Rail Service Improvement Act of 1998

Rail Service Improvement Act of 1998 - Amends Federal transportation law to lengthen from four months to 16 months after an application by a rail carrier to the Surface Transportation Board for abandonment of a railroad line or discontinuance of rail transportation the time period within which a person may offer to subsidize or purchase the railroad line.

Directs the Board to: (1) identify, and to the extent practicable implement, improvements to its procedures for deciding whether a rate, classification, rule, or order of a rail carrier is unreasonable, that will result in a more expeditious resolution of issues and a less expensive process for parties initiating a complaint; and (2) report to the Congress on actions taken and any recommendations for changes in law to improve such procedures.

Declares as primary objectives for U.S. rail transportation: (1) ensuring effective competition among rail carriers at origin and destination; (2) maintaining reasonable rates in the absence of such competition; and (3) ensuring the continued health and viability of the railroad industry.

Requires the Board, in approving an application for abandonment or discontinuance, to require compliance with conditions important to protecting the railroad line's potential for later revival as an economically viable railroad line.