I 
110TH CONGRESS 
2D SESSION 
H. R. 7117 
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 
SEPTEMBER 26, 2008 
Mr. SMITH of Washington 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 de-
termined 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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘National Freight Mo-
bility Infrastructure Act’’. 
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SEC. 2. FREIGHT MOBILITY INFRASTRUCTURE IMPROVE-
MENT PROGRAM. 
(a) ESTABLISHMENT OF PROGRAM.—The Secretary 
shall establish a program to provide grants to States and 
designated entities for projects to improve the efficiency 
of freight mobility in the United States. 
(b) DEFINITIONS.—In this section, the following defi-
nitions apply: 
(1) DESIGNATED
ENTITY.—The term ‘‘des-
ignated entity’’ means— 
(A) an entity designated by the chief exec-
utive officer of a State, the Mayor of the Dis-
trict of Columbia, or the designee of either, as 
eligible to apply for and receive funding under 
the program established under subsection (a); 
or 
(B) a regional authority if the authority is 
responsible under the laws of a State for a cap-
ital project. 
(2) ELIGIBLE PROJECT COSTS.—The term ‘‘eli-
gible project costs’’ means the— 
(A) reimbursement of the costs of develop-
ment phase activities, including planning, feasi-
bility analysis, revenue forecasting, environ-
mental review, preliminary engineering and de-
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sign work, and other preconstruction activities; 
and 
(B) the costs of construction, reconstruc-
tion, rehabilitation, and acquisition of real prop-
erty (including land related to the project and 
improvements to land), environmental mitiga-
tion, construction contingencies, acquisition of 
equipment, and operational improvements. 
(3) ELIGIBLE
PROJECT.—The term ‘‘eligible 
project’’ means any freight mobility infrastructure 
project that meets the criteria established in sub-
section (d). 
(4) STATE.—The term ‘‘State’’ has the mean-
ing given such term in section 101(a) of title 23, 
United States Code. 
(c) APPLICATIONS.—A State or designated entity 
seeking to receive a grant under this section for an eligible 
project shall submit to the Secretary an application in 
such form and in accordance with such requirements as 
the Secretary may require. 
(d) COMPETITIVE GRANT SELECTION AND ELIGI-
BILITY CRITERIA FOR GRANTS.— 
(1) IN GENERAL.—The Secretary shall— 
(A) award grants on a competitive basis; 
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(B) conduct a national solicitation for ap-
plications; and 
(C) establish criteria for selecting among 
freight projects of national and regional signifi-
cance that include, but are not limited to, those 
which enable— 
(i) the construction of grade separa-
tions at railroad, highway, and railroad- 
highway junctions; 
(ii) the construction of railroad by-
passes and spurs; 
(iii) the construction of railroad side 
tracks; 
(iv) the expansion of rail and highway 
tunnels to accommodate larger, taller, and 
additional volumes of vehicular and rail 
freight and container stacks; 
(v) the addition of railroad track and 
intermodal facilities at international gate-
ways, land, air, and sea ports, points of 
congestion, and logistic centers; 
(vi) highway and road construction at 
international gateways, land, air, and sea 
ports, points of congestion, and logistic 
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centers to better accommodate freight traf-
fic; 
(vii) the construction and improve-
ment of rail and highway bridges that 
carry a substantial amount of freight; 
(viii) the construction of highway 
ramps that carry a substantial amount of 
freight; and 
(ix) the construction of highway lanes, 
including lanes that segregate freight and 
passenger vehicular traffic. 
(2) PROJECT REQUIREMENTS.—The Secretary 
may approve a grant under this section for a project 
only if the Secretary determines that the project— 
(A) is based on the results of preliminary 
engineering; 
(B) is justified based on extent to which 
the project— 
(i) will enhance national and regional 
economies by allowing for economic devel-
opment and growth, as measured by— 
(I) the impact on the Nation’s 
gross domestic product; 
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(II) increases in new businesses 
and jobs and retention of existing 
businesses and jobs; 
(III) State and local tax receipts; 
and 
(IV) improved safety as meas-
ured by reductions in accidents, inju-
ries, and fatalities; 
(ii) seeks to maximize economic op-
portunities for communities, including in-
creasing local hiring; 
(iii) is cost-effective; and 
(iv) will improve freight mobility and 
national freight capacity and efficiency; 
and 
(C) is supported by an acceptable degree of 
non-Federal financial commitments. 
(3) SELECTION CONSIDERATIONS.—In selecting 
a project under this section, the Secretary shall con-
sider the extent to which the project— 
(A) improves freight mobility and national 
freight capacity and efficiency; 
(B) uses operational efficiencies, including 
intelligent transportation systems, that enhance 
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the efficiency, effectiveness, or both the effi-
ciency and effectiveness of the project; 
(C) helps maintain or protect the environ-
ment; and 
(D) complements and supports the objec-
tives of the State or designated entity appli-
cant’s strategic freight plan. 
(4) PRELIMINARY
ENGINEERING.—In evalu-
ating a project under paragraph (2)(A), the Sec-
retary shall analyze and consider the results of pre-
liminary engineering for the project. 
(5) NON-FEDERAL FINANCIAL COMMITMENT.— 
(A) EVALUATION OF PROJECT.—In evalu-
ating a project under paragraph (2)(C), the 
Secretary shall require that— 
(i) the proposed project plan provides 
for the availability of contingency amounts 
that the Secretary determines to be reason-
able to cover unanticipated cost increases; 
and 
(ii) each proposed non-Federal source 
of capital and operating financing is stable, 
reliable, and available within the proposed 
project timetable. 
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(B) CONSIDERATIONS.—In assessing the 
stability, reliability, and availability of proposed 
sources of non-Federal financing under sub-
paragraph (A), the Secretary shall consider— 
(i) existing financial commitments; 
(ii) the degree to which financing 
sources are dedicated to the purposes pro-
posed; 
(iii) any debt obligation that exists or 
is proposed by the recipient for the pro-
posed project; and 
(iv) the extent to which the project 
has a non-Federal financial commitment 
that exceeds the required non-Federal 
share of the cost of the project. 
(6) REGULATIONS.—Not later than 180 days 
after the date of enactment of this Act, the Sec-
retary shall issue regulations on the manner in 
which the Secretary will evaluate and rate the 
projects based on the results of preliminary engi-
neering, project justification, and the degree of non- 
Federal financial commitment, as required under 
this subsection. 
(7) PROJECT EVALUATION AND RATING.— 
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(A) IN GENERAL.—A proposed project may 
advance from preliminary engineering to final 
design and construction only if the Secretary 
finds that the project meets the requirements of 
this subsection and there is a reasonable likeli-
hood that the project will continue to meet such 
requirements. 
(B) EVALUATION AND RATING.—In mak-
ing such findings, the Secretary shall evaluate 
and rate the project as ‘‘highly recommended’’, 
‘‘recommended’’, or ‘‘not recommended’’ based 
on the results of preliminary engineering, the 
project justification criteria, and the degree of 
non-Federal financial commitment, as required 
under this subsection. In rating the projects, 
the Secretary shall provide, in addition to the 
overall project rating, individual ratings for 
each of the criteria established under the regu-
lations issued under paragraph (6). 
(e) LETTERS
OF INTENT
AND FULL FUNDING 
GRANT AGREEMENTS.— 
(1) LETTER OF INTENT.— 
(A) IN
GENERAL.—The Secretary may 
issue a letter of intent to an applicant announc-
ing an intention to obligate, for a project under 
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this section, an amount from future available 
budget authority specified in law that is not 
more than the amount stipulated as the finan-
cial participation of the Secretary in the 
project. 
(B) NOTIFICATION.—At least 60 days be-
fore issuing a letter under subparagraph (A) or 
entering into a full funding grant agreement, 
the Secretary shall notify in writing the Com-
mittee on Transportation and Infrastructure of 
the House of Representatives and the Com-
mittee on Environment and Public Works of the 
Senate of the proposed letter or agreement. The 
Secretary shall include with the notification a 
copy of the proposed letter or agreement as well 
as the evaluations and ratings for the project. 
(C) NOT AN OBLIGATION.—The issuance 
of a letter is deemed not to be an obligation 
under sections 1108(c), 1108(d), 1501, and 
1502(a) of title 31, United States Code, or an 
administrative commitment. 
(D) OBLIGATION
OR
COMMITMENT.—An 
obligation or administrative commitment may 
be made only when contract authority is allo-
cated to a project. 
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(2) FULL FUNDING GRANT AGREEMENT.— 
(A) IN
GENERAL.—A project financed 
under this subsection shall be carried out 
through a full funding grant agreement. The 
Secretary shall enter into a full funding grant 
agreement based on the evaluations and ratings 
required under subsection (d)(7). 
(B) TERMS.—If the Secretary makes a full 
funding grant agreement with an applicant, the 
agreement shall— 
(i) establish the terms of participation 
by the United States Government in a 
project under this section; 
(ii) establish the maximum amount of 
Government financial assistance for the 
project; 
(iii) cover the period of time for com-
pleting the project, including a period ex-
tending beyond the period of an authoriza-
tion; and 
(iv) make timely and efficient man-
agement of the project easier according to 
the laws of the United States. 
(C) AGREEMENT.—An agreement under 
this paragraph obligates an amount of available 
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budget authority specified in law and may in-
clude a commitment, contingent on amounts to 
be specified in law in advance for commitments 
under this paragraph, to obligate an additional 
amount from future available budget authority 
specified in law. The agreement shall state that 
the contingent commitment is not an obligation 
of the Government. Interest and other financing 
costs of efficiently carrying out a part of the 
project within a reasonable time are a cost of 
carrying out the project under a full funding 
grant agreement, except that eligible costs may 
not be more than the cost of the most favorable 
financing terms reasonably available for the 
project at the time of borrowing. The applicant 
shall certify, in a way satisfactory to the Sec-
retary, that the applicant has shown reasonable 
diligence in seeking the most favorable financ-
ing terms. 
(3) AMOUNTS.—The total estimated amount of 
future obligations of the Government and contingent 
commitments to incur obligations covered by all out-
standing letters of intent and full funding grant 
agreements may be not more than the greater of the 
amount authorized to carry out this section or an 
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amount equivalent to the last 2 fiscal years of fund-
ing authorized to carry out this section less an 
amount the Secretary reasonably estimates is nec-
essary for grants under this section not covered by 
a letter. The total amount covered by new letters 
and contingent commitments included in full funding 
grant agreements may be not more than a limitation 
specified in law. 
(f) GRANT REQUIREMENTS.— 
(1) IN GENERAL.—A grant for the construction 
of a highway under this section shall be subject to 
all of the requirements of title 23, United States 
Code. 
(2) OTHER TERMS AND CONDITIONS.—The Sec-
retary shall require that all grants under this section 
be subject to all terms, conditions, and requirements 
that the Secretary decides are necessary or appro-
priate for purposes of this section, including require-
ments for the disposition of net increases in value of 
real property resulting from the project assisted 
under this section. 
(g) GOVERNMENT’S SHARE OF PROJECT COST.— 
Based on engineering studies, studies of economic feasi-
bility, and information on the expected use of equipment 
or facilities, the Secretary shall estimate the cost of a 
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project receiving assistance under this section. A grant for 
the project shall not exceed 80 percent of the project cost. 
(h) ANNUAL REPORT.—Not later than the first Mon-
day in February the year after the date of enactment of 
this Act and each year thereafter, the Secretary shall sub-
mit to the Committees on Transportation and Infrastruc-
ture and Appropriations of the House of Representatives 
and the Committees on Environment and Public Works 
and Appropriations of the Senate a report that includes— 
(1) a proposal on the allocation of amounts to 
be made available to finance grants under this sec-
tion; 
(2) evaluations and ratings, as required under 
subsection (d); and 
(3) recommendations of projects for funding 
based on the evaluations and ratings and on existing 
commitments and anticipated funding levels for the 
next 3 fiscal years and for the next 10 fiscal years 
based on information currently available to the Sec-
retary. 
(i) APPLICABILITY OF TITLE 23.—Funds made avail-
able to carry out this section shall be available for obliga-
tion in the same manner as if such funds were apportioned 
under chapter 1 of title 23, United States Code, except 
that such funds shall not be transferable and shall remain 
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available until expended and the Federal share of the cost 
of a project under this section shall be as provided in this 
section. 
SEC. 3. ESTABLISHMENT OF NATIONAL FREIGHT MOBILITY 
INFRASTRUCTURE FUND. 
(a) ESTABLISHMENT OF THE FUND.—There is estab-
lished in the Treasury a separate account which shall be 
known as the ‘‘National Freight Mobility Infrastructure 
Fund’’ (in this section referred to as the ‘‘Fund’’). 
(b) DEPOSITS INTO THE FUND.—The account shall 
consist of— 
(1) amounts transferred to the Fund under sec-
tion 4286 of the Internal Revenue Code of 1986; 
and 
(2) amounts deposited into the Fund under sec-
tion 13031(f) of the Consolidated Omnibus Budget 
Reconciliation Act of 1985 (19 U.S.C. 58c(f)). 
(c) EXPENDITURES FROM FUND.— 
(1) IN
GENERAL.—Amounts in the account 
shall be made available to the Secretary of Trans-
portation for each of the fiscal years 2010 to 2035, 
as provided in appropriations Acts, for making ex-
penditures to meet the obligations of the United 
States to carry out this Act. 
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(2) ADMINISTRATIVE
EXPENSES.—Not more 
than 4 percent of the amounts made available to the 
Secretary under this section for a fiscal year may be 
used for administrative expenses of the Secretary in 
carrying out this Act. 
SEC. 4. FREIGHT MOBILITY INFRASTRUCTURE FEE AND 
TAX. 
(a) IMPOSITION OF TAX.— 
(1) IN GENERAL.—Chapter 33 of the Internal 
Revenue Code of 1986 is amended by adding after 
subchapter C the following new subchapter: 
‘‘Subchapter D—Transportation by Freight 
Rail and Highway 
‘‘Sec. 4286. Imposition of tax. 
‘‘SEC. 4286. IMPOSITION OF TAX. 
‘‘(a) IN GENERAL.—There is hereby imposed upon 
taxable ground transportation of property within the 
United States a tax equal to 1 percent of the fair market 
value of such transportation. 
‘‘(b) FAIR MARKET VALUE OF TAXABLE GROUND 
TRANSPORTATION.— 
‘‘(1) TRANSPORTATION
BY
UNRELATED
PER-
SONS.—In the case of amounts paid to an unrelated 
person engaged in the business of transporting prop-
erty by freight rail or highway for hire, the fair mar-
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ket value shall be the amount paid for transporting 
such property. 
‘‘(2) TRANSPORTATION
BY
RELATED
PER-
SONS.—In the case of transportation of property by 
the taxpayer or a person related to the taxpayer, the 
fair market value of such transportation shall be the 
amount which would be paid for transporting such 
property if such property were transported by an un-
related person, determined on an arms’ length basis. 
‘‘(c) BY WHOM PAID.— 
‘‘(1) IN
GENERAL.—Except as provided by 
paragraph (2), the tax imposed by subsection (a) 
shall be paid— 
‘‘(A) by the person making the payment 
subject to tax; or 
‘‘(B) in the case of transportation by a re-
lated person, by the person for whom such 
transportation is made. 
‘‘(2) PAYMENTS MADE OUTSIDE THE UNITED 
STATES.—If a payment subject to tax under sub-
section (a) is made outside the United States and 
the person making such payment does not pay such 
tax, such tax shall be paid by the person to whom 
the property is delivered in the United States by the 
person furnishing the last domestic segment of the 
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