Railroad Crossing Safety Act of 1996

Railroad Crossing Safety Act of 1996 - Increases to 100 percent the Federal share of rail-highway crossing closure costs.

Authorizes a State to make incentive payments from Federal funds appropriated for railway-highway crossings to local governments upon the permanent closure by such governments of public at-grade railway highway crossings. Bars a State from making such a payment unless the railroad owning the tracks on which the crossing is located makes an incentive payment to the government with respect to the closure. Limits the amount of the incentive payment to a local government to the lesser of the amount of the payment to the government by the railroad concerned or $7,500. Requires such government to use the incentive payment from the State for transportation safety improvements.

Directs the Secretary of Transportation to prescribe guidelines to assist the States in analyzing the costs and benefits to the public of new railway-highway grade crossings.