SB2366

Eligible projects replace tracks or bridges, improve rail capacity or restore railways. The recipient must be a rural rail transportation district that owns or operates a qualifying railroad—not merely any private railroad operator. The law defines “short line” to include both Class II and Class III railroads under federal Surface Transportation Board classifications. These are federal carrier classes, not a simple mileage test. Final law, 201.981(a)–(c); District definition; Federal carrier classifications, general instruction 1-1.

Each award requires Texas Transportation Commission approval. Ordinarily, at least 10% of total project cost must come from a source other than the state. If the district uses the award as matching funds to obtain additional project funding, the alternative test is at least 10% of the amount used as matching funds from a nonstate source. The second percentage is not necessarily 10% of the entire project. Final law, 201.981(c)–(d).

TxDOT may use only legislative appropriations for this purpose and gifts or grants, including federal grants, and may solicit gifts and grants. Money deposited in the state highway fund cannot fund an award. The commission was directed to adopt implementing rules by October 1, 2025. These are statutory funding and rulemaking requirements, not confirmation of a particular appropriation, award or completed project. Final law, 201.981(e)–(f) and section 2.

Changes during passage: The introduced and Senate committee versions allowed districts or railroad companies to receive grants. Hughes’s sole indexed floor amendment removed the railroad-company definition and company eligibility, leaving districts. The Senate-passed, House committee and final operative texts match; the adopted narrowing survives. Introduced; Senate committee; Adopted Senate amendment; Senate-passed; House committee; Final law; Version index; Amendment index.

Compare the published text versions in the official text index. A change is not attributed to a specific amendment here without a verified record.

Qualifying districts and rail users could benefit from track, bridge, capacity or restoration projects. The statute states public-safety, economic-development and traffic-reduction purposes, but does not prove that any specific project will achieve them. Districts must assemble the required nonstate share, and private railroad companies are not direct recipients under this program merely because they operate short lines. Final law.

The April 14 fiscal note says state and local fiscal impacts cannot be determined because the amount and timing of funding are unknown; it assumes TxDOT can absorb administration with existing resources. That note analyzed the introduced version, before direct railroad-company eligibility was removed. Its discussion of company recipients is therefore not the final eligibility rule. The bill makes no appropriation. Official fiscal note; Final law.