Off-System Rail Grade Separation State Fund Program

The Texas Off-System Rail Grade Separation State Fund Program was established through Senate Bill 1555 during the 89th Texas State Legislature and is authorized under Texas Transportation Code Section 471.010. The program is administered by the Texas Department of Transportation Rail Division and is designed to provide financial assistance to eligible governmental entities across Texas. The Legislature appropriated a total of 250 million dollars to support this initiative for the 2026–2027 fiscal biennium. The program reflects a statewide effort to improve transportation infrastructure by addressing safety risks and inefficiencies at rail crossings located outside the state highway system. The primary purpose of the program is to fund rail grade separation projects that enhance public safety, promote economic development, and reduce traffic congestion. These projects focus on eliminating at-grade rail crossings where railroads intersect with roadways or pedestrian pathways. By replacing these crossings with grade-separated structures such as overpasses, underpasses, or pedestrian bridges, the program aims to reduce vehicle-train and pedestrian-train conflicts while improving traffic flow and community connectivity. The initiative also supports emergency response efficiency and freight mobility by minimizing delays caused by rail operations. Funding provided through the program can be used for a range of project development and construction activities. Eligible uses include planning, environmental review, detailed design, preparation of construction plans, right-of-way acquisition, utility adjustments, and full project construction. However, funding cannot be applied to costs incurred prior to project selection and authorization, nor can it be used for rail capacity improvements or transit infrastructure additions. Additionally, all selected projects must include an administrative fee of up to 15 percent to cover TxDOT oversight and management costs. Eligibility for funding is limited to political subdivisions of the state of Texas, including cities, counties, school districts, and special districts. These entities must have jurisdiction over the project location and the authority to enter into agreements with TxDOT. Projects must be located on roadways that are not part of the state highway system and must meet criteria including improving safety, enhancing economic development, or reducing traffic congestion. Each project must also be a self-contained unit capable of independent construction, even if it is part of a larger transportation initiative. The application process is structured as a competitive, two-phase system consisting of a Preliminary Application followed by a Detailed Application. The preliminary phase captures high-level information about project eligibility, community impact, and readiness. Projects selected to advance must then submit a detailed application including cost estimates, design concepts, letters of support, and documentation of non-state funding commitments. Applications are submitted through an online portal managed by TxDOT, and there is no limit to the number of applications a sponsor may submit. Projects are evaluated by a committee appointed by the TxDOT Executive Director. Evaluation criteria include public safety improvements, traffic reduction, economic development benefits, project readiness, community support, and the level of non-state funding match. Each category carries a weighted score, with public safety, traffic reduction, economic development, project readiness, and community support each accounting for 18 percent of the evaluation, while non-state match and transformational elements account for smaller portions. Final funding decisions are made by the Texas Transportation Commission based on committee recommendations. The 2025 call for projects opened on November 3, 2025, and closed with the preliminary application deadline on November 14, 2025. Selected applicants were invited to submit detailed applications by January 19, 2026, with final award decisions anticipated by the end of February 2026. The program requires a minimum non-state funding match of 10 percent of total project costs, although this requirement may be waived for projects in economically disadvantaged counties. For additional information or assistance, applicants can contact the TxDOT Rail Division via email at RRD_RailPlan@txdot.gov or by phone at 737-243-4470.

Emphasize demonstrated safety improvements, strong local support, and early coordination with railroads to improve competitiveness; ensure project readiness and clear benefits to mobility and economic development