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Definitions of Broker and Bona Fide Agents Publication: Federal Register Signing Official: Robin Hutcheson Agency: Federal Motor Carrier Safety Administration Date: 10 June 2022  
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[Federal Register Volume 87, Number 112 (Friday, June 10, 2022)]
[Notices]
[Pages 35593-35595]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-12574]
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DEPARTMENT OF TRANSPORTATION
Federal Motor Carrier Safety Administration
[Docket No. FMCSA-2022-0134]
Definitions of Broker and Bona Fide Agents
AGENCY: Federal Motor Carrier Safety Administration (FMCSA), Department
of Transportation (DOT).
ACTION: Notice; request for comments.
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SUMMARY: FMCSA is requesting responses to a number of questions in
order to inform future guidance on the definitions of broker and bona
fide agents. FMCSA is required to issue guidance by November 15, 2022,
in response to the Infrastructure Investment and Jobs Act (IIJA).
DATES: Comments on this notice must be received on or before July 11,
2022.
ADDRESSES: You may submit comments bearing the Federal Docket
Management System Docket ID FMCSA-2022-0134 using any of the following
methods:
Federal eRulemaking Portal: Go to www.regulations.gov.
Follow the online instructions for submitting comments.
Mail: Docket Management Facility; U.S. Department of
Transportation, 1200 New Jersey Avenue SE, West Building, Ground Floor,
Room W12-140, Washington, DC 20590-0001.
[[Page 35594]]
Hand Delivery or Courier: West Building Ground Floor, Room
W12-140, 1200 New Jersey Avenue SE, Washington DC, between 9 a.m. and 5
p.m., ET, Monday through Friday, except Federal Holidays.
Fax: (202) 493-2251.
Instructions: Each submission must include the Agency name and the
docket number for this notice. Note that DOT posts all comments
received without change to www.regulations.gov, including any personal
information included in a comment. Please see the Privacy heading
below.
Docket: For access to the docket to read background documents or
comments, go to www.regulations.gov at any time or visit Room W12-140
on the ground level of the West Building, DOT, 1200 New Jersey Avenue
SE, Washington, DC, between 9 a.m. and 5 p.m., ET, Monday through
Friday, except Federal holidays. If you want acknowledgment that we
received your comments, please include a self-addressed, stamped
envelope or postcard or print the acknowledgement page that appears
after submitting comments online.
Privacy: In accordance with 5 U.S.C. 553(c), DOT solicits comments
from the public to better inform its guidance 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.
FOR FURTHER INFORMATION CONTACT: Mr. Jeff Secrist, Registration,
Licensing, and Insurance Division, Office of Registration and Safety
Information, FMCSA, 1200 New Jersey Avenue SE, Washington, DC 20590-
0001, (202) 385-2367, jeff.secrist@dot.gov. If you have questions on
viewing or submitting material to the docket, contact Dockets
Operations, (202) 366-9826.
SUPPLEMENTARY INFORMATION:
I. Public Participation and Request for Comments
FMCSA encourages you to participate by submitting comments and
related materials.
Submitting Comments
If you submit a comment, please include the docket number for this
notice (FMCSA-2022-0134), indicate the specific section of this
document to which each comment applies, and provide a reason for each
suggestion or recommendation. You may submit your comments and material
online or by fax, mail, or hand delivery, but please use only one of
these means. FMCSA recommends that you include your name and a mailing
address, an email address, or a phone number in the body of your
document so the Agency can contact you if it has questions regarding
your submission.
To submit your comment online, go to https://www.regulations.gov/docket/FMCSA-2022-0134/document, click on this notice, click
``Comment,'' and type your comment into the text box on the following
screen.
If you submit your comments by mail or hand delivery, submit them
in an unbound format, no larger than 8\1/2\ by 11 inches, suitable for
copying and electronic filing. If you submit comments by mail and would
like to know that they reached the facility, please enclose a stamped,
self-addressed postcard or envelope.
FMCSA will consider all comments and material received during the
comment period.
II. Background
Currently, broker is defined in 49 U.S.C. 13102(2) as a ``person,
other than a motor carrier or an employee or agent of a motor carrier,
that as a principal or agent sells, offers for sale, negotiates for, or
holds itself out by solicitation, advertisement, or otherwise as
selling, providing, or arranging for, transportation by motor carrier
for compensation.'' It is also defined in 49 CFR 371.2(a) as a ``person
who, for compensation, arranges, or offers to arrange, the
transportation of property by an authorized motor carrier. Motor
carriers, or persons who are employees or bona fide agents of carriers,
are not brokers within the meaning of this section when they arrange or
offer to arrange the transportation of shipments which they are
authorized to transport and which they have accepted and legally bound
themselves to transport.'' In that same section, bona fide agents are
defined as ``persons who are part of the normal organization of a motor
carrier and perform duties under the carrier's directions pursuant to a
preexisting agreement which provides for a continuing relationship,
precluding the exercise of discretion on the part of the agent in
allocating traffic between the carrier and others.'' 49 CFR 371.2(b).
Over the past decade, FMCSA has received numerous inquiries and
several petitions related to the definition of a broker.\1\ FMCSA is
aware that there is significant stakeholder interest in FMCSA's
unauthorized brokerage enforcement. On November 15, 2021, The President
signed the IIJA into law. (Pub. L. 117-58, 135 Stat. 429) Section 23021
of the IIJA \2\ directed the Secretary (FMCSA) to issue guidance,
within 1 year of the date of enactment of the IIJA, clarifying the
definitions of the terms broker and bona fide agents in 49 CFR 371.2.
The guidance must take into consideration the extent to which
technology has changed the nature of freight brokerage, the role of
bona fide agents, and other aspects of the freight transportation
industry. Additionally, when issuing the guidance, FMCSA must, at a
minimum: (1) examine the role of a dispatch service in the
transportation industry; (2) examine the extent to which dispatch
services could be considered brokers or bona fide agents; and (3)
clarify the level of financial penalties for unauthorized brokerage
activities under 49 U.S.C. 14916, applicable to a dispatch service.
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\1\ A list of open and closed petitions for rulemaking is
available at https://www.fmcsa.dot.gov/regulations/petitions-0.
\2\ The full text is available at congress.gov/117/plaws/publ58/PLAW-117publ58.pdf.
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III. Questions
FMCSA is requesting comment on the following questions, to inform
the agency as it completes the guidance required by the IIJA. Please
identify the question you are responding to in each section of your
comments.
1. What evaluation criteria should FMCSA use when determining
whether a business model/entity meets the definition of a broker?
2. Provide examples of operations that meet the definition of
broker in 49 CFR 371.2 and examples of operations that do not meet the
definition in 49 CFR 371.2.
3. What role should the possession of money exchanged between
shippers and motor carriers in a brokered transaction play in
determining whether one is conducting brokerage or not?
4. How would you define the term dispatch service? Is there a
commonly accepted definition? What role do dispatch services play in
the transportation industry?
5. To the best of your knowledge, do dispatch services need to
obtain a business license/Employer Identification Number from the State
in which they primarily conduct business?
6. Some ``dispatch services'' cite 49 CFR 371.2(b) as the reason
they do not obtain FMCSA brokerage authority registration in order to
conduct their operations. As noted above, section 371.2(b) states that
bona fide agents are ``persons who are part of the normal organization
of a motor carrier and perform duties under the carrier's
[[Page 35595]]
directions pursuant to a pre-existing agreement which provides for a
continuing relationship, precluding the exercise of discretion on the
part of the agent in allocating traffic between the carrier and
others.'' Some dispatch services interpret this regulation as allowing
them to represent more than one carrier yet not obtain broker operating
authority registration. Others interpret this regulation to argue that
a dispatch service can only represent one carrier without obtaining
broker authority. What should FMCSA consider when determining if a
dispatch service needs to obtain broker operating authority?
7. If a dispatch service represents more than one carrier, does
this in and of itself make it a broker operating without authority?
8. When should a dispatch service be considered a bona fide agent?
9. What role do bona fide agents play in the transportation of
freight?
10. Electronic bulletin boards match shippers and carriers for a
fee. The fee is a membership fee to have access to the bulletin board
information. Should electronic bulletin boards be considered brokers
and required to register with FMCSA to obtain broker operating
authority? If so, when and why?
11. How has technology changed the nature of freight brokerage, and
how should these changes be reflected, if at all, in FMCSA's guidance?
12. Are there other business models/services, other than dispatch
services and electronic bulletin boards, that should be considered when
clarifying the definition of broker?
13. Are there other aspects of the freight transportation industry
that FMCSA should consider in issuing guidance pertaining to the
definitions of broker and bona fide agents?
Robin Hutcheson,
Deputy Administrator.
[FR Doc. 2022-12574 Filed 6-9-22; 8:45 am]
BILLING CODE 4910-EX-P