Congress Passes Transportation Bill, Establishes Solvency Reqs for Brokers
The House and Senate voted June 29 to approve HR-4348, a transportation bill that will continue funding surface transportation programs for two years. The legislation will next go to President Obama, who is expected to sign the measure. A deal was reached recently as part of a conference to iron out differences between separate legislation. The bill includes new financial requirements for brokers, but exempts federally licensed customs brokers who are already subject to other federal financial requirements.
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(See ITT's Online Archives 12062821 for summary of the deal)
Text of the bill is (here).
According to an explanatory statement, the bill:
- largely maintains the Senate approach providing National Highway Traffic Safety Administration (NHTSA) additional authority over imported motor vehicles and motor vehicle equipment, though it strikes a provision related to financial responsibility requirements for importers and modifies a provision relating to conditions of importation.
- includes several provisions amending registration requirements under federal law for commercial motor vehicles (CMV), freight forwarders, and brokers.
- addresses the financial responsibility of freight-forwarders and brokers. These provisions direct rulemakings to establish minimum financial solvency and bonding requirements for these entities. The conference agreement includes exemptions for air carrier and customs brokers who are already subject to financial responsibility requirements under federal law.
- calls for the development of a National Freight Strategic Plan, encourages state freight plans and advisory committees, and provides incentives for states that fund projects to improve freight movement.
The explanatory statement is (here).
Surety Bond Provision
The Airforwarders Association (AfA) and National Customs Brokers and Forwarders Association of America (NCBFAA) worked to strip a proposed $100,000 surety bond requirement that would "remove the airfreight forwarder existing exemption on shipments with a prior or subsequent air component from the Federal Motor Carrier Safety Administration (FMCSA) regulation," said AfA. "Through a mixture of letters, meetings, phone calls and direct lobbying of House and Senate conferees and their staffs, AfA was successful in preserving this exemption for airfreight forwarders." Previously, "freight forwarders arranging ground truck shipments without a prior or subsequent air component have been required to register with the FMCSA," said AfA. "Now, despite our lobbying efforts to avoid this requirement, such registration will also require a $75,000 surety bond. On a positive note, this was mitigated from the original proposed $100,000 requirement."
The American Association of Port Authorities was largely supportive for the bill and its treatment of freight issues. For instance, MAP-21 continues the Projects of National and Regional Significance (PNRS) program, funding "large, multimodal projects that bolster freight mobility in locations that generate national or regional economic benefits," something AAPA has long supported, it said. “Overall, while this bill falls short of dedicating needed funding specifically for freight projects, it does create a framework upon which we can prioritize freight mobility needs and address congestion and capacity demands on America’s freight network going forward,” said AAPA Executive Vice President Jean Goodwin.
(See ITT’s Online Archives 11110903 for summary of November 7, 2011 introduction of S. 1813, also known as MAP-21)