A bill to improve rail service, railroad tracks, and roadbeds by public investments.

Title I: Purpose and Definitions - States that the Congress of the United States recognizes the environmental and economic importance of efficient railroad transportation to interstate commerce.

Declares that it is therefore the national policy of the United States to improve rail service and that such improvement requires public investment in and maintenance of railroad track and roadbed. Defines the terms used in this Act.

Title II: Transfer of Rail Lines - Provides that title to all rail lines operated by rail carriers will be transferred to the Department of Transportation on a date designated by the Secretary of Transportation, such date to be no later than one year from the date this Act becomes law.

States that at the time title to the rail lines owned by a rail carrier is conveyed to the Department, the Secretary shall convey, in consideration thereof, a Certificate of the Right to Carriage.

Provides that such certificate shall entitle the holder to enter into contracts with other rail carriers to operate trains upon the rail line conveyed in consideration for such certificate.

Makes it unlawful to operate a train upon any rail line so conveyed to the Department unless the operator is the holder of a Certificate of the Right to Carriage or has entered into a contract with such holder.

Grants the Commission the authority to issue additional Certificates of the Right to Carriage in the event it finds that the issuance of such certificates is in the public convenience and necessity.

Title III: Unified Surface Transportation Trust Fund - Requires that all moneys now in the Highway Trust Fund or which would be credited to that fund shall instead be paid into a fund hereby established in the Treasury of the United States to be known as the Unified Surface Transportation Fund. Provides that such transfers as are currently authorized to be made into the Highway Trust Fund shall be made into the Unified Surface Transportation Fund.

Requires rail carriers which convey rail lines to the Department pursuant to title II of this Act to pay into the Unified Surface Transportation Fund such moneys as the Commission shall determine in accord with enumerated criteria.

Title IV: Federal Railroad Maintenance and Improvement - Directs the Department of Transportation to maintain and improve the rail lines conveyed to it by the rail carriers.

Directs the Secretary to designate an interstate railroad system composed of rail lines linking: (1) large metropolitan areas; and (2) major areas producing agricultural, commodity, and manufactured products with market areas for those products.

Directs the Secretary to designate a regional railroad system composed of routes linking regional metropolitan areas with the Interstate Railroad System.

Directs the Secretary to designate a local railroad system composed of routes linking small communities and sources of agricultural, commodity, and manufactured products with either the interstate or regional railroad system.

Requires that the Secretary shall not abandon any rail line conveyed unless: (1) public hearings are held at least six months in advance of the proposed date of abandonment to consider the impact such abandonment would have; (2) it is determined that adequate alternative modes of transportation are in existence; (3) it is determined that there is inadequate potential freight volume to make the rail line profitable at current tariffs; and (4) that shippers or State and local governments are unwilling to subsidize the continued operation of that rail line.

Title V: Maintenance and Improvement - Provides for the maintenance and improvement of rail lines conveyed under this Act.

Requires that the construction of improvements shall be undertaken by privately owned construction companies who have engaged in a process of competitive bidding as specified by the Secretary in regulations he shall cause to be published in the Federal Register.

Title VI: Rail Line Condition and Arbitration - Provides that in the event that a rail carrier receiving a Certificate of the Right to Carriage believes that the Department has failed to execute its responsibility under title IV of this Act, that carrier may request that the issue be submitted to compulsory arbitration.

States that a report of findings and conclusions shall determine: (1) if the rail line meets the performance standards designated by the Secretary; (2) if the rail line has deteriorated from its condition at time of conveyance; (3) if the findings in (2) of this part is affirmative, the report shall conclude what steps should be taken to insure that the rail lines are adequately maintained; (4) and if the finding in (1) is negative, and if the schedule adopted by the Secretary pursuant to title VI of this Act requires that the rail line be maintained at that level, the report shall conclude what steps should be taken to insure that such standards will be met.

Title VII: Impoundment - States that appropriations from the Unified Surface Transportation Fund shall not be subject to impoundment by the President, the Office of Management and Budget, or the Secretary.

Directs the Secretary to not withhold or delay the expenditure of funds appropriated pursuant to this Act for any reason other than those necessary for the proper management of the functions assigned to him by this Act.

Title VIII: Repeal Of Certain Sections Of Public Law 93-236 - Provides that this Act shall repeal any sections of Public Law 93-236 in conflict with it. Provides that all abandonment of rail lines shall be pursuant to the provisions of title IV of this Act.

Title IX: The Property Tax Replacement - Establishes in the United States Treasury a fund known as the Property Tax Replacement Fund. Provides that those sums necessary to accomplish the payment of this title may be appropriated to this fund.

Provides that the Governor of each State may certify to the Secretary of the Treasury one year after the conveyance of rail lines in his State, a report detailing the loss of property tax revenue resulting from such conveyance.

Directs the Secretary of the Treasury to make payment to each Governor who certifies a report pursuant to this title in an amount provided for under a schedule set forth in this Act.

Authorizes the Secretary of the Treasury to establish such regulations as he deems necessary consistent with this Act for accomplishing the functions assigned to him in this Act.