A bill to amend the Rail Passenger Service Act to authorize appropriations for the National Railroad Passenger Corporation, and for other purposes.

Amends the Rail Passenger Service Act to authorize appropriations for FY 1989 through 1992 for the National Railroad Passenger Corporation (Amtrak).

Amends the Railroad Unemployment Insurance Act to set forth, for 1989 and 1990, the method of calculation for Amtrak's contribution toward employee's unemployment compensation benefits.

Prohibits the compensation of any rail or motor carrier employee who works in more than one State from being subject to State income taxes in any State but the State in which the employee resides.

Amends the Rail Passenger Service Act to limit the liability for certain rail accidents occurring in the District of Columbia to no more than the limits of coverage maintained by a publicly funded commuter transportation authority established under Virginia law to indemnify Amtrak or any railroad over which the authority conducts its operations.

Directs Amtrak to study and report to the Congress on the consequences on passenger revenues and operating costs of rerouting the California Zephyr through northern Illinois and central Iowa over the tracks of the Chicago and North Western Railroad.

Directs the Secretary of Transportation to study the potential need among Class II and Class III railroads for Federal guarantees of obligations for funding rehabilitation and improvement of facilities and equipment, acquisition of new railroad facilities, or refinancing of existing debt.