According to the Lone Star Rail web site (read here), they have suspended work on the Enviromental Impact Statement.
Having lost the cooperation of Union Pacific for passenger rail traffic and support of the Capital Area Metropolitan Planning Organization, the project may not recover. We have been tracking this project since if implemented it could have reduced freight train traffic (and horns) through the city. They may work out another solution with the Federal Highway Administration (FHWA) and TxDOT.
TxDOT has a project statement posted at http://www.txdot.gov/inside-txdot/projects/studies/statewide/lone-star-rail.html.