The Railroad Revitalization and Regulatory Reform Act of 1976, often called the "4R Act," is a United States federal law that established the basic outlines of regulatory reform in the railroad industry and provided transitional operating funds following the 1970 bankruptcy of Penn Central Transportation Company. The law approved the "Final System Plan" for the newly created Conrail and authorized acquisition of Northeast Corridor tracks and facilities by Amtrak.

The Act was the first in a series of laws which collectively are described as the deregulation of transportation in the United States. It was followed by the Airline Deregulation Act (1978), Staggers Rail Act (1980), and the Motor Carrier Act of 1980.

Background

Following the massive bankruptcy of the Penn Central in 1970, Congress created Amtrak to take over the failed company's intercity passenger train service, under the Rail Passenger Service Act. Congress passed the Regional Rail Reorganization Act of 1973 (the "3R Act") to salvage viable freight operations from Penn Central and other failing rail lines in the northeast, mid-Atlantic and midwestern regions, through the creation of Conrail. Conrail began operations in 1976.

Summary

  • Implementation of the Conrail "Final System Plan," as formulated by the United States Railway Association, and which specified the rail lines that Conrail would receive
  • Provision of operating funds for Conrail, which had not received direct federal funds under the 3R Act. Initial funding for 1976 was $484 million (in 1986 dollars)
  • Federal regulation of railroads was reduced significantly for the first time since passage of the 1887 Interstate Commerce Act.

Large shippers of goods by rail also wished to have more flexibility in the rail market. The result of this alignment between carriers, the shippers, and the Carter administration’s ICC, was the Staggers Act of 1980. The Staggers Act extended the principles of the 4R Act. One of the key changes from the 1976 Act was allowance of secret contracts between carriers and shippers, not limited to large-investment situations and not effectively subject to regulatory review. According to former Congressional Budget Office analyst Christopher Barnekov, such contracts allowed rail carriers and shippers much to develop more efficient transport arrangements.

See also

  • History of rail transport in the United States

References

  • Full text of the law, Legal Information Institute
  • Full text of the law, U.S. Government Publishing Office