A bill to amend the Regional Rail Reorganization Act of 1973.

Revises the Regional Rail Reorganization Act to authorize the U.S. Railway Association to acquire, hold, and vote the proposed ConRail securities to be issued to it.

Reduces the Association's authority to issue Government-guaranteed obligations from $1,500,000,000 to $500,000,000. Provides the mechanism for purchase of ConRail securities by the Association.

Authorizes acquisition of up to $1,000,000,000 principal amount of debentures and up to $1,500,000,000 of series A preferred stock.

Provides that the debentures and preferred stock may be purchased by the Association as needed by ConRail for modernization and rehabilitation of its properties, for the acquisition of equipment and other capital needs, for refinancing obligations, and for working capital.

Requires that if the Association decides to terminate ConRail funding, it must obtain the Interstate Commerce Commission's approval, which shall be deemed to have been given if it has not acted within 90 days.

Authorizes appropriation to the Association of the $2,500,000,000 for purchase of ConRail debentures and series A preferred stock, and directs that any sums received by the Association on account of the holding or disposition of the securities be deposited in the general fund of the Treasury.

Authorizes ConRail's initial capitalization consisting of debentures, series A preferred stock, series B preferred stock, and common stock, with the latter two classes going to the debtor estates.

Provides that no deficiency judgment shall be entered by the special court which shall be entered by the special court which would have the effect of impairing ConRail's financial self-sufficiency, credit, or solvency.

Authorizes the Association to make designations of additional rail properties to be transferred to or from the Corporation if this would serve better to meet the goals of the Act. Provides for the Association to initiate proposals for transfer, either on its own initiative or upon petition.

Provides that the executive Committee of the Association shall serve as ConRail's Board of Directors only until at least five members of the 9-member Board shall have been selected.

Provides that any traffic protective condition imposed by the Commission, in the course of any previous rail merger or other proceeding involving the present owner of a line to be transferred to ConRail or another railroad under the final system plan shall remain in full force and effect and apply to the operations performed by the new owners, unless and until such conditions are modified by the Commission.

Directs the Commission, in the event that implementation of the final system plan results in any disruption of rail service, to take any action now authorized under the Interstate Commerce Act to assure the continuation of transportation services. Increases the authorization of appropriations of the Rail Services Planning Office by $1,000,000 to a total of $6,000,000