Federal-Aid Railroad Act

Federal-Aid Railroad Act - Title I: Findings, Purposes, and Definitions - Declares the findings of the Congress with regard to essential rail lines in the Northeast section of the United States.

Title II: Interim and Emergency Measures - Provides that within ninety days after enactment of this Act, the trustees or trustee of any railroad in reorganization, the majority of whose lines are located in the Northeast region, all owners of rail lines leased to such railroad, whether ratified or affirmed or not, and all wholly owned subsidiaries and affiliates of such railroad, upon authorization therefor from the reorganization court, may tender all lines and other transportation properties, assets, and interests of such companies to the United States for lease by the United States for a term not to exceed three years. Provides that the trustees or companies making such tender shall at the same time agree to the operation of such properties, assets, and interests so tendered and to all other terms and conditions of this title.

Provides that as consideration for leasing the lines and other transportation properties, assets, and interests tendered for lease under this section, and for their operation by the lessor, the United States shall pay to the lessor an amount to be negotiated between the trustee or trustees of the railroad in reorganization and the Commission, which amount shall be the least amount necessary to protect the interests of the creditors of such railroad during the period such lease is in effect and to carry out the other purposes of this title. Provides that during the period of such lease there shall be no further accrual of real estate or other taxes imposed by States or their subdivisions upon the lines and other transportation properties, assets, and interests of the lessor railroad leased to the United States.

Provides that at the expiration of the lease and operating agreement, a final audit of the amount paid thereunder shall be made by independent auditors, subject to review by the Commission, and the lessor railroad shall make payment to the United States in an amount equal to the amount paid to it under the lease and operating agreement, or shall issue to the United States debentures, in such form and subject to such terms and conditions as the Commission shall prescribe in the face value of such amount. Provides that such debentures shall mature twenty years from the date of issue, shall be subordinated to other securities or claims against the lessor railroad's estate outstanding at the date of their issuance, and shall bear interest at the rate of 3 percent per year for the first five years and at the rate of 6 percent per year thereafter.

Provides that the willful failure or refusal of any carrier or subsidiary, affiliate, or holding company, or of any officer or employee of any carrier, subsidiary, or holding company, to comply with the terms of any order of the Commission pursuant to this title shall be a misdemeanor, and upon conviction thereof the carrier, subsidiary, affiliate, or holding company, or person offending shall be subject to a fine of not less than $1,000 or more than $5,000 for each offense, and each day during which such party shall willfully fail or refuse to comply with the terms of such order shall constitute a separate offense. Makes it the duty of the Attorney General of the United States to prosecute all necessary proceedings for the enforcement of the provisions of this title and for punishment of all violations thereof upon application by the Commission.

Title III: The Federal-Aid Railroad System - Provides that the Federal-aid railroad system shall consist initially of those main lines, yards, and terminals, located in the Northeast region and operated by domestic railroad companies, found by the Commission to be essential to the present and future public convenience and necessity and best suited for inclusion of an integrated system of main line, yard, and terminal facilities capable of meeting the needs of commerce of the United States and the national defense.

Prescribes the criteria for determining which main lines, yards, and terminals should be included on the Federal-aid railroad system.

Provides that to the extent consistent with the purposes of this Act, the Commission shall not designate as part of the system rail lines which are parallel to, and duplicative of, other lines included on the system.

Directs the Secretary of Transportation to prepare and submit to the Congress on January 1 of the second year following enactment of this Act, and every second year thereafter, a report, to be known as the "Railway Needs Report", setting forth major transportation services that should be provided by railroads in the United States.

Directs the Secretary to undertake and carry out a study of the long-term capital needs for line relocation, tunneling, highway grade crossing elimination, electrification, improvement of yards and other major upgrading of the railway system of the United States.

Authorizes to be appropriated to the Commission such sums as may be necessary to bring all rail lines, yards, and terminals on the system into compliance with the requirements of this title and of the Federal Railroad Safety Act of 1970, and for the administration of this title, but not to exceed $400,000,000 in each of the two fiscal years ending June 30, 1974, and June 30, 1975.

Imposes upon the amount paid within the United States for the transportation of property, except by air, from one point in the United States to another, beginning sixty days after the date of enactment of this Act, a tax equal to 1 percent of the amount so paid.

Title IV: Local Rail Services - Provides, under the Interstate Commerce Act, that no carrier by railroad subject to such Act undertake the extension of its line of railroad, or the construction of a new line of railroad, or shall engage in transportation under this part over or by means of such additional or extended line of railroad, unless and until there shall first have been obtained from the Commission a certificate that the present or future public convenience and necessity require or will require the construction, or operation, or construction and operation, of such additional or extended line of railroad.