Section 32918 of the MAP-21

PUBLIC LAW 112–141—JULY 6, 2012

SEC. 32918. FINANCIAL SECURITY OF BROKERS AND FREIGHT FORWARDERS.
(a) IN GENERAL.—Section 13906 is amended by striking subsections
(b) and (c) and inserting the following:
‘‘(b) BROKER FINANCIAL SECURITY REQUIREMENTS.—
‘‘(1) REQUIREMENTS.—
‘‘(A) IN GENERAL.—The Secretary may register a person
as a broker under section 13904 only if the person files
with the Secretary a surety bond, proof of trust fund,
or other financial security, or a combination thereof, in
a form and amount, and from a provider, determined by
the Secretary to be adequate to ensure financial responsibility.
‘‘(B) USE OF A GROUP SURETY BOND, TRUST FUND, OR
OTHER SURETY.—In implementing the standards established
by subparagraph (A), the Secretary may authorize
the use of a group surety bond, trust fund, or other financial
security, or a combination thereof, that meets the requirements
of this subsection.
‘‘(C) PROOF OF TRUST OR OTHER FINANCIAL SECURITY.—
For purposes of subparagraph (A), a trust fund or other
financial security may be acceptable to the Secretary only
if the trust fund or other financial security consists of
assets readily available to pay claims without resort to
personal guarantees or collection of pledged accounts
receivable.
‘‘(2) SCOPE OF FINANCIAL RESPONSIBILITY.—
‘‘(A) PAYMENT OF CLAIMS.—A surety bond, trust fund,
or other financial security obtained under paragraph (1)
shall be available to pay any claim against a broker arising
from its failure to pay freight charges under its contracts,
agreements, or arrangements for transportation subject to
jurisdiction under chapter 135 if—
‘‘(i) subject to the review by the surety provider,
the broker consents to the payment;
Deadline.
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PUBLIC LAW 112–141—JULY 6, 2012 126 STAT. 823
‘‘(ii) in any case in which the broker does not
respond to adequate notice to address the validity of
the claim, the surety provider determines that the
claim is valid; or
‘‘(iii) the claim is not resolved within a reasonable
period of time following a reasonable attempt by the

claimant to resolve the claim under clauses (i) and
(ii), and the claim is reduced to a judgment against
the broker.
‘‘(B) RESPONSE OF SURETY PROVIDERS TO CLAIMS.—If
a surety provider receives notice of a claim described in
subparagraph (A), the surety provider shall—
‘‘(i) respond to the claim on or before the 30th
day following the date on which the notice was
received; and
‘‘(ii) in the case of a denial, set forth in writing
for the claimant the grounds for the denial.
‘‘(C) COSTS AND ATTORNEY’S FEES.—In any action
against a surety provider to recover on a claim described
in subparagraph (A), the prevailing party shall be entitled
to recover its reasonable costs and attorney’s fees.
‘‘(3) MINIMUM FINANCIAL SECURITY.—Each broker subject
to the requirements of this section shall provide financial security
of $75,000 for purposes of this subsection, regardless of
the number of branch offices or sales agents of the broker.
‘‘(4) CANCELLATION NOTICE.—If a financial security required
under this subsection is canceled—
‘‘(A) the holder of the financial security shall provide
electronic notification to the Secretary of the cancellation
not later than 30 days before the effective date of the
cancellation; and
‘‘(B) the Secretary shall immediately post such notification
on the public Internet Website of the Department
of Transportation.
‘‘(5) SUSPENSION.—The Secretary shall immediately suspend
the registration of a broker issued under this chapter
if the available financial security of that person falls below
the amount required under this subsection.
‘‘(6) PAYMENT OF CLAIMS IN CASES OF FINANCIAL FAILURE
OR INSOLVENCY.—If a broker registered under this chapter
experiences financial failure or insolvency, the surety provider
of the broker shall—
‘‘(A) submit a notice to cancel the financial security
to the Administrator in accordance with paragraph (4);
‘‘(B) publicly advertise for claims for 60 days beginning
on the date of publication by the Secretary of the notice
to cancel the financial security; and
‘‘(C) pay, not later than 30 days after the expiration
of the 60-day period for submission of claims—
‘‘(i) all uncontested claims received during such
period; or
‘‘(ii) a pro rata share of such claims if the total

amount of such claims exceeds the financial security
available.
‘‘(7) PENALTIES.—
‘‘(A) CIVIL ACTIONS.—Either the Secretary or the
Attorney General of the United States may bring a civil
Deadline.
Notification.
Public
information.
Time period.
Web posting.
Deadline.
Deadline.
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126 STAT. 824 PUBLIC LAW 112–141—JULY 6, 2012
action in an appropriate district court of the United States
to enforce the requirements of this subsection or a regulation
prescribed or order issued under this subsection. The
court may award appropriate relief, including injunctive
relief.
‘‘(B) CIVIL PENALTIES.—If the Secretary determines,
after notice and opportunity for a hearing, that a surety
provider of a broker registered under this chapter has
violated the requirements of this subsection or a regulation
prescribed under this subsection, the surety provider shall
be liable to the United States for a civil penalty in an
amount not to exceed $10,000.
‘‘(C) ELIGIBILITY.—If the Secretary determines, after
notice and opportunity for a hearing, that a surety provider
of a broker registered under this chapter has violated the
requirements of this subsection or a regulation prescribed
under this subsection, the surety provider shall be ineligible
to provider broker financial security for 3 years.
‘‘(8) DEDUCTION OF COSTS PROHIBITED.—The amount of the
financial security required under this subsection may not be
reduced by deducting attorney’s fees or administrative costs.
‘‘(c) FREIGHT FORWARDER FINANCIAL SECURITY REQUIREMENTS.—
‘‘(1) REQUIREMENTS.—
‘‘(A) IN GENERAL.—The Secretary may register a person
as a freight forwarder under section 13903 only if the
person files with the Secretary a surety bond, proof of
trust fund, other financial security, or a combination of
such instruments, in a form and amount, and from a provider,
determined by the Secretary to be adequate to ensure
financial responsibility.

‘‘(B) USE OF A GROUP SURETY BOND, TRUST FUND, OR
OTHER FINANCIAL SECURITY.—In implementing the standards
established under subparagraph (A), the Secretary
may authorize the use of a group surety bond, trust fund,
other financial security, or a combination of such
instruments, that meets the requirements of this subsection.
‘‘(C) SURETY BONDS.—A surety bond obtained under
this section may only be obtained from a bonding company
that has been approved by the Secretary of the Treasury.
‘‘(D) PROOF OF TRUST OR OTHER FINANCIAL SECURITY.—
For purposes of subparagraph (A), a trust fund or other
financial security may not be accepted by the Secretary
unless the trust fund or other financial security consists
of assets readily available to pay claims without resort
to personal guarantees or collection of pledged accounts
receivable.
‘‘(2) SCOPE OF FINANCIAL RESPONSIBILITY.—
‘‘(A) PAYMENT OF CLAIMS.—A surety bond, trust fund,
or other financial security obtained under paragraph (1)
shall be available to pay any claim against a freight forwarder
arising from its failure to pay freight charges under
its contracts, agreements, or arrangements for transportation
subject to jurisdiction under chapter 135 if—
‘‘(i) subject to the review by the surety provider,
the freight forwarder consents to the payment;
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PUBLIC LAW 112–141—JULY 6, 2012 126 STAT. 825
‘‘(ii) in the case the freight forwarder does not
respond to adequate notice to address the validity of
the claim, the surety provider determines the claim
is valid; or
‘‘(iii) the claim—
‘‘(I) is not resolved within a reasonable period
of time following a reasonable attempt by the
claimant to resolve the claim under clauses (i)
and (ii); and
‘‘(II) is reduced to a judgment against the
freight forwarder.
‘‘(B) RESPONSE OF SURETY PROVIDERS TO CLAIMS.—If
a surety provider receives notice of a claim described in
subparagraph (A), the surety provider shall—
‘‘(i) respond to the claim on or before the 30th
day following receipt of the notice; and
‘‘(ii) in the case of a denial, set forth in writing
for the claimant the grounds for the denial.

‘‘(C) COSTS AND ATTORNEY’S FEES.—In any action
against a surety provider to recover on a claim described
in subparagraph (A), the prevailing party shall be entitled
to recover its reasonable costs and attorney’s fees.
‘‘(3) FREIGHT FORWARDER INSURANCE.—
‘‘(A) IN GENERAL.—The Secretary may register a person
as a freight forwarder under section 13903 only if the
person files with the Secretary a surety bond, insurance
policy, or other type of financial security that meets standards
prescribed by the Secretary.
‘‘(B) LIABILITY INSURANCE.—A financial security filed
by a freight forwarder under subparagraph (A) shall be
sufficient to pay an amount, not to exceed the amount
of the financial security, for each final judgment against
the freight forwarder for bodily injury to, or death of,
an individual, or loss of, or damage to, property (other
than property referred to in subparagraph (C)), resulting
from the negligent operation, maintenance, or use of motor
vehicles by, or under the direction and control of, the
freight forwarder while providing transfer, collection, or
delivery service under this part.
‘‘(C) CARGO INSURANCE.—The Secretary may require
a registered freight forwarder to file with the Secretary
a surety bond, insurance policy, or other type of financial
security approved by the Secretary, that will pay an
amount, not to exceed the amount of the financial security,
for loss of, or damage to, property for which the freight
forwarder provides service.
‘‘(4) MINIMUM FINANCIAL SECURITY.—Each freight forwarder
subject to the requirements of this section shall provide financial
security of $75,000, regardless of the number of branch
offices or sales agents of the freight forwarder.
‘‘(5) CANCELLATION NOTICE.—If a financial security required
under this subsection is canceled—
‘‘(A) the holder of the financial security shall provide
electronic notification to the Secretary of the cancellation
not later than 30 days before the effective date of the
cancellation; and
Deadline.
Deadline.
Notice.
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126 STAT. 826 PUBLIC LAW 112–141—JULY 6, 2012
‘‘(B) the Secretary shall immediately post such notification
on the public Internet web site of the Department

of Transportation.
‘‘(6) SUSPENSION.—The Secretary shall immediately suspend
the registration of a freight forwarder issued under this
chapter if its available financial security falls below the amount
required under this subsection.
‘‘(7) PAYMENT OF CLAIMS IN CASES OF FINANCIAL FAILURE
OR INSOLVENCY.—If a freight forwarder registered under this
chapter experiences financial failure or insolvency, the surety
provider of the freight forwarder shall—
‘‘(A) submit a notice to cancel the financial security
to the Administrator in accordance with paragraph (5);
‘‘(B) publicly advertise for claims for 60 days beginning
on the date of publication by the Secretary of the notice
to cancel the financial security; and
‘‘(C) pay, not later than 30 days after the expiration
of the 60-day period for submission of claims—
‘‘(i) all uncontested claims received during such
period; or
‘‘(ii) a pro rata share of such claims if the total
amount of such claims exceeds the financial security
available.
‘‘(8) PENALTIES.—
‘‘(A) CIVIL ACTIONS.—Either the Secretary or the
Attorney General may bring a civil action in an appropriate
district court of the United States to enforce the requirements
of this subsection or a regulation prescribed or order
issued under this subsection. The court may award appropriate
relief, including injunctive relief.
‘‘(B) CIVIL PENALTIES.—If the Secretary determines,
after notice and opportunity for a hearing, that a surety
provider of a freight forwarder registered under this
chapter has violated the requirements of this subsection
or a regulation prescribed under this subsection, the surety
provider shall be liable to the United States for a civil
penalty in an amount not to exceed $10,000.
‘‘(C) ELIGIBILITY.—If the Secretary determines, after
notice and opportunity for a hearing, that a surety provider
of a freight forwarder registered under this chapter has
violated the requirements of this subsection or a regulation
prescribed under this subsection, the surety provider shall
be ineligible to provide freight forwarder financial security
for 3 years
‘‘(9) DEDUCTION OF COSTS PROHIBITED.—The amount of the
financial security required under this subsection may not be
reduced by deducting attorney’s fees or administrative costs.’’.
(b) RULEMAKING.—Not later than 1 year after the date of enactment

of this Act, the Secretary shall issue regulations to implement
and enforce the requirements under subsections (b) and (c) of section
13906 of title 49, United States Code, as amended by subsection
(a).
(c) EFFECTIVE DATE.—The amendments made by subsection
(a) shall take effect on the date that is 1 year after the date
of enactment of this Act.
49 USC 13906
PUBLIC LAWS