The bill, S.B. No. 2366, establishes a grant program aimed at funding specific projects related to short line railroads in Texas. It introduces a new section, 201.981, to the Transportation Code, which defines key terms such as "District," "Railroad company," and "Short line railroad." The program is designed to enhance public safety, promote economic development, and alleviate traffic by providing grants to districts or railroad companies that own or operate short line railroads. Eligible projects include the replacement of tracks or bridges, improvements to rail capacity, and restoration of railways.

Additionally, the bill stipulates that grant funds can be used as matching funds for further financing of these projects, with the requirement that at least 10% of the total project costs must come from non-state sources. The Texas Transportation Commission is tasked with approving grants and must adopt necessary rules to implement the program by October 1, 2025. The funding for this grant program will come from legislative appropriations and external gifts or grants, explicitly excluding the use of state highway funds. The bill is set to take effect immediately upon receiving a two-thirds majority vote or on September 1, 2025, if that threshold is not met.

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