A bill to provide for the preservation, improvement, and reorganization of rail service in the Northeast; to establish the Northeast Transportation Commission, the Federal National Railway Association, and the Northeast Rail Corp.; and for other purposes.

Title I: Financial Assistance to Surface Transportation Companies - Revenue Financing Division and Railroad Equipment Obligation Insurance Fund Act - Creates, under the Interstate Commerce Act, a new division within the Department of Transportation to be known as the Revenue Financing Division. Authorizes the Secretary of Transportation in the operation of such Division to aid in financing the transportation industry and commerce and to help in maintaining its economic stability. Directs the Secretary to designate an Assistant Secretary of Transportation to assist the Secretary in the execution of his functions under this Act.

Establishes a Loan Policy Board of the Revenue Financing Division. Provides for the membership of such Board. Provides that the Board shall establish the general policies governing the granting or denying of applications for financial assistance under this Act.

Provides that the aggregate amount of loan guarantees to any common carrier shall not exceed 15 percent of the guarantees provided for such purpose under this Act. Provides that the total amount of loan guarantees made after the date of enactment of this Act which the Secretary may have outstanding at any one time shall not exceed $2,000,000,000.

Authorizes the appropriation of funds to carry out this title.

Establishes, within the Department of Transportation, a Railroad Equipment Obligation Insurance Fund. Provides that such Fund shall be used by the Secretary as a revolving fund for the purpose of assisting railroads, and their car furnishing subsidiaries in building, rebuilding, leasing, and otherwise acquiring and utilizing rolling stock.

Authorizes the Secretary to insure the lessee's obligations under an equipment lease and the interest on, and the unpaid principal balance of, any equipment obligations offered to him which he determines are eligible for insurance under this Act.

Title II: The National Rail Transportation Act - Northeast Rail Transportation Act - Provides that, within sixty days after the enactment of this title, each United States district court having jurisdiction over a railroad in reorganization shall make a finding as to whether or not, based on the financial condition of and prospects for such railroad and without consideration of the impact of this title, it is reasonably likely that such railroad with all of its rail lines and facilities intact can be reorganized on an income basis under the Bankruptcy Act, and report such finding to the Northeast Transportation Commission established under this title.

Provides for appeals from such district court findings.

Provides that the regional plan providing for the reorganization and the restructuring of the rail system in the northeast region shall designate which rail lines and facilities in the northeast region are required in order to maintain, to continue, and to preserve maximum rail service consistent with the policies and purposes of this Act. Provides that the regional plan shall identify: (1) those rail transportation services and facilities which shall be provided by the Northeast Rail Corporation formed under this title; (2) those rail lines and facilities which shall be offered for sale to a nonbankrupt railroad for inclusion in its system but which, failing acceptance of such offer, must be maintained by this Corporation; (3) those services and facilities which should be continued only upon subsidy arrangements with States, municipalities, and shippers but which failing such arrangements should be suspended; and (4) the manner in which such rail lines and facilities shall be used by the Corporation and by other railroads operating in the northeast region, including provisions for joint use, control, and operation, or for joint ownership of terminal, port, and other facilities.

Provides for standards to govern the specification of the regional plan. Provides that such standards shall include the environmental impact of alternative choices of action, particularly with regard to the effects on attainment and maintenance of any national ambient air quality standard established by the Clean Air Act Amendments of 1970. Provides that the regional plan shall be based upon due consideration of all relevant factors, including the need for and cost of rehabilitation and improvement of physical facilities, alternative means to achieve system rationalization, the cost of labor protection, marketing studies, traffic evaluations, and financial studies.

Creates a corporation with the name of the Federal National Railway Association, which shall be an instrumentality of the United States of America.

Grants the Association specified powers to achieve the objectives and to carry out the purposes of this Act.

Authorizes appropriations to the Association.

Establishes the Northeast Transportation Commission, whose function shall be to develop and to design the regional plan. Directs the President to, within thirty days after enactment of this Act, appoint, by and with the advice and consent of the Senate, twelve members of the NETC as specified in this title.

Creates the Northeast Rail Corporation, a for-profit corporation, the purpose of which shall be to preserve and to improve common carrier service by rail within the northeast region, to develop a profitable rail freight service by rail within the northeast region, and to maintain a rail system which adequately and fairly meets the needs of the residents of the northeast region for freight, commuter, and intercity passenger service in accordance with the regional plan. Provides that the Corporation will not be an agency or establishment of the United States Government.

Authorizes the Corporation: (1) to enter into leases and operating agreements with bankrupt railroads as provided under this Act; (2) to own, manage, operate, and contract for the operation of trains for the purpose of providing rail service in the northeast region in accordance with the regional plan; (3) to reject contracts of bankrupt railroads covering leased rail lines or facilities or jointly operated rail lines or facilities, which are executory in whole or in part; (4) to incur debt, both secured and unsecured; (5) to conduct research and development related to its mission and to form such corporations as may be appropriate for implementing the regional plan; and (6) to acquire by construction, purchase, or gift, or to contract for the use of, physical equipment, facilities, and devices necessary for rail freight and passenger operations in the northeast region.

Provides that, not sooner than ninety nor later than one hundred and twenty days after the enactment of this Act, the trustee or trustees of any bankrupt railroad may tender to the Corporation an offer to lease all the rail lines and properties of which they are trustees and an offer to operate, subject to all the terms and conditions of this Act, such lines and transportation properties for an initial term not to exceed eighteen months, subject to a further extension, not to exceed six months. Provides that, within thirty days of the receipt of such tender, the Corporation shall execute a lease and an operating agreement with the trustees.

Title III: Abandonment of Nonproductive Rail Facilities - Abandonment of Nonproductive Rail Facilities Act - Provides that no carrier by railroad subject to the Interstate Commerce Act shall undertake the extension of its line of railroad, or the construction of a new line of railroad, or shall acquire or operate any line of railroad, or extension thereof, 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 consturction and operation, of such additional or extended line of railroad.

Provides for operating subsidies by States to railroads covered by this title. Authorizes the Secretary of Transportation to reimburse a State for 70 percent of the amount paid by such State as an operating subsidy to continue service on a rail line or lines that would otherwise have been abandoned.

Provides that, within six months from the date of enactment of this title, the Secretary shall prescribe regulations governing the procedure for application by a State for reimbursement of railroad operating subsidies, criteria to be used in deciding upon such applications, and terms and conditions required of all contracts or other arrangements for an operating subsidy.

Provides that if the Secretary finds that an operating subsidy contract or other arrangement as submitted fails to comply with his regulations, he shall advise the State and afford it a period not to exceed fifteen days within which to bring such contract into conformity with such regulations.