TX SB2366

Establishes a Texas Department of Transportation grant program for districts that own or operate Class II or Class III short line railroads to fund track and bridge replacement, capacity improvements, and railway restoration projects

Requires at least 10% of total project costs to come from non-state sources; grant funds may also be used as matching funds to secure additional funding if 10% of the match comes from non-state sources

All grants must be approved by the Texas Transportation Commission, which is required to adopt implementing rules by October 1, 2025

Program funding limited to legislative appropriations, gifts, and federal grants; state highway fund money is explicitly prohibited from being used for these grants

Passed the Senate on April 30, 2025 (25-6) and the House on May 28, 2025 (112-29); takes effect immediately with two-thirds vote or September 1, 2025 otherwise