Conrail Public Sale Act of 1986

Conrail Public Sale Act of 1986 - 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 certain Conrail stock.

Releases any Conrail director from liability for implementing in good faith the sale of the Federal interest in Conrail common stock to the Conrail Acquisition Corporation, Inc. (Purchaser).

Directs the Secretary of Transportation to execute and deliver Purchase Agreements on behalf of the United States no later than ten days following the date of enactment of this Act. Prescribes guidelines for: (1) the sale of Conrail; (2) the cancellation of Conrail debt and preferred stock; (3) public interest covenants; (4) accounting determinations; (5) the Purchaser and transactions involving Conrail; and (6) capital stock.

Makes Conrail responsible for funding all labor protection benefits after the closing date, and absolves the United States from any liability for such benefits after that date.

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 Conrail sale.

Provides that, with certain exceptions, no persons connected with the Conrail ESOP (Employee Stock Ownership Plan) shall be subject to any fiduciary obligation or fiduciary civil liability for actions pertaining to the Purchase Agreements or disposition of Conrail Equity Corporation assets.

Deems as qualified under the Internal Revenue Code any Conrail ESOP maintained or adopted in implementing the Purchase Agreements.

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 Purchase Agreements through: (1) the sale or contribution of securities by the Purchaser or Conrail to fulfill arrangements with Conrail employees; or (2) the distribution of shares from Conrail employee stock ownership plans.

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

Title III: Revenue Provisions - Provides guidelines for the tax treatment of Conrail after the closing date. Specifies the earnings and profits which Conrail shall be deemed to have accumulated as of the closing date. Closes the Conrail taxable year upon the closing date.

Title IV: Miscellaneous Provisions - Retains the common carrier status of Conrail after the sale. Provides that purchase of Conrail stock shall not be the sole basis of a determination that a purchaser has become a common carrier by railroad under Federal law.