Brokers of Household Goods Transportation by Motor Vehicle |
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Topics: Federal Motor Carrier Safety Administration
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Anne S. Ferro
November 29, 2010
[Federal Register: November 29, 2010 (Volume 75, Number 228)]
[Rules and Regulations]
[Page 72987-72999]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29no10-16]
[[Page 72987]]
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DEPARTMENT OF TRANSPORTATION
Federal Motor Carrier Safety Administration
49 CFR Parts 371, 375, 386, and 387
[Docket No. FMCSA-2004-17008]
RIN 2126-AA84
Brokers of Household Goods Transportation by Motor Vehicle
AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.
ACTION: Final rule.
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SUMMARY: FMCSA amends its regulations to require brokers that arrange
the transportation of household goods in interstate or foreign commerce
for consumers to comply with certain consumer protection requirements.
Brokers must provide: their U.S. DOT number on their advertisements and
Internet Web sites; estimates of expected moving charges and brokerage
fees; FMCSA pamphlets containing tips for successful moves and the
consumer's rights and responsibilities; and the broker's policies
concerning deposits, cancellations, and refunds. This rulemaking is in
response to the Safe, Accountable, Flexible, Efficient Transportation
Equity Act: A Legacy for Users (SAFETEA-LU) and a petition for
rulemaking from the American Moving and Storage Association. This
rulemaking is intended to ensure that individual shippers who arrange
for transportation of household goods through brokers receive necessary
information regarding their rights and responsibilities in connection
with interstate household goods moves.
DATES: Effective date: The effective date of this final rule is January
28, 2011. Compliance date for 49 CFR 387.307(a)(2): Brokers that
arrange the transportation of household goods in interstate or foreign
commerce must increase their surety bonds or trust funds to the new
minimum amount of $25,000 and have surety companies or trust fund
managers file appropriate Forms BMC-84 or BMC-85 with FMCSA no later
than January 1, 2012.
ADDRESSES: For access to the docket to read background documents or
comments received, go to http://www.regulations.gov at any time or to
U.S. Department of Transportation, Room W12-140, 1200 New Jersey
Avenue, SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.
FOR FURTHER INFORMATION CONTACT: Mr. Brodie Mack, FMCSA Household Goods
Enforcement and Compliance Team Leader, (202) 385-2400.
SUPPLEMENTARY INFORMATION:
Legal Basis for the Rulemaking
The Secretary of Transportation's (Secretary) general jurisdiction
to establish regulations concerning the procurement by property brokers
of for-hire transportation in interstate or foreign commerce is found
at 49 U.S.C. 13501. Brokers of household goods are a subset of all
property brokers and specifically register with FMCSA as household
goods brokers as required by 49 U.S.C. 13901 and 13904. This rulemaking
applies only to household goods brokers that procure for-hire
transportation in interstate or foreign commerce.
The Secretary is authorized to collect from household goods brokers
``information the Secretary decides is necessary'' to ensure a
transportation system that meets the needs of the United States (49
U.S.C. 13101 and 13301). The Secretary also has authority to adopt
regulations applicable to registered household goods brokers which
``shall provide for the protection of shippers by motor vehicle'' (49
U.S.C. 13904(c)). The Secretary's authority to inspect and copy
household goods broker records is found at 49 U.S.C. 14122. The
Secretary has delegated these various authorities to the FMCSA
Administrator (49 CFR 1.73(a)).
This rulemaking is based on the statutory provisions cited above
and on the Household Goods Mover Oversight Enforcement and Reform Act
of 2005, Title IV, Subtitle B of the Safe, Accountable, Flexible,
Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU)
(Pub. L. 109-59). This rulemaking focuses on the business practices of
household goods brokers engaged in interstate or foreign commerce.
Household goods brokers arrange, but do not perform, the transportation
of household goods shipments.
Section 4212 of SAFETEA-LU directs the Secretary to require a
household goods broker to provide shippers with the following
information whenever the broker has contact with a shipper or a
potential shipper:
1. The broker's U.S. DOT number.
2. The FMCSA pamphlet titled, ``Your Rights and Responsibilities
When You Move.''
3. A list of all motor carriers providing transportation of
household goods used by the broker and a statement that the broker is
not a motor carrier providing transportation of household goods.
Section 4209 of SAFETEA-LU adds new civil penalties for unlawful
broker estimating practices and increases existing civil penalties for
providing household goods motor carrier or broker services subject to
FMCSA jurisdiction without being registered with FMCSA.
The Secretary's general jurisdiction at 49 U.S.C. 13501 authorizes
FMCSA to establish shipment estimating and other requirements not
specifically mandated by SAFETEA-LU in this final rule.
Background
Existing FMCSA Regulations Applicable to Household Goods Brokers
Household goods brokers have been regulated by FMCSA and its
predecessor agencies for many years and a number of regulations apply
to them, including registration requirements (49 CFR part 365), process
agent requirements (49 CFR part 366), and financial responsibility \1\
requirements (49 CFR part 387). Section 387.307 requires property
brokers, including household goods brokers, to maintain a surety bond
or trust fund agreement in the amount of at least $10,000 to provide
for payments to motor carriers or shippers, if the broker fails to
carry out its agreement to supply transportation by authorized motor
carriers.
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\1\ The term ``financial responsibility,'' is not specifically
defined in subpart C of 49 CFR part 387 (property brokers) and takes
the general, commonly understood meaning of responsibility to
compensate a party for losses, whether those losses are caused by
physical damage, breach of contract, or other type of injury. The
use of the term ``financial responsibility'' in Subpart C does not
incorporate the definitions of that term found at 49 CFR 387.5 and
387.29, which apply to Subparts A (motor carriers of property) and B
(motor carriers of passengers), respectively, of 49 CFR part 387.
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Part 371 of FMCSA's regulations specifies general property broker
transaction record requirements, prohibits misrepresentation of the
broker's name or non-carrier status, and prohibits certain rebating and
compensation practices. Part 379 specifies general recordkeeping
retention periods.
FMCSA may also issue orders to compel compliance, impose civil
monetary penalties, revoke the broker's license, or seek Federal court
orders to stop statutory and/or regulatory violations. Because
household goods brokers do not provide the actual transportation, they
are not subject to FMCSA's safety jurisdiction.
Petition for Rulemaking
On March 6, 2003, the American Moving and Storage Association
(AMSA) petitioned FMCSA to initiate a rulemaking to amend 49 CFR part
371, ``Brokers of Property,'' to impose specific
[[Page 72988]]
additional requirements on household goods brokers. A copy of AMSA's
petition is in docket FMCSA-2004-17008. AMSA's main argument for
additional rulemaking was its assertion that there were an increasing
number of moving-related Web sites hosted by household goods brokers
engaging in unfair business practices.
FMCSA granted AMSA's petition and issued an Advance Notice of
Proposed Rulemaking (ANPRM) in 2004 (69 FR 76664, December 22, 2004).
In the ANPRM, FMCSA sought answers to 36 questions related to household
goods broker issues. By posing these questions, the Agency sought to
determine the extent to which the public believes a problem exists with
household goods brokers and, if so, whether regulatory or non-
regulatory solutions would better solve the problem.
Also in the ANPRM, FMCSA discussed how it became responsible for
household goods broker regulatory oversight through the Interstate
Commerce Commission Termination Act of 1995 (ICCTA) (Pub. L. 104-88,
December 29, 1995, 109 Stat. 803) and the Motor Carrier Safety
Improvement Act of 1999 (MCSIA) (Pub. L. 106-159, December 9, 1999, 113
Stat. 1748). The ICCTA gave the Secretary of Transportation
jurisdiction over the procurement of interstate motor carrier
transportation (49 U.S.C. 13501). The MCSIA, in establishing FMCSA,
granted to the Agency regulatory oversight of the property broker
regulations. The former Interstate Commerce Commission (ICC) decided on
May 16, 1949 (Ex Parte MC-39 ``Practices of Property Brokers,'' 49
M.C.C. 277, at 286) (14 FR 2833, May 28, 1949) that it was necessary to
regulate all property brokers, including household goods brokers, in
interstate or foreign commerce. In that proceeding, the ICC decided it
was unnecessary to regulate household goods brokers separately from
general freight brokers.
Generally, the commenters to the ANPRM did not express support for
rulemaking action or address many of the specific questions raised in
the ANPRM. For example, none of the commenters submitted specific
information related to the questions about the estimated number of
household goods brokers, or questions about details of the household
goods broker business. Commenters did, however, offer useful
information and suggestions in other areas to assist FMCSA in
developing a rulemaking proposal.
The Proposed Rule
The Notice of Proposed Rulemaking (NPRM) (72 FR 5947, February 8,
2007), addressed the problems and recommendations identified by AMSA in
its petition, incorporated requirements mandated by SAFETEA-LU, and
adopted some of the recommendations made by commenters to the ANPRM.
FMCSA proposed to amend the current broker regulations in part 371 by
adding a new subpart B specifically for household goods brokers; amend
appendix B of part 386 to incorporate the civil penalties applicable to
household goods brokers added by SAFETEA-LU; and amend part 387 to
increase the amount of the surety bond or trust fund currently required
for household goods brokers.
The proposed rule consisted of five basic elements that are being
made final in this rule:
It would require household goods brokers to disclose to
individual shippers critical information designed to educate the
shipper and facilitate a satisfactory moving experience.
It would require household goods brokers to use only
household goods motor carriers that are properly licensed and insured.
It would impose requirements governing estimates,
consistent with those statutorily imposed on household goods motor
carriers.
It would incorporate new statutory penalties for providing
estimates without an agreement with a household goods motor carrier and
for operating without being registered with FMCSA.
It would adjust for inflation the current minimum level of
financial responsibility required of household goods brokers.
Discussion of Comments on the Proposed Rule
FMCSA received 11 comments on the notice of proposed rulemaking
(NPRM) (72 FR 5947, February 8, 2007). Several commenters expressed
general support for the requirements imposed on household goods
brokers. The following sections discuss comments on specific issues and
FMCSA's responses to those comments.
Scope of Part 371, Subpart B
Proposed Sec. 371.101 would require household goods brokers that
operate in interstate or foreign commerce to comply with all of the
provisions of subpart B. AMSA recommends adding a phrase to state that
the rule applies to a broker offering services ``to individual
shippers.''
FMCSA response. FMCSA agrees with AMSA. The subpart's scope should
be limited to only household goods brokers offering services to
individual shippers. It should not include commercial and government
shippers that are generally more knowledgeable of brokerage
transactions. FMCSA will change the rule to the following. ``Yes, you
must comply with all regulations in this subpart when you operate as a
household goods broker offering services to individual shippers in
interstate or foreign commerce. The regulations in this subpart do not
apply to a household goods broker when providing services to commercial
or government shippers in interstate or foreign commerce.''
Definitions of Terms
Proposed Sec. 371.103 would define terms used in subpart B. FMCSA
proposed definitions for the terms ``household goods,'' ``household
goods broker,'' and ``individual shipper.'' The acronym ``FMCSA'' was
used numerous times in the proposed rule, but the Agency does not show
a definition of the term in part 371.The Agency will add the acronym
``FMCSA'' in the final rule and define it to mean ``Federal Motor
Carrier Safety Administration.''
Qualifications of Motor Carriers Used by the Broker
Proposed Sec. 371.105 would make it clear that a household goods
broker may only act as a household goods broker for a household goods
motor carrier that has a valid, active U.S. DOT number and valid,
active operating authority issued by FMCSA. This requirement was
requested by AMSA in its Petition for Rulemaking and was suggested by
some of the commenters to the ANPRM. The use of FMCSA-registered
household goods motor carriers to provide the transportation will
provide a greater level of assurance that the household goods motor
carrier will comply with applicable FMCSA regulations. The Public
Utilities Commission of Ohio (PUCO) believes it would be useful to keep
a database of consumer complaints against each carrier so that
potential shippers could identify potentially troublesome movers.
FMCSA response. FMCSA maintains a consumer complaint database and
allows public access to consumer complaint information regarding
household goods carriers and brokers. This database can be accessed on
the Internet by going to http://www.protectyourmove.gov and selecting
the hyperlink ``Search for Moving Companies and View Complaint
History'' which will lead to http://ai.volpe.dot.gov/hhg/search.asp. In
a separate rulemaking (73 FR 9266,
[[Page 72989]]
February 20, 2008), FMCSA proposed that each household goods carrier
must submit a statutorily-mandated quarterly report about consumer
complaints it receives, which should assist individual shippers in
evaluating their transportation options.
Information in Advertisements and Internet Web Sites
FMCSA proposed (Sec. 371.107) implementing section 4212 of
SAFETEA-LU by requiring that household goods brokers disclose to
potential shippers their Department of Transportation registration
number and that they are not motor carriers providing transportation of
household goods. FMCSA also proposed that household goods brokers
disclose certain information not required by SAFETEA-LU, but which
FMCSA believes is necessary to assist individual shippers. The Agency
proposed that household goods brokers prominently display in their
advertisements and on their Web sites the following:
1. The physical location of the business.
2. Its ``MC'' operating authority number and U.S. DOT registration
number.\2\
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\2\ Brokers currently receive ``MC'' numbers, not U.S. DOT
registration numbers. FMCSA proposed eliminating the ``MC''
operating authority number in its May 19, 2005 NPRM regarding the
Unified Registration System (URS) mandated by 49 U.S.C. 13908 (70 FR
28990). FMCSA intends to issue and notify each household goods
broker of the U.S. DOT number FMCSA will assign to that active
household goods broker before the URS final rule is published. The
URS final rule will remove the requirements for household goods
brokers to display their ``MC'' numbers in their advertisements, Web
sites, and agreements with household goods motor carriers. Household
goods brokers will only be required to display their assigned U.S.
DOT number after the URS final rule becomes effective. Until FMCSA
publishes a final rule in that proceeding, household goods brokers
must display their ``MC'' numbers in their advertisements.
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3. Its status as a household goods broker that does not transport
household goods but that arranges for such transportation.
AMSA urges FMCSA to monitor brokers' Web sites to ensure that
unscrupulous brokers are not providing misleading information. The
commenter also recommends an additional subparagraph in the rule to
prohibit the broker from including the names or logos of motor carriers
unless they are FMCSA-authorized household goods motor carriers with
which the broker has a written agreement, as specified in Sec.
371.115.
FMCSA response. As a part of its enforcement program, FMCSA already
monitors the Web sites of household goods brokers and carriers to
determine if they are providing misleading information on the Internet.
We conduct compliance reviews and initiate enforcement action when
appropriate.
We add a subparagraph in the final rule to provide more information
to individual shippers receiving estimates prepared by brokers pursuant
to Sec. 371.113(b). A household goods broker that provides an estimate
on behalf of a motor carrier must state on the broker's Web site that
any estimate must be based on the carrier's tariff and that the carrier
is required to make the tariff available for public inspection upon a
reasonable request. We add this requirement to better ensure that
individual shippers understand their rights with respect to broker-
prepared estimates.
We have adopted AMSA's suggestion to add a subparagraph in the
final rule to prohibit household goods brokers from including the names
or logos of motor carriers unless they are FMCSA-authorized household
goods motor carriers with which the broker has a written agreement, as
required by Sec. 371.115. We agree that brokers should not
misrepresent to shippers that their shipments will be moved by specific
moving companies, when the broker does not have agreements with those
companies. The provision is intended to further full and honest
disclosure to the shipper.
List of Motor Carriers
FMCSA proposed (Sec. 371.109) that a household goods broker must
provide to each potential individual shipper who has contact with the
household goods broker a list of all household goods motor carriers
used by the broker, to implement sec. 4212(3) of SAFETEA-LU. National
Relocation Services and Pro Movers Network believe that the requirement
is burdensome on the broker and does not serve a consumer protection
purpose for the shipper.
FMCSA response. Notwithstanding the commenters' concerns about
burden, the carrier list requirement is mandated by SAFETEA-LU. To
address concerns regarding potential burdens on household goods
brokers, FMCSA revises its proposal to allow household goods brokers to
provide the information required by Sec. 371.109 electronically either
through a Web site or by electronic messaging (e-mail), as an
alternative to a paper-based communication.
Consumer Protection Information
FMCSA proposed (Sec. 371.111) requiring that each household goods
broker provide potential shippers with one copy of each of the two
FMCSA consumer pamphlets: ``Your Rights and Responsibilities When You
Move,'' and ``Ready to Move?--Tips for a Successful Interstate Move.''
Section 4205 of SAFETEA-LU requires household goods motor carriers to
distribute both pamphlets and the proposal would impose the same
requirement on household goods brokers. Proposed paragraph (a)
permitted the household goods broker to make the information available
through its Web site or by distribution of paper copies to each
potential shipper. PUCO supports the proposed requirement. AMSA
suggests FMCSA's requirements for household goods motor carriers in
part 375 should allow use of a hyperlink on the carrier's Web site to
provide the required consumer protection information.
FMCSA response. To better verify that shippers have been fully
informed of their opportunity to access the consumer protection
information via the broker's Web site, FMCSA has added a new paragraph
(b) to Sec. 371.111 to provide that the broker must state on any
written estimate provided pursuant to Sec. 371.113 that the individual
shipper has expressly agreed to accept access to the information via
the Web site in lieu of paper copies. FMCSA has also revised Sec.
371.111 paragraph (c) to require written or electronic verification of
the shipper's agreement to access the Federal consumer protection
information via the Internet, instead of receiving the booklet copies
in paper form.
AMSA's suggested revision of part 375 has merit and FMCSA will make
the change it requested. This change will allow household goods motor
carriers also to use a hyperlink on the carrier's Web site to provide
the required consumer protection information. FMCSA believes it is in
the best interests of shippers, brokers, and carriers for the consumer
protection information to be distributed electronically if consumers
choose to receive the information in that format. A shipper's ability
to receive consumer protection information in his/her preferred medium
should not depend on whether he/she arranges for transportation through
a broker or directly with a motor carrier.
Written Estimate Based on a Physical Survey
Proposed Sec. 371.113(a) would require that, if the household
goods broker provides an estimate, it must be in writing and must be
based on a physical survey of the shipper's household goods, if the
household goods are located within a 50 air-mile radius of the broker
or its estimating agent. The
[[Page 72990]]
Owner Operator Independent Drivers Association (OOIDA) believes the
household goods broker should be required to conduct a physical survey
regardless of the distance from the broker's place of business, unless
the shipper can provide the broker a weight by which to determine an
estimate of charges.
AMSA argues that proposed Sec. 371.113(a) does not adequately
address the inaccurate, ``lowball'' broker estimating problems
experienced by consumers who receive estimates over the telephone or
Internet without a physical survey because, in most cases, brokers are
not located anywhere near shipping sites. Accordingly, AMSA recommends
that the Agency revise its proposal by requiring that estimates be
based on a physical survey conducted by the authorized motor carrier on
whose behalf the estimate is provided, if the goods are located within
a 50-mile radius of the motor carrier or its agent. AMSA also proposes
that 49 CFR 375.409(a) be revised to require that all estimates
provided by the broker be based on physical surveys conducted by the
motor carrier transporting the shipment.
Pro Movers Network opposes the requirement for an in-home survey,
because the provision is especially burdensome for consumers who are
shipping a very small amount of goods. Pro Movers Network believes that
if the list of goods provided by the shipper is complete, an accurate
non-binding estimate based on weight does not require an in-home
estimate. Also, Pro Movers Network commented that requiring in-home
surveys limits a consumer's choices and the ability to receive a moving
estimate remotely via the Internet.
FMCSA response. In the NPRM, FMCSA expressly invited comment on the
impact to shippers, brokers, and motor carriers of applying or removing
the 50-mile requirement for household goods broker estimates based on
physical surveys, and invited comments on alternatives to this
requirement. The Agency agrees with AMSA that because household goods
brokers are rarely located within 50 miles of the shippers to whom they
provide estimates, it is likely that the 50-mile radius exception, if
implemented as proposed, would become the standard practice. As a
result, FMCSA revised Sec. 371.113(a) to require brokers to conduct or
arrange for someone to conduct physical surveys of goods that are
located within 50 miles of either the broker or the carrier on whose
behalf the broker submits an estimate. As we stated in the NPRM, FMCSA
recognizes that SAFETEA-LU did not prescribe estimating requirements
for household goods brokers as it did for household goods motor
carriers. Nevertheless, 49 U.S.C. 13904(c) grants FMCSA the authority
to promulgate this requirement. The Agency believes that an individual
shipper's protection against unreliable estimates should not depend
upon whether the shipper uses a broker or carrier to provide the
estimate. We believe AMSA's suggested revision to proposed Sec.
371.113(a) accomplishes the goal more effectively than FMCSA's original
proposal and we adopt that revision in the final rule, with a minor
modification as described below.
We decline to adopt AMSA's proposed revision to 49 CFR 375.409(a)
requiring that all estimates be based on physical surveys conducted by
motor carriers because it would essentially prevent household goods
brokers from making estimates under any circumstances. Such a
prohibition is inconsistent with section 4209 of SAFETEA-LU, which
prohibits household good brokers from making estimates before entering
into an agreement with a carrier to provide the transportation. Section
4209, therefore, implicitly recognizes that brokers are permitted to
make estimates after entering into agreements with carriers, and not
simply to provide shippers with estimates prepared by motor carriers or
their agents. However, we have revised Sec. 375.409(a) to make it
consistent with revised Sec. 371.113(a).
We also decline to adopt OOIDA's suggestion to require household
goods brokers to perform a physical survey regardless of the distance
from the broker's place of business. We do not require household goods
motor carriers or their agents to perform a physical survey regardless
of the distance from the motor carrier's or agent's place of business.
We do not believe it would be appropriate to place this burden on
brokers when we do not place it on motor carriers.
FMCSA does not agree with the suggestion of Pro Movers Network that
the requirement for a physical survey should be eliminated because it
limits a consumer's choice to receive a remote estimate. Section
371.113(c) expressly permits the individual shipper to waive the
physical survey requirement.
Explanation of Waiving the Physical Survey
PUCO states that estimates are most frequently a disputed issue and
it is important that the broker be required to provide estimates in
writing based on a survey of the property to be shipped. It believes
the option of waiving the physical survey should be explained and
should be printed in a required font size in a required location on a
standard document to ensure that the shippers are fully informed.
FMCSA response. We agree with PUCO that waiving the physical survey
requirement, where it would otherwise apply, should be explained,
printed on a standard document and printed with a minimum font size and
font typeface. We have adopted PUCO's suggestion for the final rule.
FMCSA will adopt in today's final rule the minimum font size and font
typeface following the General Services Administration (GSA) guidelines
in the ``Standard and Optional Forms Procedural Handbook.'' The GSA
handbook requires the font typeface Universe and minimum font size of 7
points for all standard Federal forms and documents.
Estimates Based on Published Tariffs
FMCSA proposed (Sec. 371.113(b)) requiring household goods brokers
to base their estimates upon the published tariffs (as defined in Sec.
375.103) of the authorized household goods motor carriers they use.
Nationwide Relocation Services believes the rule should require any
motor carrier accepting jobs from a broker to adopt the broker's tariff
as its own for all jobs secured from the broker. AMSA suggests that the
rule should require the broker's fee or service charge to be separately
stated in the estimate and not included in the motor carrier's estimate
of transportation charges.
FMCSA response. Household goods motor carriers are required to
maintain tariffs under 49 U.S.C. 13702 and must charge individual
shippers in accordance with those tariffs. Implementing regulations of
the Surface Transportation Board (STB) governing household goods
carrier tariffs, at 49 CFR 1310.3(a), require such tariffs to provide
``the specific applicable rates, charges and service terms; and must be
arranged in a way that allows for the determination of the exact rate,
charges and service terms applicable to any given shipment.'' Section
1310.3(b) permits use of multiple tariffs to determine applicable rates
and charges, provided ``the tariff containing the rates must make
specific reference to all other tariffs required to determine
applicable rates, charges and service terms. The carrier(s) party to
the rate(s) must participate in all of the tariffs so linked * * *''. A
``carrier party to the rate'' means more than one carrier can use the
same rates. A broker's rate schedule is not a tariff subject to 49
U.S.C. 13702 and the STB regulations. There is no regulatory
requirement that brokers adhere to such rate schedules, as there
[[Page 72991]]
is for household goods motor carriers to adhere to the terms of their
tariffs. FMCSA believes Nationwide Relocation Services' suggestion
would be inconsistent with 49 CFR 1310.3 and therefore, FMCSA will not
adopt it.
At this time, the Agency does not adopt AMSA's suggestion that the
broker's fee or service charge be separately stated in the estimate.
The Agency does not have sufficient information about how different
brokers charge their fees and what affect this change would have.
Agreements With Motor Carriers
Proposed Sec. 371.115(a) would require household goods brokers to
maintain written agreements with authorized household goods motor
carriers before providing estimates and lists the items that must be
included in these agreements. Nationwide Relocation Services suggests
all agreements should be submitted and filed with FMCSA. Paragraph
(a)(6) would require the signatures on the agreement to be notarized.
Pro Movers Network believes the requirement for a notarized agreement
is unrealistic and would almost certainly be impossible to execute
successfully. Because household goods carriers typically have working
agreements with between 5 and 15 brokers, the commenter asserts, the
notary requirement would have to be repeated many times for each
carrier. The commenter believes the rule would ultimately be too
stressful to the broker-carrier business relationships and
transactions. The commenter argues that the potential of lost
opportunity costs caused by strained business relationships between
household goods brokers and carriers is a distinct possibility and
FMCSA's cost and risk assessments did not take these lost opportunity
costs into account.
We also proposed changing Sec. 375.409 to state that the written
agreement between the household goods broker and the household goods
motor carrier must contain all of the items required in proposed Sec.
371.115. AMSA recommends adding a sentence stating that the estimate is
based on a physical survey of the goods conducted by the motor carrier.
FMCSA response. We believe the filing requirement suggested by
Nationwide Relocation Services would create an unnecessary burden for
FMCSA, carriers, and brokers that would have little usefulness in
protecting individual shippers. Based on comments received, we agree
that the notarization requirement will be unduly burdensome and is
unnecessary. We have removed the requirement that the agreements be
notarized.
We have also revised Sec. 375.409 to reflect the changes to Sec.
371.113(a) discussed above (requiring a physical survey if the carrier
on whose behalf the broker makes an estimate is within 50 miles of the
household goods). However, as discussed earlier in this preamble, we
are not adopting AMSA's suggested change to require that all estimates
be based on physical surveys of the property conducted by household
goods motor carriers, because it would prohibit anyone other than the
authorized motor carrier from performing the estimate. As such, it
would be inconsistent with SAFETEA-LU and would limit the flexibility
FMCSA intends to afford household goods brokers and carriers to provide
services to their individual shippers. Motor carriers can certainly
provide additional restrictions in their agreements with household
goods brokers beyond FMCSA's minimum requirements.
Verifying the Motor Carrier's Authority
As proposed, Sec. 371.119 would have required that each household
goods broker ``inspect, verify, and document'' the validity of the U.S.
DOT registration and MC operating authority for each household goods
motor carrier with which it arranges transportation each month. The
household goods broker would comply with this requirement by using
FMCSA's Web site (http://www.protectyourmove.gov) to check whether the
motor carrier has active for-hire authority to transport household
goods and evidence of the necessary financial responsibility on file
with FMCSA. Nationwide Relocation Services suggests that monitoring the
authority and licensing status of motor carriers is a role best suited
for FMCSA, and a private broker should not be required to undertake the
regulatory duty of FMCSA in policing the authority status of motor
carriers. Pro Movers Network believes FMCSA should devise an e-mail
notification system to register a broker's carriers and automatically
e-mail the broker when one of its carrier's authorities is suspended or
revoked. Manual checks by the broker of its entire network of carriers
would be time- and resource-intensive, the commenter asserts, and a
once per month check by the broker is not a fool-proof method of
verification. The commenter believes the broker should only have to
confirm whether the carrier is in ``Active'' or ``NonActive'' status in
FMCSA's Safety and Fitness Electronic Records (SAFER) database. The
commenter also states that it is not the broker's obligation and
responsibility to report carrier non-compliance to FMCSA.
FMCSA response. In response to comments and after further
consideration, FMCSA has decided to eliminate proposed Sec. 371.119
from the final rule. The intent of proposed Sec. 371.119 was to
provide additional protection to shippers by requiring brokers to
verify the validity of carriers' registration and operating authority
on a monthly basis. However, proposed Sec. 371.105 independently
prohibits anyone from acting as a household goods broker for household
goods motor carriers that do not have valid U.S. DOT numbers and valid
operating authority from FMCSA. Regardless of whether a broker complies
with the monthly verification and recordkeeping requirements, it would
nonetheless be bound by Sec. 371.105 and subject to penalties for
arranging moves with unregistered or unauthorized carriers. Considering
this redundancy, it is unclear what additional protections Sec.
371.119 would provide to shippers. Because brokers would be required to
comply with Sec. 371.105 under threat of penalty with or without Sec.
371.119, the Agency does not believe that eliminating Sec. 371.119
would diminish brokers' incentives to avoid doing business with
unregistered or unauthorized carriers. Thus, the Agency believes that
eliminating Sec. 371.119 would leave shippers with the same level of
protection against unregistered or unauthorized carriers, while
reducing the administrative burden on brokers. Furthermore, striking
this provision would eliminate any confusion over whether compliance
with Sec. 371.119 excuses or provides mitigating circumstances for
failure to comply with Sec. 371.105. FMCSA is concerned that proposed
Sec. 371.119, as written, could be interpreted as a safe haven for
brokers who comply with the verification and recordkeeping
requirements, but nonetheless arrange a move with an unregistered or
unauthorized carrier. FMCSA never intended for proposed Sec. 371.119
to be interpreted this way. As a result, FMCSA leaves it to the
household goods brokers to determine the most effective and efficient
manner in which to ensure compliance with Sec. 371.105.
Broker Surety Bond or Trust Fund
FMCSA proposed to add specific language to Sec. 387.307(a) to
require household goods brokers to have a surety bond or trust fund in
effect for $25,000, based on adjustments for inflation. The former ICC
increased the financial responsibility requirement for
[[Page 72992]]
brokers in 1979 from $5,000 to $10,000.\3\ See 44 FR 70167, December 6,
1979. The NPRM proposed adjusting the $10,000 minimum figure for
inflation as measured by the Consumer Price Index, which resulted in
purchasing power of $24,490.29 in 2006. Because a final rule based on
the NPRM would not be in effect until after the 2007's NPRM, FMCSA
found it reasonable to round the minimum requirement up to $25,000. The
requirement was raised to $10,000 to ensure shippers or motor carriers
would be paid if the broker failed to carry out its contracts,
agreements, or arrangements for the supplying of transportation by
authorized motor carriers. Sandra Irwin supports raising the amount of
the surety bond or trust fund, and AMSA, PUCO, and OOIDA believe an
increase to $25,000 is inadequate. According to OOIDA, surety companies
have reported an aggregate amount of outstanding claims against broker
bonds of between $300,000 and $500,000 in response to OOIDA's efforts
to submit claims by its members against broker bonds. Nationwide
Relocation Services believes the amount of the surety bond or trust
fund should be $50,000, and David Marsh suggests $100,000. Sandra
Irwin, David Marsh, and the Transportation Intermediaries Association
suggest the increase in the surety bond or trust fund should apply to
all property brokers, not just household goods brokers.
---------------------------------------------------------------------------
\3\ The ICC established the broker surety bond amount at $5,000
in 1936, 1 FR 1156, August 20, 1936.
---------------------------------------------------------------------------
On the other hand, Pro Movers Network points out that household
goods brokers may incur a high cost of doing business, such as
increased costs of advertising, and increasing the surety bond or trust
fund requirement to $25,000 represents an unnecessary financial burden.
FMCSA response. Commenters that favored increasing the amount of
the surety bond or trust fund did not provide adequate justification
for an increase above $25,000, especially in light of the number of
small business household goods brokers and the potential impact of
significantly increasing the amount of financial responsibility beyond
a level adjusted for inflation. Inasmuch as OOIDA did not provide
specific information regarding the number and amount of outstanding
claims per broker, its argument that an aggregate amount of $300,000 to
$500,000 in outstanding claims warrants an increase in the amount of
the bond to that level is not justifiable.
The surety bond and trust fund provisions apply only to household
goods transportation. FMCSA may consider applying the increased surety
bond and trust fund provisions to general freight brokers in the
future. Finally, FMCSA acknowledges Pro Movers Network's comment about
high costs of doing business, however, it did not provide sufficiently
specific information to justify changing FMCSA's proposal to something
other than an adjustment for inflation.
Implementation of the Household Goods Broker Surety Bond or Trust Fund
Amount
FMCSA did not propose how the Agency would implement the additional
$15,000 increase in the amount of the surety bond or trust fund
agreement. FMCSA believes it is necessary to provide household goods
brokers a sufficient amount of time to acquire the additional $15,000
for surety bonds and trust funds. The Agency will set one year from the
date of the final rule as the date when all brokers of household goods
must have filed new BMC-84s or BMC-85s, as appropriate, to prove they
have the minimum $25,000 in effect. This should give sufficient time to
household goods brokers, especially small entities, to find sureties
willing to write $25,000 surety bonds to replace their $10,000 bonds.
Likewise, for those household goods brokers using trust fund
agreements, this should give sufficient time for these entities to
raise the additional $15,000 of capital to place in escrow with their
trust fund managers.
The Final Rule
FMCSA adopts the proposed rule as final with minor changes in
response to the comments. First, as discussed in the section on the
``Scope of part 371, subpart B,'' at the suggestion of AMSA, we are
limiting the scope of part 371, subpart B to only household goods
brokers offering services to individual shippers. We have made the
appropriate changes to Sec. 371.101 to limit the scope to individual
shippers. Second, as discussed in the section of the ``Definitions,''
the Agency is adding the acronym ``FMCSA'' and the definition that it
means the Federal Motor Carrier Safety Administration, an agency within
the U.S. Department of Transportation. Third, as discussed in the
section on ``information in advertisements and Internet Web
homepages,'' we are adding Sec. 371.107(d) to require household goods
brokers who provide estimates on behalf of household goods motor
carriers, to state prominently on their Web site(s) that the estimates
must be based on the carrier's tariff and that the carrier is required
to make the tariff available for public inspection upon a reasonable
request. Fourth, also as discussed in the section on ``information in
advertisements and Internet Web homepages,'' at the suggestion of AMSA,
we are adding Sec. 371.107(e) to prohibit the broker from including
the names or logos of motor carriers unless they are FMCSA-authorized
household goods motor carriers with which the broker has a written
agreement as specified in Sec. 371.115. Fourth, as discussed in the
section ``list of motor carriers,'' FMCSA will allow household goods
brokers to provide the information required by Sec. 371.109
electronically as an alternative to a paper-based communication.
Fifth, as discussed in the section ``consumer protection
information,'' FMCSA is adding Sec. 371.111(b) to require that, if a
shipper elects to access the statutorily-mandated consumer information
via the household goods broker's Web site, then the broker must state
on the written estimate described in Sec. 371.113 that the individual
shipper expressly agreed to access the consumer protection information
via the Internet in lieu of a paper copy.
Sixth, as discussed further in the section ``consumer protection
information,'' FMCSA has also revised Sec. 371.111 paragraph (c) to
require written or electronic verification of the shipper's agreement
to access the Federal consumer protection information on the Internet,
instead of receiving the booklet copies in paper form.
Seventh, as discussed in the section ``Written estimate based on a
physical survey,'' we are adopting one of AMSA's two suggestions to
require in Sec. 371.113(a) that a physical survey of the household
goods must be conducted by the authorized motor carrier on whose behalf
the estimate is provided, if the shipment is located within a 50-mile
radius of the carrier's ``household goods agent preparing the
estimate,'' unless the physical survey requirement is waived by the
shipper.
Eighth, for Sec. 371.113(c)(2), as discussed in the section on
``Explanation of waiving the physical survey,'' we are adopting PUCO's
suggestion that the final rule require brokers to explain the physical
survey and waiver requirement to individual shippers, print the waiver
agreement on the written estimate, and print the agreement with a
minimum font size and font typeface. Ninth, as discussed in the section
``verifying the motor carrier's authority,'' FMCSA is eliminating
proposed Sec. 371.119 from the final rule. Tenth, as discussed in the
sections on ``Written estimate based on
[[Page 72993]]
a physical survey'' and ``Estimates provided by household goods
brokers,'' we have revised the household goods motor carrier
requirements applicable to household goods broker estimates in Sec.
375.409(a) to make them consistent with our revised written estimate
revisions in Sec. 371.113(a). Finally, we are adding a 1-year
compliance date in Sec. 387.307(a)(2) for household goods brokers to
obtain the additional $15,000 of financial responsibility over the
current $10,000 requirement, and to file with FMCSA the required proof
(Forms BMC-84 or BMC-85, as appropriate) of the total $25,000 minimum
financial responsibility required by the 1-year compliance date.
Regulatory Analyses
Executive Order 12866 (Regulatory Planning and Review); DOT Regulatory
Policies and Procedures
FMCSA has determined that this action is a not a significant
regulatory action within the meaning of Executive Order 12866 and the
U.S. Department of Transportation regulatory policies and procedures
(44 FR 11034, February 26, 1979). The Agency received only 11 comments
and the costs are minimal.
The total cost of the final rule is approximately $5.543 million in
the first year with annual, recurring costs of $1.776 million
thereafter. As such, the costs of this final rule do not exceed the
$100 million annual threshold as defined in Executive Order 12866. The
ten-year costs and benefits of the final rule are shown in Table 1:
Table 1--Summary of Ten-Year Costs and Benefits for Final Rule
[In millions]
------------------------------------------------------------------------
7% Discount Rate Option 3
------------------------------------------------------------------------
Costs................................................. $17.11
Benefits.............................................. 46.97
Net Benefits.......................................... 32.25
------------------------------------------------------------------------
3% Discount Rate Option 3
------------------------------------------------------------------------
Costs................................................. 16.58
Benefits.............................................. 54.91
Net Benefits.......................................... 38.33
------------------------------------------------------------------------
FMCSA's full Final Regulatory Evaluation is in the docket for this
rule. It explains in detail how we estimated cost impacts for the final
rule.
This rule establishes additional consumer protection regulations
specifically for household goods brokers to supplement the regulations
at 49 CFR part 375, which apply to motor carriers transporting
household goods by commercial motor vehicle in interstate and foreign
commerce.
FMCSA estimates these regulatory changes will produce three primary
cost impacts on household goods brokers: (1) Costs of training certain
employees on the proper application of the regulatory changes; (2)
costs to revise broker marketing materials, forms, and orders for
service, including technical writing, Web site editing, and printing
costs associated with incorporating mandated consumer information; and
(3) additional information collection burdens associated with the new
regulations, including traveling to and performing on-site physical
surveys for written estimates; making written agreements with household
goods motor carriers, stating on the written estimate that the
individual shipper expressly agreed to access the consumer protection
information on the Internet; obtaining written or electronic
verification of the shipper's agreement to access the Federal consumer
protection information on the Internet; explaining the physical survey
and waiver requirement to individual shippers; printing the waiver
agreement on the written estimate; printing the agreement with a
minimum font size and font typeface; and, finally, requiring household
goods brokers to have their sureties or trust fund managers file proof
of their $25,000 minimum financial responsibility on the Forms BMC-84
or BMC-85, as appropriate.
Regulatory Flexibility Act, as Amended by the Small Business Regulatory
Enforcement Fairness Act of 1996
The Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), as amended
by the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub.
L. 104-121, 110 Stat. 857), requires Federal agencies, as a part of
each rulemaking, to consider regulatory alternatives that minimize the
impact on small entities while achieving the objectives of the
rulemaking. The Agency's Initial Regulatory Flexibility Analysis is
available in docket FMCSA-2004-17008 at item 0018. FMCSA received no
specific comments about its Initial Regulatory Flexibility Analysis.
The Agency's Final Regulatory Flexibility Analysis (FRFA) for this
final rule is discussed below.
(1) A description of the reasons why action by the agency is being
considered.
The American Moving and Storage Association (AMSA) petitioned the
DOT for a rulemaking in March 2003 that would amend the property broker
regulations in part 371 to require brokers that arrange for household
goods transportation by motor carrier (household goods brokers) to
provide consumer information that only household-goods motor-carriers
must now provide, as well as establish additional consumer protection
requirements. Many of AMSA's concerns were addressed in the Safe
Accountable, Flexible, Efficient Transportation Equity Act: A Legacy
For Users (SAFETEA-LU), Public Law 109-59, which was enacted into law
on August 10, 2005. Specifically, section 4212 of SAFETEA-LU directs
FMCSA to issue regulations requiring household goods brokers to provide
this information to consumers.
(2) Objectives of, and legal basis for, the final rule.
This rulemaking is mandated by section 4212 of SAFETEA-LU. FMCSA's
general authority to enact consumer protection regulations governing
broker operations is contained in 49 U.S.C. 13904(c). The objective of
this rule is to ensure that individual shippers of household goods that
arrange for transportation through household goods brokers (rather than
directly through motor carriers) receive necessary information
regarding the parties with which they are dealing and their rights and
responsibilities in connection with interstate household goods moves.
It also is intended to ensure that household goods brokers deal only
with properly registered and insured motor carriers and that estimates
provided by household goods brokers be provided under specific
circumstances designed to protect the shipper against abuse. Finally,
it increases the level of financial responsibility required to ensure
that household goods brokers perform their transportation contracts.
(3) Significant issues raised by small entities' comments.
A summary of the significant issues raised by the public in
response to the NPRM and the assessment of each significant issue are
discussed earlier in this final rule under the heading ``Discussion of
Comments on the Proposed Rule.''
FMCSA is adopting the proposed rule as final with the minor changes
discussed above under the heading The Final Rule, based mainly on
comments to the NPRM. FMCSA believes most household goods brokers that
commented to the NPRM would meet the definition of a small business
entity.
(4) Description and estimate of the number of small entities to
which the final rule will apply.
There are currently 615 active, registered household goods brokers
and another 394 registered household goods
[[Page 72994]]
brokers that are inactive.\4\ We do not know the number of unregistered
household goods brokers, but we suspect that there are many. For the
purposes of our analysis, we assume the number is 75--which would put
the percentage of unregistered brokers at just over ten percent (75 is
10.87% of (615 + 75)). The figure is based on conversations with
industry experts and information from broker Web sites. We use 690,
then, as the estimate of total active brokers--registered and (now)
unregistered. Almost all are small entities according to the definition
in Small Business Administration (SBA) regulations (13 CFR part 121)
which defines a ``small entity'' in the North American Industrial
Classification System (NAICS) Code 488510 ``Freight Transportation
Arrangement'' industry by average annual receipts, which are currently
set at $7 million per firm. The motor carriers with whom household
goods brokers deal may also be indirectly affected.
---------------------------------------------------------------------------
\4\ A broker generally becomes inactive after registering with
FMCSA when its surety bond or trust fund is cancelled.
---------------------------------------------------------------------------
(5) Description of the projected reporting, record-keeping and
other compliance requirements for small entities.
The final rule requires additional record-keeping on the part of
household goods brokers to demonstrate compliance. The cost to the
household goods broker industry of this additional record-keeping
($5.543 million in the first year and $1.776 million annually to
inform, display, and disclose information to shippers and maintain the
files for three years) is reflected in our cost estimates.
Additionally, the aggregate cost to the household goods broker industry
of raising the financial responsibility requirement to $25,000 from
$10,000 (approximately $50,000 annually) is also reflected in our cost
estimates. The total cost has a present value of approximately $17.11
million over ten years when discounted at 7 percent, and does not
require any special skills that would be available to large entities
any more than to small entities.
(6) Duplication with other Federal rules.
FMCSA is unaware of any other Federal rules which will duplicate,
overlap, or conflict with this proposed rule except for the household
goods carriers rule published on July 12, 2005.\5\ Because these rules
apply only to household goods motor carriers, it was necessary to
establish separate rules applicable to household goods brokers, even
though they contain certain similarities. For example, SAFETEA-LU
requires every shipper to receive the pamphlet ``Your Rights and
Responsibilities When You Move.'' Household goods carriers are already
required to make this pamphlet available to every shipper. This rule
requires household goods brokers to make the same pamphlet available to
shippers. There is no practical way around the duplication because some
shippers do not use a household goods broker and those who do often do
not have any direct contact with a household goods carrier early enough
in the process to make effective use of the information contained in
the pamphlet.
---------------------------------------------------------------------------
\5\ 70 FR 39949 (Jul. 12, 2005).
---------------------------------------------------------------------------
(7) Description of any significant alternatives to the final rule.
FMCSA believes that there are no significant alternatives to the
final rule which would accomplish the stated objectives of the
Household Goods Mover Oversight Enforcement and Reform Act of 2005,
otherwise known as Title IV, Subtitle B of the Safe, Accountable,
Flexible, Efficient Transportation Equity Act: A Legacy for Users
(SAFETEA-LU) (Pub. L.109-59) and which would minimize any significant
economic impact of the final rule on small entities.
The Agency did consider ways in which it could assist small
household goods broker entities to mitigate the impact of increasing
the trust fund resources to the new minimum requirement of $25,000. The
Agency decided it could extend the compliance date regarding the
financial responsibility requirement so that brokers will have a full
year after publication of the final rule to come into compliance with
the $25,000 requirement, increasing trust funds from the minimum of
$10,000 to the final rule's minimum requirement of $25,000.
Therefore, FMCSA is mitigating the impact of obtaining the
additional $15,000 of financial responsibility over the current $10,000
requirement by adding a 1-year compliance date in Sec. 387.307(a)(2).
Thus, all household goods brokers will have one year from the date of
publication of this final rule to obtain the additional $15,000 of
financial responsibility over the current $10,000 requirement, and to
have their sureties and trust fund managers file with FMCSA the
required proof (Forms BMC-84 or BMC-85, as appropriate) of the total
$25,000 minimum financial responsibility required by the compliance
date for Sec. 387.307(a)(2).
As we stated above, almost all of the 690 household goods brokers
subject to this final rule meet the definition of a small business
entity under the RFA. We have estimated this final rule will cause the
average household goods broker to incur an estimated, additional $8,030
in the first year of implementation and annual recurring costs of about
$2,575. The Administrator of the FMCSA believes this final rule will
have a significant economic impact on a substantial number of small
entities (SEISONOSE).
Unfunded Mandates Reform Act
This rule does not impose a Federal mandate resulting in the
expenditure by State, local, or Tribal governments, in the aggregate,
or by the private sector, of $140.3 million or more in any one year (2
U.S.C. 1531 et seq.). The present value of the final rule is about
$17.11 million.
National Environmental Policy Act
The Agency analyzed this rule for the purpose of the National
Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq.) and
determined under our environmental procedures Order 5610.1 published
March 1, 2004 (69 FR 9680), that this action is categorically excluded
under Appendix 2, paragraphs 6.d, 6.m, and 6.q of the Order from
further environmental documentation. These categorical exclusions
relate to rulemaking actions affecting household goods brokers. In
addition, the Agency believes that the action includes no extraordinary
circumstances that would have any effect on the quality of the
environment. Thus, the action does not require an environmental
assessment or an environmental impact statement.
We have also analyzed this rule under the Clean Air Act, as amended
(CAA) section 176(c), (42 U.S.C. 7401 et seq.) and implementing
regulations promulgated by the Environmental Protection Agency.
Approval of this action is exempt from the CAA's general conformity
requirement since it involves rulemaking and policy development and
issuance. See 40 CFR 93.153(c)(2). It will not result in any emissions
increase nor will it have any potential to result in emissions that are
above the general conformity rule's de minimis emission threshold
levels. Moreover, it is reasonably foreseeable that the rule will not
increase total CMV mileage, or change the routing of CMVs, how CMVs
operate, or the CMV fleet-mix of motor carriers. This action merely
establishes regulations applicable to the business practices of
household goods brokers, which do not operate CMVs. FMCSA received no
comments to its NEPA and Clean Air Act analyses.
[[Page 72995]]
Privacy Impact Assessment
FMCSA conducted a privacy impact assessment of this rule as
required by section 522(a)(5) of the FY 2005 Omnibus Appropriations
Act, Public Law 108-447, 118 Stat. 3268 (Dec. 8, 2004) [set out as a
note to 5 U.S.C. 552a]. The assessment considers any impacts of the
rule on the privacy of information in an identifiable form and related
matters. FMCSA has determined this rule imposes no privacy impacts.
Paperwork Reduction Act
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-
3520), a Federal agency must obtain approval from the Office of
Management and Budget (OMB) for each collection of information it
conducts, sponsors, or requires through regulations. FMCSA seeks
approval of the information collection requirements in a new
information collection to be entitled ``Practices of Household Goods
Brokers.''
The collected information encompasses that which is generated,
maintained, retained, disclosed, and provided to, or for, the agency
under 49 CFR part 371. It will assist shippers in their commercial
dealings with interstate household goods brokers. The collection of
information will be used by prospective shippers to make informed
decisions about contracts and services to be ordered, executed, and
settled within the interstate household goods motor carrier industry.
Some of these information collection items were required by regulations
issued by the former ICC; however, that agency was not required to
comply with the PRA. When these items transferred from the ICC to the
Federal Highway Administration, and ultimately to FMCSA, no OMB control
number was assigned to cover this information collection transfer. It
was therefore necessary to calculate the old information collection
burden hours for these items approved under the ICC rules and to add
the new burden that will be generated by this final rule.
Assumptions used for calculation of the information collection
burden include the following: (1) There are currently approximately 690
active household goods brokers; (2) on average, each household goods
broker will enter into written agreements to estimate shipment costs
with about 31 motor carriers, (3) household goods brokers will
eventually sever some of these written agreements and make agreements
with new household goods motor carriers. We assume that an average
agreement lasts for about six years, meaning that brokers will enter
into about five new agreements each year, and (4) FMCSA estimates
household goods brokers handle about 100,000 moves each year. The first
two items result in 24,390 respondents subject to the information
collection (690 x 31 = 24,390). The third item results in an additional
3,450 respondents subject to the information collection (690 x 5 =
3,450). Together with the fourth item, a total of about 127,900
respondents (24,390 + 3,450 + 100,000) would be subject to the
information collection.
The PRA regulations at 5 CFR 1320.3(b)(2) allow FMCSA to calculate
no burden when the agency demonstrates to OMB that the activity needed
to comply with the specific regulation is usual and customary. FMCSA
sought comment in the NPRM on whether setting up the first accounting
system for a new business is a usual and customary business practice.
FMCSA received no comments from the public about this accounting system
issue. Thus, FMCSA concludes the public believes it is a usual and
customary practice when starting a new business.
Table 2 summarizes the information collection burden hours by the
actions being taken in the final rule. See attachment S of the
supporting statement for the Paperwork Reduction Act Submission in
docket FMCSA-2004-17008 for the detailed FMCSA analysis.
Table 2--Annual Burden Hours Across the 127,900 Respondents
----------------------------------------------------------------------------------------------------------------
Section Description Calculation Total hours
----------------------------------------------------------------------------------------------------------------
371.3............................... Transaction records.................. 60hr x 690............ 41,400
371.13.............................. Second accounting system............. 8hr x 125............. 1,000
371.107............................. Web site/Ad Modification............. 20hr x 690............ 13,800
371.109............................. Create A List of Carriers............ 10hr x 690............ 6,900
371.111(a).......................... Pamphlet Provision (One-Time)........ 0.5hr x 690........... 345
371.111(c).......................... Confirming Required Information...... 0.5hr/month x 12 x 690 4,140
371.113............................. Explanation of Waiver-Agreement...... (1/12)hr x 20,000..... 1,667
371.115............................. Negotiation of Agreements (One-Time). 4hr x 31 agreements x 85,560
690.
Additional Agreements Through 4 hrs x 5 agreements x 13,800
Turnover. 690.
371.117............................. Disclosure and Records............... 10hr x 690............ 6,900
371.119............................. Removed Verification Requirement..... Removed............... 0
Total First Year Hours............... ...................... 175,512
Total Recurring Annual Hours......... ...................... 89,607
----------------------------------------------------------------------------------------------------------------
We have rounded the estimates and have asked OMB for approval for
first-year burden-hours of 175,500, and subsequent-year burden-hours of
89,600. We particularly request your comments on whether the collection
of information is necessary for FMCSA to meet the goal of 49 CFR part
371 to protect consumers and household goods motor carriers, including:
(1) Whether the information is useful to this goal; (2) the accuracy of
the estimate of the burden of the information collection; (3) ways to
enhance the quality, utility and clarity of the information collected;
and (4) ways to minimize the burden of the collection of information on
respondents, including the use of automated collection techniques or
other forms of information technology.
You must submit comments on the information collection burden
addressed by this final rule to the Office of Management and Budget
(OMB). The deadline for such submissions is December 29, 2010.
Interested persons are invited to submit written comments on the
proposed information collection to the Office of Information and
Regulatory Affairs, Office of Management and Budget. Comments should be
addressed to the attention of the Desk Officer, Department of
Transportation/Federal Motor Carrier Safety Administration, and sent
via electronic mail to oira_submission@omb.eop.gov, or faxed to (202)
395-6974, or mailed to the Office of Information and Regulatory
[[Page 72996]]
Affairs, Office of Management and Budget, Docket Library, Room 10102,
725 17th Street, NW., Washington, DC 20503.
Executive Order 12988 (Civil Justice Reform)
This rulemaking meets applicable standards in sections 3(a) and
3(b)(2) of Executive Order 12988, entitled ``Civil Justice Reform,'' to
minimize litigation, eliminate ambiguity, and reduce burden.
Executive Order 12630 (Taking of Private Property)
This rule will not effect a taking of private property or otherwise
have taking implications under Executive Order 12630, entitled
``Governmental Actions and Interference with Constitutionally Protected
Property Rights.''
Executive Order 13132 (Federalism)
This action has been analyzed in accordance with the principles and
criteria contained in Executive Order 13132. The FMCSA has determined
that this rulemaking would not have a substantial direct effect on
States, nor would it limit the policy-making discretion of the States.
Executive Order 13211 (Energy Effects)
FMCSA has analyzed this action under Executive Order 13211,
entitled ``Actions Concerning Regulations That Significantly Affect
Energy Supply, Distribution, or Use.'' The Agency has determined that
it is not a ``significant energy action'' under that order because it
does not appear to be economically significant (i.e., imposing a cost
of more than $100 million in a single year) based upon analyses
performed at this stage of the rulemaking process, and is not likely to
have a significant adverse effect on the supply, distribution, or use
of energy.
Executive Order 12372 (Intergovernmental Review)
The regulations implementing Executive Order 12372 regarding
intergovernmental consultation on Federal programs and activities do
not apply to this program.
List of Subjects
49 CFR Part 371
Brokers, Motor carriers, Reporting and recordkeeping requirements.
49 CFR Part 375
Advertising, Arbitration, Consumer protection, Freight, Highways
and roads, Insurance, Motor carriers, Moving of household goods,
Reporting and recordkeeping requirements.
49 CFR Part 386
Administrative practice and procedure, Brokers, Freight forwarders,
Hazardous materials transportation, Highway safety, Motor carriers,
Motor vehicle safety, Penalties.
49 CFR Part 387
Buses, Freight, Freight forwarders, Hazardous materials
transportation, Highway safety, Insurance, Intergovernmental relations,
Motor carriers, Motor vehicle safety, Moving of household goods,
Penalties, Reporting and recordkeeping requirements, Surety bonds.
0
For the reasons discussed above, FMCSA is amending title 49, Code of
Federal Regulations, chapter III, subchapter B, as set forth below:
PART 371--BROKERS OF PROPERTY
0
1. Revise the authority citation for part 371 to read as follows:
Authority: 49 U.S.C. 13301, 13501, and 14122; subtitle B, title
IV of Pub. L. 109-59; and 49 CFR 1.73.
Subpart A--General Requirements
0
2. Add a heading for subpart A to read as set forth above, and
designate Sec. Sec. 371.1 through 371.13 under subpart A.
0
3. Add a new subpart B to read as follows:
Subpart B--Special Rules for Household Goods Brokers
Sec.
371.101 If I operate as a household goods broker in interstate or
foreign commerce, must I comply with subpart B of this part?
371.103 What are the definitions of terms used in this subpart?
371.105 Must I use a motor carrier that has a valid U.S. DOT number
and valid operating authority issued by FMCSA to transport household
goods in interstate or foreign commerce?
371.107 What information must I display in my advertisements and
Internet Web homepage?
371.109 Must I inform individual shippers which motor carriers I
use?
371.111 Must I provide individual shippers with Federal consumer
protection information?
371.113 May I provide individual shippers with a written estimate?
371.115 Must I maintain agreements with motor carriers before
providing written estimates on behalf of these carriers?
371.117 Must I provide individual shippers with my policies
concerning cancellation, deposits, and refunds?
371.121 What penalties may FMCSA impose for violations of this part?
Subpart B--Special Rules for Household Goods Brokers
Sec. 371.101 If I operate as a household goods broker in interstate
or foreign commerce, must I comply with subpart B of this part?
Yes, you must comply with all regulations in this subpart when you
operate as a household goods broker offering services to individual
shippers in interstate or foreign commerce. The regulations in this
subpart do not apply to a household goods broker when providing
services to commercial or government shippers in interstate or foreign
commerce.
Sec. 371.103 What are the definitions of terms used in this subpart?
FMCSA means the Federal Motor Carrier Safety Administration within
the U.S. Department of Transportation.
Household goods has the same meaning as the term is defined in
Sec. 375.103 of this subchapter.
Household goods broker means a person, other than a motor carrier
or an employee or bona fide 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 of household goods by motor
carrier for compensation.
Individual shipper has the same meaning as the term is defined in
Sec. 375.103 of this subchapter.
Sec. 371.105 Must I use a motor carrier that has a valid U.S. DOT
number and valid operating authority issued by FMCSA to transport
household goods in interstate or foreign commerce?
You may only act as a household goods broker for a motor carrier
that has a valid, active U.S. DOT number and valid operating authority
issued by FMCSA to transport household goods in interstate or foreign
commerce.
Sec. 371.107 What information must I display in my advertisements and
Internet Web homepage?
(a) You must prominently display in your advertisements and
Internet Web homepage(s) the physical location(s) (street or highway
address, city, and State) where you conduct business.
(b) You must prominently display your U.S. DOT registration
number(s) and MC license number issued by the FMCSA in your
advertisements and Internet Web homepage(s).
(c) You must prominently display in your advertisements and
Internet Web site(s) your status as a household goods broker and the
statement that you will not transport an individual shipper's
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household goods, but that you will arrange for the transportation of
the household goods by an FMCSA-authorized household goods motor
carrier, whose charges will be determined by its published tariff.
(d) If you provide estimates on any carrier's behalf pursuant to
Sec. 371.113(b), you must prominently display in your Internet Web
site(s) that the estimate must be based on the carrier's tariff and
that the carrier is required to make its tariff available for public
inspection upon a reasonable request.
(e) You may only include in your advertisements or Internet Web
site(s) the names or logos of FMCSA-authorized household goods motor
carriers with whom you have a written agreement as specified in Sec.
371.115 of this part.
Sec. 371.109 Must I inform individual shippers which motor carriers I
use?
(a) You must provide to each potential individual shipper who
contacts you a list of all authorized household goods motor carriers
you use, including their U.S. DOT registration number(s) and MC license
numbers. You may provide the list electronically or on paper.
(b) You must provide to each potential individual shipper who
contacts you a statement indicating that you are not a motor carrier
authorized by the Federal Government to transport the individual
shipper's household goods, and you are only arranging for an authorized
household goods motor carrier to perform the transportation services
and, if applicable, additional services. You may provide the statement
electronically or on paper.
Sec. 371.111 Must I provide individual shippers with Federal consumer
protection information?
(a) You must provide potential individual shippers with Federal
consumer protection information by one of the following three methods:
(1) Provide a hyperlink on your Internet Web site to the FMCSA Web
site containing the information in FMCSA's publications ``Ready to
Move?--Tips for a Successful Interstate Move'' and ``Your Rights and
Responsibilities When You Move.''
(2) Distribute to each shipper and potential shipper at the time
you provide an estimate, copies of FMCSA's publications ``Ready to
Move?--Tips for a Successful Interstate Move'' and ``Your Rights and
Responsibilities When You Move.''
(3) Distribute to each shipper and potential shipper at the time
you provide an estimate, copies of ``Ready to Move?--Tips for a
Successful Interstate Move'' and ``Your Rights and Responsibilities
When You Move'' as modified and produced by the authorized, lawful
motor carrier to which you intend to provide the shipment under your
written agreement required by Sec. 371.115.
(b) If an individual shipper elects to waive physical receipt of
the Federal consumer protection information by one of the methods
described in paragraphs (a)(2) and (a)(3) of this section, and elects
to access the same information via the hyperlink on the Internet as
provided in paragraph (a)(1) of this section, you must include a clear
and concise statement on the written estimate described in Sec.
371.113 that the individual shipper expressly agreed to access the
Federal consumer protection information on the Internet.
(c) You must obtain a signed, dated, electronic or paper receipt
showing the individual shipper has received both booklets that
includes, if applicable, verification of the shipper's agreement to
access the Federal consumer protection information on the Internet.
(d) You must maintain the signed receipt required by paragraph (c)
of this section for three years from the date the individual shipper
signs the receipt.
Sec. 371.113 May I provide individual shippers with a written
estimate?
(a) You may provide each individual shipper with an estimate of
transportation and accessorial charges. If you provide an estimate, it
must be in writing and must be based on a physical survey of the
household goods conducted by the authorized motor carrier on whose
behalf the estimate is provided if the goods are located within a 50-
mile radius of the motor carrier's or its agent's location, whichever
is closer. The estimate must be prepared in accordance with a signed,
written agreement, as specified in Sec. 371.115 of this subpart.
(b) You must base your estimate upon the published tariffs of the
authorized motor carrier who will transport the shipper's household
goods.
(c)(1) A shipper may elect to waive the physical survey required in
paragraph (a) of this section by written agreement signed by the
shipper before the shipment is loaded.
(2) The household goods broker must explain the physical survey
waiver agreement to the individual shipper in plain English. The
physical survey waiver agreement must be printed on the written
estimate and must be printed at no less than 7-point font size and with
the font typeface Universe.
(3) A copy of the waiver agreement must be retained as an addendum
to the bill of lading and is subject to the same record inspection and
preservation requirements as are applicable to bills of lading.
(d) You must keep the records required by this section for three
years following the date you provide the written estimate for an
individual shipper who accepts the estimate and has you procure the
transportation.
Sec. 371.115 Must I maintain agreements with motor carriers before
providing written estimates on behalf of these carriers?
(a) In order to provide estimates of charges for the transportation
of household goods, you must do so in accordance with the written
agreement required by Sec. 375.409 of this subchapter. Your written
agreement with the motor carrier(s) must include the following items:
(1) Your broker name as shown on your FMCSA registration, your
physical address, and your U.S. DOT registration number and MC license
number;
(2) The authorized motor carrier's name as shown on its FMCSA
registration, its physical address, and its U.S. DOT registration
number and MC license number;
(3) A concise, easy to understand statement that your written
estimate to the individual shipper:
(i) Will be exclusively on behalf of the authorized household goods
motor carrier;
(ii) Will be based on the authorized household goods motor
carrier's published tariff; and
(iii) Will serve as the authorized household goods motor carrier's
estimate for purposes of complying with the requirements of part 375 of
this chapter, including the requirement that the authorized household
goods motor carrier relinquishes possession of the shipment upon
payment of no more than 110 percent of a non-binding estimate at the
time of delivery;
(4) Your owner's, corporate officer's, or corporate director's
signature lawfully representing your household goods broker operation
and the date;
(5) The signature of the authorized household goods motor carrier's
owner, corporate officer, or corporate director lawfully representing
the household goods motor carrier's operation and the date; and
(b) The signed written agreement required by this section is public
information and you must produce it for review upon reasonable request
by a member of the public.
(c) You must keep copies of the agreements required by this section
for as long as you provide estimates on behalf of the authorized
household
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goods motor carrier and for three years thereafter.
Sec. 371.117 Must I provide individual shippers with my policies
concerning cancellation, deposits, and refunds?
(a) You must disclose prominently on your Internet Web site and in
your agreements with prospective shippers your cancellation policy,
deposit policy, and policy for refunding deposited funds in the event
the shipper cancels an order for service before the date an authorized
household goods motor carrier has been scheduled to pick up the
shipper's property.
(b) You must maintain records showing each individual shipper's
request to cancel a shipment and the disposition of each request for a
period of three years after the date of a shipper's cancellation
request. If you refunded a deposit, your records must include:
(1) Proof that the individual shipper cashed or deposited the check
or money order, if the financial institution provides documentary
evidence; or
(2) Proof that you delivered the refund check or money order to the
individual shipper.
Sec. 371.121 What penalties may FMCSA impose for violations of this
part?
The penalty provisions of 49 U.S.C. chapter 149, Civil and Criminal
Penalties apply to this subpart. These penalties do not overlap.
Notwithstanding these civil penalties, nothing in this section deprives
an individual shipper of any remedy or right of action under existing
law.
PART 375--TRANSPORTATION OF HOUSEHOLD GOODS IN INTERSTATE COMMERCE;
CONSUMER PROTECTION REGULATIONS
0
4. Revise the authority citation for part 375 to read as follows:
Authority: 5 U.S.C. 553; 49 U.S.C. 13102, 13301, 13704, 13707,
14104, 14706, 14708; subtitle B, title IV of Pub. L. 109-59; and 49
CFR 1.73.
0
5. Amend Sec. 375.213 by revising paragraphs (a), (b)(1), and (d), and
adding paragraph (e) to read as follows:
Sec. 375.213 What information must I provide to a prospective
individual shipper?
(a) When you provide the written estimate to a prospective
individual shipper, you must also provide the individual shipper with a
copy of Department of Transportation publication FMCSA-ESA-03-005 (or
its successor publication) entitled ``Ready to Move?--Tips for a
Successful Interstate Move.'' You may provide the individual shipper
with a paper copy or you may provide a hyperlink on your Internet Web
site to the FMCSA Web site containing the information in FMCSA's
publication ``Ready to Move?--Tips for a Successful Interstate Move.''
(b) * * *
(1) The contents of appendix A of this part, entitled ``Your Rights
and Responsibilities When You Move'' (Department of Transportation
publication FMCSA-ESA-03-006, or its successor publication). You may
provide the individual shipper with a paper copy or you may provide a
hyperlink on your Internet Web site to the FMCSA Web site containing
the information in FMCSA's publication ``Your Rights and
Responsibilities When You Move.''
* * * * *
(d) Paragraphs (c)(2) and (c)(3) of this section do not apply to
exact copies of appendix A published in the Federal Register, the Code
of Federal Regulations, or on FMCSA's Web site.
(e) If an individual shipper elects to waive physical receipt of
the Federal consumer protection information by one of the methods
described in paragraphs (a) and (b)(1) of this section, and elects to
access the same information via the hyperlink on the Internet as
provided in paragraphs (a) and (b)(1) of this section:
(1) You must include a clear and concise statement on the written
estimate described in Sec. 375.401 that the individual shipper
expressly agreed to access the Federal consumer protection information
on the Internet.
(2) You must obtain a signed, dated, electronic or paper receipt
showing the individual shipper has received both booklets that
includes, if applicable, verification of the shipper's agreement to
access the Federal consumer protection information on the Internet.
(3) You must maintain the signed receipt required by paragraph
(e)(2) of this section for three years from the date the individual
shipper signs the receipt.
0
5. Revise Sec. 375.409 to read as follows:
Sec. 375.409 May household goods brokers provide estimates?
(a) Subject to the limitations in Sec. 371.113(a) of this
subchapter, household goods brokers may provide estimates to individual
shippers provided there is a written agreement between the broker and
you, the motor carrier, adopting the broker's estimate as your own
estimate. If you, the motor carrier, make such an agreement with a
household goods broker, you must ensure compliance with all
requirements of this part pertaining to estimates, including the
requirement that you must relinquish possession of the shipment if the
shipper pays you no more than 110 percent of a non-binding estimate at
the time of delivery.
(b) Your written agreement with the household goods broker(s) must
include the items required in Sec. 371.115(a) of this subchapter.
PART 386--RULES OF PRACTICE FOR MOTOR CARRIER, BROKER, FREIGHT
FORWARDER, AND HAZARDOUS MATERIALS PROCEEDINGS
0
6. Revise the authority citation for part 386 to read as follows:
Authority: 49 U.S.C. 113, chapters 5, 51, 59, 131-141, 145-149,
311, 313, and 315; Sec. 204, Pub. L. 104-88, 109 Stat. 803, 941 (49
U.S.C. 701 note); Sec. 217, Pub. L. 105-159, 113 Stat. 1748, 1767;
Sec. 206, Pub. L. 106-159, 113 Stat. 1763; subtitle B, title IV of
Pub. L. 109-59; and 49 CFR 1.45 and 1.73.
0
7. Amend appendix B to part 386 by revising the heading and by adding
paragraphs (g)(22) and (23) to read as follows:
Appendix B to Part 386--Penalty Schedule; Violations and Monetary
Penalties
* * * * *
(g) * * *
(22) A broker for transportation of household goods who makes an
estimate of the cost of transporting any such goods before entering
into an agreement with a motor carrier to provide transportation of
household goods subject to FMCSA jurisdiction is liable to the
United States for a civil penalty of not less than $10,000 for each
violation.
(23) A person who provides transportation of household goods
subject to jurisdiction under 49 U.S.C. chapter 135, subchapter I,
or provides broker services for such transportation, without being
registered under 49 U.S.C. chapter 139 to provide such
transportation or services as a motor carrier or broker, as the case
may be, is liable to the United States for a civil penalty of not
less than $25,000 for each violation.
* * * * *
PART 387--MINIMUM LEVELS OF FINANCIAL RESPONSIBILITY FOR MOTOR
CARRIERS
0
8. The authority citation for part 387 continues to read as follows:
Authority: 49 U.S.C. 13101, 13301, 13906, 14701, 31138, 31139,
and 31144; and 49 CFR 1.73.
0
9. Amend Sec. 387.307 by redesignating paragraph (a) as paragraph
(a)(1) and adding new paragraph (a)(2) to read as follows:
Sec. 387.307 Property broker surety bond or trust fund.
(a) Security. (1) * * *
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(2) A household goods broker must have a surety bond or trust fund
in effect for $25,000 on and after January 1, 2012. The FMCSA will not
issue a household goods broker license until a surety bond or trust
fund for the full limits of liability prescribed herein is in effect.
The household goods broker license remains valid or effective only as
long as a surety bond or trust fund remains in effect and ensures the
financial responsibility of the household goods broker. The compliance
date for paragraph (a)(2) is January 1, 2012.
* * * * *
Issued on: November 19, 2010.
Anne S. Ferro,
Administrator.
[FR Doc. 2010-29813 Filed 11-26-10; 8:45 am]
BILLING CODE 4910-EX-P