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.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Motor Carrier Protection Act of 
2010''.

SEC. 2. 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.''.

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 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.''.

SEC. 4. 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:
``Sec. 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.
``Sec. 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.''.

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--
            (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.

SEC. 6. UNLAWFUL BROKERAGE ACTIVITIES.

    (a) In General.--Chapter 149 of title 49, United States Code, is 
amended by adding at the end the following:
``Sec. 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.''.

Summary: Motor Carrier Protection Act of 2010 - Requires each freight forwarder or freight broker registered with the Federal Motor Carrier Safety Administration (FMCSA) to: (1) pay an annual registration renewal fee in an amount determined by the Secretary of Transportation (DOT); (2) provide updated registration information; and (3) submit proof of compliance with applicable surety and insurance requirements.

Requires noncompliant brokers, freight forwarders, or motor carriers to be listed as inactive on all relevant DOT websites.

Requires the FMCSA Administrator to issue a distinctive registration number for each activity or service of a person (including motor carrier, freight forwarder, or broker) registered to provide one or more such activities or services. Requires a registrant to specify, in writing, the authority under which it is providing required services for each shipment for which it seeks compensation.

Revises federal motor carrier registration requirements to prohibit a motor carrier from brokering transportation services unless registered as a broker. Requires registered motor carriers to maintain insurance for property damage when transporting property.

Revises and consolidates federal registration and security requirements for freight forwarders and brokers. Prohibits a person from acting as a freight forwarder or broker unless that person: (1) holds a freight forwarder's permit or broker's license issued by the FMCSA; and (2) furnishes a bond or other surety from a provider determined by the FMCSA Administrator to be adequate to insure financial responsibility of at least $100,000.

Prohibits a person acting as a broker (other than a non-vessel-operating common carrier), 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, from providing interstate brokerage services unless that person: (1) is registered under and in compliance with this Act; and (2) has satisfied financial security requirements. Prescribes civil penalties for violators of such requirements.