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pdfFederal Register / Vol. 75, No. 228 / Monday, November 29, 2010 / Rules and Regulations
DEPARTMENT OF TRANSPORTATION
Federal Motor Carrier Safety
Administration
Legal Basis for the Rulemaking
49 CFR Parts 371, 375, 386, and 387
[Docket No. FMCSA–2004–17008]
RIN 2126–AA84
Brokers of Household Goods
Transportation by Motor Vehicle
Federal Motor Carrier Safety
Administration (FMCSA), DOT.
ACTION: Final rule.
AGENCY:
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
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SUMMARY:
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Enforcement and Compliance Team
Leader, (202) 385–2400.
SUPPLEMENTARY INFORMATION:
The Secretary of Transportation’s
(Secretary) general jurisdiction to
establish regulations concerning the
procurement by property brokers of forhire 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.
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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.
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
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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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.
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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 § 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
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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 § 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 § 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.protect
yourmove.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,
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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
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FMCSA proposed (§ 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
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
§ 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
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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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
§ 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 FMCSAauthorized household goods motor
carriers with which the broker has a
written agreement, as required by
§ 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 (§ 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 § 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 (§ 371.111)
requiring that each household goods
broker provide potential shippers with
one copy of each of the two FMCSA
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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 § 371.111 to
provide that the broker must state on
any written estimate provided pursuant
to § 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 § 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 § 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
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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
§ 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 § 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
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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 § 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
§ 375.409(a) to make it consistent with
revised § 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
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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 (§ 371.113(b))
requiring household goods brokers to
base their estimates upon the published
tariffs (as defined in § 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
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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.
mstockstill on DSKB9S0YB1PROD with RULES
Agreements With Motor Carriers
Proposed § 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 brokercarrier 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 § 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 § 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
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have removed the requirement that the
agreements be notarized.
We have also revised § 375.409 to
reflect the changes to § 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, § 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 forhire 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 email 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 foolproof 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
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72991
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 § 371.119 from the
final rule. The intent of proposed
§ 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
§ 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 § 371.105 and subject to
penalties for arranging moves with
unregistered or unauthorized carriers.
Considering this redundancy, it is
unclear what additional protections
§ 371.119 would provide to shippers.
Because brokers would be required to
comply with § 371.105 under threat of
penalty with or without § 371.119, the
Agency does not believe that
eliminating § 371.119 would diminish
brokers’ incentives to avoid doing
business with unregistered or
unauthorized carriers. Thus, the Agency
believes that eliminating § 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 § 371.119
excuses or provides mitigating
circumstances for failure to comply with
§ 371.105. FMCSA is concerned that
proposed § 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
§ 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
§ 371.105.
Broker Surety Bond or Trust Fund
FMCSA proposed to add specific
language to § 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
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Federal Register / Vol. 75, No. 228 / Monday, November 29, 2010 / Rules and Regulations
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.
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.
3 The ICC established the broker surety bond
amount at $5,000 in 1936, 1 FR 1156, August 20,
1936.
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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 § 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 § 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
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Fmt 4700
Sfmt 4700
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 § 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
§ 371.115. Fourth, as discussed in the
section ‘‘list of motor carriers,’’ FMCSA
will allow household goods brokers to
provide the information required by
§ 371.109 electronically as an alternative
to a paper-based communication.
Fifth, as discussed in the section
‘‘consumer protection information,’’
FMCSA is adding § 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 § 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
§ 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
§ 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 50mile radius of the carrier’s ‘‘household
goods agent preparing the estimate,’’
unless the physical survey requirement
is waived by the shipper.
Eighth, for § 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 § 371.119 from the
final rule. Tenth, as discussed in the
sections on ‘‘Written estimate based on
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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
§ 375.409(a) to make them consistent
with our revised written estimate
revisions in § 371.113(a). Finally, we are
adding a 1-year compliance date in
§ 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
mstockstill on DSKB9S0YB1PROD with RULES
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:
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
TABLE 1—SUMMARY OF TEN-YEAR
Small Business Regulatory Enforcement
COSTS AND BENEFITS FOR FINAL RULE Fairness Act of 1996 (Pub. L. 104–121,
110 Stat. 857), requires Federal
[In millions]
agencies, as a part of each rulemaking,
to consider regulatory alternatives that
7% Discount Rate
Option 3
minimize the impact on small entities
Costs .................................
$17.11 while achieving the objectives of the
Benefits .............................
46.97 rulemaking. The Agency’s Initial
Net Benefits ......................
32.25 Regulatory Flexibility Analysis is
available in docket FMCSA–2004–17008
3% Discount Rate
Option 3
at item 0018. FMCSA received no
Costs .................................
16.58 specific comments about its Initial
Benefits .............................
54.91 Regulatory Flexibility Analysis. The
Net Benefits ......................
38.33 Agency’s Final Regulatory Flexibility
Analysis (FRFA) for this final rule is
FMCSA’s full Final Regulatory
discussed below.
Evaluation is in the docket for this rule.
(1) A description of the reasons why
It explains in detail how we estimated
action by the agency is being
cost impacts for the final rule.
considered.
This rule establishes additional
The American Moving and Storage
consumer protection regulations
Association (AMSA) petitioned the DOT
specifically for household goods brokers for a rulemaking in March 2003 that
to supplement the regulations at 49 CFR would amend the property broker
part 375, which apply to motor carriers
regulations in part 371 to require
transporting household goods by
brokers that arrange for household
commercial motor vehicle in interstate
goods transportation by motor carrier
and foreign commerce.
(household goods brokers) to provide
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72993
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
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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.
(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,
4 A broker generally becomes inactive after
registering with FMCSA when its surety bond or
trust fund is cancelled.
5 70 FR 39949 (Jul. 12, 2005).
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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.
(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
§ 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 § 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.
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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 fleetmix 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.
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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
72995
100,000 moves each year. The first two
items result in 24,390 respondents
subject to the information collection
(690 × 31 = 24,390). The third item
results in an additional 3,450
respondents subject to the information
collection (690 × 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
371.3 ............................
371.13 ..........................
371.107 ........................
371.109 ........................
371.111(a) ...................
371.111(c) ....................
371.113 ........................
371.115 ........................
Transaction records ..............................................................................
Second accounting system ...................................................................
Web site/Ad Modification ......................................................................
Create A List of Carriers .......................................................................
Pamphlet Provision (One-Time) ............................................................
Confirming Required Information ..........................................................
Explanation of Waiver-Agreement ........................................................
Negotiation of Agreements (One-Time) ................................................
Additional Agreements Through Turnover ............................................
Disclosure and Records ........................................................................
Removed Verification Requirement ......................................................
Total First Year Hours ...........................................................................
60hr × 690 .................................
8hr × 125 ...................................
20hr × 690 .................................
10hr × 690 .................................
0.5hr × 690 ................................
0.5hr/month × 12 × 690 .............
(1/12)hr × 20,000 .......................
4hr × 31 agreements × 690 .......
4 hrs × 5 agreements × 690 ......
10hr × 690 .................................
Removed ...................................
....................................................
41,400
1,000
13,800
6,900
345
4,140
1,667
85,560
13,800
6,900
0
175,512
Total Recurring Annual Hours ...............................................................
....................................................
89,607
371.117 ........................
371.119 ........................
Total hours
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.
We have rounded the estimates and
have asked OMB for approval for firstyear 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)
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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
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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
[email protected], or faxed
to (202) 395–6974, or mailed to the
Office of Information and Regulatory
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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.
Subpart B—Special Rules for
Household Goods Brokers
49 CFR Part 386
Administrative practice and
procedure, Brokers, Freight forwarders,
Hazardous materials transportation,
Highway safety, Motor carriers, Motor
vehicle safety, Penalties.
§ 371.101 If I operate as a household
goods broker in interstate or foreign
commerce, must I comply with subpart B of
this part?
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.’’
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.
■ For the reasons discussed above,
FMCSA is amending title 49, Code of
Federal Regulations, chapter III,
subchapter B, as set forth below:
Executive Order 13132 (Federalism)
PART 371—BROKERS OF PROPERTY
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 12630 (Taking of
Private Property)
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
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of household goods, Reporting and
recordkeeping requirements.
Brokers, Motor carriers, Reporting and
recordkeeping requirements.
49 CFR Part 375
Advertising, Arbitration, Consumer
protection, Freight, Highways and
roads, Insurance, Motor carriers, Moving
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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
2. Add a heading for subpart A to read
as set forth above, and designate
§§ 371.1 through 371.13 under subpart
A.
■ 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?
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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.
§ 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
§ 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
§ 375.103 of this subchapter.
§ 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.
§ 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 FMCSAauthorized 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 § 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 FMCSAauthorized household goods motor
carriers with whom you have a written
agreement as specified in § 371.115 of
this part.
§ 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.
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§ 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
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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 § 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 § 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.
§ 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 § 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
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72997
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.
§ 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 § 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.
§ 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.
§ 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
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.
5. Amend § 375.213 by revising
paragraphs (a), (b)(1), and (d), and
adding paragraph (e) to read as follows:
■
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§ 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
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Jkt 223001
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 § 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.
■ 5. Revise § 375.409 to read as follows:
§ 375.409 May household goods brokers
provide estimates?
(a) Subject to the limitations in
§ 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
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Sfmt 4700
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 § 371.115(a) of this
subchapter.
PART 386—RULES OF PRACTICE FOR
MOTOR CARRIER, BROKER, FREIGHT
FORWARDER, AND HAZARDOUS
MATERIALS PROCEEDINGS
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.
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
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.
9. Amend § 387.307 by redesignating
paragraph (a) as paragraph (a)(1) and
adding new paragraph (a)(2) to read as
follows:
■
§ 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
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16:19 Nov 26, 2010
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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.
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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
E:\FR\FM\29NOR1.SGM
29NOR1
| File Type | application/pdf |
| File Modified | 2016-05-12 |
| File Created | 2016-05-12 |