Relating to a grant program to fund certain short line railroad projects.

Contracts

• Lease Agreements: Review all agreements between Rural Rail Transportation Districts (RRTDs) and private operators. If the District receives the grant for infrastructure improvements, the lease must clarify ownership of those improvements and whether rent adjustments are triggered.
• Vendor Procurement: Construction and engineering contracts funded by this program will be subject to state procurement standards. Do not sign sole-source agreements for grant-eligible projects now; they may be disqualified later for lack of competitive bidding.

Hiring/Training

• Grant Administration: Designate a specific officer to manage the application process. This individual must understand TxDOT’s grant portal and state audit requirements.
• Project Classification: Engineering teams must categorize all capital needs into one of three statutory buckets: (1) track/bridge maintenance, (2) capacity construction, or (3) restoration. Projects outside these definitions are ineligible.

Reporting & Record-Keeping

• Financial Segregation: Establish a separate general ledger code for grant funds. Commingling state grant dollars with general operating revenue is a primary cause of audit failure.
• Match Verification: You must generate auditable proof (bank letters, escrow agreements, or municipal resolutions) confirming you possess the 10% non-state matching funds.

Fees & Costs

• Matching Requirement: Applicants must cover at least 10% of the total project cost (or match amount, pending rule clarification) using private, local, or federal funds. State funds cannot be used for the match.
• Administrative Overhead: Budget for legal and engineering costs required to prepare the grant application; these pre-award costs are typically non-reimbursable.