A bill to amend the Regional Rail Reorganization Act of 1973 to authorize the Secretary of Transportation to guarantee notes issued to State and local taxing obligations owed by a railroad in reorganization.

Amends the Regional Rail Reorganization Act of 1973 to authorize the Secretary of Transportation to guarantee securities and obligations issued by a railroad in reorganization to State and local taxing authorities to secure the railroad's tax obligations when the Consolidated Rail Corporation, the United States Railway Association, or the Federal Government asserts a superior interest in payment out of the estate of such railroad during reorganization or liquidation proceedings under the Bankruptcy Act.

Directs the Secretary, if sufficient funds are unavailable to discharge such guarantees, to issue notes or other obligations to the Secretary of the Treasury. Authorizes the Secretary of the Treasury to sell such olbigations.

Authorizes appropriations in such amounts as may be necessary to discharge all of the Secretary of Transportation's obligations under this Act.