Rail-Highway Grade Crossing Safety Act of 1994

Rail-Highway Grade Crossing Safety Act of 1994 - Includes rail-highway crossing closures among the safety projects for which an increased Federal share of construction costs apply.

Authorizes any State, after adopting a policy requiring the review of the need for all new public at-grade rail-highway crossings, to use certain authorized funds to provide an incentive payment to a local jurisdiction upon the permanent closing by the jurisdiction of a public at-grade crossing, provided that such payments may not exceed $7,500 and that the funds are matched by an equal payment from the railroad owning the tracks on which the crossing is located. Directs the local jurisdiction receiving funds to use the Federal funds portion of the incentive payment for transportation safety improvements only. Directs the Secretary to establish guidelines to enable States to determine the public benefits and costs resulting from any new rail-highway grade crossings.

Revises provisions regarding Operation Lifesaver to require the Secretary of Transportation to set aside $500,000 of funds authorized to be appropriated for the surface transportation program (STP) for a given fiscal year for carrying out a public information and education program to help prevent and reduce motor vehicle accidents, injuries, and fatalities, to improve driver performance at railway-highway crossings, and to help prevent trespassing on rail rights-of-way and resulting injuries and fatalities. Directs that expenditure of any funds in excess of $300,000 be contingent upon receipt of matching funds from nonpublic sources.

Requires the Secretary to: (1) set aside $15 million of funds authorized to be appropriated for the STP for a given fiscal year to carry out a program to provide a financial incentive to States that review and implement grade crossing safety improvements on a corridor basis; and (2) issue investment criteria for approving projects.