South Dakota State Railroad Museum

After being saved by purchase in 1980, this is the former Milwaukee Road rail line under re-construction for continued service in 2011 near Kimball, South Dakota.

From TRAINS Newswire:
Bill Janklow, savior of Milwaukee Road’s South Dakota rail lines, dies
Published: January 12, 2012

SIOUX FALLS, S.D. — Bill Janklow, a 16-year governor of South Dakota who pushed through a sales tax that paid to save much of Milwaukee Road’s rail network in his state, has died. The controversial and brash former Republican governor was 72, and died today of brain cancer.

With most of Milwaukee’s network in the state under embargo, Janklow called the state’s legislature into special session. He tasked the body with identifying rail lines critical to the state’s infrastructure, then finding a way to purchase them. The legislature created a temporary 1 percent sales tax to fund a $25 million rail purchase program. On Nov. 13, 1980, the state purchased 760 miles of secondary trackage from Milwaukee’s trustee for $18.75 million.

In an interview with TRAINS author Jerry Huddleston prior to his cancer diagnosis, Janklow recalled how he convinced Burlington Northern President Dick Grayson to operate the lines.

“We had some BN lines in the state, and they were cripples and dead-enders. And so as we talked, I said, ‘You know, Grayson, you’re running coal trains just as fast as you can run them across North Dakota. You ought to return your cars through South Dakota.’”

After negotiations at BN’s St. Paul, Minn., headquarters, Grayson agreed to become the designated operator of the state’s newly purchased routes. The first train ran June 6, 1981. BN-operated routes included Aberdeen-Mitchell, Chamberlain-Mitchell, Canton-Mitchell, and Elk Point-Mitchell. In 2005, BN successor BNSF Railway purchased all but the Chamberlain route, and operates them to this day.

A year after BN began operating the so-called “core lines,” the state acquired 480 miles of track from Ortonville, Minn., to Terry, Mont., formerly part of Milwaukee’s transcontinental main line. Janklow again convinced the legislature to purchase the line, and leveraged his relationship with BN, convincing the railroad to operate the line under contract. It purchased the line outright in 1990.