I 

112TH CONGRESS 

1ST SESSION H. R. 2357 

To amend section 139 of title 49, United States Code, to increase the 

effectiveness of Federal oversight of motor carriers, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 24, 2011 

Mr. GUINTA (for himself and Mr. CARNAHAN) introduced the following bill; 

which was referred to the Committee on Transportation and Infrastructure 

A BILL 

To amend section 139 of title 49, United States Code, to 

increase the effectiveness of Federal oversight of motor 

carriers, and for other purposes. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Fighting Fraud in 

5 Transportation Act of 2011’’. 

6 SEC. 2. REGISTRATION REQUIREMENTS. 

7 (a) ANNUAL REVIEW OF ACTIVE REGISTRATIONS.— 

8 The Administrator of the Federal Motor Carrier Safety 

9 Administration shall establish processes and procedures to 

10 screen its list of registered motor carriers, brokers and 


pwalker on DSK5TPTVN1PROD with BILLS
2 

•HR 2357 IH

1 freight forwarders annually, and the Administrator 

2 shall— 

3 (1) ensure that the list accurately reflects only 

4 those entities with currently active operating author5 ity; and 

6 (2) show as inactive any motor carriers, brokers 

7 or freight forwarders that are no longer active or in 

8 compliance with the requirements of chapter 139 of 

9 title 49, United States Code. 

10 (b) FUNDING.—There is hereby authorized from the 

11 funds appropriated for the operations of the Federal 

12 Motor Carrier Safety Administration $2,000,000 to carry 

13 out the requirements of subsection (a). 

14 (c) AMENDMENTS.—Section 13901 of title 49, 

15 United States Code, is amended— 

16 (1) by striking ‘‘A person’’ and inserting the 

17 following: 

18 ‘‘(a) IN GENERAL.—A person’’; and 

19 (2) by adding at the end the following: 

20 ‘‘(b) REGISTRATION NUMBERS.— 

21 ‘‘(1) IN GENERAL.—If the Administrator of the 

22 Federal Motor Carrier Safety Administration reg23 isters a person under this chapter for 1 or more ac24 tivities or services, including motor carrier, freight 

25 forwarder, or broker activities or services, the AdVerDate Mar 15 2010 23:51 Jun 30, 2011 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2357.IH H2357

pwalker on DSK5TPTVN1PROD with BILLS
3 

•HR 2357 IH

1 ministrator shall issue a distinctive registration 

2 number to the person for each such activity or serv3 ice for which the person is registered. 

4 ‘‘(2) ACTIVITY OR SERVICE TYPE INDICATOR.— 

5 Each number issued under paragraph (1) shall in6 clude an indicator of the type of activity or service 

7 for which the registration number is issued, includ8 ing whether the registration number is issued for 

9 registration of a motor carrier, freight forwarder, or 

10 broker activity or service. 

11 ‘‘(c) AUTHORITY.—For each agreement to provide 

12 service for which registration is required under this chap13 ter, the registered person shall specify, in writing, the op14 erating authority under which it is providing the services 

15 required.’’. 

16 SEC. 3. REGISTRATION OF MOTOR CARRIERS. 

17 Section 13902 of title 49, United States Code, is 

18 amended— 

19 (1) in subsection (a)— 

20 (A) in paragraph (1), by inserting ‘‘using 

21 self-propelled vehicles the motor carrier owns or 

22 leases’’ after ‘‘motor carrier’’; and 

23 (B) by adding at the end the following: 

24 ‘‘(6) SEPARATE REGISTRATION REQUIRED.—A 

25 motor carrier may not broker transportation services 


pwalker on DSK5TPTVN1PROD with BILLS
4 

•HR 2357 IH

1 unless the motor carrier has registered as a broker 

2 under this chapter.’’. 

3 SEC. 4. REGISTRATION AND SECURITY OF FREIGHT FOR4 WARDERS AND BROKERS. 

5 (a) IN GENERAL.— 

6 (1) AMENDMENT.—Chapter 139 of title 49, 

7 United States Code, is amended by striking sections 

8 13903 and 13904 and inserting the following: 

9 ‘‘§ 13903. Registration of freight forwarders and bro10 kers 

11 ‘‘(a) IN GENERAL.—A person may not act as a 

12 freight forwarder by providing service subject to the juris13 diction under subchapter III of chapter 135 or as a broker 

14 unless the person holds a freight forwarder’s permit or 

15 a broker’s license, as the case may be, issued by the Fed16 eral Motor Carrier Safety Administration. 

17 ‘‘(b) ISSUANCE OF PERMIT OR LICENSE.— 

18 ‘‘(1) ELIGIBILITY REQUIREMENTS.—The Ad19 ministrator of the Federal Motor Carrier Safety Ad20 ministration shall issue a freight forwarder’s permit 

21 or broker’s license to any person that the Adminis22 tration determines— 

23 ‘‘(A) to be qualified by experience and 

24 character to act as a freight forwarder or 

25 broker, respectively; and 


pwalker on DSK5TPTVN1PROD with BILLS
5 

•HR 2357 IH

1 ‘‘(B) to be fit, willing, and able to provide 

2 the service and to comply with this part and ap3 plicable regulations of the Secretary. 

4 ‘‘(2) DURATION.—The permit or license issued 

5 under paragraph (1) shall remain in effect only as 

6 long as the freight forwarder or broker is in compli7 ance with section 13904. 

8 ‘‘(c) REGISTRATION AS MOTOR CARRIER RE9 QUIRED.— 

10 ‘‘(1) FREIGHT FORWARDERS.—A freight for11 warder may not provide transportation as a motor 

12 carrier unless the freight forwarder— 

13 ‘‘(A) has registered separately to provide 

14 transportation as a motor carrier; and 

15 ‘‘(B) has met all the requirements under 

16 this chapter applicable to motor carriers. 

17 ‘‘(2) BROKERS.—A broker may not provide 

18 transportation as a motor carrier unless the 

19 broker— 

20 ‘‘(A) has registered separately to provide 

21 transportation as a motor carrier; and 

22 ‘‘(B) has met all of the requirements under 

23 this chapter applicable to motor carriers. 


pwalker on DSK5TPTVN1PROD with BILLS
6 

•HR 2357 IH

1 ‘‘(d) REGISTRATION AS FREIGHT FORWARDER OR

2 BROKER REQUIRED.—A motor carrier registered under 

3 this chapter— 

4 ‘‘(1) may only provide transportation of prop5 erty with self-propelled motor vehicles owned or 

6 leased by the motor carrier or interchanges as per7 mitted under regulation issued by the Secretary, 

8 provided that the originating carrier must physically 

9 transport the cargo at some point, and retains liabil10 ity for the cargo and payment of interchanged car11 riers; and 

12 ‘‘(2) may not arrange such transportation un13 less the motor carrier has obtained a separate 

14 freight forwarder’s permit or broker’s license under 

15 this section. 

16 ‘‘§ 13904. Security of freight forwarders and brokers 

17 ‘‘(a) REQUIREMENTS.— 

18 ‘‘(1) IN GENERAL.—A person may not act as a 

19 freight forwarder or broker unless the person fur20 nishes a bond, proof of trust fund, or other surety, 

21 or combination of such sureties, in a form and 

22 amount, and from a provider, determined by the Ad23 ministrator of the Federal Motor Carrier Safety Ad24 ministration to be adequate to insure financial re25 sponsibility. 


pwalker on DSK5TPTVN1PROD with BILLS
7 

•HR 2357 IH

1 ‘‘(2) STANDARDS.—The Administrator may au2 thorize the use of a group bond, trust fund, or other 

3 surety, or combination of such securities that meet 

4 the legal requirements under section 13904(d). The 

5 Administrator may not accept proof of security from 

6 any person whose surety or surety provider does not 

7 meet the standards established by the Adminis8 trator, by regulation. Bonds issued under this sec9 tion may only be offered by a bonding company that 

10 has been approved by the Secretary of the Treasury. 

11 ‘‘(b) SCOPE OF FINANCIAL RESPONSIBILITY.—A 

12 bond, trust fund, or other surety obtained under this sec13 tion shall be available to pay any claim against a freight 

14 forwarder or broker arising from its failure to pay freight 

15 charges in its contracts, agreements, or arrangements for 

16 transportation subject to regulation under this chapter— 

17 ‘‘(1) with the consent of the insured freight for18 warder or broker, subject to review by the surety 

19 company; 

20 ‘‘(2) if the claim is deemed valid by the surety 

21 company after the freight forwarder or broker has 

22 failed to respond to adequate notice to address the 

23 validity of the claim; or 

24 ‘‘(3) if the claim has been reduced to a judg25 ment against the freight forwarder or broker after 


pwalker on DSK5TPTVN1PROD with BILLS
8 

•HR 2357 IH

1 the claimant made a reasonable attempt to resolve 

2 the claim under paragraphs (1) and (2), but the 

3 claim was not resolved within a reasonable period of 

4 time provided, however, that the surety must re5 spond to any claim within 30 days of receipt and, 

6 if the claim is denied, shall set forth in writing to 

7 the claimant the grounds for the denial. In any ac8 tion against a surety to recover on a claim that has 

9 not been paid, the prevailing party shall be entitled 

10 to recover its reasonable costs and attorneys fees. 

11 ‘‘(c) FREIGHT FORWARDER INSURANCE.— 

12 ‘‘(1) IN GENERAL.—The Administrator of the 

13 Federal Motor Carrier Safety Administration may 

14 not register a person as a freight forwarder under 

15 section 13903 unless the person files with the Ad16 ministrator a bond, insurance policy, or other type 

17 of security, in accordance with the standards estab18 lished by the Administrator under this section. 

19 ‘‘(2) LIABILITY INSURANCE.—A security filed 

20 under paragraph (1) shall be sufficient to pay an 

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

22 for each final judgment against the freight for23 warder for bodily injury to, or death of, an indi24 vidual, or loss of, or damage to, property (other than 

25 property referred to in paragraph (3)), resulting 


pwalker on DSK5TPTVN1PROD with BILLS
9 

•HR 2357 IH

1 from the negligent operation, maintenance, or use of 

2 motor vehicles by, or under the direction and control 

3 of, the freight forwarder when providing transfer, 

4 collection, or delivery service under this part. 

5 ‘‘(3) CARGO INSURANCE.—The Administrator 

6 may require a registered freight forwarder to file 

7 with the Administrator a bond, insurance policy, or 

8 other type of security approved by the Secretary, 

9 that will pay an amount, not to exceed the amount 

10 of the security, for loss of, or damage to, property 

11 for which the freight forwarder provides service. 

12 ‘‘(d) ADDITIONAL REQUIREMENTS.— 

13 ‘‘(1) REISSUANCE OF LICENSES AND PER14 MITS.—Not later than 4 years after the date of the 

15 enactment of the Fighting Fraud in Transportation 

16 Act of 2011, freight forwarders and brokers shall 

17 renew licenses and permits from the Federal Motor 

18 Carrier Safety Administration that are subject to 

19 the terms and conditions under this subsection. Such 

20 licenses and permits shall expire 5 years after the 

21 date of issuance and may be renewed as provided 

22 under this chapter. 

23 ‘‘(2) EXPERIENCE OR TRAINING REQUIRE24 MENT.—Each freight forwarder and broker shall em25 ploy, as an officer, an individual who— 


pwalker on DSK5TPTVN1PROD with BILLS
10 

•HR 2357 IH

1 ‘‘(A) has at least 3 years of relevant expe2 rience; or 

3 ‘‘(B) provides the Administrator with satis4 factory evidence of certified training. 

5 ‘‘(3) ONLINE.—The Administrator shall make 

6 information on permits, licenses, and financial secu7 rity publicly available online, including— 

8 ‘‘(A) the names and addresses of the prin9 cipals of each entity holding a permit or license; 

10 and 

11 ‘‘(B) the electronic address of its surety 

12 for the submission of claims. 

13 ‘‘(4) MINIMUM FINANCIAL SECURITY.—Each 

14 freight forwarder and broker shall provide financial 

15 security of $100,000, regardless of the number of 

16 branch offices or sales agents of such entities. 

17 ‘‘(5) SPECIFIC PERFORMANCE STANDARDS.— 

18 The Administrator shall set specific performance 

19 standards for bonds or other acceptable surety, in20 cluding requirements that— 

21 ‘‘(A) the broker or forwarder can file a 

22 bond issued by a surety registered and in good 

23 standing with the U.S. Department of Treas24 ury; 


pwalker on DSK5TPTVN1PROD with BILLS
11 

•HR 2357 IH

1 ‘‘(B) the broker or forwarder can file proof 

2 of a trust or other security acceptable to the 

3 Administrator provided that the surety amount 

4 consists of assets readily available to pay valid 

5 claims without resort to personal guarantees or 

6 collection of pledged accounts receivable; and 

7 ‘‘(C) the bond issuer, trust or other secu8 rity holder is ultimately financially responsible 

9 for any failure to make the required payments. 

10 ‘‘(6) NOTICE TO CANCEL.—If a surety required 

11 under this subsection is canceled— 

12 ‘‘(A) the holder of the surety shall provide 

13 electronic notification to the Administrator of 

14 such cancellation not later than 30 days before 

15 the effective date of such cancellation; and 

16 ‘‘(B) the Administrator shall immediately 

17 post such notification on its public Web site. 

18 ‘‘(7) SUSPENSION.—The Administrator shall 

19 immediately suspend the registration of a freight 

20 forwarder or broker if its available security falls 

21 below the amount required under this subsection. 

22 ‘‘(8) PAYMENT OF CLAIMS.—If a registered 

23 freight forwarder or broker experiences financial 

24 failure or insolvency, the freight forwarder’s or bro25 ker’s surety shall— 


pwalker on DSK5TPTVN1PROD with BILLS
12 

•HR 2357 IH

1 ‘‘(A) submit a notice to cancel the surety 

2 to the Administrator in accordance with para3 graph (6); 

4 ‘‘(B) publicly advertise for claims for 60 

5 days beginning on the date of publication by the 

6 Administrator of the notice to cancel the surety; 

7 and 

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

9 expiration of the 60-day period for submission 

10 of claims— 

11 ‘‘(i) all uncontested claims received 

12 during such period; or 

13 ‘‘(ii) a pro rata share of such claims 

14 if the total amount of such claims exceeds 

15 the financial security available. 

16 ‘‘(9) LIST OF CLAIMS PAID.—Each surety under 

17 this subsection shall— 

18 ‘‘(A) publish, on the surety’s Web site, a 

19 list of the claims paid by the surety immediately 

20 upon payment; and 

21 ‘‘(B) immediately submit a copy of such 

22 list to the Administrator. 

23 ‘‘(10) PENALTIES.— 


pwalker on DSK5TPTVN1PROD with BILLS
13 

•HR 2357 IH

1 ‘‘(A) IN GENERAL.—Any surety that fails 

2 to comply with the requirements under this sub3 section— 

4 ‘‘(i) shall be liable to the United 

5 States Government for a civil penalty in an 

6 amount not to exceed $10,000; and 

7 ‘‘(ii) shall be ineligible to offer broker 

8 and forwarder security under this chapter. 

9 ‘‘(B) WILFUL VIOLATIONS.—Any surety 

10 that knowingly and willfully violates the posting 

11 and notification requirements under this sub12 section shall be held financially liable for all 

13 valid claims submitted against the broker or 

14 forwarder involved, regardless of the amount of 

15 the security. 

16 ‘‘(11) DEDUCTION OF COSTS PROHIBITED.— 

17 The amount of the financial security required under 

18 this subsection may not be reduced by deducting at19 torney’s fees or administrative costs. 

20 ‘‘(12) AUDIT.—Claim payments by sureties 

21 shall be annually audited by a public accounting 

22 firm. The results of such audits shall be made pub23 licly available on the surety’s Web site.’’. 

24 (2) RULEMAKING.—Not later than 270 days 

25 after the date of the enactment of this Act, the AdVerDate Mar 15 2010 23:51 Jun 30, 2011 Jkt 099200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\H2357.IH H2357

pwalker on DSK5TPTVN1PROD with BILLS
14 

•HR 2357 IH

1 ministrator of the Federal Motor Carrier Safety Ad2 ministration shall issue regulations to enforce the re3 quirements under section 13904(d) of title 49, 

4 United States Code, as added by paragraph (1). 

5 (3) EFFECTIVE DATE.—Section 13904(d) of 

6 title 49, United States Code, as added by paragraph 

7 (1), shall take effect on the date that is 270 days 

8 after the date of the enactment of this Act. 

9 (b) REPEAL.—Subsections (b) and (c) of section 

10 13906 of title 49, United States Code, are repealed. 

11 (c) CLERICAL AMENDMENTS.—The table of sections 

12 for chapter 139 of title 49, United States Code, is amend13 ed— 

14 (1) by striking the item relating to section 

15 13903 and inserting the following: 

‘‘13903. Registration of freight forwarders and brokers.’’; 

16 and 

17 (2) by striking the item relating to section 

18 13904 and inserting the following: 

‘‘13904. Security of freight forwarders and brokers.’’. 

19 SEC. 5. REVIEW. 

20 (a) REVIEW BY INSPECTOR GENERAL.—Not later 

21 than 15 months after the date of the enactment of this 

22 subsection, the Inspector General of the Department of 

23 Transportation shall— 


pwalker on DSK5TPTVN1PROD with BILLS
15 

•HR 2357 IH

1 (1) review the regulations and enforcement 

2 practices of the Federal Motor Carrier Safety Ad3 ministration under section 13904(d) of title 49, 

4 United States Code, as added by section 4(a); and 

5 (2) make any recommendations to the Secretary 

6 of Transportation that may be necessary to improve 

7 the enforcement of such regulations. 

8 (b) SECURITY AND INSURANCE AMOUNT ASSESS9 MENT.—Every 5 years, the Administrator of the Federal 

10 Motor Carrier Safety Administration shall review, with 

11 public notice and comment, the amount of the security and 

12 insurance required under section 13904 of title 49, United 

13 States Code, to determine whether such amounts are suffi14 cient to provide adequate financial security, and shall be 

15 authorized to increase those amounts, if necessary, based 

16 upon that determination. 

17 SEC. 6. UNLAWFUL BROKERAGE ACTIVITIES. 

18 (a) IN GENERAL.—Chapter 149 of title 49, United 

19 States Code, is amended by adding at the end the fol20 lowing: 

21 ‘‘§ 14916. Unlawful brokerage activities 

22 ‘‘(a) PROHIBITED ACTIVITIES.—Any person that acts 

23 as a broker, other than a non-vessel-operating common 

24 carrier (as defined in section 40102(16) of title 46), or 

25 an ocean freight forwarder providing brokerage as part of 


pwalker on DSK5TPTVN1PROD with BILLS
16 

•HR 2357 IH

1 an international through movement involving ocean trans2 portation between the United States and a foreign port, 

3 is prohibited from providing interstate brokerage services 

4 as a broker unless that person— 

5 ‘‘(1) is registered under, and in compliance 

6 with, section 13903; and 

7 ‘‘(2) has satisfied the financial security require8 ments under section 13904. 

9 ‘‘(b) CIVIL PENALTIES AND PRIVATE CAUSE OF AC10 TION.—Any person who knowingly authorizes, consents to, 

11 or permits, directly or indirectly, either alone or in con12 junction with any other person, a violation of subsection 

13 (a) is liable— 

14 ‘‘(1) to the United States Government for a 

15 civil penalty in an amount not to exceed $10,000 for 

16 each violation; and 

17 ‘‘(2) to the injured party for all valid claims in18 curred without regard to amount. 

19 ‘‘(c) LIABLE PARTIES.—The liability for civil pen20 alties and for claims under this section for unauthorized 

21 brokering shall apply, jointly and severally— 

22 ‘‘(1) to any corporate entity or partnership in23 volved; and 

24 ‘‘(2) to the individual officers, directors, and 

25 principals of such entities.’’. 


pwalker on DSK5TPTVN1PROD with BILLS
17 

•HR 2357 IH

1 (b) CLERICAL AMENDMENT.—The table of sections 

2 for chapter 149 of title 49, United States Code, is amend3 ed by adding at the end the following: 

‘‘14916. Unlawful brokerage activities.’’. 

Æ 


pwalker on DSK5TPTVN1PROD with BILLS