue to engage the ‘‘retired’’ farmers to 

help during the critical times. 

And there is also an extended need in these areas for some of the 

younger workers, but many of the local workers are not capable of 

driving the large farming equipment or have no desire to work the 

long hours or, quote, ‘‘get their hands dirty,’’ unquote, doing these 

types of jobs. Some farmers are choosing to access the agricultural 

visa immigrants, and this brings new people into the rural areas, 

many of whom are working to secure their green cards so they can 

stay in our area, which brings us new residents. 

There are also these types of issues with the manufacturers as 

well. And in our rural communities, we also have issues securing 

the services of plumbers, electricians, and heating and cooling 

tradesmen, again due to the aging population and many of them 

being close to retirement age, not wanting to take on large projects. 

Our school system no longer provides vocational education. It is 

difficult to encourage students in high school to consider these 

fields, as they are not exposed to the benefits of working in those 

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grams available in the state, but many younger people will choose 

to move to one of the larger communities to take advantage of 

these programs as they will have more opportunities for training 

and monetary advantages in the larger communities. 

Our median household income in North Dakota and Griggs 

County has been rising slowly, according to the state data center, 

over the past few years, but is still well below the national average. 

Programs are available through the work force training and job 

service and through some of the programs that the empowerment 

zone provided, to increase the skill levels of the current work force, 

and there has been funding available through extended state programs to help businesses with this training. So this, in turn, has 

helped increase the wages for the employees and the efficiencies of 

the company. 

We still have a long way to go, but are moving in a positive direction. North Dakota also has an image problem with our weather 

that is very hard to overcome and especially difficult in the rural 

communities. This is a hard perception to overcome, but because of 

our current, positive state of affairs, we are beginning to see people 

willing to take a risk and move here. Within the past several 

months, we have had some new people move to Cooperstown from 

other states, including some from the east coast and west coast. 

They have been able to secure jobs here to support their families, 

but then have had difficulty in finding any type of housing that is 

suitable for their needs. 

And this leads me into a correlation between the community and 

economic development issues. Rural North Dakota has dealt with 

a housing shortage for many years. In Cooperstown, until this year, 

we have had no new housing units built (other than one set of 

condos) for the previous 10 years. Then about three to 5 years ago, 

the benefits from the empowerment zone started to kick in, positive 

things began happening in the community, and more jobs were 

available. Some of the younger couples moving to town were having 

babies, and we were finally starting to grow from within and without. 

Most people moving into a new community are not willing to purchase a house right away, but wish to rent. The existing rental 

units were built during the 1960’s and have not really been updated to suit the needs of the new residents. Many of the houses 

that have been available for sale are in need of total remodeling 

or are out of the price range of these new families. Without suitable housing, these workers have been forced to find housing in the 

surrounding communities, if it is available, or not moving to the 

community to take the jobs. 

With the younger families—excuse me—coming for these jobs 

and wanting to have children, the need for qualified day care has 

also been an increasingly difficult issue for the community. Our 

current certified day care is filled to capacity, has a waiting list, 

and there is an increased need for infant care, as several babies 

have been born over the past 3 years. In some cases, the parents 

have to choose whether or not to struggle finding a qualified day 

care or having one parent stay at home to care for the children. 

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crease the number of businesses, employees, and residents. The 

housing and day care needs have impacted the majority of our 

businesses, including agriculture, manufacturing, technology, and 

the medical center. 

So, what are we doing about these issues, and how are we addressing the needs? We have been able to use the empowerment 

zone programs to provide funding for several of these following 

projects to address these needs as well as the other additional 

funding that was available for other programs through the empowerment zone. 

Cooperstown has used the zone programs and funds to provide 

grants for nonprofits within the community: Griggs County Museum and the cold war interpretive site that is being built; the 

Griggs County Courthouse remodeling; WeeCare day care projects 

and programs. We established a Cooperstown Community Foundation, the endowment fund, which raised $100,000 over 2 years to 

help support nonprofits in the community, and the Griggs County 

EDC utilized funds to help with community work force training. 

The city of Cooperstown used funds from the empowerment zone to 

help with updating their infrastructure and emergency service 

equipment and training. 

Many local businesses have utilized the loan programs to help 

grow and expand their businesses, purchase equipment, provide 

training dollars, and more. We have also leveraged those funds 

with other Federal funds and USDA rural development funds: 

Cooperstown has secured three different Rural Business Opportunity Grants for technical assistance, business training—or business planning—excuse me—strategic planning, and helping entrepreneurs in starting businesses. They have also secured a Rural 

Business Enterprise Grant in partnership with the Center for Innovation that supports businesses who need marketing assistance, 

technical and business planning, and feasibility studies. Cooperstown is currently partnering with the Eastern Dakota Housing Alliance to build an income-qualified home using the Federal HOME 

funds and private donations. 

As far as the use of North Dakota funds to, again, leverage funding from the empowerment zone, several businesses were able to 

secure interest buy-down in the PACE and Flex-PACE programs 

from the Bank of North Dakota, and they have provided work force 

training funds to enhance the work force development; there have 

been various grants that were provided for tourism infrastructure, 

marketing and Web site development, and day care equipment, and 

so much more. 

Community success is hard to measure, but we have seen some 

very positive things happening in Cooperstown and some of the 

surrounding communities over the past few years. For Cooperstown, there have been several new businesses started, including an 

information technology company, several retail businesses, an expansion at one of the manufacturing companies, and a new manufacturing company. We have experienced a number of new employees at local businesses and have welcomed retirees moving back to 

the community. The City has diligently worked to maintain or expand the infrastructure, including new water and sewer lines, an 

updated lighting system, and road work that will be completed this 

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next summer, updated water plant, and soon-to-be-completed drain 

system around the community to address the higher water table. 

There are two new homes being built in Cooperstown this year, 

including one being built by a farmer who is moving into the community and one being built as the community partnership home. 

The EDC has also begun working on a 16-unit RV park and 

campground to be completed this coming summer, which will be 

available for the construction crews coming into the area over the 

next several years due to the expansion of the oil pipeline, a water 

pipeline construction project, and additional wind farm construction activity, just to name a few. 

Our tourism opportunities continue to increase for our community, county, and region with the opening of the Oscar 0 site, possible expansion of our community of the Sheyenne River National 

Scenic Byway, and the development of a dinosaur dig in our county. 

Additionally, the smaller communities in our county are also experiencing growth. Binford has been able to secure new buyers for 

their cafe, a new owner for their grocery store, a new building for 

a local insurance agent, a large expansion of a construction company’s building, and the reopening of their fish plant. Hannaford 

was the recipient of a large USDA grant in loan and CDBG funds 

to update their water and sewer infrastructure, and also experienced a large Department of Transportation project that replaced 

the overpass going into the community. And they’ve updated and 

paved all the roads in the community. They are continuing to work 

on remodeling of their school which is no longer being used as a 

school building, and have secured grants from the empowerment 

zone and from USDA to help with this project. The building will 

be remodeled into offices and conference rooms for training in the 

community. 

As you can see, we have some great things happening that directly impact the economies of our local communities, which is very 

good. However, we continue to struggle with out-migration issues, 

housing and day care issues, and the need to improve the services 

and quality-of-life aspects to encourage visitors and employees to 

choose to stay here. The ultimate goal will be to increase the population to a number that can support the basic services and businesses, and we are not there yet, but we are definitely beginning 

to show positive improvement. 

Thank you. 

[The prepared statement of Ms. Meidinger follows:] 

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The CHAIRMAN. Great. Thank you very much for that testimony. 

My intention is to have each of the witnesses testify and then we’ll 

go back to questions for the entire panel, and then open it up for 

others who are here who might want to testify on the subject of the 

hearing. 

We’ll next go to Beth Burge, and Beth will be speaking about the 

history and performance of the Griggs-Steele Empowerment Zone, 

including how the $17.7 million in Federal funding has been used, 

and how grants and loans have helped to save and create jobs in 

the region. 

Welcome, Beth. 

Ms. BURGE. Thank you. 

The CHAIRMAN. And please proceed. 

STATEMENT OF BETH BURGE, CHIEF OPERATING OFFICER, 

GRIGGS–STEELE EMPOWERMENT ZONE 

Ms. BURGE. Good morning and welcome to all of you. As Senator 

Conrad indicated, since the inception of the empowerment zone in 

Griggs and Steele Counties, we have been allocated $17.7 million 


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over the last 11 years, for an annual funding of approximately $1.6 

million per year. We’ve actually drawn $17.6 million and have a 

balance remaining of just a little over 100,000. 

Of the total funds drawn, approximately 14 percent has been 

used for the administration of the empowerment zone, with 43 percent being used for the revolving loan fund program, 14 percent for 

the equity fund program, and 29 percent being used for grant 

projects and other programs, including community reimbursements; business retention, expansion, and targeted recruiting; programs aimed at enhancing and developing housing; health care; renewable energy; tourism and recreation; and food processing and 

value-added agriculture within the zone. These programs and strategies were developed by the empowerment zone to help achieve its 

mission to increase population while maintaining rural values and 

lifestyles, to enhance community facilities and services to support 

revitalization, to end out-migration, and to invigorate and diversify 

the economy. 

As GSEZ faced the end of its funding designation, originally 

scheduled for December of 2008, it was agreed that the empowerment zone would have to narrow its strategies and focus on creating and expanding business activity in the zone, while focusing 

on its own sustainability. Therefore, the work plan for 2009 primarily focused on providing loans and equity investments to businesses and organizations within the zone. The work plan also 

called for continued support of the community coordinator program, 

which has been a very successful way to improve the link between 

the zone and the communities. We currently help fund four coordinators representing seven zone communities. 

Plans for a reduction of staff and administrative costs were also 

implemented during the last half of 2008. With a reduced staff and 

budget, additional policies and procedures were implemented which 

place greater responsibility for executive authorization and decisionmaking on the board of directors, with increased reliance on 

the professional expertise and guidance from its Loan and Investments Committees, which are made up of local community volunteers. 

Toward the end of the first quarter this year, we received the 

good news that we would receive additional funding through the 

Federal Omnibus Budget of approximately $951,000. It was nearly 

half-way through the year before we could access these funds. So, 

one of the challenges we faced was that funds had to be drawn by 

December 31st of this year. In an effort to stimulate the zone’s regional economy and to ensure that we would draw our funds by the 

12/31 deadline, the empowerment zone offered loan funds at a special, reduced rate. 

Needless to say, our focus in the last 5 months was on evaluating 

and processing several loan applications, but by the end of September of this year, the board had approved nine new loans totaling $875,000, leveraging nearly twice that much in local bank 

loans, private investments, owner contributions, funds from the 

North Dakota Development Fund, interest buy-downs from the 

Bank of North Dakota with matching interest buy-downs from local 

EDCs and JDAs. Roughly half of these loans were for new businesses in the zone, with the remainder for expansion of existing 

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businesses. In addition, these loans will help to create over 20 new 

jobs and will help to retain approximately 15 jobs in the empowerment zone region. 

Since facts and figures and general overviews rarely hit home or 

make their point, at this time we want to share some highlights 

of a few projects specifically in Griggs County which the empowerment zone helped to fund. 

To meet the continuous nursing shortage in rural North Dakota, 

the State Board of Nursing approved the offering of a Practical 

Nursing Program at Cooperstown Medical Center. This program 

provided an opportunity for CNAs employed at the medical center 

to attend the nursing program without leaving the area or their 

current job. By partnering with Lake Region State College and the 

empowerment zone, they were able to begin the training in August 

of 2008, and it ran for two semesters. I’ve shown six graduates, 

three of whom are still employed as LPNs at the medical center in 

Cooperstown. 

On July 26th of 2006, the city of Binford was dealt a horrific 

blow when their only grocery and hardware store was destroyed by 

an intense fire. The loss of this business to this community of 200 

people was devastating. Known as ‘‘Little Wal-Mart’’ to locals, it 

was a staple to many in the community, including elderly and 

those without transportation means. The store was also a major 

contributor to the Binford economy. Learning that the business 

owners did not intend to rebuild spurred Binford leaders and community members into action. Through numerous fund drives, they 

raised nearly $200,000 in donations from residents, school alumni, 

and neighboring communities. With a $50,000 grant from the empowerment zone and a $50,000 grant from South Central Dakota 

Regional Council, it happened. And almost a year after the date 

that the store was destroyed, a new Binford Grocery & Hardware 

store was open for business. 

To run the store, an agreement was reached with a grocer from 

Casselton who leases the building from the EDC and operates the 

business. Empowerment zone loan funds were also provided to purchase equipment and inventory for the store. Today, the store employs four people and boasts a sales increase of 5 percent for this 

year. 

Providing day care facilities in the zone was also another major 

project. And cities in Binford, Cooperstown, and Hope all received 

empowerment zone help to provide the much-needed day care. 

Early on, communities in the zone recognized the need for developing and improving infrastructure in the area in order to facilitate 

business development. Approximately $632,000 of empowerment 

zone funds, leveraged with an additional 600,000, was used to provide water, sewer, and roads to create or improve industrial parks 

in the communities of Cooperstown, Finley, and Hope. The empowerment zone has used nearly $1.5 million of its Federal funds 

for the construction of new buildings and for the remodeling and 

renovation of existing buildings to support new or expanding businesses in the communities of Hannaford, Cooperstown, Binford, 

Hope, and Finley. 

One such example was by Dynamics 360, and when their company grew and needed a place to expand, they came to the emVerDate Aug 31 2005 12:16 May 25, 2010 Jkt 000000 PO 00000 Frm 00214 Fmt 6601 Sfmt 6601 C:\DOCS\50924.TXT SBUD1 PsN: TISH
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powerment zone and received help through the loan fund so they 

could build a new building here in Cooperstown. This expansion 

helped to create four and a half new positions and helped to retain 

ten and a half existing employees. 

The Posi Lock group of companies currently employs 63 persons 

in Griggs County. 

One of the major projects undertaken by the empowerment zone 

in 2006 and 2007, together with leadership from CooperstownGriggs EDC, was in constructing a 21,000-square-foot industrial 

building here in the city of Cooperstown. With infrastructure provided by the city of Cooperstown, the empowerment zone used approximately $267,000 of its own revolved funds from its revolving 

loan program to match a $250,000 USDA RBEG. An additional 

$770,000 was leveraged in loans from a local bank and other economic development agencies to complete the project. 

The industrial building was designed to provide available industrial space for new or expanding primary sector businesses. Today, 

the building is home to Yuletide Expressions and Prairie 

Innovators. 

One of our immediate challenges faced by the empowerment zone 

today is finding additional tenants to occupy the building in order 

to offset the building operation cost and its debt service. Other 

challenges today include working with existing businesses of which 

we have loans and equity investments. While one of our goals is 

to help secure repayment to the empowerment zone, our main goal 

is to help these businesses remain viable. 

To cite an example of an existing business which we continue to 

work with, I’d like to share the story of Binford Eagle Fisheries in 

Binford. When the marketing director for an upper fish producer 

cooperative in Binford was contacted by a Canadian fish marketer, 

Binford Eagle Fisheries was born. The company fillets mullets and 

ships to a buyer located in New York. The company in New York 

was unable to secure enough kosher mullet fillets to fill their market demand. Binford Eagle Fisheries had all the components they 

needed to get their company up and going strong. With a supplier, 

buyer, and an experienced fish marketer, the processing plant was 

ready to proceed. With the help of empowerment zone funds, 

Binford Eagle Fisheries was able to get the ball rolling. 

Binford Eagle Fisheries has the capacity to fillet up to 50,000 

pounds of fish a week, but they have had some difficulties with 

their previous supplier, but they hope to have secured a new supplier and are expecting to be in full production mode in the near 

future. Binford Eagle Fisheries is able to attract a number of temporary employees right from their local area, as a number of stayat-home moms are eager to work on a seasonal basis during the 

school year. 

With the challenges we’re continually faced with, I’ve been reminded that it is important to celebrate accomplishments along the 

way. Although Keith Monson plans to testify on behalf of M-Power, 

I would like to emphasize that through the empowerment zone resources and its technical assistance, the empowerment zone and 

Griggs/Steele Wind Development Group were instrumental in forming M-Power, LLC, the local wind energy development company. 

210 

With the recent success of M-Power in selling its two construction-ready projects, some people might be thinking why didn’t the 

empowerment zone invest more of its funds in M-Power, which 

could have perhaps ensured its sustainability. But a big part of MPower’s success was obtaining buy-in and support for this project 

from the local communities and investors. These local investors literally became advocates, Ambassadors, fund raisers, negotiators, 

and managers for this project. Without their commitment and support, this project may never have succeeded. 

Griggs-Steele Empowerment strives to make the zone a better 

place to live and work. I think these projects help to show how empowering the citizens of a community, leveraging empowerment 

zone funds with other local and regional funds, and working together all contribute to the success of a particular region. 

On behalf of the Griggs-Steele Empowerment Zone, we’d like to 

thank you, Senator Conrad, for your past support, and we ask that 

you continue to support our cause, as we strive toward achieving 

our mission and working toward sustainability, so that our vision 

for a future where our friends and children no longer have to leave 

in order to make a satisfying life for themselves can truly be realized. 

Thank you. 

[The prepared statement of Ms. Berge follows:] 


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The CHAIRMAN. Thank you very much, Beth, for your testimony. 

And we’ll go next to Keith Monson. Keith is going to testify, I understand, focusing on the Luverne Wind Farm and the years? long 

effort of applying for Federal funds and organizing like-minded developers for this project. 

Welcome. 

Mr. MONSON. Thank you, Senator. 

The CHAIRMAN. Please proceed, Keith. 

STATEMENT OF KEITH MONSON, PRESIDENT, M-POWER, LLC 

Mr. MONSON. Senator Conrad, guests, and fellow zone community members, there’s a fact sheet and Warren Enyart’s testimony 

to the PFC up front that go into considerable detail of M-Power. 

So I’ll let that presentation do that. 

My name is Keith Monson. I’m Chairman of M-Power. 

The CHAIRMAN. Keith, can I just interrupt you for a moment? 

And we’ll make part of the record of the hearing the fact sheet that 

you have available for distribution. 


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Mr. MONSON. OK. The supporting documents go into great detail 

about the recent activities at M-Power and the resulting wind farm 

at Luverne. What I’ll briefly address is the history leading up to 

the formation of M-Power, and the role the empowerment played 

in those efforts, and our experience as it relates to policy issues in 

moving forward. 

In the fall of ’99, representatives of the Steele County JDA, and 

the Cooperstown-Griggs EDC informally agreed to research the 

possibilities of wind-generated electricity in our two-county area. At 

the urging of Jay Haley of EAPC Grand Forks, several members 

attended the AWEA Convention in Sioux City, Iowa. Hearing 

North Dakota mentioned time and time again during the sessions 

gave us hope that we were indeed on to something. Unashamedly 

introducing ourselves to anyone who would talk to us led to an 

after-hours meeting with many of the key power players within the 

wind industry at that time, including an Under Secretary of Energy who urged us to apply for a grant to put up wind monitoring 

towers. Kim Christianson of the North Dakota Energy Department 

pledged matching funds, and once the empowerment zone was officially organized, we approached that entity for an operating loan. 

It was this combination of funding that launched the first organized wind development group in the Upper Midwest. 

Realizing early on that North Dakota tax laws and economic climate were not on a level playing field with Minnesota, the newly 

formed Griggs/Steele Wind Development Group joined with Jay 

Haley in conducting meetings with landowner groups, EDCs, and 

other entities all across North Dakota—the end result of that effort 

being the organization of about 30 local groups interested in developing wind in their respective areas. About half of those groups 

then joined together to form WIND (Wind Interests of North Dakota), which acted as a coordinating force in passing legislation in 

the 2001 North Dakota legislative session, that put North Dakota 

on a par with Minnesota’s incentives at that point in time. 

Each of the newly formed groups put up wind monitoring towers. 

Their wind data, along with their local contact information, was 

made available on the WIND Web site. As the general knowledge 

of North Dakota’s wind regime became specifically detailed across 

the state, it wasn’t long before the major players in developing 

wind-powered electricity were all over the place. Those were really 

exciting times, but the reality of the matter was that the transmission system was theoretically full, and the local utilities did not 

yet see wind as a viable option. In spite of considerable efforts, no 

one got anything done for several years. 

Then, finally, committed but unused transmission became available. The small projects started to be built and became successful 

ventures for all involved. It was at about that time that Warren 

Enyart was hired as CEO of the empowerment zone. His creation 

of a Renewable Energy Committee, along with an actual budget, 

gave renewed emphasis to the idea of bringing wind-generation 

projects to the zone. Still at a disadvantage being long distances 

from any major transmission lines, it was the community-based 

idea of the local utilities buying from customers and then selling 

back to them that got our foot in the door. 

219 

As we proceeded forward with the community-based ownership 

idea, it became evident that the only incentive available—the 

PTC—was not available to a local group of landowners and investors. The PTC is based on passive income, which for all practical 

purposes limits its use to very large corporations. It was impossible 

for us to compete against another project that could utilize the 

PTC, as the tax credit provides about 30 percent of the return on 

investment. We are very fortunate that Minnkota stuck with us 

and that Otter Tail and NextEra decided to buy the project from 

us, as they have never done that before. Had the 30 percent cashback option now available been around 2 years ago, we very likely 

could have realized our original goal of a community-based project. 

Moving forward from here, if becoming energy self-sufficient is 

more than just popular rhetoric, all Americans have to be allowed 

to participate. Incentives to do so have to be made available to everyone, and not targeted to specific developers or large corporations. Wind-generated electricity, in particular, has the potential to 

reach whatever level of production the industry can incorporate 

into their systems. While transmission lines from wind farms to increasing—to increasing loads is important, this will not be the final 

solution. Incentivized individuals, businesses, and landowner 

groups can develop distributed generation projects to fit their needs 

and investment appetites, and incorporate those projects into the 

existing grid with only moderate upgrades. 

Energy-rich states such as North and South Dakota, and Montana need outlets from their existing power grids. Areas of increased electrical growth need a source of supply to their existing 

systems. Moderate upgrades to the existing grids within the various ISOs, and strategically placed high-voltage lines between the 

regional ISOs, will go a long way in balancing supply and demand 

across the whole United States. 

Smaller distributed generation projects spread over a large geographical area would also mitigate the boom-and-bust effect of 

wind either blowing or not blowing, such as happens with large 

amounts of generation located in one small spot. The RECs served 

by Minnkota recently announced a surcharge to their customers 

due to lost income because of depressed merchant prices for electricity in times when the wind was blowing. If that same number 

of megawatts of generation were spread across the length and 

width of Minnkota’s service area, rather than compressed in two 

very small locations, including our project, the natural movement 

of the weather systems through the area would average the electrical output over time. Strategically placed transmission lines between ISOs would further average outputs against usages over entire regions of the United States. 

Because of the high capital costs of developing wind farms, significant investors will still be necessary to the success of large community-driven projects. Those prospective investors need to have 

confidence about the status of the incentives that will affect their 

return on investments. The incentives, in whatever form they are, 

need to be extended over longer periods of time to allow for a continuity in development efforts, until other risks, such as third-party 

system impacts, can be defined and their associated costs adequately—equitably distributed. 

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On behalf of M-Power, LLC, I want to thank you for this opportunity to provide these observations relative to economic development and the role played by wind power. 

Thank you. 

[The prepared statement of Mr. Monson follows:] 


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The CHAIRMAN. Thank you very much, Keith, for your testimony 

as well. 

Let me get right to questions, and let me indicate to you the 

skepticism that greets at this moment any Federal expenditure 

among my colleagues. And so I’d like you to respond to the question that I’ll be asked by colleagues. The question will go something 

like this: Senator Conrad, you’re pushing for an extension of the 

Rural Empowerment Zones—how do you justify the additional Federal expenditure, given our levels of deficit and debt? 

So, Becky, you know, I will only have a few sentences to be able 

to respond to my colleagues. You know, they’re not going to listen 

to me very long on an issue of this magnitude. So, what would you 

say in a few sentences if one of my skeptical colleagues were here 


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and said, how do you justify the use of taxpayer money for these 

purposes? 

Ms. MEIDINGER. One perception is that it takes longer than just 

a few years to develop leadership that’s willing to take the risks 

necessary to be able to identify what’s needed and to then leverage 

the funds to be able to spend it on the appropriate priorities. 

Our empowerment zone has taken a while in getting organized 

and getting identified. They’ve struggled with some of the issues 

regarding the economy and the agriculture base leadership, whatever. We are on the right track. We are starting to show what it’s 

going to take to grow our area. We’re fortunate to be living in 

North Dakota at this point in time because we also have support 

from the state. We have leaders in place now that are working to 

leverage those funds for sustainability for the future, and I think 

it’s critical that they give us an additional period of time to continue to develop that, because we are making a difference. 

The CHAIRMAN. Beth, what would you say? My colleague says to 

me: Kent, how can you justify these Federal dollars? What is it 

that you’re accomplishing out there? 

What would you say to them? 

Ms. BURGE. Creating the economic opportunities, of course, is our 

biggest accomplishment, I believe—creating the infrastructure so 

that new businesses can come here. You have to create a place for 

them to expand and to come. The tax credit incentives are a big 

plus for us. We’d like to see those extended. You should probably 

bring Becky along so she can help answer that question. 

[Laughter.] 

Ms. BURGE. She does much better on the spot. 

The CHAIRMAN. Keith, what would you say? 

Mr. MONSON. Well—— 

The CHAIRMAN. Does this stuff make any difference? I mean, 

that’s—you know, I’ve got a couple of colleagues who—I know exactly what they’re going to say to me. They’re going to say: Kent, 

I mean, what difference has this made? You’ve spent all this 

money. What difference did it make? 

Mr. MONSON. Well, I would use M-Power as a single example. An investment on a zone park of about $175,000 helped cause a project 

in excess of $300 million. It’s going to have annual income in taxes 

to North Dakota and the local communities probably in excess of 

a million dollars. And that’s over a 20-year period, and we’re assuming re-powered for—their leases are 99 years. So, of the $17.7 million or whatever that was invested, you’re 

going to get a return of probably—well, I don’t know what it is— 

to the farmers that, you know—this is—we could—we’re paying it 

back in 20 years maybe in income to the county and the state of 

North Dakota. You take Steele County alone, they’re going to get 

in excess of $600,000 to the county. Griggs County—it’s over 

200,000. That goes to the schools. That goes to infrastructure. You 

could actually lower the tax rate by several mils, just because this 

same project. It’s a huge economic impact. 

The CHAIRMAN. You know, I—in listening to the testimony here 

this morning and knowing my colleagues, my suspicion is my best 

single point to make to them would be the fact that this money was 

available allowed a $300 million wind energy project to be develVerDate Aug 31 2005 12:16 May 25, 2010 Jkt 000000 PO 00000 Frm 00240 Fmt 6601 Sfmt 6601 C:\DOCS\50924.TXT SBUD1 PsN: TISH
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oped which will directly reduce our need to import foreign energy, 

and we are 60 percent dependent on foreign oil today. As a nation, 

we’re spending $500 billion a year, sending money to foreign governments to buy their oil. And this investment has helped build a 

project that will keep money here in America rather than sending 

it to Saudi Arabia, to Abu Dhabi, to Kuwait, and all the rest. 

You know, my sense is—because I’m not going to have long to 

make this point. My colleagues aren’t going to spend long listening 

to my answer. They’re going to ask these questions, but if I don’t 

have something that is very specific and grabs their attention, you 

know, I’m going to lose them. 

And I think we’ve got to have very specific answers that are very 

clear, and I’ll tell you right now what my colleagues—one of the 

things that’s highest on their radar scope in terms of what’s important for the country is reducing our dependence on foreign energy, 

and you’ve helped do that. You’ve helped—it is really quite remarkable what you have done. 

Now, Keith, you had testimony that I think is also very important, because you pointed out that production tax credits, as they 

were, are best positioned to be taken advantage of by companies 

that have passive income, and that makes it very difficult for a 

group of local investors to take advantage of those production tax 

credits. 

Now, we’re expanding the incentive base to make it more possible for groups of local investors. That was included in your testimony. 

Mr. MONSON. Right. 

The CHAIRMAN. Do you believe that that will make a significant 

difference for the future in terms of projects like this? 

Mr. MONSON. Oh, tremendous. Tremendous. If we’d had to have 

30 percent cash-back available to us so we could have—the overall 

cost of the project wouldn’t have increased, there was absolutely no 

doubt that Minnkota and Otter Tail would have bought from us 

being community based. 

The CHAIRMAN. Yes. 

Mr. MONSON. An ideal situation where they buy from their customers and sell back to them. 

The CHAIRMAN. I tried to convince my colleagues for 10 years to 

expand the credits in a way that would permit that, and it took 

until 2 years ago to convince them to do it. But that is going to 

make a big difference, isn’t it? 

Mr. MONSON. Oh, it’s going to be a huge difference. And the 

other thing is the ultimate solution is distributed generation, because all of us now are going to pay an extra half a cent a kilowatt 

of electricity because of the Luverne Wind Farm. We’re going to 

raise your electric bill, because when the wind blows, being all in 

one place, all of a sudden they’ve got too much electricity. The merchant price went from 3 and a half cents a year ago to under 2 

cents this year. So Minnkota lost $20 million that we’re going to 

make up for because we built a wind farm. Now, if that wind farm 

was spread all over as the—every front comes through North Dakota northeast to southwest. 

The CHAIRMAN. I’ve noticed that. 

[Laughter.] 

236 

Mr. MONSON. If these things were spread out—it’s blowing 40 

miles an hour here, 10 over here, and whatever. It’s going to average. The other thing that will average that is if we could get a 

high-power line to get from here to Chicago. When it’s blowing to 

beat heck here, Chicago still needs electricity. 

The CHAIRMAN. Right. 

Mr. MONSON. Right now, when it’s blowing to beat heck here, 

we’re confined to within Misol [phonetic spelling]—— 

The CHAIRMAN. Yes. 

Mr. MONSON [continuing]. Because we can’t get out of here. 

The CHAIRMAN. Yes. 

Mr. MONSON. Now, all of a sudden, Misol’s got more electricity 

than they know what to do with. And you can’t store it, so you’ve 

got to use it. And when you have too much of something, you know 

what happens to the value. 

The CHAIRMAN. Yes. Plummets. 

Mr. MONSON. It plummets. 

The CHAIRMAN. You know, I was very encouraged. I saw—I was 

watching an interview with the President a number of months ago, 

and the interviewer was asking him about wind energy potential, 

and the President actually talked about North Dakota and exactly 

what you’ve described—the need to be able to deliver power—and 

he said from a state like North Dakota so that it can get down into 

the Chicago market where it’s needed. 

And, of course, what’s happening is we get blocked because the 

transmission between here and there is taken. Isn’t that right? 

Mr. MONSON. Yes. 

The CHAIRMAN. And so, we can’t get across Minnesota and Wisconsin to get that power down into the Chicago market where it’s 

needed. 

One of the things that’s in—that we got put into the stimulus 

package is tens of billions of dollars to upgrade the transmission 

grid in the United States. That money has begun to flow, and it’s— 

even that it’s tens of billions of dollars, that’s not enough. It’s going 

to take multiples of that to get this job done, but it’s an important 

beginning to break the gridlock on the grid so we can move power 

where it can be generated and we’re not locked into just this market. And that’s exactly what you’re saying, isn’t it, Keith—— 

Mr. MONSON. Yes. 

The CHAIRMAN [continuing]. With respect to distributed power? 

Mr. MONSON. When the electrical system was forming—and 

that’s only 62 years ago that we got electricity—it was localized, 

and that’s logical. Now we’ve got pockets. We’ve got Misol and 

Misol, and whatever, that are such dense islands. There’s nothing 

connecting. 

The CHAIRMAN. Nothing connecting. Yes. 

Mr. MONSON. All we have to do is connect them, and at 186,000 

miles per second, electricity will get there. 

The CHAIRMAN. Yes. Inner ties are critical to improving the sustainability of our entire system. That is also very important in 

terms of avoiding blackouts and brownouts in the more industrialized parts of the county, because they are very vulnerable because of the structure of the system that was built. And you’re exactly right. It made perfect sense when it was constructed. 

237 

Mr. MONSON. Yes. 

The CHAIRMAN. It makes very little sense today. 

Mr. MONSON. Yes. 

The CHAIRMAN. So, these are things that we’re now making big 

investments in, to improve and upgrade. 

Let me ask the three of you, what do you believe would be the 

support level among people in the empowerment zone for a continuation of the funding? 

Becky, if we were to have a survey of people in this area, what 

do you think they would say about continuing the investment? 

Ms. MEIDINGER. I believe they would be strongly in support of it 

because they see what has been done. They see the need of what 

still needs to be done. And I think it would be important for them 

to be able to see it continued. 

The CHAIRMAN. OK. What would you say, Beth? 

Ms. BURGE. I would agree that the majority of the people would 

be in favor of continued support. 

The CHAIRMAN. Keith, what would be your impression? 

Mr. MONSON. I think it would be in excess of 100 percent, if people like Meryl and Felas and a few others would build toys. 

[Laughter.] 

The CHAIRMAN. OK. Let me go back before we open it up, because I want to make certain that people here also have an opportunity to testify in this. And that’s the question of housing. If 

there’s one issue I hear about repeatedly across North Dakota—obviously health care, because that’s very much in the news media 

today. And you referenced the importance of the local health care 

facility, and I think we all know what a jobs generator that is. 

But if there’s another issue that I hear especially in our rural 

communities, it is housing. Over and over and over, I hear that 

we’ve got jobs, but the problem is we can’t get some people to come 

here to fill those jobs because we don’t have adequate housing 

stock. We don’t have enough apartments. We don’t have enough 

single-family homes. 

You indicated there have been now for the first time in a number 

of years new construction of single-family homes. Did you also indicate there are some condominiums that are—— 

Ms. MEIDINGER. There was a set of three condominiums that was 

built about 4 years ago. 

The CHAIRMAN. And were those for sale or for rent? 

Ms. MEIDINGER. For sale. 

The CHAIRMAN. For sale. And did they—— 

Ms. MEIDINGER. Currently, they’re—one that was sold, and 

they’re renting two of them. 

The CHAIRMAN. Renting two of them. 

Ms. MEIDINGER. They’re the higher end—— 

The CHAIRMAN. Higher end. 

Ms. MEIDINGER [continuing]. Senior-friendly type—— 

The CHAIRMAN. Uh-huh. 

Ms. MEIDINGER. Very nice ones. 

The CHAIRMAN. You know, the problem that we’ve got all across 

rural North Dakota is in the financing of rural housing, because, 

as you know, when you go to get an appraisal, it’s very hard to support the construction cost for new property because if that property 

238 

were to go up for sale, the appraisals show you would not cover the 

cost of that property. And I’m not sure any of us have come up with 

a solution to that problem, especially after what has happened in 

the housing markets over the last 3 years. Trying to convince a 

lender to put up money for a property that appraisal will not support is not going to happen because the regulators who come in and 

examine their loans will say to them: What are you doing here? 

You’ve put up 100,000 for a property that, if it had to go on the 

market to sell, wouldn’t sell for $100,000. 

What have you found? How did these new houses get built? 

Ms. MEIDINGER. One of them is being built by a farmer who is 

moving into town. The other one is being built in partnership—the 

Eastern Dakota Housing Alliance has HOME—Federal HOME 

funds—— 

The CHAIRMAN. Yes. 

Ms. MEIDINGER [continuing]. Available, and there are local community partners who have either provided services, a decrease in 

their labor costs, wholesale prices on their materials, donations toward the project. 

The CHAIRMAN. So, these are being financed in untraditional 

ways? 

Ms. MEIDINGER. Yes. 

The CHAIRMAN. They’re not being financed with a traditional 

mortgage and a traditional home lender? 

Ms. MEIDINGER. Eventually, they will. This is for an incomequalified family that we’re building this for, and they will be then 

securing a mortgage, but it will probably be through maybe one of 

the USDA programs, through North Dakota housing finance programs. 

The CHAIRMAN. OK. 

Ms. MEIDINGER. Probably not a conventional mortgage. 

The CHAIRMAN. OK. Well, I think that’s an important point to 

get on the record, because at every one of these that we do and 

every stop that I have community forums, hearings, whatever the 

forum, this is an issue that has really created problems for us. 

I was with business leaders earlier this year who were talking 

about this as being—one of the most significant hurdles to getting 

jobs in the more rural parts of the state is the lack of housing 

stock. And you can’t attract the employees you need because you 

don’t have a place for them to live, and you can’t get a mortgage 

for building a new place because appraisal won’t support the loanto-value issues that are important to any examiner who is going to 

go look at a bank’s books. 

Let me—we just have a few minutes left, and I want to open it 

up to make certain that if there’s somebody in the audience that 

would like to testify and be on the record on this issue, and either 

for or against, it’s—we want to make sure that people have a 

chance to testify here. 

Is there anybody that would like to say something for the record 

for this hearing? Don’t be bashful. 

Yes, sir. 

Mr. JULISON. For the record, I’m Allen Julison. I’m the President 

of Griggs-Steele Empowerment Zone. I live over in Steele County, 

town of Hope. I farm. My [inaudible] deeds are not off yet. 

239 

[Laughter.] 

The CHAIRMAN. We’re especially pleased that you’re here today. 

Mr. JULISON. One I thing I want to stress to you and your community members is each dollar you give us is that long. We stretch 

it way out because we do the leverage you might—like Beth indicated in her report. We have very good local lenders in Griggs and 

Steele Counties that have partner with us on loans. We’ve got the 

Bank of North Dakota that does some partnering. We have grants 

available. And we take that dollar and we turn that—stretch it as 

long as we can to make it go a long ways. When you gave us this 

last round of $951,000—I mean, we’ve double that; we’ve tripled 

that on loans to existing businesses and new businesses. 

The CHAIRMAN. Because what that money does is leverage other 

money—— 

Mr. JULISON. Absolutely. 

The CHAIRMAN [continuing]. That would not otherwise be committed. 

Mr. JULISON. Yes. Because that was your opening question to the 

panel—— 

The CHAIRMAN. Yes. 

Mr. JULISON. You know, you’ve got members asking you, you 

know, why should we have this designation? We really, really want 

this designation. I understand there’s some legislation authored for 

five more years, and we need you to do everything in your power 

and try to get that legislation. 

The CHAIRMAN. OK. 

Mr. JULISON. Thank you. 

The CHAIRMAN. All right. Let me just do this: There’s some of my 

colleagues calling in right now. 

[Laughter.] 

The CHAIRMAN. Let me just see a show of hands for those who 

are in the audience for the purposes of the record. How many 

would support a continuation of funding for the empowerment 

zone? Just see a show of hands. 

And is anyone opposed? Does anybody think we should not extend it? 

Well, that’s pretty clear. Let the record show that the show of 

hands was unanimous here that people believe that support for the 

empowerment zone ought to continue. That’s about as clear as it 

could be. And let the record show that the mayor raised her hand. 

[Laughter.] 

The CHAIRMAN. Anyone else that would like to say a word? 

Yes, sir. 

Mr. FRANDY. Could I take you backward? Pretty good subject 

here, and that’s how it should be. 

The CHAIRMAN. Yes. 

Mr. FRANDY. I’m the one that built the three condos. 

The CHAIRMAN. Oh, you are? 

Mr. FRANDY. Yes, I am. 

The CHAIRMAN. Well, thank you for doing that. 

Mr. FRANDY. It was a gift more or less. Lost money. 

[Laughter.] 

Mr. FRANDY. But there is a model out there that I think might 

work. 

240 

The CHAIRMAN. Could you identify yourself for the record, sir? 

Mr. FRANDY. I’m Orville Frandy. I was—I’m a developer here in 

town. I’m also a realtor. 

The CHAIRMAN. OK. 

Mr. FRANDY. I’m a farmer-rancher. I drill things and lots of those 

things. I was also the chairman of the empowerment zone at one 

time. 

The CHAIRMAN. OK. 

Mr. FRANDY. There’s a model out there I think will work because 

it works in Minnesota all the time. 

The CHAIRMAN. And what is that? 

Mr. FRANDY. Cooperative. 

The CHAIRMAN. Cooperative? Hmm. 

Mr. FRANDY. Yes. 

[Laughter.] 

Mr. FRANDY. We’ve been chasing this for 2 years. We can’t get 

the people in this area. They don’t understand it. It’s probably our 

problem for not making it understandable. I think it will work 

here. I think it will work in North Dakota. It’s worked in Minnesota. There are 290-some models. 

The CHAIRMAN. Can you describe for us your understanding of 

how it would work? 

Mr. FRANDY. What you do is you don’t own the property. You 

own a collective of them. It’s like a regular co-op. 

The CHAIRMAN. Yes. So, the members—— 

Mr. FRANDY. The members—they get shares. They don’t get a 

deed. They get shares, and they own it like any [inaudible] collective. Say it’s for five members. They simply take in—have their 

own leadership. 

The CHAIRMAN. Yes. 

Mr. FRANDY. They do all of that as a collective organization, just 

like a regular co-op. 

The CHAIRMAN. And can you tell us how they finance? 

Mr. FRANDY. Initially—this could go many different ways. 

The CHAIRMAN. Yes. 

Mr. FRANDY. They can go ahead and require an investment by them. It’s a model—we’re working on this—$150,000 units. So 

there’s five of them. They’re investing in this $40,000. Then they 

invest that money like you would normally do with one, and then 

they form a co-op. And they manage it as that. And then they operate. 

Now, here’s the catch of why they’re not jumping on this. You’re going to have a payment of that initial $40,000, and you’re going 

to have a monthly payment of a fairly serious number, probably 

$700 or $800. That’s what stops them. They say, why would I want 

to do that? But they don’t understand they’re going to get a 

$150,000 unit for $40,000 plus the payments. This works in Minnesota all the time. And I can tell you why it’s never coming to 

North Dakota. It’s managed by HUD. That’s where they get their— 

that’s where they get their—— 

The CHAIRMAN. Yes. 

Mr. FRANDY [continuing]. Dollars. There’s 90 of them in Minnesota. You get people in, in Minnesota—— 

The CHAIRMAN. When you say 90 of them—— 

241 

Mr. FRANDY. Units. They get as big as—they get as big as, in 

Minnesota, I think, 90 units in a single pod. 

The CHAIRMAN. Oh, I see. The 90 projects? 

Mr. FRANDY. Yes, 90 projects. 

The CHAIRMAN. Not 90 housing units. 

Mr. FRANDY. No, no. 

The CHAIRMAN. Ninety projects. 

Mr. FRANDY. Thousands of them, of units. 

The CHAIRMAN. Thousands of units? 

Mr. FRANDY. Yes. Here’s the catch. HUD manages these things. 

There’s nobody in the Minnesota area—or, I should say, our area— 

there’s zero in North Dakota. In Minnesota, they’re managed by either—I think it’s out of Chicago—here they’re managed by Denver. 

The CHAIRMAN. Uh-huh. 

Mr. FRANDY. Nobody in Denver knows how to—— 

The CHAIRMAN. Knows how to do it? 

Mr. FRANDY. Yes. So, we’re going to—we’ve been working with 

people—— 

The CHAIRMAN. Yes. We’re in the Denver region; they’re in the 

Chicago region. 

Mr. FRANDY. Yes. They know how to do it. And we’ve been trying 

to wager this. We just can’t get strong enough to get—you’ve got 

to have five people for our pod—roughly, now—to buy into it; 

$40,000 each. But they—— 

The CHAIRMAN. Five people, they put up $40,000, then they own a share of a $150,000 unit—— 

Mr. FRANDY. Yes. 

The CHAIRMAN. And, of course, they then have an ongoing mortgage payment. 

Mr. FRANDY. Absolutely. They don’t like that either. 

The CHAIRMAN. Yes. 

Mr. FRANDY. But—— 

The CHAIRMAN. But, I mean, that’s reality. 

Mr. FRANDY. That’s right. The people here—they’re aged and 

they’ve been used to looking at houses—they bought their last 

house 40 years ago. 

The CHAIRMAN. Yes. 

Mr. FRANDY. Forty thousand dollars bought the whole house. 

The CHAIRMAN. Yes. Well, I got to tell you, I mean, I’ve gone 

through that sticker shock myself, you know? You, buy—I tell you, 

you go to Washington, D.C., see what a house costs there. I mean, 

I was in shock for about 3 months buying a house down there because houses costs seven times what the equivalent house would 

cost here. I mean, the same kind of—you know. 

Mr. FRANDY. We can’t get the local people to understand this. 

That’s one of our issues. That’s their decision—— 

The CHAIRMAN. Well, it’s a different model. 

Mr. FRANDY. Absolutely. 

The CHAIRMAN. It’s a very different—it’s a little hard to get your 

mind around if you’ve never heard of it. 

Mr. FRANDY. They should get used to it because all these people 

sitting here are abandoned farmers. 

The CHAIRMAN. Yes. And are part of rural electric co-ops—— 

Mr. FRANDY. Absolutely. 

242 

The CHAIRMAN [continuing]. Part of telephone co-ops, part of—— 

Mr. FRANDY. Yes. Anyway, that’s the—— 

The CHAIRMAN. OK, well—— 

Mr. FRANDY. If anyone studied it, I think you would find in this 

state—Minnesota does it all the time—study it in this state, I 

think you’d have some success. 

The CHAIRMAN. Is Tim outside there, Shawn? 

Mr. FERGUSON. Yes, he is. 

The CHAIRMAN. This is Tim Moore. Why don’t you come in the 

room so people can see you. Tim is in charge of my economic development operation in my office in Bismarck. He’s a former vice 

president of the Bank of North Dakota, was with one of the largest 

accounting firms in our state before I convinced him to come back 

to work on these economic development issues for me. And I’m very 

fortunate to have him. He’s very, very knowledgeable about finance. 

So, I’d say to you, if you have an issue of finance and you’re looking for somebody that can help, Tim is on my staff in Bismarck, 

and he is one of the most knowledgeable people on any financial 

issue in our state, and he has worked in both the private sector 

and the public sector, and has a real record of accomplishment. So, 

Tim Moore is a person that can help. And if it’s dealing with HUD 

in the regional office, Tim is somebody who should be involved in 

that effort. 

I’d also like to introduce my staff director on the Budget Committee in Washington, Mary Naylor. Mary is from Fargo, North 

Dakota. Mary has been with me almost 20 years, and she is the 

Staff Director of the Senate Budget Committee, a North Dakota native, very respected in the staffs of both the Republican and Democratic side for her knowledge of the Federal budget. And she is 

home with us now. She is visiting family in Fargo, but came up 

today to be here as well. So, thank you, Mary. 

Any final word from either of our witnesses? Any final word you 

want on the record? Or anyone else in the audience who would 

want to be recognized? 

Yes, Mayor. 

The Mayor. Senator Conrad, as mayor, I—you know, I have a 

real tie to this community, having grown up here, and the importance of economic development in this region not only touches upon 

the M-Power—the oil dependency from foreign countries, but I also 

see with our manufacturing base that we have products that are 

made right here in North Dakota that are shipped internationally. 

And there’s a lot of jobs that are tied to help from the empowerment zone—the continued funding—that we can keep our small 

communities alive. And we have a beautiful building that we’re 

looking for companies to bring more people in, and it’s just—I look 

at the statistics and our small communities that are shrinking, and 

I believe that there are people that want to move to the small communities. They would love to, but they need that job to come here. 

And so, I, too, want to encourage whatever support you can give 

us on continuing. 

The CHAIRMAN. All right. Thank you, Mayor. Thank you very 

much for that testimony. 

243 

I know that we’ve run out of time. We have to—in fact, we’re 

going to go over to the wind farm next, because we want to make 

sure that we’ve had an ability to tell our colleagues that we’ve seen 

it first hand and are able to describe it to them, because I do think 

it is a very powerful argument. Mayor, you make an additional argument that I think is especially effective. 

I want to thank everyone, especially thank our witnesses here 

today. I appreciate it very much for your taking your time and contributing your insights to the work of the Committee. I’d like to 

thank everyone who has attended this hearing in Cooperstown. We 

very much appreciate it. 

With that, the hearing is concluded. 

[Whereupon, at 11:19 a.m., the hearing was adjourned.] 

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