Sale of Conrail Act of 1985

Sale of Conrail Act of 1985 - Declares it is the purpose of the Congress to return the Consolidated Rail Corporation (Conrail) to the private sector by implementing the Plan of the Secretary of Transportation (the Secretary) to sell the Federal interest in Conrail common stock.

Title I: Amendments to the Regional Rail Reorganization Act of 1973 and the Northeast Rail Service Act of 1981 - Amends the Regional Rail Reorganization Act of 1973 to terminate the authority of the United States Railway Association (the Association) to purchase Conrail securities when the sale of the Federal interest in Conrail common stock has been consummated. Makes the Regional Rail Reorganization Act of 1973 inapplicable to Conrail after the sale of the Federal interest in Conrail common stock has been consummated. Makes specified provisions of such Act still applicable to Conrail under certain conditions.

Directs the Secretary to implement the plan to sell Conrail common stock to the Norfolk Southern Corporation. States that such implementation, and the coordinated operation of Conrail's properties with those of Norfolk Southern Corporation and its affiliates as a single rail system, is deemed approved by Interstate Commerce Commission.

Directs the Secretary to implement the Secretary's Plan by performing specified Definitive Agreements which shall conform substantially with the Memorandum of Intent between the United States and Norfolk Southern Corporation signed February 8, 1985.

Repeals provisions which allow the sale of Conrail common stock to other railroads or to certain railroad employees.

Authorizes the Secretary to recapitalize Conrail in such a way that the Federal interest in any debt or preferred stock is cancelled and contributed to the Corporation's capital.

Sets forth guidelines under which the Norfolk Southern Corporation may bring suit against the United States for breach of specified representations.

Provides protective labor conditions under specified arbitration provisions to certain personnel whose employment is adversely affected by the sale of the Federal interest in Conrail common stock.

Amends the Northeast Rail Service Act of 1981 to confer jurisdiction upon a special Federal district court (established by the judicial panel on multi-district litigation) to hear civil actions relating to the: (1) Sale of Conrail Act of 1985; (2) enforcement of the Secretary's Plan or the Definitive Agreements (pertaining to the Conrail sale); and (3) the value of the interest in Conrail Equity Corporation preferred stock of the Conrail Employees Stock Ownership Plan (ESOP) and related trusts.

Provides that, with certain exceptions, no persons connected with the Conrail ESOP shall be subject to any fiduciary obligation or fiduciary civil liability for actions pertaining to the Secretary's Plan or disposition of Conrail Equity Corporation assets.

Deems as qualified under the Internal Revenue Code any Conrail ESOP maintained or adopted in implementing the Secretary's Plan.

States that the registration and prospectus delivery requirements of the Securities Act of 1933 (including State laws and certain Federal approval requirements) shall not apply to implementation of the Secretary's Plan through: (1) the sale or contribution of securities by Norfolk Southern Corporation to fulfill arrangements with Conrail employees; or (2) the distribution of shares from Conrail employee stock ownership plans.

Title II: Technical and Conforming Amendments - Makes technical and conforming amendments to various laws affected by this Act.

Title III: Miscellaneous Provisions - States that Conrail's status as a common carrier is not affected by the sale of the Federal interest in Conrail common stock.