Broker and Freight Forwarder Financial Responsibility; Extension of Compliance Date, 107021-107026 [2024-30509]
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Federal Register / Vol. 89, No. 250 / Tuesday, December 31, 2024 / Rules and Regulations
§ 309.130 How will Tribal IV–D programs
be funded and what forms are required?
PART 310—COMPUTERIZED TRIBAL
IV–D SYSTEM AND OFFICE
AUTOMATION
(a) * * *
(2) Tribes and Tribal organizations
eligible for grants will receive a single
annual award.
*
*
*
*
*
§ 309.135
54. The authority citation for part 310
continues to read as follows:
■
Authority: 42 U.S.C. 655(f) and 1302.
[Amended]
50. Amend § 309.135(d) by removing
the number ‘‘269A’’ and adding, in its
place, the number ‘‘425’’.
■
§ 309.145
[Amended]
52. Amend § 309.160 by removing the
acronym ‘‘OCSE’’ everywhere it appears
and adding, in its place, the acronym
‘‘OCSS’’.
■
§ 309.170
[Amended]
53. Amend § 309.170 by:
a. Revising the first sentence of
paragraph (a), the introductory text of
paragraph (b), and paragraphs (b)(1) and
(2);
■ b. Adding the word ‘‘and’’ at the end
of paragraph (b)(6);
■ c. Removing paragraph (b)(7);
■ d. Redesignate paragraph (b)(8) as
paragraph (b)(7); and
■ e. Revising paragraph (c).
The revisions read as follows:
■
■
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§ 309.170 What statistical and narrative
reporting requirements apply to Tribal IV–D
programs?
(a) Tribes and Tribal organizations
operating a Tribal IV–D program must
submit to OCSS the Child Support
Services Program: Quarterly Report of
Collections (Form OCSS–34). * * *
(b) Tribes and Tribal organizations
must submit the following information
and statistics for Tribal IV–D program
activity and caseload on the Tribal
Annual Data Report (OCSS–75) for each
annual funding period:
(1) Total number of cases and, of the
total number of cases, the number that
are Tribal cases, the number that are
State or Tribal TANF cases, and the
number that are non-TANF cases;
(2) Total number of children in cases
open during the fiscal year and total
number of children with paternity
concluded;
*
*
*
*
*
(c) A Tribe or Tribal organization
must submit the Tribal Annual Data
Report (OCSS–75) required by
paragraph (b) of this section no later
than 90 days after the end of each
funding period.
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55. Amend § 310.1(a)(6) by removing
the acronym ‘‘OCSE’’ and adding, in its
place, the acronym ‘‘OCSS’’.
56. Amend § 310.5(b)(1) by:
■ a. Removing the acronym ‘‘OCSE’’ and
adding, in its place, the acronym
‘‘OCSS’’; and
■ b. Removing the words ‘‘of this part’’.
§ 310.10
[Amended]
57. Amend § 310.10 by removing the
acronym ‘‘OCSE’’ and adding, in its
place, the acronym ‘‘OCSS’’ in
paragraphs (a)(1), (f) introductory text,
(f)(2), and (g).
■
§ 310.20
[Amended]
58. Amend § 310.20 by removing the
acronym ‘‘OCSE’’ everywhere it appears
and adding, in its place, the acronym
‘‘OCSS’’ in paragraphs (a)(1) and (b).
■
§ 310.25
[Amended]
59. Amend § 310.25 by removing the
acronym ‘‘OCSE’’ and adding, in its
place, the acronym ‘‘OCSS’’ in
paragraphs (b), (c)(2), and (d).
■
§ 310.30
[Amended]
60. Amend § 310.30 by removing the
acronym ‘‘OCSE’’ everywhere it appears
and adding, in its place, the acronym
‘‘OCSS’’ in paragraphs (a) and (b).
■
§ 310.35
[Amended]
61. Amend § 310.35 by removing the
acronym ‘‘OCSE’’ everywhere it appears
and adding, in its place, the acronym
‘‘OCSS’’ in paragraphs (a) introductory
text, (a)(1) introductory text, (a)(1)(ii),
(a)(2) introductory text, (a)(2)(ii), and
(b).
■
§ 310.40
[Amended]
62. Amend § 310.40 by removing the
acronym ‘‘OCSE’’ everywhere it appears
and adding, in its place, the acronym
‘‘OCSS’’.
■
[FR Doc. 2024–30987 Filed 12–30–24; 8:45 am]
BILLING CODE 4184–41–P
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Federal Motor Carrier Safety
Administration
49 CFR Parts 386 and 387
[Docket No. FMCSA–2024–0280]
Broker and Freight Forwarder
Financial Responsibility; Extension of
Compliance Date
Federal Motor Carrier Safety
Administration (FMCSA), Department
of Transportation (DOT).
ACTION: Final rule.
AGENCY:
[Amended]
■
[Amended]
DEPARTMENT OF TRANSPORTATION
RIN 2126–AC76
[Amended]
■
§ 310.5
51. Amend § 309.145(a)(3)(v) by
removing the acronym ‘‘OCSE’’ and
adding, in its place, the acronym
‘‘OCSS’’.
■
§ 309.160
§ 310.1
107021
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FMCSA amends its November
16, 2023, final rule, ‘‘Broker and Freight
Forwarder Financial Responsibility,’’ by
extending the compliance date for
certain provisions from January 16,
2025, to January 16, 2026. FMCSA is
taking this action because the Agency
determined that only its forthcoming
online registration system will be used
to accept filings and track notifications,
and this functionality will not be added
to its legacy systems. As the online
registration system is not expected to be
available before January 16, 2025,
FMCSA extends the compliance date to
provide regulated entities time to begin
using and familiarizing themselves with
the system before compliance is
required.
SUMMARY:
Effective date: This rule is
effective December 31, 2024.
Expiration dates: Section 387.307T,
which contains the regulations on
brokers of property surety bonds or trust
funds which are currently in effect,
expires as of January 16, 2026. Section
387.307 is stayed until January 16, 2026.
Compliance dates: Brokers, freight
forwarders, surety providers, and
financial institutions must comply with
all the provisions of § 387.307 beginning
on January 16, 2026.
Petition submittal date: Petitions for
reconsideration of this final rule must
be submitted to the FMCSA
Administrator no later than January 30,
2025.
FOR FURTHER INFORMATION CONTACT: Ana
Alvarez, Financial Analyst, Office of
Registration, Financial Responsibility
Filings Division, FMCSA, 1200 New
Jersey Avenue SE, West Building, 6th
Floor, Washington, DC 20590; (202)
366–0401; ana.alvarez@dot.gov. If you
have questions on viewing or submitting
material to the docket, call Dockets
Operations at (202) 366–9826.
SUPPLEMENTARY INFORMATION: FMCSA
organizes this final rule as follows:
DATES:
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Federal Register / Vol. 89, No. 250 / Tuesday, December 31, 2024 / Rules and Regulations
I. Availability of Rulemaking Documents
II. Executive Summary
A. Purpose and Summary of the Regulatory
Action
B. Costs and Benefits
III. Abbreviations
IV. Legal Basis
V. Discussion of Proposed Rulemaking and
Comments
A. Proposed Rulemaking
B. Comments and Responses
C. Effective Date
VI. Regulatory Analyses
A. E.O. 12866 (Regulatory Planning and
Review), E.O. 13563 (Improving
Regulation and Regulatory Review), E.O.
14094 (Modernizing Regulatory Review),
and DOT Regulatory Policies and
Procedures
B. Congressional Review Act
C. Regulatory Flexibility Act (Small
Entities)
D. Assistance for Small Entities
E. Unfunded Mandates Reform Act of 1995
F. Paperwork Reduction Act
G. E.O. 13132 (Federalism)
H. Privacy
I. E.O. 13175 (Indian Tribal Governments)
J. National Environmental Policy Act of
1969
I. Availability of Rulemaking
Documents
To view any documents mentioned as
being available in the docket, go to
https://www.regulations.gov/docket/
FMCSA-2024-0280/document and
choose the document to review. To view
comments, click this final rule, then
click ‘‘Browse Comments.’’ If you do not
have access to the internet, you may
view the docket online by visiting
Dockets Operations on the ground floor
of the DOT West Building, 1200 New
Jersey Avenue SE, Washington, DC
20590–0001, between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal
holidays. To be sure someone is there to
help you, please call (202) 366–9317 or
(202) 366–9826 before visiting Dockets
Operations.
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II. Executive Summary
A. Purpose and Summary of the
Regulatory Action
FMCSA extends certain compliance
dates in the 2023 final rule, ‘‘Broker and
Freight Forwarder Financial
Responsibility’’ (88 FR 78656, Nov. 16,
2023), from January 16, 2025, to January
16, 2026, creating a single compliance
date for all provisions in the rule. This
extension will ensure that parties
required to comply with the regulations
have sufficient opportunity to register in
the new online registration system and
begin using it, and that FMCSA is able
to properly process and respond to such
filings. The provisions affected by this
extension are:
1. Immediate suspension of broker/
freight forwarder operating authority.
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When a broker or freight forwarder’s
available financial security falls below
$75,000, FMCSA shall suspend its
operating authority registration.
2. Surety or trust responsibilities in
cases of broker/freight forwarder
financial failure or insolvency. If a
surety/trustee becomes aware that a
broker or freight forwarder is
experiencing financial failure or
insolvency, it must notify FMCSA and
initiate cancellation of the financial
responsibility.
3. Enforcement authority and
penalties for financial responsibility
providers who do not comply with the
regulations. FMCSA is incorporating
statutorily mandated penalties into its
regulations. After notice and an
opportunity for a hearing, surety
companies or financial institutions who
violate 49 CFR 387.307 will be ineligible
to provide financial responsibility for 3
years and may also be subject to a civil
penalty.
The extension of the compliance date
is necessary so that FMCSA can make
the new online registration system
available to entities required to register
and make filings in the system. This
extension is also intended to provide
users with an opportunity to begin
using, and become familiar with, the
new online registration system before
compliance with the system becomes
mandatory. The planned release for the
new registration system is 2025.
B. Costs and Benefits
The 2023 Broker and Freight
Forwarder Financial Responsibility final
regulatory impact analysis estimated
costs for compliance and
implementation among brokers, freight
forwarders, surety bond and trust fund
providers, and the Federal government.
This rule delays certain provisions
requiring filings in the new online
registration system until January 16,
2026, resulting in all provisions of the
rule becoming effective at the same
time.
Despite the delayed compliance for
certain provisions, FMCSA finds that
the benefits stipulated in the 2023 final
rule remain unchanged by this rule. The
provision mandating that brokers and
freight forwarders maintain assets
readily available in trust funds, will still
take effect as originally scheduled, on
January 16, 2026.
As it pertains to the immediate
suspension provision, in the 2023 final
rule’s Regulatory Impact Analysis, the
Agency estimated that less than 0.5
percent of all brokers would have faced
immediate suspension proceedings
under the new requirements in 2025.
FMCSA lacked the data to quantify the
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number of financial failures that will
occur in any given year and would
therefore trigger the surety or trust
responsibilities in cases of brokers/
freight forwarder financial failure or
insolvency. However, the Agency
believes that the number of
determinations of financial failure or
insolvency is already represented in the
immediate suspension estimate. As the
affected population is relatively small,
the Agency believes that the impact of
a delay is de minimis.
Brokers and freight forwarders, surety
bond and trust fund providers may
incur cost savings by not being required
to file documentation relating to certain
other provisions until January 16, 2026.
FMCSA may also incur cost savings in
delaying the enforcement of several
provisions of the 2023 final rule. In
conclusion, the Agency finds that the
change in costs and benefits as a result
of the extension would be de minimis
for these entities.
III. Abbreviations
CE Categorical exclusion
CFR Code of Federal Regulations
DOT Department of Transportation
E.O. Executive Order
FMCSA Federal Motor Carrier Safety
Administration
FR Federal Register
NOOA National Owner Operators
Association
NPRM Notice of proposed rulemaking
OMB Office of Management and Budget
OOIDA Owner-Operator Independent
Drivers Association
PIA Privacy Impact Assessment
PTA Privacy Threshold Assessment
SBTC Small Business in Transportation
Coalition
URS Unified Registration System
UMRA Unfunded Mandates Reform Act
U.S.C. United States Code
IV. Legal Basis
The legal basis of the Broker and
Freight Forwarder Financial
Responsibility final rule, set forth at 88
FR 78658 (Nov. 16, 2023), also serves as
the legal basis for this final rule. The
statutory authority identified in that
discussion is 49 U.S.C. 13906, which
contains requirements for the financial
security of brokers and freight
forwarders and directs the Secretary to
issue regulations to implement and
enforce these requirements. Authority to
carry out and enforce these provisions
has been delegated to the Administrator
of FMCSA (49 CFR 1.87(a)(5)).
As discussed in the November 16,
2023, final rule, 49 CFR 387.403T(c)
makes any requirements applicable to
broker of property surety bonds and
trust funds in § 387.307 applicable to
the surety bond or trust fund required
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Federal Register / Vol. 89, No. 250 / Tuesday, December 31, 2024 / Rules and Regulations
of freight forwarders as well.1 Therefore,
any time this rule refers to brokers, the
same requirements are also applicable to
freight forwarders.
Unless stated otherwise, FMCSA
generally considers provisions that are
not inextricably intertwined to be
severable, meaning that if any provision
in a rule is later held to be invalid, the
remainder of the rule is not affected (49
CFR 389.41). While many provisions of
this rule are integrated and the Agency
anticipates the rule will function most
effectively with all provisions operating
together, FMCSA nonetheless finds that
each major provision of the rule is
severable from the others and could
operate functionally even in the event
some provisions were deemed invalid.
In the event a court were to invalidate
one or more of this final rule’s unique
provisions, the remaining provisions
should stand.
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V. Discussion of the Proposed
Rulemaking and Comments
A. Proposed Rule
On November 16, 2023, FMCSA
published a final rule adopting
regulations to implement 49 U.S.C.
13906(b) and (c) (88 FR 78656). The
final rule became effective 60 days later,
on January 16, 2024. However,
compliance with the provisions relating
to immediate suspension, financial
failure or insolvency, and penalties for
trust or surety providers who fail to
comply with the regulations is not
required until January 16, 2025, and full
compliance with all of the final rule’s
provisions is not required until 2 years
after the effective date, beginning on
January 16, 2026.
On November 4, 2024, FMCSA
published a notice of proposed
rulemaking (NPRM), proposing to
extend the compliance deadlines for the
provisions of the Broker and Freight
Forwarder Financial Responsibility rule
from January 16, 2025, to January 16,
2026. The affected provisions relate to
immediate suspension, financial failure
or insolvency, and penalties for trust or
surety providers who fail to comply
with the regulations., In addition,
FMCSA proposed to amend the
expiration date of the temporary rule
governing current practices, § 387.307T,
and the compliance dates in § 387.307.
This extension would create a single
compliance date for all provisions in the
rule, allow FMCSA to implement the
new online registration system for filers
1 Although 49 CFR 387.403 is currently
suspended, it contains the same language making
§ 387.307 applicable to freight forwarders. Thus,
when the suspension is ultimately lifted, it will
have no effect on the analysis here.
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to use, and ensure that filers are familiar
with the online registration system and
able to perform all duties mandated by
the rule prior to the compliance date.
The close of comments was initially
set as November 19, 2024. The Small
Business in Transportation Coalition
(SBTC) requested an extension of the
comment period, and FMCSA granted a
7-day reopening of the comment period
on November 21, 2024, with the
comment period closing on November
29, 2024 (89 FR 92084).
B. Comments and Responses
FMCSA received 13 comments on this
proposed rule with nine opposing the
extension of the compliance date, two
supporting it, one requesting an
extension to the comment period, and
one out of scope comment. The National
Owner Operators Association (NOOA),
the Owner-Operator Independent
Drivers Association (OOIDA), and seven
individual commenters opposed
delaying the compliance dates for the
provisions outlined in the November 16,
2023, final rule. First Century Financial
Corporation and one individual
commenter supported delaying the
effective date for certain provisions
outlined in the November 2023 final
rule. SBTC requested an extension of
the comment period, which was
granted. One commenter addressed
broker transparency issues, which fall
outside the scope of this rule.
1. Need for the Extension
Comments
NOOA commented that FMCSA has
had sufficient lead time to either add to
its existing infrastructure or accelerate
development of the forthcoming online
registration system. NOOA states that
regulated entities have been anticipating
the need to comply with the regulations,
making the proposed delay excessive.
NOOA also stated that FMCSA did not
provide adequate justification for
extending the compliance date, as it
does not outline any significant
challenges that regulated entities would
face in using the system.
FMCSA Response
The proposed revised compliance
dates are crucial to ensure the smooth
transfer of vital data, requiring careful
coordination to avoid disruptions for
users. It also allows adequate time to
finalize and thoroughly test the
capabilities of the new online
registration system, to ensure the
system’s stability and security. This
timeframe also enables FMCSA to
provide training and outreach to both
internal staff and external stakeholders,
supporting a more efficient transition
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107023
and reducing potential difficulties for
regulated entities who will use the new
system.
FMCSA determined that
implementing the new online
registration system was a priority
because of its wide-ranging impacts,
given that it is intended to function as
a clearinghouse and depository of
information on, and identification of, all
foreign and domestic motor carriers,
brokers, and freight forwarders, and
other entities required to register with
the Department, as well as information
on safety fitness and compliance with
minimum levels of financial
responsibility. Additionally, prioritizing
rollout of the comprehensive online
registration system aligns with statutory
requirements for FMCSA to improve its
information technology and data
systems to ensure better oversight of
motor carriers, drivers, and equipment,
pursuant to section 103 of the ICC
Termination Act of 1995 (Pub. L. 104–
88, 109 Stat. 803, 888, Dec. 29, 1995)
and subtitle C of title IV of the Safe,
Accountable, Flexible, Efficient
Transportation Equity Act: A Legacy for
Users (Pub. L. 109–59, 119 Stat. 1144,
1761, Aug. 10, 2005). Building the
functionality into the existing system
would have required the Agency to
divert critical resources away from
development of the new online
registration system and fulfillment of
that statutory mandate.
2. Impacts of Delayed Compliance
Comments
NOOA commented that delaying
compliance with these rules would
disproportionately impact small
operators, brokers, and freight
forwarders, and that the industry relies
on a streamlined process for
transparency and operational efficiency
and will be disadvantaged by the delay.
Michael Ravnitzky commented that
the extension of the compliance date
would have a positive impact on small
businesses, as the burdens of
compliance generally affect small
businesses more than large ones. He
stated that having additional time to
comply would reduce small business
burdens and facilitate a smoother
transition to the new regulations.
FMCSA Response
FMCSA understands that this
extension will provide cost savings for
certain small businesses. By delaying
the implementation of certain
provisions, those small businesses will
incur fewer expenses related to
paperwork and regulatory compliance.
The additional time provided by this
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Federal Register / Vol. 89, No. 250 / Tuesday, December 31, 2024 / Rules and Regulations
extension will allow small businesses to
better prepare for the implementation of
all provisions, likely leading to
increased compliance. However,
FMCSA also recognizes that other small
businesses, mainly motor carriers,
would prefer the immediate suspension
provisions to take effect as originally
scheduled because of the deterrent
effect on brokers who fail to pay carriers
and continue to accrue claims. As
described in the Costs and Benefits
section, above, the Agency estimates
this rule will affect less than 0.5 percent
of property brokers each year, and the
effects of delaying compliance will
therefore not be substantial across the
transportation industry.
FMCSA finds that without certain
automated processes currently under
development in the new online
registration system, effective
compliance management will be
compromised. Specifically, the Agency
believes that tracking and processing
drawdown notifications manually will
be inefficient, leading to delays, higher
administrative costs, and potential
compliance risks for both FMCSA and
the industry. The ability to efficiently
suspend the operating authority of
brokers and freight forwarders who fail
to maintain the required financial
security within the 7-day regulatory
time frame depends upon both the
regulated entities and the Agency being
able to utilize a fully functional online
filing system. For more detailed
information regarding the launching of
the new online registration system,
stakeholders are encouraged to visit
https://www.fmcsa.dot.gov/registration/
resources-hub.
3. Training and Familiarization Period
Comments
In its comment, NOOA asserted that
the training and familiarization period
can be streamlined if FMCSA provides
thoughtful, targeted training programs to
circumvent the need to delay the
compliance date. NOOA believes
FMCSA has previously demonstrated its
capacity to do so and requested that the
Agency maintain its original compliance
date of January 16, 2025.
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FMCSA Response
FMCSA is committed to developing
both general and audience-specific
training materials to support users in
navigating the new registration system
effectively once it is rolled out and
made available. This will include
tailored guidance for different user
groups to address specific filing needs
and reduce any potential learning curve.
FMCSA will continue to leverage
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feedback to refine these training
programs, ensuring that they are
comprehensive, accessible, and focused
on facilitating a smooth transition for all
users.
4. Timeline for Online Registration
System
Comments
OOIDA submitted a comment noting
that it had previously expressed
skepticism in its December 2023
Petition for Reconsideration about the
timeline provided for the URS
rulemaking process to be completed
before the January 2025 compliance
date. OOIDA stressed that URS remains
a work in progress and that historically
there have been numerous problems
associated with its rollout. Additionally,
OOIDA raised the issue that there are no
assurances that the online registration
system will be completed by the new
proposed compliance date. OOIDA
requested that the Agency find
alternative and/or temporary methods to
support the January 2025
implementation date issued in the
November 2023 final rule (88 FR 78656).
FMCSA Response
FMCSA is actively engaged in
developing and preparing for rollout of
the new registration system, with a
planned rollout in 2025. Although
FMCSA always planned to build the
filing functionality necessary to
implement this rule into the new
system, the compliance dates were not
specifically tied to the launch date for
that system. FMCSA initially believed
its existing systems could be used to
accept the required filings. However,
through its stakeholder engagement
efforts, FMCSA determined that adding
the filing functionality to its legacy
systems for use in the interim would
likely create confusion and additional
training burdens for filers, who would
be responsible for learning to use two
different filing systems in quick
succession. Doing so would also utilize
FMCSA resources that are better
directed toward implementing the new
online registration system. Therefore,
FMCSA determined that stakeholders
would benefit from delaying the
compliance date until after the planned
rollout of the new online registration
system.
5. Out of Scope Comments
FMCSA received one comment
concerning issues beyond the scope of
this rule, which related to a separate
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rulemaking on broker transparency.2
FMCSA has moved this comment to the
appropriate docket and will consider it
in connection with that rulemaking.
C. Effective Date
The Administrative Procedure Act
section 553 prescribes a 30-day waiting
period between publication of a rule
and the effective date of that rule.
However, agencies may waive this
waiting period for substantive rules
which grant or recognize an exemption
or relieve a restriction (5 U.S.C.
553(d)(1)). Here, FMCSA finds that the
delay of an effective date of a
substantive rule requirement is a
substantive rule that relieves a
restriction for a period of time, so
making the rule effective immediately
on publication is justified. FMCSA is
balancing the benefit of requiring
compliance as soon as is practicable
with the burden on regulated entities,
who are not yet required to comply with
any of the provisions in the November
16, 2023, final rule, to perform the
duties required. As the extension of the
compliance date does not change the
substance of any provisions of that rule,
but merely provides regulated parties
additional time to prepare, they would
not be prejudiced if the change goes into
effect immediately.
VI. Regulatory Analyses
A. Executive Order (E.O.) 12866
(Regulatory Planning and Review), E.O.
13563 (Improving Regulation and
Regulatory Review), E.O. 14094
(Modernizing Regulatory Review), and
DOT Regulatory Policies and Procedures
FMCSA has considered the impact of
this final rule under E.O. 12866 (58 FR
51735, Oct. 4, 1993), Regulatory
Planning and Review, as supplemented
by E.O. 13563 (76 FR 3821, Jan. 21,
2011), Improving Regulation and
Regulatory Review, and amended by
E.O. 14094 (88 FR 21879, Apr. 11,
2023), Modernizing Regulatory Review,
as well as the impact under DOT
regulatory policies and procedures
(DOT Order 2100.6A, June 7, 2021).
This final rule is not a significant
regulatory action under section 3(f) of
E.O. 12866, as amended. Accordingly,
the Office of Management and Budget
(OMB) has not reviewed it under that
E.O.
The 2023 Broker and Freight
Forwarder Financial Responsibility final
regulatory impact analysis estimated
costs for compliance and
implementation among brokers, freight
2 The Transparency in Property Broker
Transactions docket can be found at: https://
www.regulations.gov/docket/FMCSA-2023-0257.
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Federal Register / Vol. 89, No. 250 / Tuesday, December 31, 2024 / Rules and Regulations
forwarders, surety bond and trust fund
providers, and the Federal government.
This rule delays certain provisions
requiring filings in the new online
registration system until January 16,
2026, resulting in all provisions of the
rule becoming effective at the same
time.
Despite the delayed compliance for
certain provisions, FMCSA finds that
the benefits stipulated in the 2023 final
rule remain unchanged by this rule. The
provision mandating that brokers and
freight forwarders maintain assets
readily available in trust funds, will still
take effect as originally scheduled, on
January 16, 2026.
As it pertains to the immediate
suspension provision, in the 2023 final
rule’s regulatory impact analysis, the
Agency estimated that less than 0.5
percent of all brokers would have faced
immediate suspension proceedings
under the new requirements in 2025.
FMCSA lacked the data to quantify the
number of financial failures that will
occur in any given year and would
therefore trigger the surety or trust
responsibilities in cases of brokers/
freight forwarder financial failure or
insolvency. However, the Agency
believes that the number of
determinations of financial failure or
insolvency is already represented in the
immediate suspension estimate. As the
affected population is relatively small,
the Agency believes that the impact of
a delay is de minimis.
Brokers and freight forwarders, surety
bond and trust fund providers may
incur cost savings by not being required
to file documentation relating to certain
other provisions until January 16, 2026.
FMCSA may also incur cost savings in
delaying the enforcement of several
provisions of the 2023 final rule. In
conclusion, the Agency finds that the
change in costs and benefits as a result
of the extension would be de minimis
for these entities.
B. Congressional Review Act
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This rule is not amajor ruleas defined
under the Congressional Review Act (5
U.S.C. 801–808).3
3 A major rule means any rule that OMB finds has
resulted in or is likely to result in (a) an annual
effect on the economy of $100 million or more; (b)
a major increase in costs or prices for consumers,
individual industries, geographic regions, Federal,
State, or local government agencies; or (c)
significant adverse effects on competition,
employment, investment, productivity, innovation,
or on the ability of United States-based enterprises
to compete with foreign-based enterprises in
domestic and export markets (5 U.S.C. 802(4)).
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C. Regulatory Flexibility Act (Small
Entities)
The Regulatory Flexibility Act (5
U.S.C. 601 et seq.), as amended by the
Small Business Regulatory Enforcement
Fairness Act of 1996 4 requires Federal
agencies to consider the effects of the
regulatory action on small business and
other small entities and to minimize any
significant economic impact. The term
small entities comprises small
businesses and not-for-profit
organizations that are independently
owned and operated and are not
dominant in their fields, and
governmental jurisdictions with
populations of less than 50,000 (5 U.S.C.
601(6)). Accordingly, DOT policy
requires an analysis of the impact of all
regulations on small entities, and
mandates that agencies strive to lessen
any adverse effects on these businesses.
This final rule will extend the
compliance date for specific provisions
of the 2023 final rule, ‘‘Broker and
Freight Forwarder Financial
Responsibility,’’ by 1 year from January
16, 2025, to January 16, 2026. The
provisions already scheduled for
compliance on January 16, 2026, will
not be affected. The rule will impact
small entities such as some surety bond
and trust fund providers, brokers, and
freight forwarders. The extension will
provide small entities with additional
time to register in the new online
registration system and understand its
operations and functionalities. By
delaying the submission of
documentation for certain provisions
until January 16, 2026, these entities
will also realize de minimis cost
savings.
Consequently, I certify that this action
will not have a significant economic
impact on a substantial number of small
entities.
D. Assistance for Small Entities
In accordance with section 213(a) of
the Small Business Regulatory
Enforcement Fairness Act of 1996 (Pub.
L. 104–121, 110 Stat. 857), FMCSA
wants to assist small entities in
understanding this final rule so they can
better evaluate its potential effects on
themselves and participate in the
rulemaking initiative. If the final rule
will affect your small business,
organization, or governmental
jurisdiction and you have questions
concerning its provisions or options for
compliance, please consult the person
listed under FOR FURTHER INFORMATION
CONTACT.
4 Public Law 104–121, 110 Stat. 857 (Mar. 29,
1996).
PO 00000
Frm 00049
Fmt 4700
Sfmt 4700
107025
Small businesses may send comments
on the actions of Federal employees
who enforce or otherwise determine
compliance with Federal regulations to
the Small Business Administration’s
Small Business and Agriculture
Regulatory Enforcement Ombudsman
(Office of the National Ombudsman, see
https://www.sba.gov/about-sba/
oversight-advocacy/office-nationalombudsman) and the Regional Small
Business Regulatory Fairness Boards.
The Ombudsman evaluates these
actions annually and rates each agency’s
responsiveness to small business. If you
wish to comment on actions by
employees of FMCSA, call 1–888–REG–
FAIR (1–888–734–3247). DOT has a
policy regarding the rights of small
entities to regulatory enforcement
fairness and an explicit policy against
retaliation for exercising these rights.
E. Unfunded Mandates Reform Act of
1995
The Unfunded Mandates Reform Act
of 1995 (2 U.S.C. 1531–1538) (UMRA)
requires Federal agencies to assess the
effects of their discretionary regulatory
actions. The Act addresses actions that
may result in the expenditure by State,
local, or Tribal government, in the
aggregate, or by the private sector of
$200 million (which is the value
equivalent of $100 million in 1995,
adjusted for inflation to 2023 levels) or
more in any 1 year. This final rule will
not result in such an expenditure, so the
analytical requirements of UMRA do not
apply.
F. Paperwork Reduction Act
Due to the change of compliance date,
the existing information collection
requirements pertaining to broker and
freight forwarder financial
responsibilities will be updated at a
later date.
G. E.O. 13132 (Federalism)
A rule has implications for federalism
under section 1(a) of E.O. 13132 if it has
‘‘substantial direct effects on the States,
on the relationship between the national
government and the States, or on the
distribution of power and
responsibilities among the various
levels of government.’’
FMCSA has determined that this rule
will not have substantial direct costs on
or for States. Nothing in this document
preempts any State law or regulation.
Therefore, this rule does not have
sufficient federalism implications to
warrant the preparation of a Federalism
Impact Statement.
E:\FR\FM\31DER1.SGM
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107026
Federal Register / Vol. 89, No. 250 / Tuesday, December 31, 2024 / Rules and Regulations
H. Privacy
The Consolidated Appropriations Act,
2005,5 requires the Agency to assess the
privacy impact of a regulation that will
affect the privacy of individuals. This
rule will not change any previously
analyzed collections of personally
identifiable information.
The Privacy Act (5 U.S.C. 552a)
applies only to Federal agencies and any
non-Federal agency that receives
records contained in a system of records
from a Federal agency for use in a
matching program.
The E-Government Act of 2002,6
requires Federal agencies to conduct a
Privacy Impact Assessment (PIA) for
new or substantially changed
technology that collects, maintains, or
disseminates information in an
identifiable form. No new or
substantially changed technology will
collect, maintain, or disseminate
information as a result of this rule.
Accordingly, FMCSA has not conducted
a PIA. However, FMCSA will publish a
PIA and a System of Records Notice
covering all information that will be
collected in the new online registration
system.
In addition, the Agency submitted a
Privacy Threshold Assessment (PTA) to
evaluate the risks and effects the
proposed rulemaking might have on
collecting, storing, and sharing
personally identifiable information. The
PTA was adjudicated by DOT’s Chief
Privacy Officer on November 21, 2024.
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I. E.O. 13175 (Indian Tribal
Governments)
This rule does not have Tribal
implications under E.O. 13175,
Consultation and Coordination with
Indian Tribal Governments, because it
will not have a substantial direct effect
on one or more Indian Tribes, on the
relationship between the Federal
Government and Indian Tribes, or on
the distribution of power and
responsibilities between the Federal
Government and Indian Tribes.
J. National Environmental Policy Act of
1969
FMCSA analyzed this rule pursuant to
the National Environmental Policy Act
of 1969 (42 U.S.C. 4321 et seq.) and
determined this action is categorically
excluded from further analysis and
documentation in an environmental
assessment or environmental impact
statement under FMCSA Order 5610.1
(69 FR 9680), appendix 2, paragraphs
(6.k) and (6.q). The categorical
exclusions (CEs) in paragraphs (6.k) and
(6.q) cover broker activities and
implementation of record preservation.
The requirements in this rule are
covered by these CEs.
List of Subjects
49 CFR Part 386
Administrative practice and
procedure, Brokers, Freight forwarders,
Hazardous materials transportation,
Highway safety, Highway and roads,
Motor carriers, Motor vehicle safety,
Penalties.
49 CFR Part 387
Buses, Freight, Freight forwarders,
Hazardous materials transportation,
Highway safety, Insurance,
Intergovernmental relations, Motor
carriers, Motor vehicle safety, Moving of
household goods, Penalties, Reporting
and recordkeeping requirements, Surety
bonds.
For the reasons set forth in the
preamble, FMCSA amends 49 CFR parts
386 and 387 as follows:
PART 386—RULES OF PRACTICE FOR
FMCSA PROCEEDINGS
1. The authority citation for part 386
continues to read as follows:
■
Authority: 28 U.S.C. 2461 note; 49 U.S.C.
113, 1301 note, 31306a; 49 U.S.C. chapters 5,
51, 131–141, 145–149, 311, 313, and 315; and
49 CFR 1.81, 1.87.
2. Amend appendix B by revising and
republishing paragraph (g)(24) to read as
follows:
■
Appendix B to Part 386—Penalty
Schedule: Violations and Monetary
Penalties
*
*
*
*
*
(g) * * *
(24) Beginning on January 16, 2026, a
surety company or financial institution
for a broker or freight forwarder
pursuant to § 387.307 of this subchapter
that violates 49 U.S.C. 13906(b) or (c) or
§ 387.307:
(i) Is liable to the United States for a
penalty of $12,882 for each violation;
and
(ii) Will be ineligible to provide
broker financial security for 3 years.
*
*
*
*
*
PART 387—MINIMUM LEVELS OF
FINANCIAL RESPONSIBILITY FOR
MOTOR CARRIERS
3. The authority citation for part 387
continues to read as follows:
■
5 Public
Law 108–447, 118 Stat. 2809, 3268, note
following 5 U.S.C. 552a (Dec. 4, 2014).
6 Public Law 107–347, sec. 208, 116 Stat. 2899,
2921 (Dec. 17, 2002).
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Authority: 49 U.S.C. 13101, 13301, 13906,
13908, 14701, 31138, 31139; sec. 204(a), Pub.
PO 00000
Frm 00050
Fmt 4700
Sfmt 4700
L. 104–88, 109 Stat. 803, 941; and 49 CFR
1.87.
4. Amend § 387.307 by:
a. Lifting the stay of the section;
b. Revising the introductory text and
paragraphs (b) and (c)(6);
■ c. Removing paragraph (c)(7);
■ d. Redesignating paragraph (c)(8) as
paragraph (c)(7); and
■ e. Staying the section until January 16,
2026.
The revisions read as follows:
■
■
■
§ 387.307 Property broker surety bond or
trust fund.
This section is effective January 16,
2026.
*
*
*
*
*
(b) Acceptable assets. Trust funds
under this section must contain assets
aggregating to $75,000 that can be
liquidated to cash within 7 calendar
days. Acceptable assets included in any
trust fund filed under this section are
limited to cash, irrevocable letters of
credit issued by a federally insured
depository institution, and Treasury
bonds.
(c) * * *
(6) An insurance company; or
*
*
*
*
*
■ 5. Amend § 387.307T by revising the
introductory text to read as follows:
§ 387.307T
trust fund.
Property broker surety bond or
This section will remain in effect
until January 16, 2026.
*
*
*
*
*
Issued under the authority of delegation in
49 CFR 1.87.
Vincent G. White,
Deputy Administrator.
[FR Doc. 2024–30509 Filed 12–30–24; 8:45 am]
BILLING CODE 4910–EX–P
DEPARTMENT OF THE INTERIOR
Fish and Wildlife Service
50 CFR Parts 19, 21, and 22
[Docket No. FWS–HQ–MB–2022–0023;
FXMB12320900000–245–FF09M31000]
RIN 1018–BC76
Regulatory Authorizations for
Migratory Bird and Eagle Possession
by the General Public, Educators, and
Government Agencies
Fish and Wildlife Service,
Interior.
ACTION: Final rule.
AGENCY:
We, the U.S. Fish and
Wildlife Service, are revising current
regulatory authorizations and adding
SUMMARY:
E:\FR\FM\31DER1.SGM
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]]>Agencies
[Federal Register Volume 89, Number 250 (Tuesday, December 31, 2024)]
[Rules and Regulations]
[Pages 107021-107026]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-30509]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
Federal Motor Carrier Safety Administration
49 CFR Parts 386 and 387
[Docket No. FMCSA-2024-0280]
RIN 2126-AC76
Broker and Freight Forwarder Financial Responsibility; Extension
of Compliance Date
AGENCY: Federal Motor Carrier Safety Administration (FMCSA), Department
of Transportation (DOT).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: FMCSA amends its November 16, 2023, final rule, ``Broker and
Freight Forwarder Financial Responsibility,'' by extending the
compliance date for certain provisions from January 16, 2025, to
January 16, 2026. FMCSA is taking this action because the Agency
determined that only its forthcoming online registration system will be
used to accept filings and track notifications, and this functionality
will not be added to its legacy systems. As the online registration
system is not expected to be available before January 16, 2025, FMCSA
extends the compliance date to provide regulated entities time to begin
using and familiarizing themselves with the system before compliance is
required.
DATES: Effective date: This rule is effective December 31, 2024.
Expiration dates: Section 387.307T, which contains the regulations
on brokers of property surety bonds or trust funds which are currently
in effect, expires as of January 16, 2026. Section 387.307 is stayed
until January 16, 2026.
Compliance dates: Brokers, freight forwarders, surety providers,
and financial institutions must comply with all the provisions of Sec.
387.307 beginning on January 16, 2026.
Petition submittal date: Petitions for reconsideration of this
final rule must be submitted to the FMCSA Administrator no later than
January 30, 2025.
FOR FURTHER INFORMATION CONTACT: Ana Alvarez, Financial Analyst, Office
of Registration, Financial Responsibility Filings Division, FMCSA, 1200
New Jersey Avenue SE, West Building, 6th Floor, Washington, DC 20590;
(202) 366-0401; [email protected]. If you have questions on viewing
or submitting material to the docket, call Dockets Operations at (202)
366-9826.
SUPPLEMENTARY INFORMATION: FMCSA organizes this final rule as follows:
[[Page 107022]]
I. Availability of Rulemaking Documents
II. Executive Summary
A. Purpose and Summary of the Regulatory Action
B. Costs and Benefits
III. Abbreviations
IV. Legal Basis
V. Discussion of Proposed Rulemaking and Comments
A. Proposed Rulemaking
B. Comments and Responses
C. Effective Date
VI. Regulatory Analyses
A. E.O. 12866 (Regulatory Planning and Review), E.O. 13563
(Improving Regulation and Regulatory Review), E.O. 14094
(Modernizing Regulatory Review), and DOT Regulatory Policies and
Procedures
B. Congressional Review Act
C. Regulatory Flexibility Act (Small Entities)
D. Assistance for Small Entities
E. Unfunded Mandates Reform Act of 1995
F. Paperwork Reduction Act
G. E.O. 13132 (Federalism)
H. Privacy
I. E.O. 13175 (Indian Tribal Governments)
J. National Environmental Policy Act of 1969
I. Availability of Rulemaking Documents
To view any documents mentioned as being available in the docket,
go to https://www.regulations.gov/docket/FMCSA-2024-0280/document and
choose the document to review. To view comments, click this final rule,
then click ``Browse Comments.'' If you do not have access to the
internet, you may view the docket online by visiting Dockets Operations
on the ground floor of the DOT West Building, 1200 New Jersey Avenue
SE, Washington, DC 20590-0001, between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays. To be sure someone is there to
help you, please call (202) 366-9317 or (202) 366-9826 before visiting
Dockets Operations.
II. Executive Summary
A. Purpose and Summary of the Regulatory Action
FMCSA extends certain compliance dates in the 2023 final rule,
``Broker and Freight Forwarder Financial Responsibility'' (88 FR 78656,
Nov. 16, 2023), from January 16, 2025, to January 16, 2026, creating a
single compliance date for all provisions in the rule. This extension
will ensure that parties required to comply with the regulations have
sufficient opportunity to register in the new online registration
system and begin using it, and that FMCSA is able to properly process
and respond to such filings. The provisions affected by this extension
are:
1. Immediate suspension of broker/freight forwarder operating
authority. When a broker or freight forwarder's available financial
security falls below $75,000, FMCSA shall suspend its operating
authority registration.
2. Surety or trust responsibilities in cases of broker/freight
forwarder financial failure or insolvency. If a surety/trustee becomes
aware that a broker or freight forwarder is experiencing financial
failure or insolvency, it must notify FMCSA and initiate cancellation
of the financial responsibility.
3. Enforcement authority and penalties for financial responsibility
providers who do not comply with the regulations. FMCSA is
incorporating statutorily mandated penalties into its regulations.
After notice and an opportunity for a hearing, surety companies or
financial institutions who violate 49 CFR 387.307 will be ineligible to
provide financial responsibility for 3 years and may also be subject to
a civil penalty.
The extension of the compliance date is necessary so that FMCSA can
make the new online registration system available to entities required
to register and make filings in the system. This extension is also
intended to provide users with an opportunity to begin using, and
become familiar with, the new online registration system before
compliance with the system becomes mandatory. The planned release for
the new registration system is 2025.
B. Costs and Benefits
The 2023 Broker and Freight Forwarder Financial Responsibility
final regulatory impact analysis estimated costs for compliance and
implementation among brokers, freight forwarders, surety bond and trust
fund providers, and the Federal government. This rule delays certain
provisions requiring filings in the new online registration system
until January 16, 2026, resulting in all provisions of the rule
becoming effective at the same time.
Despite the delayed compliance for certain provisions, FMCSA finds
that the benefits stipulated in the 2023 final rule remain unchanged by
this rule. The provision mandating that brokers and freight forwarders
maintain assets readily available in trust funds, will still take
effect as originally scheduled, on January 16, 2026.
As it pertains to the immediate suspension provision, in the 2023
final rule's Regulatory Impact Analysis, the Agency estimated that less
than 0.5 percent of all brokers would have faced immediate suspension
proceedings under the new requirements in 2025. FMCSA lacked the data
to quantify the number of financial failures that will occur in any
given year and would therefore trigger the surety or trust
responsibilities in cases of brokers/freight forwarder financial
failure or insolvency. However, the Agency believes that the number of
determinations of financial failure or insolvency is already
represented in the immediate suspension estimate. As the affected
population is relatively small, the Agency believes that the impact of
a delay is de minimis.
Brokers and freight forwarders, surety bond and trust fund
providers may incur cost savings by not being required to file
documentation relating to certain other provisions until January 16,
2026. FMCSA may also incur cost savings in delaying the enforcement of
several provisions of the 2023 final rule. In conclusion, the Agency
finds that the change in costs and benefits as a result of the
extension would be de minimis for these entities.
III. Abbreviations
CE Categorical exclusion
CFR Code of Federal Regulations
DOT Department of Transportation
E.O. Executive Order
FMCSA Federal Motor Carrier Safety Administration
FR Federal Register
NOOA National Owner Operators Association
NPRM Notice of proposed rulemaking
OMB Office of Management and Budget
OOIDA Owner-Operator Independent Drivers Association
PIA Privacy Impact Assessment
PTA Privacy Threshold Assessment
SBTC Small Business in Transportation Coalition
URS Unified Registration System
UMRA Unfunded Mandates Reform Act
U.S.C. United States Code
IV. Legal Basis
The legal basis of the Broker and Freight Forwarder Financial
Responsibility final rule, set forth at 88 FR 78658 (Nov. 16, 2023),
also serves as the legal basis for this final rule. The statutory
authority identified in that discussion is 49 U.S.C. 13906, which
contains requirements for the financial security of brokers and freight
forwarders and directs the Secretary to issue regulations to implement
and enforce these requirements. Authority to carry out and enforce
these provisions has been delegated to the Administrator of FMCSA (49
CFR 1.87(a)(5)).
As discussed in the November 16, 2023, final rule, 49 CFR
387.403T(c) makes any requirements applicable to broker of property
surety bonds and trust funds in Sec. 387.307 applicable to the surety
bond or trust fund required
[[Page 107023]]
of freight forwarders as well.\1\ Therefore, any time this rule refers
to brokers, the same requirements are also applicable to freight
forwarders.
---------------------------------------------------------------------------
\1\ Although 49 CFR 387.403 is currently suspended, it contains
the same language making Sec. 387.307 applicable to freight
forwarders. Thus, when the suspension is ultimately lifted, it will
have no effect on the analysis here.
---------------------------------------------------------------------------
Unless stated otherwise, FMCSA generally considers provisions that
are not inextricably intertwined to be severable, meaning that if any
provision in a rule is later held to be invalid, the remainder of the
rule is not affected (49 CFR 389.41). While many provisions of this
rule are integrated and the Agency anticipates the rule will function
most effectively with all provisions operating together, FMCSA
nonetheless finds that each major provision of the rule is severable
from the others and could operate functionally even in the event some
provisions were deemed invalid. In the event a court were to invalidate
one or more of this final rule's unique provisions, the remaining
provisions should stand.
V. Discussion of the Proposed Rulemaking and Comments
A. Proposed Rule
On November 16, 2023, FMCSA published a final rule adopting
regulations to implement 49 U.S.C. 13906(b) and (c) (88 FR 78656). The
final rule became effective 60 days later, on January 16, 2024.
However, compliance with the provisions relating to immediate
suspension, financial failure or insolvency, and penalties for trust or
surety providers who fail to comply with the regulations is not
required until January 16, 2025, and full compliance with all of the
final rule's provisions is not required until 2 years after the
effective date, beginning on January 16, 2026.
On November 4, 2024, FMCSA published a notice of proposed
rulemaking (NPRM), proposing to extend the compliance deadlines for the
provisions of the Broker and Freight Forwarder Financial Responsibility
rule from January 16, 2025, to January 16, 2026. The affected
provisions relate to immediate suspension, financial failure or
insolvency, and penalties for trust or surety providers who fail to
comply with the regulations., In addition, FMCSA proposed to amend the
expiration date of the temporary rule governing current practices,
Sec. 387.307T, and the compliance dates in Sec. 387.307. This
extension would create a single compliance date for all provisions in
the rule, allow FMCSA to implement the new online registration system
for filers to use, and ensure that filers are familiar with the online
registration system and able to perform all duties mandated by the rule
prior to the compliance date.
The close of comments was initially set as November 19, 2024. The
Small Business in Transportation Coalition (SBTC) requested an
extension of the comment period, and FMCSA granted a 7-day reopening of
the comment period on November 21, 2024, with the comment period
closing on November 29, 2024 (89 FR 92084).
B. Comments and Responses
FMCSA received 13 comments on this proposed rule with nine opposing
the extension of the compliance date, two supporting it, one requesting
an extension to the comment period, and one out of scope comment. The
National Owner Operators Association (NOOA), the Owner-Operator
Independent Drivers Association (OOIDA), and seven individual
commenters opposed delaying the compliance dates for the provisions
outlined in the November 16, 2023, final rule. First Century Financial
Corporation and one individual commenter supported delaying the
effective date for certain provisions outlined in the November 2023
final rule. SBTC requested an extension of the comment period, which
was granted. One commenter addressed broker transparency issues, which
fall outside the scope of this rule.
1. Need for the Extension
Comments
NOOA commented that FMCSA has had sufficient lead time to either
add to its existing infrastructure or accelerate development of the
forthcoming online registration system. NOOA states that regulated
entities have been anticipating the need to comply with the
regulations, making the proposed delay excessive. NOOA also stated that
FMCSA did not provide adequate justification for extending the
compliance date, as it does not outline any significant challenges that
regulated entities would face in using the system.
FMCSA Response
The proposed revised compliance dates are crucial to ensure the
smooth transfer of vital data, requiring careful coordination to avoid
disruptions for users. It also allows adequate time to finalize and
thoroughly test the capabilities of the new online registration system,
to ensure the system's stability and security. This timeframe also
enables FMCSA to provide training and outreach to both internal staff
and external stakeholders, supporting a more efficient transition and
reducing potential difficulties for regulated entities who will use the
new system.
FMCSA determined that implementing the new online registration
system was a priority because of its wide-ranging impacts, given that
it is intended to function as a clearinghouse and depository of
information on, and identification of, all foreign and domestic motor
carriers, brokers, and freight forwarders, and other entities required
to register with the Department, as well as information on safety
fitness and compliance with minimum levels of financial responsibility.
Additionally, prioritizing rollout of the comprehensive online
registration system aligns with statutory requirements for FMCSA to
improve its information technology and data systems to ensure better
oversight of motor carriers, drivers, and equipment, pursuant to
section 103 of the ICC Termination Act of 1995 (Pub. L. 104-88, 109
Stat. 803, 888, Dec. 29, 1995) and subtitle C of title IV of the Safe,
Accountable, Flexible, Efficient Transportation Equity Act: A Legacy
for Users (Pub. L. 109-59, 119 Stat. 1144, 1761, Aug. 10, 2005).
Building the functionality into the existing system would have required
the Agency to divert critical resources away from development of the
new online registration system and fulfillment of that statutory
mandate.
2. Impacts of Delayed Compliance
Comments
NOOA commented that delaying compliance with these rules would
disproportionately impact small operators, brokers, and freight
forwarders, and that the industry relies on a streamlined process for
transparency and operational efficiency and will be disadvantaged by
the delay.
Michael Ravnitzky commented that the extension of the compliance
date would have a positive impact on small businesses, as the burdens
of compliance generally affect small businesses more than large ones.
He stated that having additional time to comply would reduce small
business burdens and facilitate a smoother transition to the new
regulations.
FMCSA Response
FMCSA understands that this extension will provide cost savings for
certain small businesses. By delaying the implementation of certain
provisions, those small businesses will incur fewer expenses related to
paperwork and regulatory compliance. The additional time provided by
this
[[Page 107024]]
extension will allow small businesses to better prepare for the
implementation of all provisions, likely leading to increased
compliance. However, FMCSA also recognizes that other small businesses,
mainly motor carriers, would prefer the immediate suspension provisions
to take effect as originally scheduled because of the deterrent effect
on brokers who fail to pay carriers and continue to accrue claims. As
described in the Costs and Benefits section, above, the Agency
estimates this rule will affect less than 0.5 percent of property
brokers each year, and the effects of delaying compliance will
therefore not be substantial across the transportation industry.
FMCSA finds that without certain automated processes currently
under development in the new online registration system, effective
compliance management will be compromised. Specifically, the Agency
believes that tracking and processing drawdown notifications manually
will be inefficient, leading to delays, higher administrative costs,
and potential compliance risks for both FMCSA and the industry. The
ability to efficiently suspend the operating authority of brokers and
freight forwarders who fail to maintain the required financial security
within the 7-day regulatory time frame depends upon both the regulated
entities and the Agency being able to utilize a fully functional online
filing system. For more detailed information regarding the launching of
the new online registration system, stakeholders are encouraged to
visit https://www.fmcsa.dot.gov/registration/resources-hub.
3. Training and Familiarization Period
Comments
In its comment, NOOA asserted that the training and familiarization
period can be streamlined if FMCSA provides thoughtful, targeted
training programs to circumvent the need to delay the compliance date.
NOOA believes FMCSA has previously demonstrated its capacity to do so
and requested that the Agency maintain its original compliance date of
January 16, 2025.
FMCSA Response
FMCSA is committed to developing both general and audience-specific
training materials to support users in navigating the new registration
system effectively once it is rolled out and made available. This will
include tailored guidance for different user groups to address specific
filing needs and reduce any potential learning curve. FMCSA will
continue to leverage feedback to refine these training programs,
ensuring that they are comprehensive, accessible, and focused on
facilitating a smooth transition for all users.
4. Timeline for Online Registration System
Comments
OOIDA submitted a comment noting that it had previously expressed
skepticism in its December 2023 Petition for Reconsideration about the
timeline provided for the URS rulemaking process to be completed before
the January 2025 compliance date. OOIDA stressed that URS remains a
work in progress and that historically there have been numerous
problems associated with its rollout. Additionally, OOIDA raised the
issue that there are no assurances that the online registration system
will be completed by the new proposed compliance date. OOIDA requested
that the Agency find alternative and/or temporary methods to support
the January 2025 implementation date issued in the November 2023 final
rule (88 FR 78656).
FMCSA Response
FMCSA is actively engaged in developing and preparing for rollout
of the new registration system, with a planned rollout in 2025.
Although FMCSA always planned to build the filing functionality
necessary to implement this rule into the new system, the compliance
dates were not specifically tied to the launch date for that system.
FMCSA initially believed its existing systems could be used to accept
the required filings. However, through its stakeholder engagement
efforts, FMCSA determined that adding the filing functionality to its
legacy systems for use in the interim would likely create confusion and
additional training burdens for filers, who would be responsible for
learning to use two different filing systems in quick succession. Doing
so would also utilize FMCSA resources that are better directed toward
implementing the new online registration system. Therefore, FMCSA
determined that stakeholders would benefit from delaying the compliance
date until after the planned rollout of the new online registration
system.
5. Out of Scope Comments
FMCSA received one comment concerning issues beyond the scope of
this rule, which related to a separate rulemaking on broker
transparency.\2\ FMCSA has moved this comment to the appropriate docket
and will consider it in connection with that rulemaking.
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\2\ The Transparency in Property Broker Transactions docket can
be found at: https://www.regulations.gov/docket/FMCSA-2023-0257.
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C. Effective Date
The Administrative Procedure Act section 553 prescribes a 30-day
waiting period between publication of a rule and the effective date of
that rule. However, agencies may waive this waiting period for
substantive rules which grant or recognize an exemption or relieve a
restriction (5 U.S.C. 553(d)(1)). Here, FMCSA finds that the delay of
an effective date of a substantive rule requirement is a substantive
rule that relieves a restriction for a period of time, so making the
rule effective immediately on publication is justified. FMCSA is
balancing the benefit of requiring compliance as soon as is practicable
with the burden on regulated entities, who are not yet required to
comply with any of the provisions in the November 16, 2023, final rule,
to perform the duties required. As the extension of the compliance date
does not change the substance of any provisions of that rule, but
merely provides regulated parties additional time to prepare, they
would not be prejudiced if the change goes into effect immediately.
VI. Regulatory Analyses
A. Executive Order (E.O.) 12866 (Regulatory Planning and Review), E.O.
13563 (Improving Regulation and Regulatory Review), E.O. 14094
(Modernizing Regulatory Review), and DOT Regulatory Policies and
Procedures
FMCSA has considered the impact of this final rule under E.O. 12866
(58 FR 51735, Oct. 4, 1993), Regulatory Planning and Review, as
supplemented by E.O. 13563 (76 FR 3821, Jan. 21, 2011), Improving
Regulation and Regulatory Review, and amended by E.O. 14094 (88 FR
21879, Apr. 11, 2023), Modernizing Regulatory Review, as well as the
impact under DOT regulatory policies and procedures (DOT Order 2100.6A,
June 7, 2021). This final rule is not a significant regulatory action
under section 3(f) of E.O. 12866, as amended. Accordingly, the Office
of Management and Budget (OMB) has not reviewed it under that E.O.
The 2023 Broker and Freight Forwarder Financial Responsibility
final regulatory impact analysis estimated costs for compliance and
implementation among brokers, freight
[[Page 107025]]
forwarders, surety bond and trust fund providers, and the Federal
government. This rule delays certain provisions requiring filings in
the new online registration system until January 16, 2026, resulting in
all provisions of the rule becoming effective at the same time.
Despite the delayed compliance for certain provisions, FMCSA finds
that the benefits stipulated in the 2023 final rule remain unchanged by
this rule. The provision mandating that brokers and freight forwarders
maintain assets readily available in trust funds, will still take
effect as originally scheduled, on January 16, 2026.
As it pertains to the immediate suspension provision, in the 2023
final rule's regulatory impact analysis, the Agency estimated that less
than 0.5 percent of all brokers would have faced immediate suspension
proceedings under the new requirements in 2025. FMCSA lacked the data
to quantify the number of financial failures that will occur in any
given year and would therefore trigger the surety or trust
responsibilities in cases of brokers/freight forwarder financial
failure or insolvency. However, the Agency believes that the number of
determinations of financial failure or insolvency is already
represented in the immediate suspension estimate. As the affected
population is relatively small, the Agency believes that the impact of
a delay is de minimis.
Brokers and freight forwarders, surety bond and trust fund
providers may incur cost savings by not being required to file
documentation relating to certain other provisions until January 16,
2026. FMCSA may also incur cost savings in delaying the enforcement of
several provisions of the 2023 final rule. In conclusion, the Agency
finds that the change in costs and benefits as a result of the
extension would be de minimis for these entities.
B. Congressional Review Act
This rule is not amajor ruleas defined under the Congressional
Review Act (5 U.S.C. 801-808).\3\
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\3\ A major rule means any rule that OMB finds has resulted in
or is likely to result in (a) an annual effect on the economy of
$100 million or more; (b) a major increase in costs or prices for
consumers, individual industries, geographic regions, Federal,
State, or local government agencies; or (c) significant adverse
effects on competition, employment, investment, productivity,
innovation, or on the ability of United States-based enterprises to
compete with foreign-based enterprises in domestic and export
markets (5 U.S.C. 802(4)).
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C. Regulatory Flexibility Act (Small Entities)
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.), as amended
by the Small Business Regulatory Enforcement Fairness Act of 1996 \4\
requires Federal agencies to consider the effects of the regulatory
action on small business and other small entities and to minimize any
significant economic impact. The term small entities comprises small
businesses and not-for-profit organizations that are independently
owned and operated and are not dominant in their fields, and
governmental jurisdictions with populations of less than 50,000 (5
U.S.C. 601(6)). Accordingly, DOT policy requires an analysis of the
impact of all regulations on small entities, and mandates that agencies
strive to lessen any adverse effects on these businesses.
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\4\ Public Law 104-121, 110 Stat. 857 (Mar. 29, 1996).
---------------------------------------------------------------------------
This final rule will extend the compliance date for specific
provisions of the 2023 final rule, ``Broker and Freight Forwarder
Financial Responsibility,'' by 1 year from January 16, 2025, to January
16, 2026. The provisions already scheduled for compliance on January
16, 2026, will not be affected. The rule will impact small entities
such as some surety bond and trust fund providers, brokers, and freight
forwarders. The extension will provide small entities with additional
time to register in the new online registration system and understand
its operations and functionalities. By delaying the submission of
documentation for certain provisions until January 16, 2026, these
entities will also realize de minimis cost savings.
Consequently, I certify that this action will not have a
significant economic impact on a substantial number of small entities.
D. Assistance for Small Entities
In accordance with section 213(a) of the Small Business Regulatory
Enforcement Fairness Act of 1996 (Pub. L. 104-121, 110 Stat. 857),
FMCSA wants to assist small entities in understanding this final rule
so they can better evaluate its potential effects on themselves and
participate in the rulemaking initiative. If the final rule will affect
your small business, organization, or governmental jurisdiction and you
have questions concerning its provisions or options for compliance,
please consult the person listed under FOR FURTHER INFORMATION CONTACT.
Small businesses may send comments on the actions of Federal
employees who enforce or otherwise determine compliance with Federal
regulations to the Small Business Administration's Small Business and
Agriculture Regulatory Enforcement Ombudsman (Office of the National
Ombudsman, see https://www.sba.gov/about-sba/oversight-advocacy/office-national-ombudsman) and the Regional Small Business Regulatory Fairness
Boards. The Ombudsman evaluates these actions annually and rates each
agency's responsiveness to small business. If you wish to comment on
actions by employees of FMCSA, call 1-888-REG-FAIR (1-888-734-3247).
DOT has a policy regarding the rights of small entities to regulatory
enforcement fairness and an explicit policy against retaliation for
exercising these rights.
E. Unfunded Mandates Reform Act of 1995
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
(UMRA) requires Federal agencies to assess the effects of their
discretionary regulatory actions. The Act addresses actions that may
result in the expenditure by State, local, or Tribal government, in the
aggregate, or by the private sector of $200 million (which is the value
equivalent of $100 million in 1995, adjusted for inflation to 2023
levels) or more in any 1 year. This final rule will not result in such
an expenditure, so the analytical requirements of UMRA do not apply.
F. Paperwork Reduction Act
Due to the change of compliance date, the existing information
collection requirements pertaining to broker and freight forwarder
financial responsibilities will be updated at a later date.
G. E.O. 13132 (Federalism)
A rule has implications for federalism under section 1(a) of E.O.
13132 if it has ``substantial direct effects on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government.''
FMCSA has determined that this rule will not have substantial
direct costs on or for States. Nothing in this document preempts any
State law or regulation. Therefore, this rule does not have sufficient
federalism implications to warrant the preparation of a Federalism
Impact Statement.
[[Page 107026]]
H. Privacy
The Consolidated Appropriations Act, 2005,\5\ requires the Agency
to assess the privacy impact of a regulation that will affect the
privacy of individuals. This rule will not change any previously
analyzed collections of personally identifiable information.
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\5\ Public Law 108-447, 118 Stat. 2809, 3268, note following 5
U.S.C. 552a (Dec. 4, 2014).
---------------------------------------------------------------------------
The Privacy Act (5 U.S.C. 552a) applies only to Federal agencies
and any non-Federal agency that receives records contained in a system
of records from a Federal agency for use in a matching program.
The E-Government Act of 2002,\6\ requires Federal agencies to
conduct a Privacy Impact Assessment (PIA) for new or substantially
changed technology that collects, maintains, or disseminates
information in an identifiable form. No new or substantially changed
technology will collect, maintain, or disseminate information as a
result of this rule. Accordingly, FMCSA has not conducted a PIA.
However, FMCSA will publish a PIA and a System of Records Notice
covering all information that will be collected in the new online
registration system.
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\6\ Public Law 107-347, sec. 208, 116 Stat. 2899, 2921 (Dec. 17,
2002).
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In addition, the Agency submitted a Privacy Threshold Assessment
(PTA) to evaluate the risks and effects the proposed rulemaking might
have on collecting, storing, and sharing personally identifiable
information. The PTA was adjudicated by DOT's Chief Privacy Officer on
November 21, 2024.
I. E.O. 13175 (Indian Tribal Governments)
This rule does not have Tribal implications under E.O. 13175,
Consultation and Coordination with Indian Tribal Governments, because
it will not have a substantial direct effect on one or more Indian
Tribes, on the relationship between the Federal Government and Indian
Tribes, or on the distribution of power and responsibilities between
the Federal Government and Indian Tribes.
J. National Environmental Policy Act of 1969
FMCSA analyzed this rule pursuant to the National Environmental
Policy Act of 1969 (42 U.S.C. 4321 et seq.) and determined this action
is categorically excluded from further analysis and documentation in an
environmental assessment or environmental impact statement under FMCSA
Order 5610.1 (69 FR 9680), appendix 2, paragraphs (6.k) and (6.q). The
categorical exclusions (CEs) in paragraphs (6.k) and (6.q) cover broker
activities and implementation of record preservation. The requirements
in this rule are covered by these CEs.
List of Subjects
49 CFR Part 386
Administrative practice and procedure, Brokers, Freight forwarders,
Hazardous materials transportation, Highway safety, Highway and roads,
Motor carriers, Motor vehicle safety, Penalties.
49 CFR Part 387
Buses, Freight, Freight forwarders, Hazardous materials
transportation, Highway safety, Insurance, Intergovernmental relations,
Motor carriers, Motor vehicle safety, Moving of household goods,
Penalties, Reporting and recordkeeping requirements, Surety bonds.
For the reasons set forth in the preamble, FMCSA amends 49 CFR
parts 386 and 387 as follows:
PART 386--RULES OF PRACTICE FOR FMCSA PROCEEDINGS
0
1. The authority citation for part 386 continues to read as follows:
Authority: 28 U.S.C. 2461 note; 49 U.S.C. 113, 1301 note,
31306a; 49 U.S.C. chapters 5, 51, 131-141, 145-149, 311, 313, and
315; and 49 CFR 1.81, 1.87.
0
2. Amend appendix B by revising and republishing paragraph (g)(24) to
read as follows:
Appendix B to Part 386--Penalty Schedule: Violations and Monetary
Penalties
* * * * *
(g) * * *
(24) Beginning on January 16, 2026, a surety company or financial
institution for a broker or freight forwarder pursuant to Sec. 387.307
of this subchapter that violates 49 U.S.C. 13906(b) or (c) or Sec.
387.307:
(i) Is liable to the United States for a penalty of $12,882 for
each violation; and
(ii) Will be ineligible to provide broker financial security for 3
years.
* * * * *
PART 387--MINIMUM LEVELS OF FINANCIAL RESPONSIBILITY FOR MOTOR
CARRIERS
0
3. The authority citation for part 387 continues to read as follows:
Authority: 49 U.S.C. 13101, 13301, 13906, 13908, 14701, 31138,
31139; sec. 204(a), Pub. L. 104-88, 109 Stat. 803, 941; and 49 CFR
1.87.
0
4. Amend Sec. 387.307 by:
0
a. Lifting the stay of the section;
0
b. Revising the introductory text and paragraphs (b) and (c)(6);
0
c. Removing paragraph (c)(7);
0
d. Redesignating paragraph (c)(8) as paragraph (c)(7); and
0
e. Staying the section until January 16, 2026.
The revisions read as follows:
Sec. 387.307 Property broker surety bond or trust fund.
This section is effective January 16, 2026.
* * * * *
(b) Acceptable assets. Trust funds under this section must contain
assets aggregating to $75,000 that can be liquidated to cash within 7
calendar days. Acceptable assets included in any trust fund filed under
this section are limited to cash, irrevocable letters of credit issued
by a federally insured depository institution, and Treasury bonds.
(c) * * *
(6) An insurance company; or
* * * * *
0
5. Amend Sec. 387.307T by revising the introductory text to read as
follows:
Sec. 387.307T Property broker surety bond or trust fund.
This section will remain in effect until January 16, 2026.
* * * * *
Issued under the authority of delegation in 49 CFR 1.87.
Vincent G. White,
Deputy Administrator.
[FR Doc. 2024-30509 Filed 12-30-24; 8:45 am]
BILLING CODE 4910-EX-P
