H. R. 4348—416

(1) IN GENERAL .—Chapter 139 is amended by adding at

the end the following:

‘‘§ 13909. Availability of information

 ‘‘The Secretary shall make information relating to registration

and financial security required by this chapter publicly available

on the Internet, including––

‘‘(1) the names and business addresses of the principals

of each entity holding such registration;

‘‘(2) the status of such registration; and

‘‘(3) the electronic address of the entity’s surety provider

for the submission of claims.’’.

(2) CONFORMING AMENDMENT .—The analysis for chapter

139 is amended by adding at the end the following:

‘‘13909. Availability of information.’’.

SEC. 32915. ADDITIONAL MOTOR CARRIER REGISTRATION REQUIREMENTS.

 Section 13902, as amended by sections 32101 and 32107(a)

of this Act, is amended––

(1) in subsection (a)—

(A) in paragraph (1), by inserting ‘‘using self-propelled

vehicles the motor carrier owns, rents, or leases’’ after

‘‘motor carrier’’; and

(B) by adding at the end the following:

‘‘(6) SEPARATE REGISTRATION REQUIRED .—A motor carrier

may not broker transportation services unless the motor carrier

has registered as a broker under this chapter.’’; and

(2) by inserting after subsection (h) the following:

‘‘(i) REGISTRATION AS  FREIGHT  FORWARDER OR  BROKER

 REQUIRED .—A motor carrier registered under this chapter––

‘‘(1) may only provide transportation of property with—

‘‘(A) self-propelled motor vehicles owned or leased by

the motor carrier; or

‘‘(B) interchanges under regulations issued by the Secretary

if the originating carrier—

‘‘(i) physically transports the cargo at some point;

and

‘‘(ii) retains liability for the cargo and for payment

of interchanged carriers; and

‘‘(2) may not arrange transportation described in paragraph

(1) unless the motor carrier has obtained a separate registration

as a freight forwarder or broker for transportation under section

13903 or 13904, as applicable.’’.

SEC. 32916. REGISTRATION OF FREIGHT FORWARDERS AND BROKERS.

 (a) REGISTRATION OF  FREIGHT  FORWARDERS .—Section 13903,

as amended by section 32107(b) of this Act, is amended—

(1) in subsection (a)—

(A) by striking ‘‘finds that the person is fit’’ and

inserting the following: ‘‘determines that the person––

‘‘(1) has sufficient experience to qualify the person to act

as a freight forwarder; and

‘‘(2) is fit’’; and

(B) by striking ‘‘and the Board’’;

(2) by redesignating subsections (b) and (c) as subsections

(d) and (e), respectively;

H. R. 4348—417

(3) by inserting after subsection (a) the following:

‘‘(b) DURATION .—A registration issued under subsection (a) shall

only remain in effect while the freight forwarder is in compliance

with section 13906(c).

‘‘(c) EXPERIENCE OR  TRAINING  REQUIREMENT .—Each freight forwarder

shall employ, as an officer, an individual who––

‘‘(1) has at least 3 years of relevant experience; or

‘‘(2) provides the Secretary with satisfactory evidence of

the individual’s knowledge of related rules, regulations, and

industry practices.’’; and

(4) by amending subsection (d), as redesignated, to read

as follows:

‘‘(d) REGISTRATION AS  MOTOR  CARRIER  REQUIRED .—

‘‘(1) IN GENERAL .—A freight forwarder may not provide

transportation as a motor carrier unless the freight forwarder

has registered separately under this chapter to provide

transportation as a motor carrier.’’.

(b) REGISTRATION OF  BROKERS .—Section 13904, as amended

by section 32107(c) of this Act, is amended—

(1) in subsection (a), by striking ‘‘finds that the person

is fit’’ and inserting the following: ‘‘determines that the person—

‘‘(1) has sufficient experience to qualify the person to act

as a broker for transportation; and

‘‘(2) is fit’’;

(2) by redesignating subsections (b), (c), (d), and (e) as

subsections (d), (e), (f), and (g) respectively;

(3) by inserting after subsection (a) the following:

‘‘(b) DURATION .—A registration issued under subsection (a) shall

only remain in effect while the broker for transportation is in

compliance with section 13906(b).

‘‘(c) EXPERIENCE OR  TRAINING  REQUIREMENTS .—Each broker

shall employ, as an officer, an individual who––

‘‘(1) has at least 3 years of relevant experience; or

‘‘(2) provides the Secretary with satisfactory evidence of

the individual’s knowledge of related rules, regulations, and

industry practices.’’;

(4) by amending subsection (d), as redesignated, to read

as follows:

‘‘(d) REGISTRATION AS  MOTOR  CARRIER  REQUIRED .—

‘‘(1) IN GENERAL .—A broker for transportation may not

provide transportation as a motor carrier unless the broker

has registered separately under this chapter to provide

transportation as a motor carrier.

‘‘(2) LIMITATION .—This subsection does not apply to a motor

carrier registered under this chapter or to an employee or

agent of the motor carrier to the extent the transportation

is to be provided entirely by the motor carrier, with other

registered motor carriers, or with rail or water carriers.’’; and

(5) by amending subsection (e), as redesignated, to read

as follows:

‘‘(e) REGULATION TO  PROTECT  MOTOR  CARRIERS AND  SHIPPERS .—

Regulations of the Secretary applicable to brokers registered under

this section shall provide for the protection of motor carriers and

shippers by motor vehicle.’’.

SEC. 32917. EFFECTIVE PERIODS OF REGISTRATION.

 Section 13905(c) is amended to read as follows:

H. R. 4348—418

‘‘(c) EFFECTIVE  PERIOD .—

‘‘(1) IN GENERAL .—Except as otherwise provided in this

part, each registration issued under section 13902, 13903, or

13904—

‘‘(A) shall be effective beginning on the date specified

by the Secretary; and

‘‘(B) shall remain in effect for such period as the Secretary

determines appropriate by regulation.

‘‘(2) REISSUANCE OF REGISTRATION .—

‘‘(A) REQUIREMENT .—Not later than 4 years after the

date of enactment of the Commercial Motor Vehicle Safety

Enhancement Act of 2012, the Secretary shall require a

freight forwarder or broker to renew its registration issued

under this chapter.

‘‘(B) EFFECTIVE PERIOD .—Each registration renewal

under subparagraph (A)—

‘‘(i) shall expire not later than 5 years after the

date of such renewal; and

‘‘(ii) may be further renewed as provided under

this chapter.’’.

SEC. 32918. FINANCIAL SECURITY OF BROKERS AND FREIGHT FORWARDERS.

 (a) IN  GENERAL .—Section 13906 is amended by striking subsections

(b) and (c) and inserting the following:

‘‘(b) BROKER  FINANCIAL  SECURITY  REQUIREMENTS .—

‘‘(1) REQUIREMENTS .—

‘‘(A) IN GENERAL .—The Secretary may register a person

as a broker under section 13904 only if the person files

with the Secretary a surety bond, proof of trust fund,

or other financial security, or a combination thereof, in

a form and amount, and from a provider, determined by

the Secretary to be adequate to ensure financial responsibility.

‘‘(B) USE OF A GROUP SURETY BOND , TRUST FUND , OR

OTHER SURETY .—In implementing the standards established

by subparagraph (A), the Secretary may authorize

the use of a group surety bond, trust fund, or other financial

security, or a combination thereof, that meets the requirements

of this subsection.

‘‘(C) PROOF OF TRUST OR OTHER FINANCIAL SECURITY .—

For purposes of subparagraph (A), a trust fund or other

financial security may be acceptable to the Secretary only

if the trust fund or other financial security consists of

assets readily available to pay claims without resort to

personal guarantees or collection of pledged accounts

receivable.

‘‘(2) SCOPE OF FINANCIAL RESPONSIBILITY .—

‘‘(A) PAYMENT OF CLAIMS .—A surety bond, trust fund,

or other financial security obtained under paragraph (1)

shall be available to pay any claim against a broker arising

from its failure to pay freight charges under its contracts,

agreements, or arrangements for transportation subject to

jurisdiction under chapter 135 if––

‘‘(i) subject to the review by the surety provider,

the broker consents to the payment;

H. R. 4348—419

‘‘(ii) in any case in which the broker does not

respond to adequate notice to address the validity of

the claim, the surety provider determines that the

claim is valid; or

‘‘(iii) the claim is not resolved within a reasonable

period of time following a reasonable attempt by the

claimant to resolve the claim under clauses (i) and

(ii), and the claim is reduced to a judgment against

the broker.

‘‘(B) RESPONSE OF SURETY PROVIDERS TO CLAIMS .—If

a surety provider receives notice of a claim described in

subparagraph (A), the surety provider shall––

‘‘(i) respond to the claim on or before the 30th

day following the date on which the notice was

received; and

‘‘(ii) in the case of a denial, set forth in writing

for the claimant the grounds for the denial.

‘‘(C) COSTS AND ATTORNEY ’S FEES .—In any action

against a surety provider to recover on a claim described

in subparagraph (A), the prevailing party shall be entitled

to recover its reasonable costs and attorney’s fees.

‘‘(3) MINIMUM FINANCIAL SECURITY .—Each broker subject

to the requirements of this section shall provide financial security

of $75,000 for purposes of this subsection, regardless of

the number of branch offices or sales agents of the broker.

‘‘(4) CANCELLATION NOTICE .—If a financial security required

under this subsection is canceled––

‘‘(A) the holder of the financial security shall provide

electronic notification to the Secretary of the cancellation

not later than 30 days before the effective date of the

cancellation; and

‘‘(B) the Secretary shall immediately post such notification

on the public Internet Website of the Department

of Transportation.

‘‘(5) SUSPENSION .—The Secretary shall immediately suspend

the registration of a broker issued under this chapter

if the available financial security of that person falls below

the amount required under this subsection.

‘‘(6) PAYMENT OF CLAIMS IN CASES OF FINANCIAL FAILURE

OR INSOLVENCY .—If a broker registered under this chapter

experiences financial failure or insolvency, the surety provider

of the broker shall––

‘‘(A) submit a notice to cancel the financial security

to the Administrator in accordance with paragraph (4);

‘‘(B) publicly advertise for claims for 60 days beginning

on the date of publication by the Secretary of the notice

to cancel the financial security; and

‘‘(C) pay, not later than 30 days after the expiration

of the 60-day period for submission of claims––

‘‘(i) all uncontested claims received during such

period; or

‘‘(ii) a pro rata share of such claims if the total

amount of such claims exceeds the financial security

available.

‘‘(7) PENALTIES .—

‘‘(A) CIVIL ACTIONS .—Either the Secretary or the

Attorney General of the United States may bring a civil

H. R. 4348—420

action in an appropriate district court of the United States

to enforce the requirements of this subsection or a regulation

prescribed or order issued under this subsection. The

court may award appropriate relief, including injunctive

relief.

‘‘(B) CIVIL PENALTIES .—If the Secretary determines,

after notice and opportunity for a hearing, that a surety

provider of a broker registered under this chapter has

violated the requirements of this subsection or a regulation

prescribed under this subsection, the surety provider shall

be liable to the United States for a civil penalty in an

amount not to exceed $10,000.

‘‘(C) ELIGIBILITY .—If the Secretary determines, after

notice and opportunity for a hearing, that a surety provider

of a broker registered under this chapter has violated the

requirements of this subsection or a regulation prescribed

under this subsection, the surety provider shall be ineligible

to provider broker financial security for 3 years.

‘‘(8) DEDUCTION OF COSTS PROHIBITED .—The amount of the

financial security required under this subsection may not be

reduced by deducting attorney’s fees or administrative costs.

‘‘(c) FREIGHT  FORWARDER  FINANCIAL  SECURITY  REQUIREMENTS .—

‘‘(1) REQUIREMENTS .—

‘‘(A) IN GENERAL .—The Secretary may register a person

as a freight forwarder under section 13903 only if the

person files with the Secretary a surety bond, proof of

trust fund, other financial security, or a combination of

such instruments, in a form and amount, and from a provider,

determined by the Secretary to be adequate to ensure

financial responsibility.

‘‘(B) USE OF A GROUP SURETY BOND , TRUST FUND , OR

OTHER FINANCIAL SECURITY .—In implementing the standards

established under subparagraph (A), the Secretary

may authorize the use of a group surety bond, trust fund,

other financial security, or a combination of such

instruments, that meets the requirements of this subsection.

‘‘(C) SURETY BONDS .—A surety bond obtained under

this section may only be obtained from a bonding company

that has been approved by the Secretary of the Treasury.

‘‘(D) PROOF OF TRUST OR OTHER FINANCIAL SECURITY .—

For purposes of subparagraph (A), a trust fund or other

financial security may not be accepted by the Secretary

unless the trust fund or other financial security consists

of assets readily available to pay claims without resort

to personal guarantees or collection of pledged accounts

receivable.

‘‘(2) SCOPE OF FINANCIAL RESPONSIBILITY .—

‘‘(A) PAYMENT OF CLAIMS .—A surety bond, trust fund,

or other financial security obtained under paragraph (1)

shall be available to pay any claim against a freight forwarder

arising from its failure to pay freight charges under

its contracts, agreements, or arrangements for transportation

subject to jurisdiction under chapter 135 if––

‘‘(i) subject to the review by the surety provider,

the freight forwarder consents to the payment;

H. R. 4348—421

‘‘(ii) in the case the freight forwarder does not

respond to adequate notice to address the validity of

the claim, the surety provider determines the claim

is valid; or

‘‘(iii) the claim—

‘‘(I) is not resolved within a reasonable period

of time following a reasonable attempt by the

claimant to resolve the claim under clauses (i)

and (ii); and

‘‘(II) is reduced to a judgment against the

freight forwarder.

‘‘(B) RESPONSE OF SURETY PROVIDERS TO CLAIMS .—If

a surety provider receives notice of a claim described in

subparagraph (A), the surety provider shall––

‘‘(i) respond to the claim on or before the 30th

day following receipt of the notice; and

‘‘(ii) in the case of a denial, set forth in writing

for the claimant the grounds for the denial.

‘‘(C) COSTS AND ATTORNEY ’S FEES .—In any action

against a surety provider to recover on a claim described

in subparagraph (A), the prevailing party shall be entitled

to recover its reasonable costs and attorney’s fees.

‘‘(3) FREIGHT FORWARDER INSURANCE .—

‘‘(A) IN GENERAL .—The Secretary may register a person

as a freight forwarder under section 13903 only if the

person files with the Secretary a surety bond, insurance

policy, or other type of financial security that meets standards

prescribed by the Secretary.

‘‘(B) LIABILITY INSURANCE .—A financial security filed

by a freight forwarder under subparagraph (A) shall be

sufficient to pay an amount, not to exceed the amount

of the financial security, for each final judgment against

the freight forwarder for bodily injury to, or death of,

an individual, or loss of, or damage to, property (other

than property referred to in subparagraph (C)), resulting

from the negligent operation, maintenance, or use of motor

vehicles by, or under the direction and control of, the

freight forwarder while providing transfer, collection, or

delivery service under this part.

‘‘(C) CARGO INSURANCE .—The Secretary may require

a registered freight forwarder to file with the Secretary

a surety bond, insurance policy, or other type of financial

security approved by the Secretary, that will pay an

amount, not to exceed the amount of the financial security,

for loss of, or damage to, property for which the freight

forwarder provides service.

‘‘(4) MINIMUM FINANCIAL SECURITY .—Each freight forwarder

subject to the requirements of this section shall provide financial

security of $75,000, regardless of the number of branch

offices or sales agents of the freight forwarder.

‘‘(5) CANCELLATION NOTICE .—If a financial security required

under this subsection is canceled––

‘‘(A) the holder of the financial security shall provide

electronic notification to the Secretary of the cancellation

not later than 30 days before the effective date of the

cancellation; and

H. R. 4348—422

‘‘(B) the Secretary shall immediately post such notification

on the public Internet web site of the Department

of Transportation.

‘‘(6) SUSPENSION .—The Secretary shall immediately suspend

the registration of a freight forwarder issued under this

chapter if its available financial security falls below the amount

required under this subsection.

‘‘(7) PAYMENT OF CLAIMS IN CASES OF FINANCIAL FAILURE

OR INSOLVENCY .—If a freight forwarder registered under this

chapter experiences financial failure or insolvency, the surety

provider of the freight forwarder shall––

‘‘(A) submit a notice to cancel the financial security

to the Administrator in accordance with paragraph (5);

‘‘(B) publicly advertise for claims for 60 days beginning

on the date of publication by the Secretary of the notice

to cancel the financial security; and

‘‘(C) pay, not later than 30 days after the expiration

of the 60-day period for submission of claims––

‘‘(i) all uncontested claims received during such

period; or

‘‘(ii) a pro rata share of such claims if the total

amount of such claims exceeds the financial security

available.

‘‘(8) PENALTIES .—

‘‘(A) CIVIL ACTIONS .—Either the Secretary or the

Attorney General may bring a civil action in an appropriate

district court of the United States to enforce the requirements

of this subsection or a regulation prescribed or order

issued under this subsection. The court may award appropriate

relief, including injunctive relief.

‘‘(B) CIVIL PENALTIES .—If the Secretary determines,

after notice and opportunity for a hearing, that a surety

provider of a freight forwarder registered under this

chapter has violated the requirements of this subsection

or a regulation prescribed under this subsection, the surety

provider shall be liable to the United States for a civil

penalty in an amount not to exceed $10,000.

‘‘(C) ELIGIBILITY .—If the Secretary determines, after

notice and opportunity for a hearing, that a surety provider

of a freight forwarder registered under this chapter has

violated the requirements of this subsection or a regulation

prescribed under this subsection, the surety provider shall

be ineligible to provide freight forwarder financial security

for 3 years.

‘‘(9) DEDUCTION OF COSTS PROHIBITED .—The amount of the

financial security required under this subsection may not be

reduced by deducting attorney’s fees or administrative costs.’’.

(b) RULEMAKING .—Not later than 1 year after the date of enactment

of this Act, the Secretary shall issue regulations to implement

and enforce the requirements under subsections (b) and (c) of section

13906 of title 49, United States Code, as amended by subsection

(a).

(c) EFFECTIVE  DATE .—The amendments made by subsection

(a) shall take effect on the date that is 1 year after the date

of enactment of this Act.

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SEC. 32919. UNLAWFUL BROKERAGE ACTIVITIES.

 (a) IN  GENERAL .—Chapter 149 is amended by adding at the

end the following:

‘‘SEC. 14916. UNLAWFUL BROKERAGE ACTIVITIES.

 ‘‘(a) PROHIBITED  ACTIVITIES .—A person may provide interstate

brokerage services as a broker only if that person––

‘‘(1) is registered under, and in compliance with, section

13904; and

‘‘(2) has satisfied the financial security requirements under

section 13906.

‘‘(b) EXCEPTIONS .—Subsection (a) shall not apply to—

‘‘(1) a non-vessel-operating common carrier (as defined in

section 40102 of title 46) or an ocean freight forwarder (as

defined in section 40102 of title 46) when arranging for inland

transportation as part of an international through movement

involving ocean transportation between the United States and

a foreign port;

‘‘(2) a customs broker licensed in accordance with section

111.2 of title 19, Code of Federal Regulations, only to the

extent that the customs broker is engaging in a movement

under a customs bond or in a transaction involving customs

business, as defined by section 111.1 of title 19, Code of Federal

Regulations; or

‘‘(3) an indirect air carrier holding a Standard Security

Program approved by the Transportation Security Administration,

only to the extent that the indirect air carrier is engaging

in the activities as an air carrier as defined in section 40102(2)

or in the activities defined in section 40102(3).

‘‘(c) CIVIL  PENALTIES AND  PRIVATE  CAUSE OF  ACTION .—Any

person who knowingly authorizes, consents to, or permits, directly

or indirectly, either alone or in conjunction with any other person,

a violation of subsection (a) is liable—

‘‘(1) to the United States Government for a civil penalty

in an amount not to exceed $10,000 for each violation; and

‘‘(2) to the injured party for all valid claims incurred without

regard to amount.

‘‘(d) LIABLE  PARTIES .—The liability for civil penalties and for

claims under this section for unauthorized brokering shall apply,

jointly and severally—

‘‘(1) to any corporate entity or partnership involved; and

‘‘(2) to the individual officers, directors, and principals of

such entities.’’.

(b) CLERICAL  AMENDMENT .—The analysis for chapter 149 is

amended by adding at the end the following:

‘‘14916. Unlawful brokerage activities.’’.

PART II—HOUSEHOLD GOODS

TRANSPORTATION

SEC. 32921. ADDITIONAL REGISTRATION REQUIREMENTS FOR HOUSEHOLD

GOODS MOTOR CARRIERS.

 (a) Section 13902(a)(2) is amended—

(1) in subparagraph (B), by striking ‘‘section 13702(c);’’

and inserting ‘‘section 13702(c); and’’;

(2) by amending subparagraph (C) to read as follows:

The Map 21 Law In Detail

Other Bonds Available