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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Fighting Fraud in 
Transportation Act of 2011’’. 
SEC. 2. REGISTRATION REQUIREMENTS. 
(a) ANNUAL REVIEW OF ACTIVE REGISTRATIONS.— 
The Administrator of the Federal Motor Carrier Safety 
Administration shall establish processes and procedures to 
screen its list of registered motor carriers, brokers and 
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freight forwarders annually, and the Administrator 
shall— 
(1) ensure that the list accurately reflects only 
those entities with currently active operating author-
ity; and 
(2) show as inactive any motor carriers, brokers 
or freight forwarders that are no longer active or in 
compliance with the requirements of chapter 139 of 
title 49, United States Code. 
(b) FUNDING.—There is hereby authorized from the 
funds appropriated for the operations of the Federal 
Motor Carrier Safety Administration $2,000,000 to carry 
out the requirements of subsection (a). 
(c) 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 Safety Administration reg-
isters a person under this chapter for 1 or more ac-
tivities or services, including motor carrier, freight 
forwarder, or broker activities or services, the Ad-
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ministrator shall issue a distinctive registration 
number to the person for each such activity or serv-
ice for which the person is registered. 
‘‘(2) ACTIVITY OR SERVICE TYPE INDICATOR.— 
Each number issued under paragraph (1) shall in-
clude an indicator of the type of activity or service 
for which the registration number is issued, includ-
ing whether the registration number is issued for 
registration of a motor carrier, freight forwarder, or 
broker activity or service. 
‘‘(c) AUTHORITY.—For each agreement to provide 
service for which registration is required under this chap-
ter, the registered person shall specify, in writing, the op-
erating authority under which it is providing the services 
required.’’. 
SEC. 3. 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 
self-propelled 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 
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unless the motor carrier has registered as a broker 
under this chapter.’’. 
SEC. 4. REGISTRATION AND SECURITY OF FREIGHT FOR-
WARDERS 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 bro-
kers 
‘‘(a) IN GENERAL.—A person may not act as a 
freight forwarder by providing service subject to the juris-
diction 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 Fed-
eral Motor Carrier Safety Administration. 
‘‘(b) ISSUANCE OF PERMIT OR LICENSE.— 
‘‘(1) ELIGIBILITY
REQUIREMENTS.—The Ad-
ministrator of the Federal Motor Carrier Safety Ad-
ministration shall issue a freight forwarder’s permit 
or broker’s license to any person that the Adminis-
tration determines— 
‘‘(A) to be qualified by experience and 
character to act as a freight forwarder or 
broker, respectively; and 
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‘‘(B) to be fit, willing, and able to provide 
the service and to comply with this part and ap-
plicable 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 compli-
ance with section 13904. 
‘‘(c) REGISTRATION
AS
MOTOR
CARRIER
RE-
QUIRED.— 
‘‘(1) FREIGHT
FORWARDERS.—A freight for-
warder 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. 
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‘‘(d) REGISTRATION AS FREIGHT FORWARDER OR 
BROKER REQUIRED.—A motor carrier registered under 
this chapter— 
‘‘(1) may only provide transportation of prop-
erty with self-propelled motor vehicles owned or 
leased by the motor carrier or interchanges as per-
mitted under regulation issued by the Secretary, 
provided that the originating carrier must physically 
transport the cargo at some point, and retains liabil-
ity for the cargo and payment of interchanged car-
riers; and 
‘‘(2) may not arrange such transportation un-
less 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 fur-
nishes 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 Ad-
ministrator of the Federal Motor Carrier Safety Ad-
ministration to be adequate to insure financial re-
sponsibility. 
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‘‘(2) STANDARDS.—The Administrator may au-
thorize the use of a group bond, trust fund, or other 
surety, or combination of such securities that meet 
the 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 Adminis-
trator, by regulation. Bonds issued under this sec-
tion 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 sec-
tion 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 for-
warder 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 claim has been reduced to a judg-
ment against the freight forwarder or broker after 
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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 provided, however, that the surety must re-
spond to any claim within 30 days of receipt and, 
if the claim is denied, shall set forth in writing to 
the claimant the grounds for the denial. In any ac-
tion against a surety to recover on a claim that has 
not been paid, the prevailing party shall be entitled 
to recover its reasonable costs and attorneys fees. 
‘‘(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 Ad-
ministrator a bond, insurance policy, or other type 
of security, in accordance with the standards estab-
lished 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 for-
warder for bodily injury to, or death of, an indi-
vidual, or loss of, or damage to, property (other than 
property referred to in paragraph (3)), resulting 
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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
PER-
MITS.—Not later than 4 years after the date of the 
enactment of the Fighting Fraud in Transportation 
Act of 2011, freight forwarders and brokers shall 
renew 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
REQUIRE-
MENT.—Each freight forwarder and broker shall em-
ploy, as an officer, an individual who— 
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‘‘(A) has at least 3 years of relevant expe-
rience; or 
‘‘(B) provides the Administrator with satis-
factory evidence of certified training. 
‘‘(3) ONLINE.—The Administrator shall make 
information on permits, licenses, and financial secu-
rity publicly available online, including— 
‘‘(A) the names and addresses of the prin-
cipals 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 $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, in-
cluding requirements that— 
‘‘(A) the broker or forwarder can file a 
bond issued by a surety registered and in good 
standing with the U.S. Department of Treas-
ury; 
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‘‘(B) the broker or forwarder can file proof 
of a trust or other security acceptable to the 
Administrator provided that 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 bond issuer, trust or other secu-
rity holder 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 Web site. 
‘‘(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 bro-
ker’s surety shall— 
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‘‘(A) submit a notice to cancel the surety 
to the Administrator in accordance with para-
graph (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 Web site, 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.— 
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‘‘(A) IN GENERAL.—Any surety that fails 
to comply with the requirements under this sub-
section— 
‘‘(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 sub-
section 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 at-
torney’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 pub-
licly available on the surety’s Web site.’’. 
(2) RULEMAKING.—Not later than 270 days 
after the date of the enactment of this Act, the Ad-
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ministrator of the Federal Motor Carrier Safety Ad-
ministration shall issue regulations to enforce the re-
quirements 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) REPEAL.—Subsections (b) and (c) of section 
13906 of title 49, United States Code, are repealed. 
(c) CLERICAL AMENDMENTS.—The table of sections 
for chapter 139 of title 49, United States Code, is amend-
ed— 
(1) by striking the item relating to section 
13903 and inserting the following: 
‘‘13903. Registration of freight forwarders and brokers.’’; 
and 
(2) by striking the item relating to section 
13904 and inserting the following: 
‘‘13904. Security of freight forwarders and brokers.’’. 
SEC. 5. 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— 
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(1) review the regulations and enforcement 
practices of the Federal Motor Carrier Safety Ad-
ministration 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 ASSESS-
MENT.—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 suffi-
cient to provide adequate financial security, and shall be 
authorized to increase those amounts, if necessary, based 
upon that determination. 
SEC. 6. UNLAWFUL BROKERAGE ACTIVITIES. 
(a) IN GENERAL.—Chapter 149 of title 49, United 
States Code, is amended by adding at the end the fol-
lowing: 
‘‘§ 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 
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an international through movement involving ocean trans-
portation 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 require-
ments under section 13904. 
‘‘(b) CIVIL PENALTIES AND PRIVATE CAUSE OF AC-
TION.—Any person who knowingly authorizes, consents to, 
or permits, directly or indirectly, either alone or in con-
junction 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 in-
curred without regard to amount. 
‘‘(c) LIABLE PARTIES.—The liability for civil pen-
alties and for claims under this section for unauthorized 
brokering shall apply, jointly and severally— 
‘‘(1) to any corporate entity or partnership in-
volved; and 
‘‘(2) to the individual officers, directors, and 
principals of such entities.’’. 
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(b) CLERICAL AMENDMENT.—The table of sections 
for chapter 149 of title 49, United States Code, is amend-
ed by adding at the end the following: 
‘‘14916. Unlawful brokerage activities.’’. 
Æ 
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