An Act to amend the Regional Rail Reorganization Act of 1973 to authorize the purchase of an additional $1,200,000,000 of the Series A preferred stock of the Corporation, and for other purposes.
PL 95-565 (S.2788), enacted 11/01/1978

PUBLIC LAW 95-565—NOV. 1, 1978 
92 STAT. 2397 
Public Law 95-565 
95th Congress 
An Act 
To amend the Regional Rail Reorganization Act of 1973 to authorize the purchase 
of an additional $1,200,000,000 of the series A prteferred stock of the Corpora-
tion, and for other purposes. 
Be it enacted hy the Senate and House of Representatives of the 
United States of America in Congress assembled, That this Act may be 
cited as the "United States Eailway Association Amendments Act of 
1978". 
SEC. 2. (a) Section 216(a) of the Regional Rail Reorganization Act 
of 1973 (45 U.S.C. 726 (a)) is amended by striking out "$1,100,000,000" 
and inserting in lieu thereof "$2,300,000,000". 
(b) Section 216(b)(2) of such Act (45 U.S.C. 716(b)(2)) is 
amended by striking out "$1,100,000,000" and inserting in lieu thereof 
"$2,300,000,000". 
(c) Section 216(f) of such Act (45 U.S.C. 726(f)) is amended by 
striking 
out 
"$2,100,000,000" 
and 
inserting 
in 
lieu 
thereof 
"$3,300,000,000". 
SEC. 3. Section 216 of the Regional Rail Reorganization Act of 1973 
(45 U.S.C. 726) is further amended by redesignating subsection (f) 
thereof as subsection (g) and by inserting immediately after subsection 
(e) thereof a new subsection as follows: 
" (f) (1) The Association shall not invest the final $345,000,000 of the 
additional investment in the Corporation authorized by the Regional 
Rail Reorganization Act Amendments of 1978 unless and until (A) 
the Corporation has in eflpect an employee stock ownership plan which 
satisfies the requirements of paragraphs (2) and (3), and (B) the 
requirements of the other paragraphs of this subsection have been 
satisfied. 
" (2) The employee stock ownership plan shall: 
"(A) provide: 
" (i) for a transfer to the plan and allocation to the accounts 
of plan participants in periodic installments of Series A pre-
ferred stock of the Corporation with a stated redemption 
value of at least $345,000,000 or any other securities in an 
amount determined by the Association, with the concurrence 
of the Finance Committee, as constituting a meaningful inter-
est in the Corporation, or any combination thereof so deter-
mined by the Association, with the concurrence of the Finance 
Committee. The use of Series A preferred stock to fund the 
Employee Stock Ownership Plan shall not be interpreted to 
relieve ConRail of the responsibility for repaying in full to 
the United States Railway Association its indebtedness as 
represented by all shares originally issued under Public Law 
94-210 and this Act; 
"(ii) for immediate vesting of the rights of participants to 
such securities upon allocation, subject to defeasance as a 
result of the plan's termination which termination shall occur 
in the event that, by the end of the 120th month beginning 
•after the month in which securities or interests therein are first 
allocated to participants' accounts, the Corporation has not 
Nov. 1. 1978 
[S. 2788] 
United States 
Railway 
Association 
Amendments 
Act of 1978. 
45 u s e 701 note. 
45 u s e 726. 
Employee stock 
ownership plan. 
92 STAT. 2398 
PUBLIC LAW 95-565—NOV. 1, 1978 
attained for two consecutive quarters positive net income and 
a freight labor cost to freight revenue ratio equal to the aver-
age such ratio for all Class I railroads in 1977, as determined 
pursuant to procedures adopted by the Corporation pursuant 
to regulations promulgated by the Association with the con-
' 
,
^ 
, 
currence of the Finance Committee; 
"(B) be an employee benefit plan which is designed to invest 
primarily in employer securities; 
"(C) meets such other requirements (similar to requirements 
applicable to employee stock ownership plans as defined in sec-
26 use 4975. 
tion 4975(e) (7) of the Internal Revenue Code of 1954) as the 
Secretary of the Treasury or his delegate may describe; 
* 
'• 
"(T>) have been approved by the Board of Directors of the 
\/„ 
• 
. Corporation to the extent and in the manner which may be 
"' ' ' 
^"' 
required by the Corporation's articles of incorporation and bylaws 
' -1_ 
, 
then in effect; and 
"(E) have been prepared in consultation with, and been 
approved by, the Association and the Finance Committee. 
" (3) Notwithstanding any other provision of law, if a plan does not 
meet the requirements of section 401 of the Internal Revenue Code of 
26 use 401. 
1954— 
"(A) stock transferred under paragraph (2) and allocated to 
<
j the account of any participant under paragraph (2) shall not be 
considered income of the participant or his beneficiary under the 
' 
Internal Revenue Code of 1954 until such stock or dividends are 
-J, !. ^v,-,*«,«'I if 
actually distributed or made available to the participant or his 
' ,., f . 
beneficiary and, at such time, shall be taxable under section 72 of 
26 use 72. 
the Internal Revenue Code of 1954 (treating the participant or his 
beneficiary as having a basis of 0 in the stock) ; 
' 
"(B) no amount shall be allocated to any participant under the 
plan in excess of the amount which might be allocated if the 
plan met the requirements of section 401 of the Internal Revenue 
Code of 1954; and 
"(C) the plan must meet the requirements of sections 410 and 
26 use 410, 
415 of the Internal Revenue Code of 1954. 
415. 
" (4) The Corporation shall adopt such terms and conditions govern-
ing the securities or interests therein to be transferred to the plan 
(including limitations on voting rights) as the Association, with the 
concurrence of the Finance Committee, determines are necessary to 
protect reasonably the interests of the United States in the litigation 
45 use 743. 
pursuant to section 303(c) of this Act and in the event of any action 
to further reorganize or restructure the Corporation's assets or capital 
structure. 
"(5) The Corporation, the Association, and a representative 
appointed by the Chairman of the Railway Labor Executives' Associa-
tion as representative of all the classes or crafts of employees of the 
Corporation shall engage in negotiations to agree upon a plan in 
accordance with the provisions of this subsection. The parties shall 
incorporate their agreement into a written plan instrument specifying 
PUBLIC LAW 95-565—NOV. 1, 1978 
92 STAT. 2399 
the terms and conditions set forth in this subsection and such other 
terms and conditions as they may decide upon, with the concurrence 
of the Finance Committee, unless the parties are unable to reach on an 
agreement on the plan following the exertion of every reasonable 
effort to do so, in accordance witn the Kailway Labor Act, in which 
event, the Corporation and the Association, with the concurrence of 
the Finance Committee, shall establish a written plan with such terms 
and conditions as they may agree upon in accordance with this sub-
section. Within one year after the effective date of this subsection, the Plan, transmittal 
Corporation shall transmit a draft of such plan to the Congress and *
o Congress, 
shall report on its progress in establishing and administering the plan. 
The report shall include recommendations of contractual and statu-
tory provisions necessary to reasonably (A) exempt any Trustee of 
the plan, the Corporation, the Association, any member of the Finance 
Committee, and any other person from any fiduciary duty, responsi-
bility or liability for the acquisition of, investment in, or retention of 
any security or interest therein of the Corporation or for any other 
transaction contemplated by this subsection and (B) provide for the 
United States to indemnify, defend, and hold harmless such persons 
against any and all liabilities, claims, actions, judgments, amounts 
paid in settlement, and costs and expenses actually incurred in con-
nection with any matter so exempted in which it is determined that 
such persons were acting in good faith and in a manner they believed 
to not be opposed to the best interests of the plan. 
"(6) Within fourteen months of the effective date of this subsec- Report to 
tion, the Association shall report to the Congress on the draft plan Congress, 
and on any legal obstacle to the ability of the Corporation to effectuate 
and implement an employee stock ownership plan of the nature con-
templated by this subsection, including specific recommendations on 
amendments to this subsection and other relevant laws which would 
harmonize the requirements of this subsection with those other laws. 
The Department of Transportation and the Department of the Treas-
ury, as each finds appropriate, shall provide separate comments to the 
Association for inclusion with such report, 
"(7) For the purposes of this subsection, the officers of each duly 
authorized representative of the crafts or classes of the employees of 
, • 
the Corporation who have been given leaves of absence by the Corpora- 
"' "" 
tion to serve as such officers, are to be eligible to participate in such 
plan on the same basis as are employees whose employment is governed 
by a collective bargaining agreement with the Corporation.". 
SEC. 4. (a) The first section of the Act entitled "An Act to authorize 43 USC 975. 
the President of the United States to locate, construct, and operate 
railroads in the Territory of Alaska, and for other purposes", 
approved March 12, 1914 (38 Stat. 305; 43 U.S.C. 957), is amended 
by inserting after "to fix compensation of all officers, agents, or other 
employees designated by him;" the following: "and, notwithstanding 
any other provision of law or regulation, to fix relocation, travel and 
transportation expenses for the General Manager of the railroad 
designated under this Act". 
(b) This section shall apply to the General Manager serving on 43 U
S
C 975 note, 
the date of enactment of this section with respect to relocation, travel, 
92 STAT. 2400 
PUBLIC LAW 95-565—NOV. 1, 1978 
Railroad bridge, 
reconstruction. 
Appropriation 
authorization. 
45 use 747. 
Report to 
Congress. 
Information, 
submittal to 
Congress. 
Monitoring 
report, 
transmittal to 
Congress. 
or transportation expenses which were incurred before or after the 
date of enactment of this section. 
SEC. 5. Section 505 of the Railroad Revitalization and Regulatory 
Reform Act (45 U.S.C. 825) is amended by (a) striking the last 
sentence of subsection (d)(3) thereof; and (b) striking "purchase 
under this title after September 30,1978," and inserting in lieu thereof 
", after September 30, 1979, make commitments to purchase under 
this title" in subsection (e) thereof. 
SEC. 6. (a) The Consolidated Rail Corporation shall (1) carry 
out such reconsti'uction of the railroad bridge over the Hudson River 
at Poughkeepsie, New York, as is necessary for the purposes of this 
section and make appropriate repairs and improvements in rail yards 
and tracks which service the rail system using such bridge, (2) 
restore freight service on such system at least to the extent provided 
prior to the fire damage to such bridge in 1974, and (3) take appro-
priate steps to promote the use of such system. 
(b) There is authorized to be appropriated to the Secretary of 
Transportation not to exceed $9,000,000 for making payments to the 
Corporation to cover costs incurred pursuant to subsection (a)(1). 
SEC. 7. Section 307 of the Regional Rail Reorganization Act is 
amended by inserting after subsection (b) a new subsection (c) as 
follows: 
"(c) MONITORING OF THE CORPORATION.— (1) The Association shall 
also report to the Congress, in accordance with this subsection, on the 
policies of the Corporation and the results of such policies with 
respect to operations, cost containment, and marketing. 
"(2) Within 90 days after the date of enactment of this subsection, 
the Association shall (A) subdivide each such policy area into con-
stituent parts or groups of parts which are specific and significant, 
(B) identify the most appropriate indicia to reflect accurately such 
parts or groups of parts, and (C) (i) determine any and all deficiencies 
in data used to compute the values of such indicia including consist-
ency and clarity of definitions, timeliness of data entry, editing and 
validation of input data, and processing, and (ii) outline the efforts of 
the Association and Corporation to correct the deficiencies and the 
results of such efforts. On or before the end of such 90-day period, 
the Association shall submit to the Congress such methodological 
information and additional information which the Association deems 
necessary or appropriate to further the purpose of this title. 
"(3) Using such indicia, the Association shall report on (A) the 
relationship of each constituent part or groups of parts to the Corpora-
tion's revenue and capital and operating expenses, (B) the extent to 
which such parts or group of parts contributes to profits or losses, 
(C) the efforts of management to contain or reduce the contribution 
of such part or group of parts to losses, (D) the results of such efforts, 
and (E) such other information as the Association deems necessary 
or appropriate. 
"(4) The Association shall (A) transmit to the Congress the first 
such monitoring report pursuant to paragraph (3) at the end of the 
first calendar quarter which begins after the end of the 90-day period 
PUBLIC LAW 95-565—NOV. 1, 1978 
92 STAT. 2401 
for preparation and submission of the methodological information 
pursuant to paragraph (2), (B) report such monitoring information 
to the Congress at the end of the first quarter of each calendar year 
thereafter, (C) update methodological and monitoring information 
periodically as the Association deems necessary or appropriate, but 
in no case less frequently than once a year, and (D) where the results 
of such updating are statistically significant or relevant to Congres-
sional policymaking, report them and the reasons for their significance 
at the end of the calendar quarter in which the updating occurred.". 
Approved November 1, 1978. 
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LEGISLATIVE HISTORY: 
HOUSE REPORT No. 95-1175, accompanying H.R. 12161 (Comm. on Interstate and 
Foreign Commerce). 
SENATE REPORT No. 95-885 (Comm. on Commerce, Science, and Transportation). 
CONGRESSIONAL RECORD, Vol. 124 (1978): 
Aug. 1, considered and passed Senate. 
Oct. 6, 11, 15, H.R. 12161 considered and passed House; passage vacated, and 
S. 2788, amended, passed in lieu.