Short title

This Act may be cited as the

Motor Carrier Protection Act of 2010

Registration requirements

(a)

In general

(1)

Annual registration fee

Each freight forwarder or freight broker that registers under chapter 139 of title 49, United States Code, shall— (A)pay an annual registration renewal fee in an amount to be determined by the Secretary; (B)provide updated information for each registration; and (C)submit proof that the registrant is in compliance with the applicable surety and insurance requirements under such chapter 139. (2)

Use of fees

All new fees collected by the Secretary as a result of the new licensing requirements under this Act and the amendments made by this Act shall be used to administer and enforce the registration and related requirements under chapter 139 of title 49, United States Code. (3)

Consequence of noncompliance

Not later than 30 days after the date on which a broker, freight forwarder, or motor carrier fails to comply with this subsection, such entity shall be listed as inactive on all relevant Department of Transportation Internet websites. (b)

Amendments

Section 13901 of title 49, United States Code, is amended— (1)by striking A person and inserting the following:

(a)

In general

A person

; and

(2)by adding at the end the following:

(b)

Registration numbers

(1)

In general

If the Administrator of the Federal Motor Carrier Administration registers a person under this chapter for 1 or more activities or services, including motor carrier, freight forwarder, or broker activities or services, the Administrator shall issue a distinctive registration number to the person for each such activity or service for which the person is registered. (2)

Activity or service type indicator

Each number issued under paragraph (1) shall include an indicator of the type of activity or service for which the registration number is issued, including whether the registration number is issued for registration of a motor carrier, freight forwarder, or broker activity or service. (c)

Authority

For each shipment for which a registered person seeks compensation, the registered person shall specify, in writing, the operating authority under which it is providing the services required.

Registration of motor carriers

Section 13902 of title 49, United States Code, is amended— (1)in subsection (a)— (A)in paragraph (1), by inserting using vehicles the motor carrier owns 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)in subsection (f), by adding at the end the following:

(4)

Insurance requirements

A motor carrier registered under this section shall maintain insurance for property damage required under section 13906(a)(4) for all shipments transported under its operating authority.

Registration and security of freight forwarders and brokers

(a)

In general

(1)

Amendment

Chapter 139 of title 49, United States Code, is amended by striking sections 13903 and 13904 and inserting the following:

13903.

Registration of freight forwarders and brokers

(a)

In general

A person may not act as a freight forwarder by providing service subject to the jurisdiction under subchapter III of chapter 135 or as a broker unless the person holds a freight forwarder’s permit or a broker’s license, as the case may be, issued by the Federal Motor Carrier Safety Administration. (b)

Issuance of permit or license

(1)

Eligibility requirements

The Administrator of the Federal Motor Carrier Safety Administration shall issue a freight forwarder’s permit or broker’s license to any person that the Administration determines— (A)to be qualified by experience and character to act as a freight forwarder or broker, respectively; and (B)to be fit, willing, and able to provide the service and to comply with this part and applicable regulations of the Secretary. (2)

Duration

The permit or license issued under paragraph (1) shall remain in effect only as long as the freight forwarder or broker is in compliance with section 13904. (c)

Registration as motor carrier required

(1)

Freight forwarders

A freight forwarder may not provide transportation as a motor carrier unless the freight forwarder— (A)has registered separately to provide transportation as a motor carrier; and (B)has met all the requirements under this chapter applicable to motor carriers. (2)

Brokers

A broker may not provide transportation as a motor carrier unless the broker— (A)has registered separately to provide transportation as a motor carrier; and (B)has met all of the requirements under this chapter applicable to motor carriers. (d)

Registration as freight forwarder or broker required

A motor carrier registered under this chapter— (1)may only provide transportation of property with motor vehicles owned or leased by the motor carrier; and (2)may not arrange such transportation unless the motor carrier has obtained a separate freight forwarder’s permit or broker’s license under this section.

13904.

Security of freight forwarders and brokers

(a)

Requirements

(1)

In general

A person may not act as a freight forwarder or broker unless the person furnishes a bond, proof of trust fund, or other surety, or combination of such sureties, in a form and amount, and from a provider, determined by the Administrator of the Federal Motor Carrier Safety Administration to be adequate to insure financial responsibility. (2)

Standards

The Administrator may authorize the use of a group bond, trust fund, or other surety, or combination of such securities that meet the cash and legal requirements under section 13904(d). The Administrator may not accept proof of security from any person whose surety or surety provider does not meet the standards established by the Administrator, by regulation. Bonds issued under this section may only be offered by a bonding company that has been approved by the Secretary of the Treasury. (b)

Scope of financial responsibility

A bond, trust fund, or other surety obtained under this section shall be available to pay any claim against a freight forwarder or broker arising from its failure to pay freight charges in its contracts, agreements, or arrangements for transportation subject to regulation under this chapter— (1)with the consent of the insured freight forwarder or broker, subject to review by the surety company; (2)if the claim is deemed valid by the surety company after the freight forwarder or broker has failed to respond to adequate notice to address the validity of the claim; or (3)if the claimant made a reasonable attempt to resolve the claim under paragraphs (1) and (2), but the claim was not resolved within a reasonable period of time. (c)

Freight forwarder insurance

(1)

In general

The Administrator of the Federal Motor Carrier Safety Administration may not register a person as a freight forwarder under section 13903 unless the person files with the Administrator a bond, insurance policy, or other type of security, in accordance with the standards established by the Administrator under this section. (2)

Liability insurance

A security filed under paragraph (1) shall be sufficient to pay an amount, not to exceed the amount of the 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 paragraph (3)), resulting from the negligent operation, maintenance, or use of motor vehicles by, or under the direction and control of, the freight forwarder when providing transfer, collection, or delivery service under this part. (3)

Cargo insurance

The Administrator may require a registered freight forwarder to file with the Administrator a bond, insurance policy, or other type of security approved by the Secretary, that will pay an amount, not to exceed the amount of the security, for loss of, or damage to, property for which the freight forwarder provides service. (d)

Additional requirements

(1)

Reissuance of licenses and permits

Not later than 4 years after the date of the enactment of the Motor Carrier Protection Act of 2010, freight forwarders and brokers shall acquire new licenses and permits from the Federal Motor Carrier Safety Administration that are subject to the terms and conditions under this subsection. Such licenses and permits shall expire 5 years after the date of issuance and may be renewed as provided under this chapter. (2)

Experience or training requirement

Each freight forwarder and broker shall employ, as an officer, an individual who— (A)has at least 3 years of relevant experience; or (B)provides the Administrator with satisfactory evidence of certified training. (3)

Online

The Administrator shall make information on permits, licenses, and financial security publicly available online, including— (A)the names and addresses of the principals of each entity holding a permit or license; and (B)the electronic address of its surety for the submission of claims. (4)

Minimum financial security

Each freight forwarder and broker shall provide financial security of at least $100,000, regardless of the number of branch offices or sales agents of such entities. (5)

Specific performance standards

The Administrator shall set specific performance standards for bonds or other acceptable surety, including requirements that— (A)at least $10,000 be deposited with the surety in cash; (B)the balance of the surety amount consists of assets readily available to pay valid claims without resort to personal guarantees or collection of pledged accounts receivable; and (C)the surety is ultimately financially responsible for any failure to make the required payments. (6)

Notice to cancel

If a surety required under this subsection is canceled— (A)the holder of the surety shall provide electronic notification to the Administrator of such cancellation not later than 30 days before the effective date of such cancellation; and (B)the Administrator shall immediately post such notification on its public website. (7)

Suspension

The Administrator shall immediately suspend the registration of a freight forwarder or broker if its available security falls below the amount required under this subsection. (8)

Payment of claims

If a registered freight forwarder or broker experiences financial failure or insolvency, the freight forwarder’s or broker’s surety shall— (A)submit a notice to cancel the surety to the Administrator in accordance with paragraph (6); (B)publicly advertise for claims for 60 days beginning on the date of publication by the Administrator of the notice to cancel the surety; 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. (9)

List of claims paid

Each surety under this subsection shall— (A)publish, on the surety’s website, a list of the claims paid by the surety immediately upon payment; and (B)immediately submit a copy of such list to the Administrator. (10)

Penalties

(A)

In general

Any surety that fails to comply with the requirements under this subsection— (i)shall be liable to the United States Government for a civil penalty in an amount not to exceed $10,000; and (ii)shall be ineligible to offer broker and forwarder security under this chapter. (B)

Wilful violations

Any surety that knowingly and willfully violates the posting and notification requirements under this subsection shall be held financially liable for all valid claims submitted against the broker or forwarder involved, regardless of the amount of the security. (11)

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. (12)

Audit

Claim payments by sureties shall be annually audited by a public accounting firm. The results of such audits shall be made publicly available on the surety’s website.

(2)

Rulemaking

Not later than 270 days after the date of the enactment of this Act, the Administrator of the Federal Motor Carrier Safety Administration shall issue regulations to enforce the requirements under section 13904(d) of title 49, United States Code, as added by paragraph (1). (3)

Effective date

Section 13904(d) of title 49, United States Code, as added by paragraph (1), shall take effect on the date that is 270 days after the date of the enactment of this Act. (b)

Clerical amendments

The table of sections for chapter 139 of title 49, United States Code, is amended— (1)by striking the item relating to section 13903 and inserting the following:

Sec. 13903. Registration of freight forwarders and brokers.

;

and

(2)by striking the item relating to section 13904 and inserting the following:

Sec. 13904. Security of freight forwarders and brokers.

Review

(a)

Review by Inspector General

Not later than 15 months after the date of the enactment of this subsection, the Inspector General of the Department of Transportation shall— (1)review the regulations and enforcement practices of the Federal Motor Carrier Safety Administration under section 13904(d) of title 49, United States Code, as added by section 4(a); and (2)make any recommendations to the Secretary of Transportation that may be necessary to improve the enforcement of such regulations. (b)

Security and insurance amount assessment

Every 5 years, the Administrator of the Federal Motor Carrier Safety Administration shall review, with public notice and comment, the amount of the security and insurance required under section 13904 of title 49, United States Code, to determine whether such amounts are sufficient to provide adequate financial security.

Unlawful brokerage activities

(a)

In general

Chapter 149 of title 49, United States Code, is amended by adding at the end the following:

14916.

Unlawful brokerage activities

(a)

Prohibited activities

Any person that acts as a broker, other than a non-vessel-operating common carrier (as defined in section 40102(16) of title 46), or an ocean freight forwarder providing brokerage as part of an international through movement involving ocean transportation between the United States and a foreign port, is prohibited from providing interstate brokerage services as a broker unless that person— (1)is registered under, and in compliance with, section 13903; and (2)has satisfied the financial security requirements under section 13904. (b)

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. (c)

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 table of sections for chapter 149 of title 49, United States Code, is amended by adding at the end the following:

Sec. 14916. Unlawful brokerage activities.