I 

112TH CONGRESS 

1ST SESSION H. R. 3607 

To establish a program to improve freight mobility in the United States, 

to establish the National Freight Mobility Infrastructure Fund, and 

for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 8, 2011 

Mr. SMITH of Washington (for himself and Mr. DICKS) introduced the following bill; which was referred to the Committee on Transportation and 

Infrastructure, and in addition to the Committee on Ways and Means, 

for a period to be subsequently determined by the Speaker, in each case 

for consideration of such provisions as fall within the jurisdiction of the 

committee concerned 

A BILL 

To establish a program to improve freight mobility in the 

United States, to establish the National Freight Mobility 

Infrastructure Fund, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘National Freight Mobility Infrastructure Act’’. 

6 (b) TABLE OF CONTENTS.— 

Sec. 1. Short title; table of contents. 


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TITLE I—NATIONAL FREIGHT MOBILITY INFRASTRUCTURE 

IMPROVEMENT PROGRAM 

Sec. 101. Definitions. 

Sec. 102. Establishment of program. 

Sec. 103. Applications. 

Sec. 104. Competitive project selection and eligibility criteria for grants. 

Sec. 105. Funding agreements. 

Sec. 106. Grant requirements. 

Sec. 107. Annual report. 

Sec. 108. Applicability of title 23. 

Sec. 109. Regulations. 

TITLE II—FUNDING 

Sec. 201. Establishment of National Freight Mobility Infrastructure Fund. 

Sec. 202. Freight mobility infrastructure tax. 

1 TITLE I—NATIONAL FREIGHT 

2 MOBILITY INFRASTRUCTURE 

3 IMPROVEMENT PROGRAM 

4 SEC. 101. DEFINITIONS. 

5 In this title, the following definitions apply: 

6 (1) DESIGNATED ENTITY.—The term ‘‘des7 ignated entity’’ means— 

8 (A) an entity designated by the chief exec9 utive officer of a State (or the chief executive 

10 officer’s designee) as eligible to apply for and 

11 receive funding under the program established 

12 under section 102; 

13 (B) a regional authority if the authority is 

14 responsible under the laws of a State for a cap15 ital project; and 

16 (C) a public port. 

17 (2) ELIGIBLE PROJECT COSTS.—The term ‘‘eli18 gible project costs’’ means the— 


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1 (A) reimbursement of the costs of develop2 ment phase activities, including planning, feasi3 bility analysis, revenue forecasting, environ4 mental review, preliminary engineering and de5 sign work, and other preconstruction activities; 

6 and 

7 (B) the costs of construction, reconstruc8 tion, rehabilitation, and acquisition of real prop9 erty (including land related to the project and 

10 improvements to land), environmental mitiga11 tion, construction contingencies, acquisition of 

12 equipment, and operational improvements. 

13 (3) ELIGIBLE PROJECT.—The term ‘‘eligible 

14 project’’ means any freight mobility infrastructure 

15 project that meets the criteria established in section 

16 104. 

17 (4) SECRETARY.—The term ‘‘Secretary’’ means 

18 the Secretary of Transportation. 

19 (5) STATE.—The term ‘‘State’’ has the mean20 ing given such term in section 101(a) of title 23, 

21 United States Code. 

22 SEC. 102. ESTABLISHMENT OF PROGRAM. 

23 (a) IN GENERAL.—The Secretary shall establish a 

24 program to provide grants to States and designated entiVerDate Mar 15 2010 03:14 Dec 14, 2011 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3607.IH H3607

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1 ties for projects to improve the efficiency of freight mobil2 ity in the United States. 

3 (b) OVERHEAD COSTS.—In carrying out the pro4 gram, the Secretary shall seek to minimize administrative 

5 costs, including overhead, enforcement, and auditing costs. 

6 SEC. 103. APPLICATIONS. 

7 A State or designated entity seeking to receive a 

8 grant under this title for an eligible project shall submit 

9 to the Secretary an application in such form and in ac10 cordance with such requirements as the Secretary may re11 quire. 

12 SEC. 104. COMPETITIVE PROJECT SELECTION AND ELIGI13 BILITY CRITERIA FOR GRANTS. 

14 (a) SELECTION OF PROJECTS.—In carrying out this 

15 title, the Secretary shall— 

16 (1) award grants on a competitive basis; 

17 (2) conduct a national solicitation for applica18 tions; and 

19 (3) establish criteria for selecting among freight 

20 projects of national and regional significance that in21 clude, but are not limited to, those which enable— 

22 (A) the construction of grade separations 

23 at railroad, highway, and railroad-highway 

24 junctions; 


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1 (B) the construction of railroad bypasses 

2 and spurs; 

3 (C) the construction of railroad side 

4 tracks; 

5 (D) the expansion of rail and highway tun6 nels to accommodate larger, taller, and addi7 tional volumes of vehicular and rail freight and 

8 container stacks; 

9 (E) the addition of railroad track and 

10 intermodal facilities at international gateways, 

11 land, air, and sea ports, points of congestion, 

12 and logistic centers; 

13 (F) highway and road construction (includ14 ing reinforcement for heavy weight vehicles and 

15 heavy traffic volume) at international gateways, 

16 land, air, and sea ports, points of congestion, 

17 and logistic centers to better accommodate and 

18 speed the flow of freight traffic; 

19 (G) the construction and improvement of 

20 rail and highway bridges that carry a substan21 tial amount of freight; 

22 (H) the construction of highway ramps 

23 that carry a substantial amount of freight; and 


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1 (I) the construction of highway lanes, in2 cluding lanes that segregate freight and pas3 senger vehicular traffic. 

4 (b) PROJECT REQUIREMENTS.—The Secretary may 

5 approve a grant under this title for a project only if the 

6 Secretary determines that the project— 

7 (1) will improve freight mobility and national 

8 freight capacity and efficiency; 

9 (2) is cost-effective; 

10 (3) is based on the results of preliminary engi11 neering; 

12 (4) is justified based on extent to which the 

13 project— 

14 (A) will enhance national and regional 

15 economies by allowing for economic develop16 ment, growth, and efficiency as measured by— 

17 (i) the impact on the Nation’s gross 

18 domestic product; 

19 (ii) increases in new businesses and 

20 jobs and retention of existing businesses 

21 and jobs; 

22 (iii) State and local tax receipts; and 

23 (iv) improved safety as measured by 

24 reductions in accidents, injuries, and fatali25 ties; and 


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1 (B) seeks to maximize economic opportuni2 ties for communities; and 

3 (5) is supported by an acceptable degree of non4 Federal financial commitments, as determined under 

5 subsection (d). 

6 (c) SELECTION CONSIDERATIONS.—In selecting a 

7 project under this title, the Secretary shall consider the 

8 extent to which the project— 

9 (1) improves freight mobility and national 

10 freight capacity and efficiency; 

11 (2) is cost effective; 

12 (3) complements and supports the objectives of 

13 a strategic freight plan to be developed by the State 

14 or designated entity in accordance with such require15 ments as the Secretary may prescribe; 

16 (4) facilitates freight throughput of higher vol17 ume and values; 

18 (5) uses operational efficiencies, including intel19 ligent transportation systems, that enhance the effi20 ciency or effectiveness (or both) of the project; 

21 (6) enhances national and regional economies 

22 by allowing for economic development, growth, and 

23 efficiency; 

24 (7) helps maintain or protect the environment; 


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1 (8) improves safety as measured by reductions 

2 in accidents, injuries, and fatalities; and 

3 (9) is supported by an acceptable degree of non4 Federal financial commitments, as determined under 

5 subsection (d). 

6 (d) NON-FEDERAL FINANCIAL COMMITMENT.— 

7 (1) REQUIREMENTS.—In evaluating a project 

8 under this section, the Secretary shall require that— 

9 (A) the proposed project plan provides for 

10 the availability of contingency amounts that the 

11 Secretary determines to be reasonable to cover 

12 unanticipated cost increases; and 

13 (B) each proposed non-Federal source of 

14 capital and operating financing is stable, reli15 able, and available within the proposed project 

16 timetable. 

17 (2) CONSIDERATIONS.—In assessing the sta18 bility, reliability, and availability of proposed sources 

19 of non-Federal financing under paragraph (1)(B), 

20 the Secretary shall consider— 

21 (A) existing financial commitments; 

22 (B) the degree to which financing sources 

23 are dedicated to the purposes proposed; 


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1 (C) any debt obligation that exists or is 

2 proposed by the recipient for the proposed 

3 project; and 

4 (D) the extent to which the project has a 

5 non-Federal financial commitment that exceeds 

6 the required non-Federal share of the cost of 

7 the project. 

8 (e) PROJECT EVALUATION.— 

9 (1) IN GENERAL.—A proposed project may ad10 vance from preliminary engineering to final design 

11 and construction only if the Secretary finds that the 

12 project meets the requirements of this section and 

13 there is a reasonable likelihood that the project will 

14 continue to meet such requirements. 

15 (2) EVALUATION AND RATING.—In making 

16 such findings, the Secretary shall evaluate and rate 

17 the project as ‘‘highly recommended’’, ‘‘rec18 ommended’’, or ‘‘not recommended’’ based on the re19 sults of preliminary engineering, the project selection 

20 considerations, and the degree of non-Federal finan21 cial commitment, as required under this title. In rat22 ing the projects, the Secretary shall provide, in addi23 tion to the overall project rating, individual ratings 

24 for each of the project selection considerations. 


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1 (3) PRIORITY.—The Secretary shall award 

2 grants first for projects designated as ‘highly rec3 ommended’ and next for projects designated as ‘rec4 ommended’, in an order based upon the extent to 

5 which each project adheres to the project selection 

6 considerations applicable to the project under this 

7 section. 

8 (f) DISTRIBUTION AMONG STATES.—Not to exceed 

9 10 percent of the funds made available to carry out this 

10 title in a fiscal year may be used to make grants for 

11 projects located in a single State. 

12 SEC. 105. FUNDING AGREEMENTS. 

13 (a) FULL FUNDING GRANT AGREEMENTS.— 

14 (1) IN GENERAL.—A project financed under 

15 this title shall be carried out through a full funding 

16 grant agreement. The Secretary shall enter into a 

17 full funding grant agreement based on the evalua18 tions and ratings required under section 104(e). 

19 (2) TERMS.—If the Secretary makes a full 

20 funding grant agreement with an applicant, the 

21 agreement shall— 

22 (A) establish the terms of participation by 

23 the United States Government in a project 

24 under this section; 


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1 (B) establish the maximum amount of 

2 Government financial assistance for the project; 

3 (C) cover the period of time for completing 

4 the project, including a period extending beyond 

5 the period of an authorization; and 

6 (D) make timely and efficient management 

7 of the project easier according to the laws of 

8 the United States. 

9 (3) AGREEMENT.—An agreement under this 

10 subsection obligates an amount of available budget 

11 authority specified in law and may include a com12 mitment, contingent on amounts to be specified in 

13 law in advance for commitments under this sub14 section, to obligate an additional amount from fu15 ture available budget authority specified in law. The 

16 agreement shall state that the contingent commit17 ment is not an obligation of the Government. Inter18 est and other financing costs of efficiently carrying 

19 out a part of the project within a reasonable time 

20 are a cost of carrying out the project under a full 

21 funding grant agreement, except that eligible costs 

22 may not be more than the cost of the most favorable 

23 financing terms reasonably available for the project 

24 at the time of borrowing. The applicant shall certify, 

25 in a way satisfactory to the Secretary, that the apVerDate Mar 15 2010 03:14 Dec 14, 2011 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H3607.IH H3607

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1 plicant has shown reasonable diligence in seeking the 

2 most favorable financing terms. 

3 (b) AMOUNTS.—The total estimated amount of fu4 ture obligations of the Government and contingent com5 mitments to incur obligations covered by all full funding 

6 grant agreements may be not more than the greater of 

7 the amount authorized to carry out this section or an 

8 amount equivalent to the last 2 fiscal years of funding au9 thorized to carry out this section less an amount the Sec10 retary reasonably estimates is necessary for grants under 

11 this section not covered by a full funding grant agreement. 

12 The total amount covered by full funding grant agree13 ments may be not more than a limitation specified in law. 

14 SEC. 106. GRANT REQUIREMENTS. 

15 (a) HIGHWAY CONSTRUCTION PROJECTS.—A grant 

16 for the construction of a highway under this title shall be 

17 subject to all of the requirements of title 23, United States 

18 Code. 

19 (b) OTHER TERMS AND CONDITIONS.—The Sec20 retary shall require that all grants under this title be sub21 ject to all terms, conditions, and requirements that the 

22 Secretary decides are necessary or appropriate for pur23 poses of this section, including requirements for the dis24 position of net increases in the value of real property re25 sulting from the project assisted under this title. 


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1 (c) GOVERNMENT’S SHARE OF PROJECT COST.— 

2 Based on engineering studies, studies of economic feasi3 bility, and information on the expected use of equipment 

4 or facilities, the Secretary shall estimate the cost of a 

5 project receiving assistance under this title. A grant for 

6 the project shall not exceed 80 percent of the project cost. 

7 SEC. 107. ANNUAL REPORT. 

8 Not later than the first Monday in February the year 

9 after the date of enactment of this Act and each year 

10 thereafter, the Secretary shall submit to the Committees 

11 on Transportation and Infrastructure and Appropriations 

12 of the House of Representatives and the Committees on 

13 Commerce, Science, and Transportation and Appropria14 tions of the Senate a report that includes— 

15 (1) a proposal on the allocation of amounts to 

16 be made available to finance grants under this sec17 tion; 

18 (2) evaluations and ratings, as required under 

19 section 104(e); and 

20 (3) recommendations of projects for funding 

21 based on the evaluations and ratings and on existing 

22 commitments and anticipated funding levels for the 

23 next 3 fiscal years and for the next 10 fiscal years 

24 based on information currently available to the Sec25 retary. 


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1 SEC. 108. APPLICABILITY OF TITLE 23. 

2 Funds made available to carry out this title shall be 

3 available for obligation in the same manner as if such 

4 funds were apportioned under chapter 1 of title 23, United 

5 States Code, except that such funds shall not be transfer6 able and shall remain available until expended and the 

7 Federal share of the cost of a project under this section 

8 shall be as provided in this title. 

9 SEC. 109. REGULATIONS. 

10 Not later than 180 days after the date of enactment 

11 of this Act, the Secretary of Transportation shall issue 

12 regulations to carry out this title. 

13 TITLE II—FUNDING 

14 SEC. 201. ESTABLISHMENT OF NATIONAL FREIGHT MOBIL15 ITY INFRASTRUCTURE FUND. 

16 (a) ESTABLISHMENT OF THE FUND.—There is estab17 lished in the Treasury a separate account which shall be 

18 known as the ‘‘National Freight Mobility Infrastructure 

19 Fund’’ (in this section referred to as the ‘‘Fund’’). 

20 (b) DEPOSITS INTO THE FUND.—The account shall 

21 consist of amounts transferred to the Fund under section 

22 4286 of the Internal Revenue Code of 1986. 

23 (c) EXPENDITURES FROM FUND.— 

24 (1) IN GENERAL.—Amounts in the account 

25 shall be made available to the Secretary of Trans26 portation for each of the fiscal years 2011 to 2036, 


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1 without further appropriation, for making expendi2 tures to meet the obligations of the United States to 

3 carry out this Act. 

4 (2) ADMINISTRATIVE EXPENSES.—Not more 

5 than 4 percent of the amounts made available to the 

6 Secretary under this section for a fiscal year may be 

7 used for administrative expenses of the Secretary in 

8 carrying out this Act. 

9 SEC. 202. FREIGHT MOBILITY INFRASTRUCTURE TAX. 

10 (a) IMPOSITION OF TAX.—Chapter 33 of the Internal 

11 Revenue Code of 1986 is amended by adding after sub12 chapter C the following new subchapter: 

13 ‘‘Subchapter D—Transportation by Freight 

14 Rail and Highway 

‘‘Sec. 4286. Imposition of tax. 

15 ‘‘SEC. 4286. IMPOSITION OF TAX. 

16 ‘‘(a) IN GENERAL.—There is hereby imposed upon 

17 taxable ground transportation of property within the 

18 United States a tax equal to 1 percent of the fair market 

19 value of such transportation. 

20 ‘‘(b) FAIR MARKET VALUE OF TAXABLE GROUND

21 TRANSPORTATION.— 

22 ‘‘(1) TRANSPORTATION BY UNRELATED PER23 SONS.—In the case of amounts paid to an unrelated 

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1 erty by freight rail or highway for hire, the fair mar2 ket value shall be the amount paid for transporting 

3 such property. 

4 ‘‘(2) TRANSPORTATION BY RELATED PER5 SONS.—In the case of transportation of property by 

6 the taxpayer or a person related to the taxpayer, the 

7 fair market value of such transportation shall be the 

8 amount which would be paid for transporting such 

9 property if such property were transported by an un10 related person, determined on an arms’ length basis. 

11 ‘‘(c) BY WHOM PAID.— 

12 ‘‘(1) IN GENERAL.—Except as provided by 

13 paragraph (2), the tax imposed by subsection (a) 

14 shall be paid— 

15 ‘‘(A) by the person making the payment 

16 subject to tax; or 

17 ‘‘(B) in the case of transportation by a re18 lated person, by the person for whom such 

19 transportation is made. 

20 ‘‘(2) PAYMENTS MADE OUTSIDE THE UNITED

21 STATES.—If a payment subject to tax under sub22 section (a) is made outside the United States and 

23 the person making such payment does not pay such 

24 tax, such tax shall be paid by the person to whom 

25 the property is delivered in the United States after 


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1 the final segment of transportation in the United 

2 States. 

3 ‘‘(3) DETERMINATIONS OF AMOUNTS PAID IN

4 CERTAIN CASES.—For purposes of this section, rules 

5 similar to the rules of section 4271(c) shall apply. 

6 ‘‘(d) TRANSFER OF AMOUNTS EQUIVALENT TO TAX

7 TO NATIONAL FREIGHT MOBILITY INFRASTRUCTURE

8 FUND.—There are hereby appropriated to the National 

9 Freight Mobility Infrastructure Fund amounts equivalent 

10 to the taxes received in the Treasury under subsection (a). 

11 ‘‘(e) DEFINITIONS.—For purposes of this part— 

12 ‘‘(1) TAXABLE GROUND TRANSPORTATION.— 

13 The term ‘taxable ground transportation’ means 

14 transportation of property by— 

15 ‘‘(A) freight rail, or 

16 ‘‘(B) commercial motor vehicle (as defined 

17 in section 31101(1) of title 49, United States 

18 Code) for a distance of more than 50 miles. 

19 ‘‘(2) RELATED PERSON.—A person (hereinafter 

20 in this paragraph referred to as the ‘related person’) 

21 is related to any person if the related person bears 

22 a relationship to such person specified in section 

23 267(b) or 707(b)(1), or the related person and such 

24 person are engaged in trades or businesses under 

25 common control (within the meaning of subsections 


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1 (a) and (b) of section 52). For purposes of the pre2 ceding sentence, in applying section 267(b) or 

3 707(b)(1), ‘10 percent’ shall be substituted for ‘50 

4 percent’. 

5 ‘‘(f) EXEMPTION FOR UNITED STATES AND POSSES6 SIONS AND STATE AND LOCAL GOVERNMENTS.—Sub7 section (a) shall not apply to the transportation of prop8 erty purchased for the exclusive use of the United States, 

9 or any State or political subdivision thereof. For purposes 

10 of the preceding sentence, the term ‘State’ includes the 

11 District of Columbia.’’. 

12 (b) CREDITS OR REFUNDS TO PERSONS WHO COL13 LECTED CERTAIN TAXES.—Section 6415 of such Code is 

14 amended by striking ‘‘or 4271’’ each place it appears and 

15 inserting ‘‘4271, or 4286’’. 

16 (c) REGULATIONS.—Not later than 180 days after 

17 the date of the enactment of this Act, the Secretary of 

18 the Treasury shall issue regulations to carry out the 

19 amendments made by this section. 

20 (d) EFFECTIVE DATE.—The amendments made by 

21 this section shall apply to transportation beginning on or 

22 after the last day of the 180-day period beginning on the 

23 date of the issuance of regulations under subsection (c). 

Æ 


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