GRANT PROGRAM FOR CERTAIN SHORT LINE RAILROAD PROJECTS.

(a) In this section:

(1) "District" has the meaning assigned by Section 172.001.

(2) "Short line railroad" means a Class II or Class III railroad as defined by the federal Surface Transportation Board.

(b) For the purpose of increasing public safety, enhancing economic development, and reducing traffic, the department shall establish and administer a program to award grants to districts that own or operate short line railroads to fund projects that:

(1) replace short line railroad tracks or bridges;

(2) improve short line rail capacity; or

(3) restore short line railways.

(c) A district that owns or operates a short line railroad may use money awarded by the department under this section as matching funds to secure additional funding for a short line railroad project described by Subsection (b).

(d) Each grant awarded under this section must be approved by the commission. The commission may not approve a grant under this section unless the commission determines that:

(1) at least 10 percent of the total project costs will be provided by a source other than the state; or

(2) if the grant money is being used as matching funds under Subsection (c), at least 10 percent of the amount used as matching funds will be provided by a source other than the state.

(e) The department may fund the grant program under this section only from money appropriated by the legislature for that purpose and from gifts and grants, including grants from the federal government. The department may solicit and accept gifts and grants from any source for the purposes of this section. Money deposited to the credit of the state highway fund may not be used to fund a grant awarded under this section.

(f) The commission shall adopt rules as necessary to implement this section.