Proposed Amendments to Title V of the Regional Rail Reorganization Act of 1973

Senate bill 2530 contains a proposal to change the employee protection provisions of the Regional Rail Reorganization Act. The bill would solve many problems; however, there are some important areas of concern not adequately addressed by the proposed legislation. Estimates on how much the provision would eventually cost vary. The existing provision provides that an employee who was working for 5 or more years on the effective date of the Rail Act is entitled to employee protection benefits until age 65, unless he dies, resigns, or is fired, or unless entitlement is suspended for one of the reasons specified in the law. When Congress passed the Rail Act, it had been advised that most of the protection payments would be needed for termination and separation allowances rather than for monthly allowances and that the $250 million fund would be sufficient. Because monthly payments have constituted the bulk of the protection payments and have increased the program's cost beyond original expectations, the program should be limited to bring it more in line with original intentions. The Rail Act protects employees much longer than other federally established employee protection programs. Federally mandated employee protection programs for other industries also have shorter protection periods than the Rail Act. The Department of Transportation's proposed changes to the Rail Act will reduce the scope and cost of the employee protection program. However, a more consistent Federal approach to employee protection within the rail industry and among all industries is desirable to provide fair treatment to all workers affected by Federal interventions. GAO believes Congress intended the provision to protect employees who were affected by the rail consolidation. Conrail and the U.S. Rail Association do not agree and believe that the legislation was intended to be used for purposes such as the separations resulting from the Agreement. Conrail's use of funds does not violate the terms of the law. However, Congress should clarify its intent as to what the fund may be used for.