SB1555

Regular Session

Relating to a grant program to fund certain railroad grade separation projects.

ModeratePlan for compliance

Medium Cost

Effective:2025-09-01

Enforcing Agencies

Texas Department of Transportation (TxDOT) • Texas Transportation Commission

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

Effective Date: September 1, 2025
Compliance Deadline: October 1, 2025 (Texas Transportation Commission must adopt implementing rules by this date; grant applications will follow immediately).
Agency Rulemaking: The Texas Transportation Commission is statutorily required to define grant selection criteria and administration rules by October 1, 2025. Expect a regulatory comment period in Q3 2025 regarding the definition of "eligible costs" and "public safety" weighting.

Immediate Action Plan

1. Municipalities: Immediately identify high-priority crossings and secure the 10% match source for the FY2026 budget cycle.
2. Contractors: Verify or renew TxDOT pre-qualification status immediately; do not wait for the grant solicitation.
3. Legal Counsel: Prepare to review standard TxDOT "Advanced Funding Agreements" to facilitate the mandatory jurisdictional handoff.
4. Railroads: Centralize engineering review requests through TxDOT District contacts rather than local public works departments for these specific projects.

Operational Changes Required

Contracts

Mandatory Delegation Agreements: Municipalities receiving funds must execute a binding agreement designating TxDOT as the project manager. Legal counsel must review these for liability indemnification clauses, as the state assumes supervision.
Procurement Shift: Construction contracts will not be let through local municipal bid boards. They will be procured via TxDOT’s system. Prime contractors must adhere to TxDOT Standard Specifications, not local public works standards.

Hiring/Training

Contractor Pre-Qualification: Construction firms intending to bid on these projects must hold active pre-qualification status with TxDOT. A standard municipal vendor registration is insufficient.
Project Management: Municipal engineers must be trained to interface with TxDOT District offices for oversight, rather than managing the general contractor directly.

Reporting & Record-Keeping

Source of Funds Verification: Applicants must maintain auditable records proving the required 10% funding match comes from local, federal, or private sources (e.g., railroad contributions), as State Highway Fund monies cannot be used for the match.
Designation Filings: The specific agreement designating TxDOT’s authority must be filed prior to the commencement of any construction activity.

Fees & Costs

10% Capital Match: Municipalities must budget for a minimum 10% match of total project costs in their FY2026 Capital Improvement Plans.
Insurance Premiums: Contractors should anticipate higher insurance limits required by TxDOT (including Railroad Protective Liability) compared to standard municipal road work.

Strategic Ambiguities & Considerations

"Gifts and Grants" for Matching: The statute allows the 10% match to come from "sources other than the state." Rulemaking must clarify if contributions from the railroad operator or adjacent private developers count toward this municipal match requirement.
Maintenance Responsibility: The law mandates TxDOT manage *construction*, but is silent on post-completion maintenance. We anticipate the implementing rules or the Interlocal Agreement will force the asset back to the municipality for long-term maintenance, despite the state managing the build.
Selection Weighting: The bill lists safety, traffic reduction, and economic development as criteria. The October rules will define which factor is dispositive for award selection.

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Schedule Consultation

Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.

Legislative Timeline

This bill's path through the Texas Legislature

TopicsPolitical Subdivisions State Finances State Finances--management & Control Transportation Transportation--railroads Transportation Commission, Texas Transportation, Texas Department of State Finances--appropriations

Official Analysis

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BILL ANALYSIS

Senate Research Center	S.B. 1555
89R13159 MZM-F	By: Nichols; Alvarado
	Transportation
	3/6/2025
	As Filed

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

During the 88th legislative interim, the Senate Committee on Transportation was tasked to assess the implementation of funding appropriated by the 88th Legislature. The areas to which funding will be appropriated are aviation, maritime ports, international points of entry, existing rail line operations, and public transportation from non-dedicated state funds and federal funds. The committee will also make recommendations to ensure these sectors meet current demands and are prepared for future growth.

During that hearing, it was determined that the committee should further investigate rail grade separations. Rail grade separations at highway rail crossings improve safety, emergency response times, economic productivity, congestion mitigation, evacuation routing, and supply chain fluidity for critical locations in Texas.

S.B. 1555 creates a grant program for railroad grade separation projects. This bill requires the Texas Department of Transportation to award grants to political subdivisions for rail-roadway grade separation projects that are located at intersections of railroads and roadways that are not part of the state highway system or county and city projects. This bill also requires a ten percent match from local jurisdiction for the grant.

As proposed, S.B. 1555 amends current law relating to a grant program to fund certain railroad grade separation projects.

RULEMAKING AUTHORITY

Rulemaking authority is expressly granted to the Texas Transportation Commission in SECTION 1 (Section 471.010, Transportation Code) of this bill.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Chapter 471, Transportation Code, by adding Section 471.010, as follows:

Sec. 471.010.� GRANT PROGRAM FOR CERTAIN RAILROAD GRADE SEPARATION PROJECTS. (a)� Requires the Texas Department of Transportation (TxDOT), for the purpose of increasing public safety, enhancing economic development, and reducing traffic, to establish and administer a program to award grants to political subdivisions of this state or railroad companies to fund rail-roadway grade separation projects that are located at intersections of railroads and roadways that are not part of the state highway system and rail-pedestrian grade separation projects that are located at intersections of railroads and pedestrian crossings.

(b) Authorizes a political subdivision or railroad company to use money awarded by TxDOT under this section as matching funds to secure additional funding for a grade separation project described by Subsection (a).

(c) Requires that each grant awarded under this section be approved by the Texas Transportation Commission (TTC). Prohibits TTC from approving a grant under this section unless TTC determines that at least 10 percent of the total project costs will be provided by a source other than the state or, if the grant money is being used as matching funds under Subsection (b), at least 10 percent of the amount used as matching funds will be provided by a source other than the state.

(d) Authorizes TxDOT to 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. Authorizes TxDOT to solicit and accept gifts and grants from any source for the purposes of this section. Prohibits money deposited to the credit of the state highway fund from being used to fund a grant awarded under this section.

(e) Requires TTC to adopt rules as necessary to implement this section.

SECTION 2. Requires TTC, not later than October 1, 2025, to adopt the rules required by Section 471.010, Transportation Code, as added by this Act.

SECTION 3. Effective date: upon passage or September 1, 2025.

Senate Authors

Sen. Robert NicholsRepublican · Primary Author

Joint Authors

Carol Alvarado (D)

Coauthors (8)

House Sponsors

Rep. Jared PattersonRepublican · Primary Sponsor

Joint Sponsors

Cosponsors (2)

Bill Text(with markup)

S.B. No. 1555

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

	AN ACT
	relating to a grant program to fund certain railroad grade
	separation projects.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1. Chapter 471, Transportation Code, is amended by
	adding Section 471.010 to read as follows:
	Sec. 471.010. GRANT PROGRAM FOR CERTAIN RAILROAD GRADE
	SEPARATION PROJECTS. (a) 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 political subdivisions of this state to fund:
	(1) rail-roadway grade separation projects that are
	located at intersections of railroads and public roadways that are
	not part of the state highway system; and
	(2) rail-pedestrian grade separation projects that
	are located at intersections of railroads and public pedestrian
	crossings.
	(b) 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 at least 10
	percent of the total project costs will be provided by a source
	other than the state.
	(c) 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.
	(d) A political subdivision that receives a grant under this
	section shall designate the department to manage contracting for,
	in accordance with Subchapter A, Chapter 223, and supervision of
	the planning and construction of a project for which the grant was
	awarded. A political subdivision shall enter into an agreement
	with the department prescribing the terms of a designation under
	this subsection in accordance with applicable state or federal law.
	The department, acting as the designee of a political subdivision
	under this section, shall make each contract in accordance with the
	law governing the making of contracts by or on behalf of the state.
	(e) The commission shall adopt rules as necessary to
	implement this section.
	SECTION 2. Not later than October 1, 2025, the Texas
	Transportation Commission shall adopt the rules required by Section
	471.010, Transportation Code, as added by this Act.
	SECTION 3. This Act takes effect immediately if it receives
	a vote of two-thirds of all the members elected to each house, as
	provided by Section 39, Article III, Texas Constitution. If this
	Act does not receive the vote necessary for immediate effect, this
	Act takes effect September 1, 2025.

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION


March 11, 2025

TO:	Honorable Robert Nichols, Chair, Senate Committee on Transportation

FROM:	Jerry McGinty, Director, Legislative Budget Board

IN RE:	SB1555 by Nichols (Relating to a grant program to fund certain railroad grade separation projects.), As Introduced

The fiscal impact to the state cannot be determined because the amount and timing of legislative appropriations and amounts of gifts and grants that would be received by the Department of Transportation to fund rail-roadway grade separation project grant awards is unknown.

The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.

The bill would amend the Transportation Code to require the Department of Transportation (TxDOT) to establish and administer a program to award grants to Texas political subdivisions or railroad companies to fund rail-roadway grade separation projects at rail-roadway intersections that are not part of the state highway system and rail-pedestrian grade separation projects. The bill would stipulate that TxDOT may fund the grant program only from money appropriated by the legislature for that purpose and from gifts and grants. The bill would require the Texas Transportation Commission to adopt rules to implement the grant program. The bill would take effect immediately upon receiving a vote of two-thirds of all members elected to each house or, otherwise, on September 1, 2025.

Based on information provided by TxDOT, it is assumed any costs or duties associated with administering the grant program could be absorbed within existing resources. Because the amount and timing of legislative appropriations and amounts of gifts and grants that would be received by TxDOT to fund rail-roadway grade separation grant awards is unknown, the fiscal impact to the State cannot be determined.

Local Government Impact

The fiscal implications of the bill cannot be determined at this time.

Source Agencies:

304 Comptroller of Public Accounts, 601 Department of Transportation

LBB Staff:

JMc, AAL, GDZ, TG

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Frequently Asked Questions

Common questions about SB1555

What does Texas SB1555 do?

SB1555 creates a state grant program for local railroad grade separation projects but legally mandates that recipient municipalities surrender construction management and contracting authority to TxDOT. This shifts procurement from local ordinances to strict state standards (Chapter 223, Transportation Code) and requires a 10% non-state funding match from applicants. Implementation Timeline Effective Date: September 1, 2025 Compliance Deadline: October 1, 2025 (Texas Transportation Commission must adopt implementing rules by this date; grant applications will follow immediately).

Who authored SB1555?

SB1555 was authored by Texas Senator Robert Nichols during the Regular Session.

When was SB1555 signed into law?

SB1555 was signed into law by Governor Greg Abbott on May 24, 2025.

Which agencies enforce SB1555?

SB1555 is enforced by Texas Department of Transportation (TxDOT) and Texas Transportation Commission.

How urgent is compliance with SB1555?

The compliance urgency for SB1555 is rated as "moderate". Businesses and organizations should review the requirements and timeline to ensure timely compliance.

What is the cost impact of SB1555?

The cost impact of SB1555 is estimated as "medium". This may vary based on industry and implementation requirements.

What topics does SB1555 address?

SB1555 addresses topics including political subdivisions, state finances, state finances--management & control, transportation and transportation--railroads.

Legislative data provided by LegiScanLast updated: November 25, 2025

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