Rail authority mistakenly thought $2 million budget was discretionary
ROBERT N. CROSSMAN JR. Jacksonville

It was never obvious during the hearings leading up to the passage of the bill establishing the Texas State Railroad Authority how much more than the assets of Texas State Railroad were going to be involved (exclusive of the right-of-way.)

Rider 25 of the budget bill provided $2 million in "matching funds" for a potential $10 million Transportation Enhancement Grant through TxDOT, using federal transportation funds.

This type grant is commonly referred to as a 20/80 grant. The 20 percent, or $2 million, would be placed in escrow to establish the availability of the 20 percent. This type grant is restricted to non-operating items.

The TSRA apparently considered the $2 million to be discretionary and planned to loan at least $1 million to American Heritage Railway

AHR).

It appears that TSRA did not fully consider what they contracted to provide to AHR, since they agreed to a $ 2 million revolving loan fund for use by AHR.

TSRA does not have income except that appropriated by the Legislature.

It now appears that AHR was not in a position to fund the operation of TSR.

I fully expect that TSRA will shorten the eight-year "gift period" for AHR to gain full ownership in just one or two years, thus allowing AHR to achieve ownership in a much shorter time.