17142 Federal Register / Vol. 80, No. 61 / Tuesday, March 31, 2015 / Notices 

pursuant to 49 U.S.C. 10502(b). A final 

decision will be issued by June 29, 

2015. 

Any OFA under 49 CFR 1152.27(b)(2) 

will be due by July 9, 2015, or 10 days 

after service of a decision granting the 

petition for exemption, whichever 

occurs first. Each OFA must be 

accompanied by a $1,600 filing fee. See 

49 CFR 1002.2(f)(25). 

All interested persons should be 

aware that, following abandonment, the 

Line may be suitable for other public 

use, including interim trail use. Any 

request for a public use condition under 

49 CFR 1152.28 or for trail use/rail 

banking under 49 CFR 1152.29 will be 

due no later than April 20, 2015. Each 

trail request must be accompanied by a 

$300 filing fee. See 49 CFR 

1002.2(f)(27). 

All filings in response to this notice 

must refer to Docket No. AB 303 (SubNo. 46X) and must be sent to: (1) 

Surface Transportation Board, 395 E 

Street SW., Washington, DC 20423– 

0001; and (2) Robert A. Wimbish, 

Fletcher & Sippel LLC, 29 North Wacker 

Drive, Suite 920, Chicago, IL 60606– 

2832. Replies to the petition are due on 

or before April 20, 2015. 

Persons seeking further information 

concerning abandonment procedures 

may contact the Board’s Office of Public 

Assistance, Governmental Affairs and 

Compliance at (202) 245–0238 or refer 

to the full abandonment regulations at 

49 CFR part 1152. Questions concerning 

environmental issues may be directed to 

the Board’s Office of Environmental 

Analysis (OEA) at (202) 245–0305. 

Assistance for the hearing impaired is 

available through the Federal 

Information Relay Service at 1–800– 

877–8339. 

An environmental assessment (EA) (or 

environmental impact statement (EIS), if 

necessary) prepared by OEA will be 

served upon all parties of record and 

upon any other agencies or persons who 

comment during its preparation. Other 

interested persons may contact OEA to 

obtain a copy of the EA (or EIS). EAs in 

abandonment proceedings normally will 

be made available within 60 days of the 

filing of the petition. The deadline for 

submission of comments on the EA 

generally will be within 30 days of its 

service. 

Board decisions and notices are 

available on our Web site at 

‘‘WWW.STB.DOT.GOV.’’ 

Decided: March 25, 2015. 

By the Board, Rachel D. Campbell, 

Director, Office of Proceedings. 

Kenyatta Clay, 

Clearance Clerk. 

[FR Doc. 2015–07243 Filed 3–30–15; 8:45 am] 

BILLING CODE 4915–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Motor Carrier Safety 

Administration 

[FMCSA–2013–0513] 

Registration and Financial Security 

Requirements for Brokers of Property 

and Freight Forwarders; Association of 

Independent Property Brokers and 

Agents’ Exemption Application 

AGENCY: Federal Motor Carrier Safety 

Administration (FMCSA). 

ACTION: Notice of denial of application 

for exemption. 

SUMMARY: FMCSA denies an application 

from the Association of Independent 

Property Brokers and Agents (AIPBA) 

for an exemption for all property 

brokers and freight forwarders from the 

$75,000 bond provision included in 

section 32918 of the Moving Ahead for 

Progress in the 21st Century Act (MAP– 

21), now codified in 49 U.S.C. 13906. 

AIPBA filed its request pursuant to 49 

U.S.C. 13541 on August 14, 2013. On 

December 26, 2013, FMCSA published a 

notice in the Federal Register 

requesting comments from all interested 

parties on AIPBA’s exemption 

application. After reviewing the public 

comments, the Agency has concluded 

that the exemption should be denied on 

the basis that 49 U.S.C.13541 does not 

give FMCSA the authority to essentially 

nullify a statutory provision by 

exempting the entire class of persons 

subject to the provision. Furthermore, 

even if the Agency had the authority to 

issue such a blanket exemption, 

AIPBA’s exemption application does 

not meet the factors provided in section 

13541 because (1) the new $75,000 bond 

requirement is necessary to carry out the 

National Transportation Policy at 49 

U.S.C.13101, (2) there has been no 

showing that the $75,000 requirement 

‘‘is not needed to protect shippers from 

the abuse of market power’’ and (3) the 

requested exemption is not in the public 

interest. 

DATES: This decision is effective March 

31, 2015. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Thomas Yager, Chief of Driver and 

Carrier Operations, (202) 366–4001 or 

thomas.yager@dot.gov, FMCSA, 

Department of Transportation, 1200 

New Jersey Ave. SE., Washington, DC 

20590. 

ADDRESSES: For access to the docket to 

read background documents, including 

those referenced in this document, or to 

read comments received, go to: 

• Regulations.gov, http://

www.regulations.gov, at any time and 

insert FMCSA–2013–0513 in the 

‘‘Keyword’’ box, and then click 

‘‘Search.’’ 

• Docket Management Facility, Room 

W12–140, DOT Building, 1200 New 

Jersey Ave. SE., Washington, DC 20590. 

You may view the docket online by 

visiting the facility between 9 a.m. and 

5 p.m., Monday through Friday except 

Federal holidays. 

Viewing Comments and Documents 

AIPBA’s exemption application and 

all public comments are available in the 

public docket. To view comments filed 

in this docket, go to http://

www.regulations.gov and click on the 

‘‘Read Comments’’ box in the upper 

right hand side of the screen. Then, in 

the ‘‘Keyword’’ box, insert ‘‘FMCSA– 

2013–0513’’ and click ‘‘Search.’’ Next, 

click ‘‘Open Docket Folder’’ in the 

‘‘Actions’’ column. Finally, in the 

‘‘Title’’ column, click on the document 

you would like to review. If you do not 

have access to the Internet, you may 

view the docket by visiting the Docket 

Management Facility at the address 

above. 

Privacy Act 

In accordance with 5 U.S.C. 553(c), 

DOT solicits comments from the public 

to better inform its rulemaking process. 

DOT posts these comments, without 

edit, including any personal information 

the commenter provides, to 

www.regulations.gov, as described in 

the system of records notice (DOT/ALL– 

14 FDMS), which can be reviewed at 

www.dot.gov/privacy. 

SUPPLEMENTARY INFORMATION: 

Legal Basis for the Exemption 

Application and Proceeding 

Section 13541(a) of title 49 of the 

United States Code (49 U.S.C. 13541) 

requires the Secretary of Transportation 

(Secretary) to exempt a person, class of 

persons, or a transaction or service from 

the application, in whole or in part, of 

a provision of 49 U.S.C., Subtitle IV, 

Part B (Chapters 131–149), or to use the 

exemption authority to modify the 

application of a provision of 49 U.S.C. 

Chapters 131–149 as it applies to such 

person, class, transaction, or service 

when the Secretary finds that the 

application of the provision: 

• Is not necessary to carry out the 

transportation policy of 49 U.S.C. 13101 


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• Is not needed to protect shippers 

from the abuse of market power or that 

the transaction or service is of limited 

scope; and 

• Is in the public interest. 

The exemption authority provided by 

section 13541 ‘‘may not be used to 

relieve a person from the application of, 

and compliance with, any law, rule, 

regulation, standard, or order pertaining 

to cargo loss and damage [or] insurance 

. . . .’’ 49 U.S.C. 13541(e)(1). 

AIPBA seeks an exemption from the 

$75,000 financial security requirements 

for brokers and freight forwarders at 49 

U.S.C. 13906 (b) & (c). Section 13906 is 

located in 49 U.S.C. Subtitle IV Part B 

(chapter 139) and therefore may be 

considered within the general scope of 

the exemption authority provided by 

section 13541. The Secretary may begin 

a section 13541 exemption proceeding 

on the application of an interested 

party. 49 U.S.C. 13541(b). See, e.g., 

Motor Carrier Financial Information 

Reporting Requirements-Request for 

Public Comments, 68 FR 48987 (Aug. 

15, 2003). The Secretary may ‘‘specify 

the period of time during which an 

exemption’’ is effective and may revoke 

the exemption ‘‘to the extent specified, 

on finding that application of a 

provision of [49 U.S.C. Chapters 131– 

149] to the person, class, or 

transportation is necessary to carry out 

the transportation policy of [49 U.S.C.] 

section 13101.’’ 49 U.S.C. 13541(c), (d). 

The Administrator of FMCSA has 

been delegated authority under 49 CFR 

1.87 to carry out the functions vested in 

the Secretary by 49 U.S.C. 13541. 

Background 

On July 6, 2012, the President signed 

MAP–21 into law, which included a 

number of mandatory, non-discretionary 

changes to FMCSA programs. Some of 

these changes amended the financial 

security requirements applicable to 

property brokers and freight forwarders 

operating under FMCSA’s jurisdiction. 

Pub.L. 112–141, § 32918, 126 Stat. 405 

(codified at 49 U.S.C. 13906(b) & (c)). 

More specifically, 49 U.S.C. 13906(b) 

and (c) requires brokers and freight 

forwarders to provide evidence of 

minimum financial security in the 

amount of $75,000. 

On September 5, 2013, FMCSA 

published guidance (78 FR 54720) 

‘‘concerning the implementation of 

certain provisions of . . . (MAP–21) 

concerning persons acting as a broker or 

a freight forwarder.’’ On October 1, 

2013, FMCSA issued regulations 

requiring brokers and freight forwarders 

to have a $75,000 surety bond or trust 

fund in effect. 49 CFR 387.307(a), 

387.403(c); 78 FR 60226, 60233. 

On November 14, 2013, after initially 

filing a complaint and then voluntarily 

dismissing the case in district court, 

AIPBA filed a petition for review in the 

U.S. Court of Appeals for the Eleventh 

Circuit. Association of Independent 

Property Brokers and Agents, Inc. v. 

Foxx, No. 13–15238–D (11th Cir.). The 

petition alleges that the Agency’s 

October 1, 2013 final rule was 

improperly issued without notice and 

comment. The court, upon AIPBA’s 

request, has stayed the case pending the 

resolution of this exemption proceeding. 

On January 23, 2015, AIPBA 

instituted another proceeding in the 

United States District Court for the 

Middle District of Florida, seeking to 

invalidate the $75,000 bond 

requirement from 49 U.S.C. 13906. 

Association of Independent Property 

Brokers and Agents, Inc. v. Foxx et al, 

No. 5:15–cv–00038–JSM–PRL (M.D. 

Fla.). No additional briefs or rulings 

have been filed in the district court case. 

AIPBA Exemption Application 

In an August 14, 2013 letter to the 

Secretary, AIPBA, through its counsel, 

requested that the Department 

‘‘permanently exempt all property 

brokers and freight forwarders from the 

$75,000 broker bond provision of MAP– 

21. . . .’’ AIPBA argues that the 

‘‘$75,000 broker surety bond amount is 

not necessary to carry out the 

transportation policy of section 13101, 

[or] . . . to protect shippers from the 

abuse of market power . . . and . . . is 

not in the public interest.’’ AIPBA seeks 

a categorical exemption ‘‘so that 

property brokers and forwarders can 

continue to do business under the 

existing bond regulations.’’ A copy of 

the exemption application is included 

in the docket referenced at the 

beginning of this notice. 

First, AIPBA believes that the $75,000 

bond requirement is contrary to the 

transportation policy of 49 U.S.C. 13101 

because it violates the federal 

government’s policy to ‘‘encourage fair 

competition, and reasonable rates for 

transportation by motor carriers of 

property’’ and to ‘‘allow a variety of 

quality and price options to meet 

changing market demands and the 

diverse requirements of the shipping 

and traveling public,’’ citing 49 U.S.C. 

13101(a) (2)(A),(D). 

AIPBA also argues that the $75,000 

broker bond requirement ‘‘is not 

necessary to protect shippers from the 

abuse of market power.’’ According to 

AIPBA,’’[t]he unnecessarily high 

$75,000 broker bond requirement will 

cause the majority of property brokers to 

leave the marketplace, which will 

expose shippers to abuses of market 

power by the few large property brokers 

able to stay in business.’’ 

With regard to the public interest, 

AIPBA believes that the new bond 

requirement will ‘‘cause a significant 

increase in consumer prices once the 

supply of property brokers is drastically 

reduced.’’ AIPBA indicated that a lack 

of competition will require shippers to 

pay more for transportation services. In 

addition to predicting that small and 

mid-sized brokers will be forced out of 

the marketplace due to the new higher 

bond requirement, AIPBA believes the 

new requirement will serve as a barrier 

to entry into the marketplace for other 

property brokers. 

Finally, while AIPBA acknowledges 

that ‘‘there are certain regulations from 

which [the Secretary] cannot issue 

exemptions,’’ it believes that: 

‘‘. . . the broker bond does not fall into one 

of the listed categories. Specifically, the bond 

is a financial security rather than a type of 

required insurance, a distinction emphasized 

in 49 U.S.C 13906 by the choice of a bond 

or insurance as well as MAP–21’s proposed 

amendment to 49 U.S.C. 13906, which still 

requires the broker bond but deletes all 

reference to insurance.’’ 

Request for Comments 

On December 26, 2013, FMCSA 

requested public comment on the 

AIPBA exemption application (78 FR 

78472). Specifically, FMCSA requested 

comments on whether the Agency 

should grant or deny AIPBA’s 

application, in whole or in part. The 

Agency also requested comments on 

how it should apply 49 U.S.C. 

13541(a)(1–3) to AIPBA’s request. 

Discussion of Public Comments 

General Discussion 

FMCSA received 80 responses to the 

December 26, 2013, notice, 23 of which 

were anonymous. Most of the 

commenters (52, including 16 of the 

anonymous commenters) supported the 

AIPBA application for an exemption 

and 26 (including 7 of the anonymous 

commenters) opposed the request. The 

named commenters are: Micah 

Applebee; AIPBA; Dave Britton; 

William Cohen; Gerard Coyle; Sue 

Cuthbertson; Raymond Donahue; 

Rodney Falkenstein; Christine Friend; 

Philip Fulmer; Kelley Gabor; Ray 

Gerdes; Kathy Harris; David Hoke; Scott 

Housely; Matt Kloss; James Lamb (2 

responses); Deborah J. Larson; Lew 

Levy; Stuart Looney (LineHaul 

Logistics, Inc.); Angela Maccombs; 

Michael Majerek; Mike Manzella; Aaron 

Menice; Deborah McCoy; Jenny Merkey; 

Michael Millard (2 responses); John 

Miller; Gaetono P. Monteleone 


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1AIPBA’s comments were dated January 22, 

2014. 

(Transport Management Service 

Corporation); Ronald Morales; Hugh 

Nolan; Chris Olson; Charles Onsum; the 

Owner-Operator Independent Drivers 

Association (OOIDA); M. Peters; James 

Powers; Roger’s Freight, LLC; James 

Randolph; Kevin Reidy; Paul 

Rosenweig, Jr.; Bev Smith; Michael 

Stanley (SMS Transportation); Robert 

Schwartz; Tracey Spence; the Surety & 

Fidelity Association of America (SFAA); 

Kelly Swickard; John Thomas; The 

Transportation Intermediaries 

Association (TIA); Veles Logistics, Inc.; 

Patrick Walsh; Werner Enterprises, Inc.; 

and, Gregory Williamson (Williamson’s 

Enterprises). One commenter provided 

only his first name, Larry, and one 

hand-written comment (from Mike) 

included an illegible last name. 

Many of the commenters who wrote 

in support of AIPBA’s application 

believe the increased bond requirement 

has resulted in a significant decrease in 

the number of freight forwarders and 

brokers with the requisite authority 

from FMCSA. Some of these 

commenters argue that the increased 

bond requirement has resulted in the 

loss of jobs and an adverse impact on 

consumer prices. A number of the 

commenters who identified themselves 

as brokers argued the new requirement 

is intended to reduce competition by 

eliminating small businesses rather than 

to reduce fraud. Several commenters 

also argue that implementation of the 

$75,000 bond requirement is 

inconsistent with the transportation 

policy in 49 U.S.C. 13101. 

Commenters writing in opposition to 

AIPBA’s application argue that the 

previous $10,000 bond requirement was 

originally set in 1979 and that small 

trucking companies, especially owner 

operators, will be better protected and 

have better business opportunities with 

the $75,000 bond. A number of these 

commenters include brokers who state 

that obtaining the higher bond amount 

was relatively easy. And some state that 

the previous $10,000 bond was 

insufficient and resulted in 

transportation service providers being 

left unpaid after the broker went out of 

business. 

Specific Issues Raised by AIPBA and 

Supporters of AIPBA’s Application 

Unintended Consequences 

A number of the commenters writing 

in support of AIPBA’s application 

believe the increased bond requirement 

has resulted in unintended 

consequences such as brokers and 

freight forwarders being forced out of 

the industry, a loss of jobs and 

decreased rates for trucking companies. 

AIPBA indicated in its comments that 

the total number of property brokers on 

October 1, 2013, was 21,565 and that 

8,218 broker operating authority 

registrations have been revoked since 

December 1, 2013. AIPBA indicated that 

the total number of freight forwarders 

on October 1, 2013, was 2,212 with 

1,583 freight forwarder operating 

authority registrations revoked since 

December 1, 2013.1 AIPBA believes 

there will be a secondary wave of 

revocations when bonding companies 

that rushed to acquire market share 

adjust their rates after the financial 

security market settles. 

AIPBA also argues the increase in the 

bond requirements has resulted in the 

loss of jobs and an adverse impact on 

consumer prices. AIPBA believes the 

increase in bonds has had an adverse 

impact on rates for truckers as well. 

Incremental Increase in Bond 

Requirement 

Matt Kloss supports the AIPBA 

exemption in part and believes FMCSA 

should consider an incremental increase 

in the bond limit rather than leaving the 

limit at $75,000. He states that he has 

been in the brokerage business for 12 

years and he has never had a successful 

filing against his bond. He explains that 

he is not in the business to steal money 

from trucking companies. He argues that 

‘‘[e]stablished companies with good 

histories should have been required to 

increase the bond to $20,000 this year, 

with future increases that are 

manageable.’’ 

An anonymous commenter believes 

that the bond requirement ‘‘. . . should 

be initially lowered to a more 

reasonable amount of $25,000.’’ This 

commenter also argued that the rules 

should require a $25,000 fee per agent 

for large brokers. 

Costs of the $75,000 Bond Will Drive 

Brokers Out of the Industry 

Sue Cuthbertson discusses the 

premiums that she had to pay to comply 

with the $75,000 bond requirement. She 

explains that she used to pay $900 per 

year for her broker bond and she now 

has to pay $3,500 per year for the 

$75,000 bond. She says that she could 

barely stay in business paying the $900. 

An anonymous commenter writing in 

support of the AIPBA application 

describes a similar experience with 

premiums for the $75,000 bond. The 

commenter explains that initially the 

premium quoted was $3,500. However, 

after the commenter shopped around for 

better rates, the same company quoted 

the commenter a more favorable 

premium of $1,300. 

Specific Comments by Opponents of 

AIPBA’s Application 

Protection of the General Public’s, 

Shippers’ and Carriers’ Financial 

Interests 

OOIDA believes that the $75,000 bond 

requirement helps to increase carriers’ 

comfort in dealing with brokers they do 

not know and as such helps promote 

efficiency in the marketplace. According 

to OOIDA: 

‘‘Many of OOIDA’s members are small 

business men and women who operate under 

their own federal operating authority and 

rely upon brokers to find freight to meet their 

business goals. Part of the efficiency of the 

current transportation marketplace is that 

brokers match motor carriers available to 

haul freight and shippers needing to move 

freight—parties who do not have an ongoing 

relationship, but who might make mutually 

beneficial connections on a load by load 

basis. This efficiency in the marketplace is 

increased greatly when motor carriers feel 

comfortable taking loads from brokers who 

they do [not] know (apparent omission in 

original). By securing the debts of brokers to 

the motor carrier, the federal broker bond or 

trust is intended to give motor carriers 

confidence that they will be paid when they 

are doing business with a broker they do not 

know.’’ 

OOIDA also argues that ‘‘raising the 

bond or trust amount to $75,000 is 

intended to reduce harm caused by 

undercapitalized brokers who steal 

transportation service from motor 

carriers—the protected parties under the 

broker bond or trust statute . . . The 

$10,000 bond or trust was simply not 

sufficient to serve its intended 

purpose—to protect the motor carriers 

from non-payment by brokers.’’ OOIDA 

also comments on the connection 

between the new $75,000 financial 

responsibility requirement and the 

National Transportation Policy (NTP) at 

49 U.S.C. 13101. According to OOIDA, 

‘‘[b]y this statute, Congress burnished 

the national transportation goals of 

encouraging ‘sound economic 

conditions in transportation, including 

sound economic conditions among 

carriers;’ 49 U.S.C. 13101(a)(1)(C), and 

acted to promote efficient transportation 

and to enable efficient and wellmanaged carriers to . . . maintain fair 

wages and working conditions. Sections 

13101(a)(2)(B)&(F).’’ 

Stuart Looney states: 

‘‘The purpose for requiring the posting of 

a bond is well established as furthering 

protection to the general public. The public 

is well served with this requirement as 

freight brokering is an easy entry undertaking 

and is fraught with many thinly capitalized 

and reasonably unprofessional participants.’’ 


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2AIPBA does not argue that ‘‘the transaction or 

service is of limited scope,’’ 49 U.S.C. 13541(a)(2), 

nor do other commenters. 

The Surety & Fidelity Association of 

America (SFAA) believes a bond 

requirement of less than $75,000 would 

deprive shippers and carriers of the 

additional protection that Congress 

thought was necessary. According to 

SFAA ‘‘the intent of the bond is to 

protect shippers and motor carriers . . . 

There are a number of cases in which 

the $10,000 bond was not sufficient to 

pay all claims in the full amount 

. . . .’’ SFAA cited multiple cases for its 

proposition. 

SFAA also argues that the surety 

bond: 

‘‘. . . protects the public interest by ensuring 

that FMCSA licenses are provided to 

qualified, well-capitalized brokers and freight 

forwarders . . . While claims handling is a 

critical function of the surety, another 

equally critical function is the surety’s 

prequalification of a principal before the 

surety will write a bond. A surety will review 

the capabilities and financial strength of 

bonds applicants and provide bonds only to 

those entities that the surety has determined 

are capable of performing the underlying 

obligation . . . The bond provides financial 

protection to shippers and carriers, which 

serves to reduce costs in the long run by 

eliminating the need for a carrier or shipper 

to include the risk of nonpayment in its 

pricing.’’ 

The Transportation Intermediaries 

Association (TIA) indicates that 

eliminating the bond requirement is 

‘‘not acceptable’’ to shippers or carriers. 

According to TIA, 2 major trucking 

organizations, the American Trucking 

Associations (ATA) and OOIDA have 

supported increasing the bond well 

above the new $75,000 amount. 

According to TIA, in a 2009 letter, 

‘‘ATA cited a study they conducted 

indicating that only 13 percent of 

carriers’ claims against brokers were 

satisfied by the $10,000 bond.’’ 

According to TIA, in recent years, its 

members have seen shippers demand 

$100,000 bonds to exclusively protect 

one shipper. 

Werner Enterprises, Inc. (Werner) 

argues that ‘‘[t]he eroded value of the 

bond since it was last adjusted to 

$10,000 in 1977’’ means ‘‘there is 

essentially no real security for broker 

misconduct.’’ 

Veles Logistics Inc. (Veles), which 

describes itself as a ‘‘small group of 

owner-operators,’’ believes the $75,000 

bond will help to get rid of ‘‘unstable 

unsafe financially weak and fraudulent 

brokers.’’ Veles also believes the new 

bond requirement will increase the 

prices of loads by eliminating ‘‘third 

and fourth and fifth resellers out of the 

freight moving chain.’’ 

Scott Housely argues: 

‘‘The brokerage limit as it stand[s] at 

$75,000.00 addresses a larger problem of 

unethical brokers who have not invested in 

the industry and don’t intend to. Carriers in 

the past had little recourse in collecting bad 

debt from brokers or the shippers that they 

worked for due to the transient nature of 

many brokers. The limit as it stands does not 

[impede] any good brokers and enhances the 

relationship with the asset based carriers 

who are the backbone of the entire system. 

Please keep the current rule in place.’’ 

Granting the Exemption Would 

Eliminate the Bond Requirement 

OOIDA expresses concern that if 

FMCSA granted AIPBA’s request, the 

Agency would not have the discretion to 

return to the $10,000 bond limit; the 

Agency would have to allow brokers to 

operate without having a bond. OOIDA 

argues: 

‘‘The application would have the effect of 

permitting all brokers to operate without a 

broker bond or trust of any amount. When 

Congress enacted a $75,000 bond or trust 

statute, it repealed the $10,000 bond or trust 

statute. AIPBA’s requested exemption would 

not reenact the $10,000 bond or trust 

requirement; it would exempt all property 

brokers from the requirement to carry any 

bond or trust. The statute found at 49 U.S.C. 

13541 only permits FMCSA to grant 

exemptions from certain statutory 

requirements. It does not permit FMCSA to 

amend or revise applicable statutes. FMCSA 

has no power to institute a bond or trust 

requirement of any amount other than the 

statutorily set $75,000 amount. The goal of 

AIPBA’s application, the creation of a broker 

industry with no bond or trust protecting the 

motor carrier industry, would completely 

subvert congressional intent.’’ 

Costs of the Bond are Reasonable 

Werner states: 

‘‘The bond cost is a problem for some 

brokers for good reason. A bond such as this 

which is designed to guaranty the integrity 

and ability of a party to respond for their 

failures to another party is priced not only 

upon the total exposure of the company 

writing the bond but also upon the financial 

strength of the party being bonded. Our 

experience was that the cost of our $10,000 

bond was $77 per year which increased to 

$338 for a $75,000 bond. The cost increase 

is not significant. Companies that are 

experiencing higher costs may be the 

companies for whom the shippers and motor 

carriers need protection.’’ 

TIA states: 

It is ironic that those making the argument 

to eliminate the bond increase because some 

brokers and forwarders cannot afford it, 

actually make the case for the higher bond. 

Congress determined that companies should 

not handle other people’s money if they 

cannot afford to protect it. Broker and 

forwarder bonds are available in the 

marketplace today for less than $6,000 per 

year. 

TIA argues that when the cost for the 

bond is spread over an average of 5 

loads per day, the bond premium works 

out to be less than $5.00 per load. 

FMCSA Decision 

FMCSA has considered AIPBA’s 

exemption request and all of the 

comments received, including AIPBA’s 

subsequent comments, and FMCSA 

denies the request. FMCSA does not 

have the authority to disregard 

Congress’s directive in the revised 

statutory provision by exempting all 

property brokers and freight forwarders 

from the bond requirement. Essentially, 

AIPBA’s opposition to the increase in 

the bond amount is a challenge to 

Congress’s judgment that the increase is 

necessary and appropriate, indeed in 

the public interest. 

Furthermore, even if the Agency had 

the authority to grant AIPBA’s 

exemption application, AIPBA’s request 

does not meet the three part statutory 

test in 49 U.S.C. 13541. Specifically, 

FMCSA finds that the $75,000 bond 

requirement at 49 U.S.C. 13906(b)–(c) is 

necessary to carry out the transportation 

policy of section 13101, and is needed 

to protect shippers from the abuse of 

market power. . . .’’ 2 Moreover, and 

most critically, an industry-wide 

exemption for brokers and freight 

forwarders from the $75,000 bond 

requirement is not in the public interest. 

The Scope of FMCSA’s Exemption 

Authority 

In Section 32918 of MAP–21, 

Congress expressly mandated that all 

FMCSA regulated brokers and freight 

forwarders have a minimum of $75,000 

in financial security. 49 U.S.C. 

13906(b),(c). AIPBA asks the Agency to 

permanently exempt all property 

brokers and freight forwarders subject to 

section 32918’s $75,000 bond 

requirement. FMCSA is denying 

AIPBA’s exemption application because 

the Agency lacks the authority to issue 

the kind of blanket exemption that 

AIPBA seeks. 

While section 13541 gives the Agency 

broad authority to exempt certain 

persons or transactions, FMCSA does 

not have the authority to effectively 

nullify a statute by exempting the entire 

class of persons subject to the bond 

requirement, as AIPBA requests. 49 

U.S.C. 13541(a); Terran ex rel. Terran v. 

Secretary of Health and Human 

Services, 195 F.3d 1302, 1312 (Fed. Cir. 

1999) (‘‘The Constitution does not 

authorize members of the executive 

branch to enact, amend, or repeal 

statutes.’’). AIPBA’s request would 


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17146 Federal Register / Vol. 80, No. 61 / Tuesday, March 31, 2015 / Notices 

3FMCSA, by regulation, raised the bond 

requirement to $25,000 for household goods (HHG) 

brokers in 2010. 49 CFR 387.307 (2012). Pursuant 

to regulation, as of October 1, 2013, all FMCSA 

regulated brokers and freight forwarders (HHG and 

non-HHG) are required to have $75,000 in financial 

security. 49 CFR 387.307(a) (brokers); 49 CFR 

387.403(c)(freight forwarders). 

4 In late-filed comments, James P. Lamb, AIPBA’s 

president, alleged that the broker bond increase in 

MAP–21 ‘‘caused 9,800 intermediaries to lose their 

licenses, first time jobless claims then shot up, 

consumer prices are on the increase, and truckers’ 

rates are down for all equipment types. . . .’’ 

amount to a usurpation of a 

congressional mandate. Therefore, 

because the Agency lacks the authority 

to grant AIPBA’s blanket exemption, the 

Agency is denying AIPBA’s exemption 

application. 

Public Interest 

Even if FMCSA had the authority to 

grant AIPBA’s exemption application, a 

blanket exemption covering all brokers 

and freight forwarders is not in the 

public interest. ‘‘Congress is presumed 

to legislate in the public interest.’’ Time 

Warner Entertainment Co. L.P. v. F.C.C., 

810 F.Supp. 1302, 1304 n.6 (D.D.C. 

1992). As discussed above, granting an 

exemption to all brokers and freight 

forwarders would flout a clear and 

recent congressional directive and 

statement of the public interest. Further, 

numerous commenters have persuaded 

FMCSA that such an exemption is not 

in the public interest. 

First, FMCSA finds that granting 

AIPBA’s request would undermine the 

purpose of the bond requirement—the 

protection of shippers and motor 

carriers that utilize brokers and freight 

forwarders as third party intermediaries. 

FMCSA’s predecessor, the Interstate 

Commerce Commission (ICC), very 

clearly stated that ‘‘ ‘[t]he legislative 

history . . . clearly reveals that the 

primary purpose of Congress in 

regulating motor transportation brokers 

is to protect carriers and the traveling 

and shipping public against dishonest 

and financially unstable middlemen in 

the transportation industry.’ ’’ 

Clarification of Insurance Regulation, 3 

I.C.C.2d 689, 692 (1987)(quoting Carla 

Ticket Service, Inc., Broker Application, 

94 M.C.C. 579, 580 (1964)). 

According to OOIDA, ‘‘[t]he $10,000 

bond or trust was simply not sufficient 

to serve its intended purpose—to 

protect the motor carriers from nonpayment by brokers.’’ And, as SFAA 

notes, ‘‘the intent of the bond is to 

protect shippers and motor carriers. A 

bond in a lesser amount would deprive 

shippers and carriers of the additional 

protection that Congress thought was 

necessary. There are a number of cases 

in which the $10,000 bond was not 

sufficient to pay all claims in the full 

amount. . . .’’ Moreover, according to 

TIA, in 2009, ‘‘ATA cited a study they 

conducted indicating that only 13 

percent of carriers’ claims against 

brokers were satisfied by the $10,000 

bond.’’ This unanimity of input from 

members of the three industries most 

affected by the $75,000 requirement 

(transportation intermediaries, motor 

carriers and the surety bond industry) is 

noteworthy. Given that the purpose of 

the financial security requirement is to 

protect shippers and motor carriers, and 

the widespread view that the previous 

$10,000 requirement 3 was deficient in 

performing that function, it would not 

serve the public interest to grant 

AIPBA’s requested exemption. FMCSA 

will not perpetuate, through the grant of 

an exemption, the pre-MAP–21 status 

quo of shippers and motor carriers not 

being able to collect from financially 

insolvent brokers. Neither AIPBA nor 

any of the commenters that supported 

its request have shown how the public 

interest in protecting shippers and 

motor carriers would be served by 

granting the requested exemption. 

On the other hand, in its exemption 

application, AIPBA argues that the 

$75,000 broker surety bond amount is 

‘‘not in the public interest.’’ AIPBA 

argues that the $75,000 broker bond 

would: 

. . . cause a significant increase in consumer 

prices once the supply of property brokers is 

drastically reduced . . . In addition, the high 

amount of the broker bond will not only 

cause existing small and mid-size property 

brokers to leave the marketplace, but will 

also serve as a barrier to entry by other 

property brokers . . . The statutory loss of 

broker licenses on October 1, without further 

warning, will cause chaos in the trucking and 

shipping industry, and will cause thousands 

of brokers to lose their livelihood on October 

1, 2013, a date now less than 60 days away. 

This will result in an immediate loss of jobs 

for these brokers and the agents they employ. 

It will also cause significant supply chain 

disruptions. Such a scenario is not in the 

public interest. 

In its January 22, 2014, comments in 

response to FMCSA’s Federal Register 

Notice in this proceeding, AIPBA states 

‘‘[w]ith regard to the public interest . . . 

a lack of competition will require 

shippers to pay more for transportation 

services.’’ AIPBA also argues that ‘‘it is 

in the public interest to allow open 

competition, as the public benefits from 

lower consumer prices and increased 

employment. A larger pool of property 

brokers provides more competition and 

better access to brokers for shippers, 

which reduces the overall prices of 

products to consumers.’’ 

FMCSA acknowledges that the 

number of FMCSA-registered brokers 

and freight forwarders declined after the 

$75,000 bond requirement went into 

effect on October 1, 2013. Between 

September 2013 and December 2013, 

the number of freight forwarders with 

active authority dropped from 2,351 to 

925. The number of freight forwarders 

then increased to 1,208 by December 

2014. During this same period, the 

number of active brokers dropped from 

21,375 to 13,839, and then increased to 

15,471 in December 2014. However, 

AIPBA has provided no proof of a 

causal connection between the broker 

license revocations and an adverse 

impact on consumer prices or an 

adverse impact on rates for truckers.4

Moreover, even if AIPBA had shown 

that the $75,000 requirement caused all 

of the consequences it alleges, it has not 

focused on the key public interest 

implicated in the broker bond—the 

protection of motor carriers and 

shippers. It has not provided, nor have 

we discerned, any evidence that 

shippers or motor carriers would be 

adequately protected by the pre-MAP– 

21 bond requirement. 

Abuse of Market Power 

In its exemption application, AIPBA 

asserts that ‘‘[t]he $75,000 broker surety 

bond amount is not necessary to protect 

shippers from the abuse of market 

power.’’ To the contrary, AIPBA asserts 

that ‘‘[e]xemption from the increased 

broker amount will protect shippers 

from an abuse of market power. The 

unnecessarily high $75,000 broker bond 

requirement will cause the majority of 

property brokers to leave the 

marketplace, which will expose 

shippers to abuses of market power by 

the few large property brokers able to 

stay in business.’’ In its subsequent 

comments, AIPBA reiterates its 

assertion that the new ‘‘minimum 

financial security is not necessary to 

protect shippers from abuse of market 

power.’’ AIPBA argues that ‘‘the new 

minimum security amount is the direct 

result of collusion to abuse market 

power. The exemption would help stop 

the loss of property brokers and provide 

more options for shippers, which would 

protect shippers.’’ Other commenters 

did not address the abuse of market 

power. 

Based on the record before it, FMCSA 

cannot find that application of the 

$75,000 broker/freight forwarder bond 

requirement under 49 U.S.C. 

13906(b),(c) ‘‘is not needed to protect 

shippers from the abuse of market 

power. . . .’’ 49 U.S.C. 13541(a)(2). 

While AIPBA hypothesizes that a 

smaller brokerage industry will abuse its 

market power with regard to shippers, it 


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Federal Register / Vol. 80, No. 61 / Tuesday, March 31, 2015 / Notices 17147 

provides no evidence outlining such 

abuse. Moreover, it provides no 

evidence that the new $75,000 bond 

requirement is not required to protect 

against such abuse of market power. 

Without any evidence, FMCSA will not 

exempt an entire industry from a clearly 

articulated congressional directive to 

raise the broker and freight forwarder 

financial responsibility requirements. 

National Transportation Policy (NTP) 

Finally, in its application, AIPBA 

argues that the $75,000 bond 

requirement is contrary to the 

transportation policy of 49 U.S.C. 

13101, because it violates the federal 

government’s policy to ‘‘encourage fair 

competition, and reasonable rates for 

transportation by motor carriers of 

property’’ and to ‘‘allow a variety of 

quality and price options to meet 

changing market demands and the 

diverse requirements of the shipping 

and traveling public. . . .’’ 49 U.S.C. 

13101(a)(2)(A), (D). AIPBA argues that 

the new broker bond amount ‘‘will 

likely result in a loss of tens of 

thousands of jobs and higher consumer 

prices as a matter of supply and 

demand.’’ Further, according to AIPBA, 

‘‘per Kevin Reid of the National 

Association for Minority Truckers, the 

anti-competitive effects of the new 

broker bond requirement will 

detrimentally affect the participation of 

minorities in the motor carrier system, 

which is another violation of the 

transportation policy.’’ 

In its docket comments in this 

proceeding, AIPBA argues that ‘‘a 

$75,000 bond to protect carriers is not 

necessary to implement the national 

transportation policy because there is no 

shipper bond to protect carriers when 

they receive loads without the 

involvement of an intermediary.’’ 

Further, AIPBA argues that 

‘‘enforcement of the new financial 

security minimum is contrary to the 

national transportation policy of 49 

U.S.C. 13101 because it restricts 

opportunity, competition and 

reasonable rates.’’ 

On the other hand, with regard to the 

National Transportation Policy (NTP), 

OOIDA argues that Congress’s new 

$75,000 requirement ‘‘burnished the 

national transportation goals of 

encouraging ‘sound economic 

conditions in transportation, including 

sound economic conditions among 

carriers;’ 49 U.S.C. 13101(a)(1)(C), and 

acted to promote efficient transportation 

and to enable efficient and wellmanaged carriers to . . . maintain fair 

wages and working conditions. Sections 

13101(a)(2)(B)&(F).’’ OOIDA’s point is 

well taken. 

While AIPBA is correct that the NTP 

provides that the policy of the United 

States Government is to ‘‘encourage fair 

competition, and reasonable rates for 

transportation by motor carriers of 

property,’’ ‘‘allow a variety of quality 

and price options to meet changing 

market demands and the diverse 

requirements of the shipping and 

traveling public’’, 49 U.S.C. 

13101(a)(2)(A), (D), and ‘‘promote 

greater participation by minorities in the 

motor carrier system,’’ 49 U.S.C. 

3101(a)(2)(J), these are not the only 

elements of the NTP. Among other 

goals, the NTP provides that federal 

transportation policy includes 

‘‘promot[ing] efficiency in the motor 

carrier transportation system . . . ,’’ 49 

U.S.C. 13101(a)(2)(B), meeting the needs 

of shippers, 49 U.S.C. 13101(a)(2)(C), 

and ‘‘enabl[ing] efficient and wellmanaged carriers to earn adequate 

profits, attract capital, and maintain fair 

wages and working conditions. . . .’’ 49 

U.S.C. 13101(a)(2)(F). 

FMCSA finds that application of the 

$75,000 broker and freight forwarder 

financial responsibility requirements 

under 49 U.S.C. 13906(b), (c) is 

‘‘necessary to carry out the 

transportation policy of section 13101. 

. . .’’ 49 U.S.C. 13541(a)(1). First, 

Congress set that amount as the 

minimum requirement and in so doing, 

must be presumed to have acted in a 

manner consistent with the NTP. 

Second, as OOIDA, TIA and SFAA have 

shown, the previous $10,000 bond was 

inadequate in the event of broker 

financial problems. In such instances, 

both shippers and motor carriers faced 

losses. Accordingly, applying the new 

$75,000 bond amount is necessary to 

meet the ‘‘needs of shippers,’’ 49 U.S.C. 

13101(a)(2)(C), and to allow motor 

carriers to ‘‘earn adequate profits [and] 

attract capital,’’ 49 U.S.C. 13101(a)(2)(F), 

as directed by the NTP. 

Moreover, AIPBA has not shown why 

applying the new $75,000 requirement 

is not necessary to carry out those 

provisions of the NTP. FMCSA does not 

believe that AIPBA has provided 

evidence that there has been a decrease 

in motor carrier competition or an 

increase in shipping rates due to the 

implementation of the $75,000 bond 

requirement. Indeed at p. 5 of their 

docket comments, AIPBA admits that 

rates have actually decreased. Further, 

aside from an unsubstantiated 

projection, AIPBA makes no showing 

that the new $75,000 requirement will 

undermine the NTP’s goal of 

‘‘promot[ing] greater participation by 

minorities in the motor carrier system. 

. . .’’ 49 U.S.C. 13101(a)(2)(J). 

FMCSA does not find that the $75,000 

financial responsibility requirement for 

brokers/freight forwarders is ‘‘not 

necessary to carry out the transportation 

policy of section 13101. . . .’’ 49 U.S.C. 

13541(a)(1). Nor does FMCSA find that 

continued regulation under section 

13906(b), (c) ‘‘is not needed to protect 

shippers from the abuse of market 

power’’ or that the transaction or service 

at issue is of ‘‘limited scope. . . .’’ 49 

U.S.C. 13541(a)(2). Finally, granting the 

exemption requested by AIPBA is not in 

the public interest. 49 U.S.C. 

13541(a)(3). Accordingly, AIBPA’s 

request is denied. 

Issued on: March 25, 2015. 

T.F. Scott Darling, III, 

Chief Counsel. 

[FR Doc. 2015–07353 Filed 3–30–15; 8:45 am] 

BILLING CODE 4910–EX–P 

DEPARTMENT OF TRANSPORTATION 

Federal Transit Administration 

Notice of Intent To Prepare an 

Environmental Impact Statement for 

the GA 400 Transit Initiative in Fulton 

County, Georgia 

AGENCY: Federal Transit Administration 

(FTA), DOT. 

ACTION: Notice of Intent (NOI) to prepare 

an Environmental Impact Statement 

(EIS) and Section 4(f) Evaluation. 

SUMMARY: The Federal Transit 

Administration (FTA) and the 

Metropolitan Atlanta Rapid Transit 

Authority (MARTA) issue this Notice of 

Intent (NOI) to prepare an 

Environmental Impact Statement (EIS) 

and an evaluation per 49 U.S.C, 303 and 

23 CFR 774 (‘‘Section 4(f)’’) for the 

extension of high capacity, rapid transit 

in the Georgia (GA) 400 corridor in 

north Fulton County, GA from 

Dunwoody to Alpharetta. The EIS and 

Section 4(f) Evaluation will be prepared 

in accordance with regulations 

implementing the National 

Environmental Policy Act (NEPA) and 

40 CFR parts 1500 through 1508, 

Section 4(f), as well as FTA’s 

regulations and guidance implementing 

NEPA (23 CFR 771). 

The purpose of this NOI is to: (1) 

Advise the public and agencies that 

MARTA in coordination with the FTA 

is preparing an EIS for the proposed 

project; (2) provide information 

including previous planning studies and 

decision, purpose and need, and 

alternatives being considered; and, (3) 

invite public and agency participation 

in the EIS process, which includes a 


asabaliauskas on DSK5VPTVN1PROD with NOTICES